Global recruitment slowdown persists, says leading recruiter Hays, with a notable drop in UK fees reported over the summer. The recruitment agency, specializing in sectors like accountancy and technology, witnessed a 20% decrease in fees for the UK market during the three months ending on September 30.
Dirk Hahn, the Chief Executive of Hays, acknowledged the challenging market conditions, citing prolonged hiring processes and decreased confidence levels as contributing factors that are expected to persist in the near future. The subdued hiring trend aligns with a broader global decline in recruitment activity, prompting Hays to reduce its consultant workforce by approximately 25% over the past 18 months.
Further efforts to streamline operations saw an additional 2% reduction in headcount announced by the company. Hays has consolidated its footprint by closing or merging 17 offices worldwide within the last year, including 12 closures between April and June. Fee reductions were also evident in key markets like Germany and Australia, resulting in a 14% decline in fees across the organisation.
Despite the overall downturn, Hays noted a relatively stronger performance in temporary job placements compared to permanent roles, indicating a heightened sense of caution among employers. Temporary job fees saw a lesser 16% decrease in the UK, in contrast to a more significant 26% decline in permanent positions.
The private sector demonstrated subdued hiring activity, albeit holding steady, while the public sector experienced a modest quarterly reduction, as highlighted by the company. In response to the challenging economic landscape, Hays announced plans to cut costs by around £30 million following a year of nearly minimal profits.
While the market responded positively to the news with a 1.9% increase in shares on Friday morning, the company’s shares remain down by 20% year-to-date. The persistent hiring slowdown and fee reductions underscore the ongoing impact of global economic uncertainties on the recruitment industry.
In conclusion, Hays continues to navigate the demanding recruitment environment with a focus on cost-efficiency and adaptability in response to evolving market dynamics.