Recruiter Hays has reported yet another fall in fees as it struggles amid a sharp downturn in the market.
Group net fees, a key performance indicator in the recruitment sector, fell by 14 per cent year on year in the three months to 30 September, with fees in the UK and Ireland down by 20 per cent.
However, Hays said that consultant productivity rose by five per cent year on year, and it was on track to cut costs by £30m per year by the end of 2027.
Headcount at the recruiter has fallen by 18 per cent year on year, and two per cent in the last quarter.
The group continued to expect that profit this year will be “sequentially lower” than the last, and added that it expected “near-term market conditions to remain challenging”.
The recruitment market has been in crisis mode for multiple years, with cost-cutting across industries, caution over hiring from firms, and potential candidates’ reluctance to move job hitting firms hard.
Market leader Hays’ share price has fallen by more than 20 per cent in the year to date.
However, things are expected to pick back up again next year: Mintel has predicted a more rapid return to growth in 2025 amid a more positive macroeconomic climate. If the UK’s economy continues to pick up speed—as is hoped—business confidence should boost hiring.
Dirk Hahn, Chief Executive, said: “Net fees in the quarter were down as expected reflecting the tough market conditions, particularly in Perm where we see longer time to hire and low levels of confidence which we expect to continue.
“Given this backdrop, we remain resolutely focused on operational rigour through business line prioritisation, resource allocation, and efficiency initiatives and, due to our actions, Group consultant productivity increased by 5% YoY in Q1.
“We have a strategy in place to build a structurally more profitable and resilient business underpinned by our culture and talented colleagues worldwide. So, I remain confident that the business will benefit materially when our end markets recover.”