Hays suffers 47% dip in annual profit

Hays has suffered a 47% dip in annual profit.

The FTSE-listed recruiter said “challenging” conditions for “perm and temp” hiring was behind it profiting about half as much as it did in 2023.

But instead of citing its £105million in operating profit (down from £197m), press titles splashed that Hays’s profit has ‘sunk by 92%.’

Online, the figure riled candidates which Hays has placed, like users of limited companies, who observed that the 92% only relates to profit before tax.

Even so, profit was “significantly impacted” in the 12 months to June, said Hays’s CEO Dirk Hahn, tumbling from £192m to £14.7m.

'Longer than normal time-to-hire'

Hahn blamed “low confidence levels,” and “longer-than-normal ‘time-to-hire” -- which ContractorUK reported hitting techies in May.

Similar to Hahn saying those issues aren’t just affecting the UK (he pointed to Germany and Australia too), it’s seemingly not just Hays.

“Over the past 12 months…the recruitment industry across Europe has faced similar challenges,” a systems and data contractor began, in a social media post.

“The drop in Hays’s profits…[looks to be] part of a larger trend reflecting broader economic uncertainties and reduced hiring activity.

“Companies have been hesitant to expand their workforce[s], leading to decreased demand for recruitment services….[and that’s why] it is not just Hays, [it’s] other [big-name agencies] as well.”

'Adecco, Michael Page and Manpower are next'

Tech recruiter Matt Collingwood says other bellwethers of business confidence will warrant a beady eye when they update the markets shortly.

“I’ll be interested to see the next results from Adecco, Michael Page and Manpower,” Collingwood, boss of VIQU, said after Hays’s update on Thursday.

He added: “[But actually] I don't think…[our smaller staffing business has] ever been as busy as [in] the last few months. Could we be seeing the end of the corporate recruitment machines?”

'By the time they shortlist, we've completed interviews'

Asked on LinkedIn, the agency boss's question led to a flurry of suggestions as to why larger technology recruitment agencies appear to be struggling.

A boutique agency-owner hinted that big agencies can be too slow, as “by the time they are shortlisting, we have completed interviews.”  

Another staffing captain, Anthony Pierce of AP Talent Solutions, said many big agencies hired too many people, just to “fill jobs” in 2022.

Pierce said such recruits “could not then do [Business Development] basics” in 2023, yet some agencies are “still carrying” such agents today.

'Average recruiters'

Meanwhile, a C-suite recruiter said nationwide contracts to hire specialist, back-office managers often leave too small a commission to be appealing.   

“The good recruiters [therefore] leave for specialist firms who pay much better,” said the executive-level recruiter, Max Forsyth.

“You - [the large agency] - [get] left with average recruiters who can’t fill specialist roles. And [you get left with exasperated] client hiring managers.”

'Hays lost the personal touch'

Pointing the finger directly at Hays, a digital transformation consultant shared the experience of ‘STEM’ candidates like him.

“Many really skilled workers I know in the STEM industries simply won't work with Hays…because they have lost that personal touch”.

The consultant, Mike Breidenbach, said in his experience big agencies increasingly ‘fail at getting the best deal for candidates.’

In late May 2024, Hays was criticised online for offering a Project Support Manager Role, inside IR35, for “up to” £110 a day.

'29 hours a day down the mill, and then paying the mill'

In the same month, a ContractorUK Forum user complained that a Service Desk Analyst role, also via Hays, paid just £11.80 an hour.

“That equates to £88.50 for a typical 7.5 hour working day,” posted the user, edison.

“[The Hays advert specifies] security clearance too. [But] at this [low advertised] rate, contractors will be working twenty-nine hours a day down the mill. And paying the mill!”

Often, news of an agency offering low rates, or low-balling, or not seeming to get the best for a candidate, can “spread quickly.”

'Candidate-trust'

Issuing this alert to his agency ‘followers’ last week, one IT contractor continued:

“We still get the roles but the commissions [just don't] go to [such an agency] business.

“I think that on that score, [such an agency] would have a lot of work to do to win back candidate-trust.”

At the time of writing, Hays has a score on Trustpilot of 1.7 out of 5.0, ranking it as “Bad.”

Verified reviews posted by candidates placed by Hays are headed “Not a good experience;” “They fob you off” and “Waste [of] time.”

But some of the 331 reviews of Hays on Trustpilot also state “Most helpful in every way,” “Completely understanding” and “Extremely efficient.”

'Best agency -- in comparison to others'

Writing on Reddit, where Hays’s 47% annual profit-slide is still being discussed, one user echoed:

“Strangely, Hays has been the best agency that I have worked with a few times -- in comparison with all the others.”

In 2018, Hays scooped ‘Best IT Contractor Recruitment Agency’ at ContractorUK’s Reader Awards.

But the recruiter has been unable to retrieve the title since, with it being lifted in 2019 by Trust in Soda; in 2022 by SRG, and in 2023 by SThree.

The Contracting Awards (as the event is now called) revealed a nominations shortlist for its 2024 awards ceremony on November 13th last week, and Hays is among five competing for the title of ‘Best Contractor Recruitment Agency.'

'Restructuring, repositioning'

In its market update on Thursday, Hays said it was working on “driving consultant productivity”.

In wake of its 47% profit-dip, the company also said it had made a “strong start” on “restructuring” its operations and “repositioning” its business.

Hays shares fell Thursday on the back of its trading update but later were up 1.4% as the results were no worse than expected due to a profit warning in January 2024, following a “difficult December” 2023.