Recruitment firm Hays fees drop amid dire jobs market
Recruitment firm Hays reported a drop in its annual net fees as the jobs market readjusted to the coronavirus pandemic.
The figures
Hays reported that profit before tax plunged 49 per cent from £246.3m to £126.2m, while operating profit dropped 46 per cent to £135m.
Group fees fell 11 per cent for the year as growth slowed during the first half of the year. The second half was characterised by the impact of coronavirus with fourth quarter fees plunging 34 per cent.
Operating profit dropped 45 per cent to £135m, while Hays was trading broadly breakeven in the fourth quarter.
Net fees fell 12 per cent to £996.2m, with fees for permanent jobs falling 15 per cent to £407.1m.
Why it’s interesting
Although fees took a hit from coronavirus in the fourth quarter of the year, fees between May and July were stable. Hays said it had seen modest signs of improvement as markets started to stabilise.
Fees in the UK and Ireland were down 14 per cent, while operating profit dropped 66 per cent.
Hays said external issues, such as the UK general election, bushfires in Australia and general strikes in France, contributed to an overall deterioration in fees for the second quarter.
Additionally, the severity of each country’s lockdown arrangements influenced its fee performance, with Australia and the US less affected than most of its European markets.
What Hays said
Hays chief executive Alistair Cox said:
“The pandemic severely impacted all our markets globally. Our priority was protecting our colleagues and supporting our clients and candidates as they adjusted overnight to new realities. Facing conditions far harsher than I have known, our business rose to the challenge and I am immensely proud of the commitment and innovation of all our people.
Overall, we have protected our business, while taking actions to appropriately reduce costs. Conditions in all regions were very tough, yet the business we have purposefully built showed its strength, with Temp outperforming Perm, relative resilience in technical sectors like IT & Life Sciences, and also growth in large Corporate Accounts.