Red flags: Recruiter Hays the latest to sound alarm on 2024 economy

Total fees brought in by Hays dropped 17 per cent compared to last year, the firm revealed in a trading statement for the first three months of the year.

Hays became the second recruiter in as many days to sound the alarm on the hiring market and the state of the global economy this morning, with fees crashing across the world.

The update comes just a day after a similarly downbeat assessment by headhunter peer Pagegroup.

Total fees brought in by Hays dropped 17 per cent compared to last year, the firm revealed in a trading statement for the first three months of the year.

The drop-off was especially bad in Australia and New Zealand, where revenue fell 29 per cent versus a year ago.

However, in the UK and Ireland figures were still dire, with fees declining by 16 per cent. This was also a comparable decline to Germany.

Most regions traded broadly in line with the overall UK business, apart from the Scotland and South West & Wales, which were down 26 per cent and 23 per cent respectively.

London, the group’s largest region, fell by 18 per cent, while Ireland only saw fees drop by 11 per cent.

Hays saw a greater drop in fees from its permanent segment, which saw fees drop 21 per cent, while temporary positions only declined by 14 per cent.

All big recruiters noted a marked slowdown in activity in 2023, with Hays citing a weak December and a poor finish to the end of last year, so it is unsurprising to see the trend continue.

The group saw a two per cent improvement in consultant productivity throughout the quarter, while group consultant headcount decreased by six per cent throughout the quarter and by 16 per cent compared to the start of last year.

Recruiters are often bellwethers for the state of the wider economy.

Hays’ chief executive Dirk Hahn only began in the role from previous CEO Alistair Cox on 1 September 2023, leaving him to cope with a challenging start.

Hahn described market conditions as “challenging throughout the quarter“, and the company said that it expected near-term market conditions to remain challenging “but broadly stable.

“While economic uncertainties remain, we have a strong and clear strategy and will continue to build a more resilient business through greater focus, increased operational rigour and strong cost management,” the CEO added.

“As set out at our H1 results, we are firmly focused on targeting the many structural growth opportunities we see and, over time, rebuilding our conversion rate.”