Hays' quarterly recruitment fees drop on German hiring slowdown

Wed, 14th Jan 2026 13:05

Second quarter like-for-like net fees drop 10% versus ⁠9% forecast

First half ‌adjusted operating profit forecast to drop ⁠22%

Shares drop around 5% to lowest since December 2011

Jan 14 (Reuters) - Recruiter Hays reported a bigger-than-expected drop in quarterly ‍net fees led by weaker technology and engineering hiring in its biggest market Germany, hitting ⁠its shares on Wednesday.

The British company expects pre-exceptional operating profit for the six months ended December to be about 20 million pounds ($26.89 million), down 21.6% from a year earlier, after reporting a 10% drop in its second-quarter like-for-like net fees, against expectations of a 9% drop.

Persistently weak global hiring coupled with dour business confidence and heightened macroeconomic uncertainty has weighed on Hays as employers delay filling positions.

Hays shares were down about 4.8% at 1241 GMT to 48.5 ‍pence, hitting their lowest since December 2011.

Brokerage Jefferies said Hays' second-half profit forecast of 20 million ‌pounds looked "too optimistic" after the tough second quarter ended December.

GERMAN MARKET WEAKNESS

German public and private companies have cut average working hours to ‌manage costs amid a sluggish job market, hurting temporary and contracting revenue at Hays.

Hays saw double-digit declines in net fees from key sectors such as technology and engineering in Germany, ‌which accounts for 33% of its net fees. Overall, its German net fees missed market expectations.

CEO Dirk Hahn is counting on hiring levels to recover as companies reset budgets and job seekers reassess goals.

"While it is difficult to predict timing, we know our markets will recover," CFO James Hilton told journalists ⁠on a conference call.

Recruitment in the UK and Ireland, which ‍contributes 20% of net fees, was also weak during the quarter, with like-for-like fees falling 9%, though better than the 10% drop expected by analysts in company-compiled consensus.

Peer PageGroup on Tuesday posted a smaller-than-feared drop ⁠in quarterly profit as China returned to growth, but weakness in Europe raised questions about its dividend and outlook, knocking its shares lower.