Hays, the U.K. recruitment company, has announced a decrease in group net fees for the first quarter of fiscal 2024. The company expects a decline in its conversion rate and operating profit.
Decrease in Group Net Fees
For the quarter ended September 30, Hays reported a 7% decline in group net fees on a like-for-like basis compared to the previous year’s record quarter. This decline can be attributed to longer hiring processes and a decrease in job flows.
The temporary and contracting segments, which account for 58% of the fees, remained stable due to increased fee margins and a focus on higher value markets. However, fees in the permanent segment, which make up 42% of group fees, saw a significant 15% decrease, with the private sector experiencing a 9% decline.
Dirk Hahn, Chief Executive Officer of Hays, commented on the performance: “Temporary and contracting, our largest business and a key strategic focus, produced a resilient performance, although permanent markets remain more difficult, with increased time-to-hire.”
Hays experienced fee growth led by Germany, its largest market. However, the EMEA region reported flat fees, while Australia and New Zealand, Asia, and the Americas proved to be the most challenging markets.
“Our key markets remain characterized by skill shortages and continue to be positively impacted by wage inflation,” Hahn added.
Outlook for First Half
Hays anticipates a decline in the first-half conversion rate and operating profit. This decline can be attributed, in part, to foreign exchange and working day effects. However, the company did not provide a specific figure.