Hays expects macro uncertainty to impact rest of year

(Sharecast News) - Recruitment firm Hays said it experienced the typical recovery in post-summer activity in its first quarter, but expects ongoing macroeconomic uncertainty to weigh on its performance over the remainder of the year. Like-for-like net fees declined by 8% year-on-year over the three months to 30 September, with a 5% decrease in temp and contracting fees met with a 13% drop in the permanent side of the business. That followed a 9% overall LFL in net fees in the fourth quarter.

Compared with the fourth quarter, LFL net fee declines worsened in Germany (to -7% from -5%) and the Rest of World category (to -10% from -9%), but eased in the UK and Ireland (to -9% from -13%) and Australia (to -5% from -10%).

Notably, the company delivered 4% net fee growth from its large enterprise clients during the quarter and "good" temp and contracting net fee growth in several of its focus countries like Spain (+27%), Italy (+12%) and the US (+2%).

Year-on-year consultant net fee productivity growth accelerated to 7% in the first quarter, which Hays put down to a "continued focus on resource allocation", while consultant headcount declined by 4% quarter-on-quarter and 15% year-on-year.

"Our initiatives to improve consultant net fee productivity in real terms through our Five Levers strategy and structurally lower our cost-base will be key drivers of profit recovery," said chief executive Dirk Hahn.

Hahn reiterated his confidence that Hays would "benefit materially" when markets eventually recover, but the firm's outlook remains subdued.

"We expect near-term market conditions to remain challenging and, although we have limited forward visibility, we believe this is likely to persist through FY26," the company said.