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Enterprise

Recruitment firm Hays faces steep profit decline as industry pressures mount

The recruitment firm, which has seen profits slump by more than 50% in the last six months, has been hit hard by a long-running recruitment sector slump

Recruitment firm Hays

Hays, a recruitment firm, has reported another decrease in profit as it continues to struggle with ongoing challenges in the recruitment sector.

The company's net fees, a crucial performance indicator in the recruitment industry, fell by 13 per cent in the six months ending 31 December, as reported by .

Operating profit dropped by 56 per cent to £25.5m, while pre-tax profit declined by 66 per cent to £9.1m. Over the past year, Hays' share price has fallen by more than a quarter.

Since 2022, net fees have decreased by nearly a quarter, and the company's headcount has reduced by approximately 2,700 employees over the last two years. In the first half of 2022, Hays reported a pre-tax profit of £94m.

The recruitment sector has been severely impacted by cost-cutting across industries, firms' caution over hiring, and potential candidates' reluctance to change jobs.

Fellow recruitment companies Robert Walters and Pagegroup have also experienced a slump in profits as they struggle to adapt to changing conditions, with both firms also reducing their workforce.

Hays' CEO stated that the company is focusing on "long-term growth markets", adding: "Our key markets are being driven by powerful, supportive megatrends and remain characterised by significant talent shortages, which we help solve for our clients. When client and candidate confidence improves and the cycle recovers, I am confident we will deliver a healthy drop through of net fees to operating profit."

Hays is currently concentrating on cost-saving measures.