Hays reports 20% drop in UK and Ireland fees amid challenging recruitment market

Recruitment firm Hays has reported another decrease in fees, reflecting the ongoing downturn in the market. The company's group net fees, a crucial performance measure in the recruitment sector, dropped by 14 per cent year on year in the three months to 30 September, with fees in the UK and Ireland falling by 20 per cent.

Despite this, Hays noted that consultant productivity increased by five per cent year on year, and it is on track to reduce costs by £30m annually by the end of 2027. The number of employees at the recruitment firm has decreased by 18 per cent year on year, and two per cent in the last quarter.

The company continues to anticipate that this year's profit will be "sequentially lower" than the previous year, and expects "near-term market conditions to remain challenging". The recruitment market has been under pressure for several years, with cost-cutting across sectors, firms' caution over hiring, and potential candidates' reluctance to change jobs impacting companies significantly.

Hays, a market leader, has seen its share price drop by more than 20 per cent so far this year. However, expectations are for a recovery next year: Mintel predicts a faster return to growth in 2025 amid a more positive macroeconomic environment.

If the UK economy continues to accelerate as hoped, business confidence should stimulate hiring, as reported by City AM.

Chief executive Dirk Hahn said: "Net fees in the quarter were down as expected reflecting the tough market conditions, particularly in Perm where we see longer time to hire and low levels of confidence which we expect to continue."

He added that, "Given this backdrop, we remain resolutely focused on operational rigour through business line prioritisation, resource allocation, and efficiency initiatives and, due to our actions, Group consultant productivity increased by 5% YoY in Q1."