Recruiter Hays posts drop in charges amid jobs hunch… however says downturn ‘will not final perpetually’

Recruiter Hays has reported a bigger-than-expected drop in the fees it collected for filling roles in the second quarter of its financial year due to the jobs market downturn. 

After a series of profit warnings and downgrades, Hays reported that group net fees declined by 10 per cent in the three months to December, led by a big fall in permanent roles.

The Bank of England’s most recent data found employment fell by 1.8 per cent in November. 

However, the global jobs giant said the current slump ‘won’t last forever’.

Quarterly permanent fees dropped 14 per cent in the second quarter, while fees for filling temporary and contract riles slipped 6 per cent.

In its UK and Ireland business, fees declined by 9 per cent due to weak public sector demand. 

Private sector recruitment – which makes up 71 per cent of Hays’ fees in the UK and Ireland – reduced by 5 per cent year-on-year.

Hiring halted: Hays highlighted weaker demand for filling roles in the public sector

However, the recruitment giant said there were some green shoots of growth in the UK as tech hiring returned to growth for the first time in two years. 

Construction and property and accountancy and finance roles dropped 12 and 10 per cent, respectively.

Globally, Hays pointed to ‘ongoing macroeconomic uncertainty,’ and said the biggest material factor in the second quarter was reduced working hours in Germany.

The UK and Germany remained the weakest markets, with stronger growth across Australia and New Zealand. 

Finance chief James Hilton said the return to work over the next six weeks is ‘critical’ with German working hours a ‘sensitivity’.

He added: ‘The whole recruitment market has had its challenges over the past two/three years. [There’s been an] unusual period of economic performance across the world, starting in the US and Europe will be the last out of this downturn.

‘Macro trends haven’t gone away… which is creating uncertainty in businesses and candidates. That won’t last forever. Economies will normalise and people will get on with their lives.’

Despite softer revenues, strong consultant productivity growth of 6 per cent and cost-cutting measures mean Hays expects first half pre-exceptional operational profits of £20million, in line with market expectations.

Chief executive Dirk Hahn said: ‘Amidst ongoing macroeconomic uncertainty , challenging Perm conditions, and weaker average hours worked in Germany, we are executing well against our strategy and continue to make significant operational progress.

‘As ever, our new year “return to work” will be important so we are closely monitoring activity levels… I remain confident that we will benefit materially when markets recover.’

Hays has struggled in a hiring market that has been in a downturn for almost three years, and the recruiter has not reported year-on-year growth in its fees since the first quarter of 2023.

Mark Crouch, market analyst at eToro said: ‘Things are starting to look very serious for Hays, what began as a slowdown has turned into a rout.

‘Global economic uncertainty, weak business confidence and sector-specific pressure have all bitten Hays hard.

‘Confidence has drained away and the shares have slipped below GFC lows. 

‘Back then, markets were falling in unison and a bottom eventually formed. 

‘In 2026, the FTSE 100 is racing to record highs while Hays continues to sink. An uncomfortable truth that times have changed and if Hays is to recover, so must they.’