Hays shares fall after difficult December

Hays, a UK recruitment group, has reported a decline in activity in the UK and Ireland due to a slowdown in the volume of individuals securing permanent roles. The company’s first-half profits are expected to be £60mn, below current market expectations. Hays shares fell as much as 18% on Tuesday after the FTSE 250 recruitment group issued a profit warning on the back of a “clear slowdown” in global jobs markets. The company’s fees fell by more than 15%, and the number of job hunters registering with Hays was down year on year but remained in line with seasonal trends.

Fees from permanent hiring fell 17% in the three months to the end of December, year on year, while temporary placement fees came in 5% lower. The company suffered a 10% drop in fee income in the quarter, with the steepest declines in the UK and Ireland and Australia and New Zealand. The number of job hunters registering with Hays was down year on year, but it was becoming more difficult to place those people.

In response to the slowdown in demand, Hays has embarked on a series of cost cuts, cutting its consultant headcount by 5% in its most recent quarter, and raising permanent hiring fees by 8%. Hays is now expecting £60mn in first-half profits, more than 10% below current market expectations of £73mn.

Market conditions will likely remain challenging. In July, Hays issued a trading update for the second quarter of 2023, reporting a decline in activity within the UK and Ireland due to the volume of individuals securing permanent roles falling.