Weaker economic outlook dents fee income at Hays

Hays reported a dip in quarterly fee income on Thursday, on the back of growing macroeconomic uncertainties.

The white collar recruiter, which specialises in both temporary and permanent positions, said net fees fell by 2% on both a total and like-for-like basis in the three months to 30 June.

Within that, the biggest falls were seen in the UK and Ireland, down 7% on a like-for-like basis, and in Australia and the rest of the world, off 15%.

Temporary and contracting - which accounts for 58% of growth fees - rose 4% but permanent was down 9%.

However, the firm insisted it remained on track to meet full-year guidance.

Alistair Cox, chief executive, said: "We delivered a resilient fourth quarter performance against a tougher market backdrop, and we expect 2023 full-year operating profit will be in line with market expectations.

"Growth was again drive by temporary and contracting, our largest business and key strategic focus. However, permanent hiring processes continue to lengthen.

"Despite macroeconomic uncertainties, our key markets remain characterised by skill shortages and wage inflation. Our early management actions to increase average fee margins and control our costs have underpinned our performance, and consultant productivity is good overall."

Analysts are expecting full-year operating profits of around £196m.

Despite high levels of job vacancies, recruitment confidence has been affected by weaker macroeconomic effects, including high inflation and increasing interest rates. A number of sectors, including technology and financial services, have also seen mass lay-offs.

Last week Hays’ rival Robert Walters also reported a slide in quarterly fee income.