Hays profits plummet due to hiring slump in Europe

In the latter half of 2024, Hays, a major recruitment agency headquartered in London, experienced a significant decline in its operating profit, which fell by 56% compared to the same period in the previous year. The company reported an operating profit of £26 million, affected by slowed hiring practices across the UK and Europe amidst economic and political uncertainties. Throughout the year, Hays closed 15 of its offices in the UK and Ireland and reduced its workforce by over 1,100, a move reflective of broader trends affecting the job market. The economic climate in Europe has become increasingly challenging, with various factors contributing to lower hiring rates. Hays attributed part of this slowdown to considerable challenges stemming from economic conditions, exacerbated by electoral events and shifts in political sentiment across Western Europe. Many companies adopted a more cautious approach to hiring, resulting in prolonged recruitment processes and a decrease in placement volumes. In this context, Hays also noted a 13% drop in fees generated across the group over the six-month period ending December 31. Specifically, the UK and Ireland markets demonstrated the most significant decline at 17%. The chief executive, Dirk Hahn, emphasized that instability in client and candidate confidence is a barrier to recovery, though he remains optimistic about potential future improvements. To mitigate the challenges, Hays implemented cost-cutting measures to the tune of approximately £25 million annually, aimed at increasing operational efficiency. The recruitment firm's market leadership allowed it to adapt more swiftly than smaller competitors, which are likely to struggle under similar pressures. The long-term outlook will heavily depend on recovery in hiring practices which could help recover the lost profits.