Hays scores record fees on back of robust temporary job market

Hays has achieved its best-ever quarterly result following record fee earnings in eight countries and a growing shift among employers towards temporary hiring.

Net fees at the recruiter grew by 5 per cent on a like-for-like basis for the three months ending March, despite heightened global economic pressures and 10 per cent overall thanks to a depreciating pound sterling.

Longer contract extensions helped fees from interim placements expand by 11 per cent, offsetting a decline in its permanent hiring segment as uncertainty made companies take longer to bring on full-time workers.

In Hays’ largest market, Germany, net fees shot up by 23 per cent to record levels amid skills shortages and high demand for talent from the technology, engineering, accountancy and finance sectors.

The FTSE 250 firm also achieved its highest-ever quarterly fees in Switzerland and France, where they jumped by 15 and 16 per cent respectively, while they soared by more than half in the United Arab Emirates.

Performance was weaker across the British Isles and Australia, due to declining business from permanent hires and major regions like London and New South Wales.

Meanwhile, trading in China remained affected by the Covid-19 pandemic, even though the country’s government has significantly loosened lockdown restrictions.

Yet the London-based company anticipates a better operating profit and percentage of successful hires in the second half of the financial year.

Alistair Cox, the outgoing Hays chief executive, said: ‘Our key markets continue to be characterised by acute skill shortages and wage inflation, and we are benefiting from our early management actions to increase fee margins in skill-short markets.’

Employers across the world have been struggling to recruit new staff for the last two years amid a ‘great resignation’ of workers seeking better pay and conditions.

Many firms have offered big wage hikes to attract or retain talent, providing a bumper windfall for British headhunters, whose fee earnings are usually based on a percentage of a new hire’s annual salary.

The global jobs market has remained relatively buoyant, even as soaring energy prices and interest rate rises by central banks have slowed economic growth and hiring levels.

Technology companies, a core constituency of Hays’ earnings, have been at the forefront of headcount culls and recruitment freezes in recent months, as loosening pandemic-related restrictions mean people spend less time online.

Around 170,000 tech workers have already been laid off or are due to be made redundant in 2023, 6,000 more than during the whole of last year, according to the data tracker website Layoffs.fyi.

Many of the most prominent Silicon Valley giants, including Amazon and Facebook owner Meta have been among those to announce major layoffs.

Hays shares were 0.5 per cent higher at 114.6p on mid-Friday afternoon, although their value has shrunk by about 31 per cent in the past two years.