Thursday, 9 July 2009

Sunshine fails to make Hays

(By Anthony Miller – Thursday 9th July 2009 8:15am). Multidiscipline, international recruitment firm Hays gave an even grimmer view (if that were possible!) of market conditions than Michael Page did a couple of days ago (see UK slowdown slows at Michael Page). Hays CEO Alistair Cox (see Alistair Cox) reported “reductions in demand in all the 28 countries in which we operate”. Indeed Q4 net fee income (basically gross profit) declined 40% yoy like-for-like (see here), even worse than the -31% in the prior quarter (see Mixed bag of Easter trading updates). Hays’ UK business suffered more, with NFI down 45% (vs -37% in Q3) though Cox described the public sector business as “resilient” – even though fees decreased 3%. Permanent recruitment is even sicker (‑57% LFL) compared to -46% LFL the prior quarter. Hays pruned headcount 26% during the year – close to the one-third cull at Michael Page – and closed 15 UK offices.

In other words, it’s getting worse. Indeed, Cox reported demand continuing to weaken in both perm and temp businesses. Green shoots? Forget it!

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