Yahoo Finance Hays: Recruiter reports slower job market as fees continue to tumble
Recruiter Hays has seen an increase in the time it takes its clients to hire, with a sharp decline in its fees reported.
The London-listed company said market conditions “remained challenging” as group fees dropped by 15 per cent in the three months to June 30, 2024, compared to the same period in the year before.
This was driven by a reduction of 17 per cent reduction in the UK, Ireland and Germany, 22 per cent in Australia and New Zealand and 11 per cent in the rest of the world.
The group’s June fee exit rate was also down 18 per cent, which the company said was due to “challenging conditions” in Germany and Australia, plus the negative effects of elections in the UK and France.
Hays’ technology division was especially hard hit by the ongoing challenges, with fees decreasing by 35 per cent in the UK and Ireland and by 19 per cent in Australia and New Zealand and Germany.
Hays chief executive Dirk Hahn said: “Market conditions remained challenging in the quarter. Overall, we continued to see longer-than-normal ‘time-to-hire’, impacted by low levels of confidence.
“Given this backdrop, we have remained focused on driving consultant productivity and tight cost control, and we have delivered annualised savings of £60m during our FY24.
“Our proactive actions meant that average Group consultant productivity increased by three per cent in Q4.
“Given ongoing global uncertainties, in the near-term we expect our key markets will remain challenging.
“Looking ahead, we are focused on building a more resilient business, targeting the many long-term growth opportunities we see, and underpinned by our clear strategy and enhanced operational rigour.
“I know we can deliver substantial profit growth once our end markets recover, driven by our financial strength and strong teams of talented colleagues worldwide.”
Hays contingency staffing to ‘boom’
lly Anibaba, analyst at Third Bridge, said: “Third Bridge experts believe contingency staffing will “boom” in 2024, offsetting permanent hiring volatility. Hays contingency staffing will drive 2024 growth, as other recruiters lack its expertise and pool of candidates. A 20-25 per cent cash flow gain predicted at year-end.
“Hays’ strong reputation and full-service offerings allow it to maintain fees, while competitors are dropping to 8-10 per cent in the permanent staffing sector. The recruitment company can offset tech client losses by shifting strategic focus to public sector and temporary healthcare contracts.”
“Third Bridge said it believes Hays portfolio diversity insulates the company from market uncertainties and its ability to focus on contingency and temporary staffing solutions helps them navigate tough times until the job market improves.”
