Hays records 14th quarterly net-fee decline as shares slide

what happened

Reuters reports that recruiter Hays posted its 14th consecutive quarterly fall in net fees on Monday. Weak recruitment in Germany’s automotive sector and Britain’s private economy outweighed gains in the US and selected Asian markets, sending the company’s shares down 10%.

Geopolitical tensions, tariffs and the conflict in the Middle East have restrained hiring and encouraged employers to use temporary or shorter contracts. Like-for-like net fees fell 3% in the quarter ending in September, ahead of the 4% decline analysts had forecast and less severe than the 8% drop recorded in the same period a year earlier.

US net fees increased 8%, supported by construction demand in the data-centre and energy industries. Canada delivered a 12% rise, China 27% and Japan 2%. Germany, however, recorded a 6% decrease, while fees in the UK fell 5%, with permanent and temporary recruitment both weak across the private and public sectors.

Hays finance chief James Hilton told analysts that the German temporary-staffing operation, which has exposure to autos, remained under heavy pressure, with temporary volumes down about 20% year on year. Under CEO Mark Dearnley, Hays is reorganising its portfolio, leaving several countries and concentrating on 16 core markets. The company said it was in advanced talks to sell operations in Belgium, Brazil, Greater China, Malaysia, the Netherlands, Singapore and the UAE. Hays expects market conditions to stay stable in the near term. Shares of Michael Page, Adecco, Randstad and Robert Walters fell 2.6% to 5% by 0830 GMT.

why it matters

Persistent weakness in Europe is weighing on recruitment stocks, while US and selected Asian markets provide relative support for sector activity.

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