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.
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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.
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Hays has reported annual cost savings of £25m through "operational restructuring and back office efficiency programmes" over the past six months, bringing total savings to approximately £55m since the start of the 2024 tax year.
The firm noted that fees from temporary and contracting work were "growing strongly", despite significant economic challenges.
Hahn stated: "Our focused strategy has five levers designed to build a structurally more profitable, resilient and growing business and, despite ongoing macroeconomic uncertainty, we have remained relentlessly focused on delivering them."
Earlier this year, analysts at Panmure Liberum suggested that "deep cultural change is required at Hays as it shifts from the international growth strategy to a focus on tight operational control to drive consultant productivity faster than cost inflation."
They added, "This is a complex process that will take time and there is much still to be proven."
The brokerage firm rated Hays as a 'Hold'.