Recruiter Hays warns on profit amid hiring slowdown
Reuters
Published Jan 09, 2024 07:20
Updated Jan 09, 2024 08:20
(Reuters) -Recruitment firm Hays (LON:HAYS) on Tuesday forecast lower-than-expected first-half profit and said the short-term outlook will remain challenging amid a hiring slowdown as a weak macroeconomic outlook weighs on global markets.
Shares in the FTSE 250 firm fell as much as 19% to a more than three-year low of 87.1 pence, bottoming the mid-cap index.
Some of the top UK-listed recruiters in recent times have highlighted the challenging market conditions, with job candidates avoiding the risk of switching jobs and employers offering lower salary hikes amid broader economic uncertainties.
"Overall market conditions became increasingly challenging through the quarter, including a clear slowdown in most markets in December, notably in our Perm businesses as client and candidate decision-making slowed," CEO Dirk Hahn said in a trading statement.
Hays, which in October had flagged a persistent weakness in hiring permanent workers and weak demand in China, said group fees dropped 10% in the second quarter ended Dec. 31, pressured by a "more difficult" December, where fees fell by 15%.
London-headquartered Hays said volumes in its temporary hiring segment - its largest business and a key strategic focus - declined 5% year-on-year amid a lack of a normal seasonal step-up in worker volumes, including in its biggest market Germany.
Hays said it expected first-half pre-exceptional operating profit to be below market expectations at about 60 million pounds ($76.4 million), hurt by a hiring slowdown at the end of the December quarter.
The consensus operating profit for the first half of fiscal 2024 was 73 million pounds, according to a company-compiled analysts' estimate.
The company said it would incur an exceptional restructuring charge in the first half of its 2024 fiscal of about 12 million pounds related to cost-saving measures.
($1 = 0.7851 pounds)
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Written By: Reuters
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