Thursday 26 August 2021 3:32 pm

Net fees slip at recruitment giant Hays as Covid rocked business confidence

Net fees at recruitment giant Hays have dropped eight per cent as the firm grappled with the Covid-19 impacts of rocky business and candidate confidence.

The group’s total fees fell from £996.2m to £918.1m in the year to 30 June. Meanwhile, the firm’s operating profit also dropped 30 per cent from £135m to £95m.

Shares jumped 4.01 per cent to 163.3p per share in its afternoon trading.

However, Hays reinstated a special dividend this year, at 8.93p per share after a more positive second-half performance which its boss has confirmed it will increase again in November. While its basic earnings per share lifted 17 per cent to 3.67p in the period.

“As business and candidate confidence increased globally, our management actions drove record consultant productivity, leading to a strong recovery in fees and profits. This included our largest markets of Germany, Australia and the UK,” recruitment boss Alistair Cox said.

The boss added that across all its markets, “there are clear signs of skill shortages and wage inflation in certain industries, particularly technology and life sciences.”

Despite the modest growth, Cox said that the firm begins the new financial year with a solid momentum.

“Overall, the strength of the recovery has been dramatic. We now see a clear route back to, and then exceeding, pre-pandemic levels of profit, faster than we envisaged even six months ago.

“With such confidence in our future, we are proposing to resume core and special dividends, paying a total of 10.15p per share to shareholders in November,” he said.

Partner at Begbies Traynor Julie Palmer said: “The strength of the recruitment sector has been remarkable given the fact the entire globe was brought to a standstill just 18 months ago.

With people fighting for jobs, switching sectors after the pandemic shut down their original industry and with inflation creeping up and making people search for better wages, Hays has seen a fluctuation of candidate traffic.”

However, Palmer cautioned that the firm “ought to remain alert”.

“It wasn’t too long ago where the company had to cut 1,000 jobs amidst the pandemic bomb that set industries across the country ablaze and these results aren’t as good as they could have been,” she said.

“Even though the economy is recovering and the country is slowly picking up after the devastation, we never truly know what will land on the market that could destroy and damage the recruitment sector once again.”