International recruiter Hays reported a 43% drop in profits to £151m for the 12 months to the end of June as net fees plunged by 18%. However, the company says the UK jobs market is stabilising. 

Permanent jobs took the biggest hit with fees down 29%, with the temporary market recording a 7% fall.

In the UK and Ireland, net fees declined by 27% to £383.7m, with operating profit down 54% to £63.5m. Permanent placement net fees decreased by 40% as market conditions deteriorated in Hays’ private sector markets. Temporary placement net fees decreased by 15%, with most of the decline in the second half of the year.

Hays says it has continued to take action to address the falls in demand. During the past 12 month it reduced its UK headcount by 26% and closed 43 offices as it sought to consolidate office space.  

The company says the withdrawal of the staff hire concession on 1 April has resulted in a reduction of around 800 temporary workers hired through Hays (around £5m in net fees) as the cost of temporary workers became more expensive for a number of clients. 

Alistair Cox, Hays’ chief executive, says: “The recruitment markets in the past year have been the most challenging on record. However, Hays has performed creditably due to our scale, the strength of our market positions, our early action to address the cost base and our ability to redirect resources to more resilient sectors such as education, healthcare, oil & gas and pharmaceutical.

“We are also continuing to gain market share across the world and are investing in new markets including India and Russia. In addition, we are very pleased to have signed a series of significant recruitment contracts with leading global companies drawing on the full range of our expertise.
 
“Currently we are seeing initial signs of stability in the UK and Asia Pacific markets, although no indications of recovery. The Continental European markets, which entered the downturn later than the other regions, are still experiencing deteriorating conditions.”