A slump in hiring activity at businesses around the world means profits will more than halve at Hays, the global recruitment company has warned, sending its shares down more than 10%.
Demand for new permanent staff has fallen sharply, reflecting “low levels of client and candidate confidence as a result of macroeconomic uncertainty”, Hays told investors in an unscheduled update.
The recruiter, which finds workers across the world for corporations such as Airbus and Sony, now expects its pre-exceptional operating profit to be about £45m for its current financial year, compared with City expectations of £56.4m. Last year Hays reported a profit of £105.1m.
Analysts at the broker RBC Capital Markets said in a note: “This is not wholly unsurprising given the enhanced macro-political uncertainty, and the fact that new job inflow is reducing … it is clear that a recovery is unlikely anytime soon.”
Hays said it expected like-for-like net fees to be down 9% in the final quarter of its financial year. Fees from the permanent job market were expected to drop by 14%, with temporary and contracting work down 5%.
Shares in Hays fell by as much as 20% in early trading on Thursday, sending it to the bottom of the FTSE 250 index of medium-sized companies and to its lowest level in 13 years. The shares pared back the loss over the course of the morning, trading down 11% by midday.
The warning also pushed shares in the rival recruiter PageGroup, which generates just under three-quarters of its fees from permanent hiring, down by 8%. Shares in its Dutch rival Randstad also dropped by 4% in early trading.
Hays said that in Germany, which made up about two-thirds of the company’s operating profit in 2024, temporary hiring was also affected because of its high exposure to the car industry. The sector was already struggling, with profit warnings at BMW and Mercedes and moves to shut factories at Volkswagen, and has been hit further this year by the uncertainty around US trade tariffs.
Hays said it expected net fees to drop 13% in the UK and Ireland, and by 9% in Australia and New Zealand.
This month, official figures showed that more than 250,000 jobs have been lost in Britain since Rachel Reeves’s autumn budget. Separate figures from the Office for National Statistics showed that the UK unemployment rate rose to 4.6% in the three months to April, up from 4.5% in the previous three-month period, to reach the highest level since July 2021.
