Why Hays’ first half results should have us worried about the job market
The chief executive of global recruitment firm Hays has said he is “not satisfied” with the company’s performance as demand for permanent jobs slipped again amid an increasingly difficult economic environment.
Frontman Dirk Hahn said the FTSE 250 firm was trading in “challenging conditions,” as it reported a 15 per cent decrease in permanent job role fees during the half year.
Temporary placement fees were more resilient, down only 3 per cent on last year.
Hays cut over 1,000 job roles last year in response to the slow down and to save around £30m.
Hays released a profit warning last month, coming at the same time as downbeat updates from fellow recruiters Robert Walters and Page Group.
Recruitment firms often act as a canary in the coalmine for the wider economy.
Hahn said today: “The half-year saw increasingly challenging conditions, with a clear slowdown in most Perm markets in December, while our larger temp and contracting business again showed greater resilience.
“We acted decisively to drive consultant productivity, better align our operations to market conditions and opportunities, and reduce costs.”
He added: “I am not satisfied with our profit performance. Our focused strategy targets the many structural growth opportunities we see, while driving profitability through increased resilience, operational rigour and enhanced execution.
“We will also be guided by our ‘Golden Rule’ for our businesses, namely that operating profit growth should exceed fee growth, which in turn should exceed headcount growth through the cycle.”
Underlying profits came in at £60m, in line with what the company had predicted when it warned on its earnings late last year.