Hays has lowered its annual profit forecast and painted a grim picture for the UK recruitment sector, further highlighting the difficulties plaguing the global job market.
The London-based firm anticipates pre-exceptional operating profits to be around £45m in 2025, significantly below the analyst consensus of £56.4m, as reported by City AM.
Shares plummeted over 13% in early trading.
Companies are wrestling with hikes in national insurance contributions and the worldwide uncertainty sparked by US tariffs. A February industry survey revealed the harshest job market conditions since the pandemic.
On Thursday, Hays cautioned that it foresees “challenging market conditions to persist into 2026” as it aims to boost net-fee productivity.
The fourth quarter’s activity levels were hampered by a slump in permanent hiring, attributed to “low levels of client and candidate confidence as a result of macroeconomic uncertainty.”
Hays predicts a nine per cent year-on-year decline in group like-for-like net fees for the fourth quarter.
In Germany, the company’s largest market, net fees dipped five per cent year-on-year due to “weaker conditions” in both temporary and permanent sectors.
Over the past 12 months, Hays’ shares have nosedived more than 30%.
The FTSE 250 company had already issued a warning in April about economic uncertainty and a challenging job market.
Recruitment market ‘rough,’ says Hays CFO
Acknowledging the turbulence faced by the recruitment industry, Hays’ chief financial officer, James Hilton, expressed the difficulties saying, “It has been a pretty rough recruitment market for the last two years,”.
Emphasising the extent of the issue, he added, “These are challenging markets and we see that across Europe.”
On Thursday, Hays reaffirmed its dedication to implementing a “focused strategy” designed to navigate the tough environment.
Highlighting the path towards recovery, Hays indicated, “Our initiatives to improve net fee productivity in real terms and back-office efficiency will be important drivers of medium-term profit recovery when the market recovers.”
