Recruiter Hays is a strong barometer of the underlying jobs market, and today’s results will come as a warning to businesses and the UK government.
Hays said its fee decline eased in the latest quarter, but its temporary staffing business proved resilient with North America returning to growth.
The company reported a 3% like-for-like drop in net fees in the three months to 30 September, an improvement on recent quarters, with temporary and contract placements down just 1% but permanent recruitment down 7%, reflecting continued caution among employers over hiring. Germany and the UK, two of its biggest markets, both saw fees fall, while North America grew, with the US and Canada up 8% and 12%.
The recruiter said it was pressing ahead with its “Momentum” strategy, which involves focusing on fewer countries, cutting costs and investing in technology.
It is targeting around £50m of further annual cost savings this year, delivered about £10m in the quarter, and reported a twelfth straight quarter of growth in consultant productivity.
It has also signed an AI partnership with Synthesia and is rolling out a new customer relationship management system. At least Hays is investing in the same technology driving some of its fee erosion.
Hays, which is reshaping its business around 16 core countries and exploring the sale of several other operations, said it expected stable market conditions in the near term, with temporary staffing more resilient than permanent hiring.
It ended the quarter with net debt of about £45m, having held net cash three months earlier.