Hays Group recently announced a 10% decline in group fees during the second quarter of the company’s 2024 financial year. The company attributed this quarterly decrease to a challenging December, where fees saw a 15% drop. Within the UK & Ireland (UKI), net fees experienced a 17% decrease. Temporary fees, constituting over half of UKI fees, fell by 13%, while permanent fees had a more significant drop of 21%. Private sector fees, which consist of 64% of Hays’s UKI fee revenues, decreased by 21%, while public sector fees declined by 6%. Due to the slowdown in the quarter’s final days, Hays anticipates a pre-exceptional operating profit of approximately £60m for the first half of the year, falling below the current market consensus expectations. The company noted a 5% reduction in consultant headcount for the quarter and a 12% year-on-year decrease. They also reduced non-consultant headcount by 3% in the quarter. Hays aims to achieve annualized savings of around £30m in the first half of 2024 through cost reduction measures, with additional significant savings expected in the latter half of the year. Consequently, an exceptional restructuring charge of approximately £12m is expected in the first half of FY24.
Hays CEO Dirk Hahn said “Overall market conditions became increasingly challenging through the quarter, including a clear slowdown in most markets in December, notably in our perm businesses as client and candidate decision-making slowed. Temp volumes remained broadly stable sequentially through the quarter, but declined YoY as we did not see our normal seasonal step-up in worker volumes. As a result, we expect operating profit in our first half to be c.£60m, despite our ongoing actions to reduce costs. Given increased uncertainties and reduced client and candidate confidence, our New Year ‘return to work’ is particularly important, and we are closely monitoring activity levels. It is too early to say if December’s weakness reflects a sustained market slowdown or some placement deferrals, however, we expect near-term market conditions to remain challenging. Consequently, we accelerated our cost reduction and efficiency programmes, while focusing on increased operational performance and rigour.”