Hays LON: HAS reported an 8% year-over-year decline in group net fees in its trading update for the quarter ended March 31, 2026, as demand for permanent hiring remained weaker than temp and contracting markets. Speaking on the company’s conference call, Chief Financial Officer James Hilton said Temp and Contracting net fees fell 6% while permanent placement net fees dropped 12%.
Despite the lower fee base, Hilton said “strong consultant net fee productivity growth and cost discipline continues to offset lower net fees,” adding that the company still expects fiscal 2026 pre-exceptional operating profit to be in line with consensus expectations. He also pointed to “heightened global macroeconomic uncertainty,” while noting that temp and contracting markets are showing greater resilience than permanent hiring.
Group performance: productivity gains and cost actions
Hilton said the group saw a “modestly stronger return to work” in the U.K. & Ireland and ANZ during the quarter, while Germany’s decline in volumes and hours worked was “in line with our expectations.” On a volume basis, group Temp and Contracting volumes decreased 5% year-over-year, including Germany down 9%, U.K. and Ireland down 8%, ANZ down 6%, and the rest of world up 2%.
Permanent net fees decreased 12%, driven by a 15% drop in volumes. Hilton said this was partly offset by a 3% rise in the group’s average permanent fee, which he attributed to actions “to target higher salary roles.”
Hays highlighted continued restructuring and efficiency efforts:
- Average consultant net fee productivity rose 7% year-over-year in Q3, marking 10 consecutive quarters of seasonally adjusted productivity improvement, which Hilton described as “sector-leading.”
- Consultant headcount fell 3% in the quarter and 14% year-over-year, while non-consultant headcount ended the quarter down 7% year-over-year.
- Hays delivered an additional GBP 15 million per annum of structural cost savings in Q3, bringing FY 2026 annualized savings to GBP 30 million and cumulative annualized structural savings since the start of FY 2024 to GBP 95 million.
The company ended the quarter with net debt of approximately GBP 15 million, which Hilton said was in line with expectations and reflected normal seasonal cash flows.
Regional trends: Germany, U.K. & Ireland, and ANZ
In Germany, Hays’ largest market, fees declined 11% year-over-year. Temp and Contracting fees were down 11%, with volumes down 9% and an additional 2% impact from “negative hours and mix.” Hilton said the decline in average hours worked was concentrated in public sector and Enterprise Solutions clients after federal budget approval was delayed, while placement volumes “have remained resilient.”
Germany’s permanent business was “sequentially stable,” and the year-over-year decline eased to 10%. Hilton detailed a mixed specialism picture: technology was flat year-over-year, engineering was down 27% (impacted by the automotive sector), accounting and finance fell 22%, while construction and property grew 37% and now accounts for 9% of German net fees.
In the U.K. and Ireland, fees fell 10%. Temp and Contracting declined 6%, while permanent fees dropped 15%. Hilton said the private sector was down 8% and the public sector down 13%. Technology was flat, while construction and property and accountancy and finance decreased by 8% and 6%, respectively. Enterprise fees declined 4%, and office support was flat as the company’s focus on higher salary roles offset lower junior volumes. Consultant net fee productivity increased 11%, and Hilton said average candidate salary growth remained elevated at 8% for permanent and accelerated to 9% in Temp and Contracting.
In ANZ, fees decreased 2% year-over-year. Temp and Contracting declined 1% with return-to-work “modestly ahead of previous years,” while permanent fees fell 6% as conversion became more difficult. Hilton said the private sector was down 1% and the public sector down 6%. Construction and property rose 6%, office support increased 7%, and accountancy and finance rose 5%, while technology declined 11%. Australia was down 2% and New Zealand down 11%.
Rest of world: mixed demand, North America pipeline, and Asia strength
In the rest of world division (24 countries), like-for-like fees decreased 6%. Temp returned to growth, up 3%, while permanent fell 12%. Hilton reminded listeners that reported growth rates include the impact of previously announced exits from Chile, Colombia, Thailand, and Mexico.
In EMEA ex-Germany, fees declined 8%. Hilton described France as “tough and loss-making,” with fees down 17%, but said actions to address productivity and costs were on plan and that he expected improvement in the second half. Southern Europe was a bright spot, with Spain and Portugal delivering record quarterly net fees, up 17% and 6% respectively, and Poland up 2%.
In the Americas, fees decreased 7%, including the U.S. down 8% and Canada down 2%, while Brazil fell 12%. Hilton said Hays had previously highlighted a “substantial bid pipeline” with large enterprise clients in North America and reported that “several contracts have now reached final close,” with mobilization expected over coming quarters. In response to a UBS question, he added that several enterprise wins were concentrated “in North America and in the U.S., in particular in the tech sector.”
Asia fees increased 8%, led by Japan up 33% on strong Temp and Contracting growth and an easier comparable, with mainland China up 16% and Hong Kong up 9%. Asked to expand on Japan’s performance, Hilton said growth reflected returns on investments made “over the last couple of years” in contracting, with engineering and technology contracting growing “at north of 40% year-on-year.”
Outlook: CEO search, restructuring costs, and Middle East monitoring
Hilton said Hays had seen “little to no impact at all” in fees or forward indicators from developments in the Middle East so far, while emphasizing that the company remains vigilant and is focused on employee safety, including roughly 70 colleagues in the UAE. For Q4, he said consultant headcount capacity is “appropriate for current market conditions” and is expected to remain “broadly stable,” though Hays will continue reallocating resources between business lines.
On restructuring, Hilton said the acceleration of the cost program has resulted in around GBP 20 million of exceptional restructuring costs to date in FY 2026. In response to an RBC question on charges in the second half, he said Hays incurred about GBP 10 million in H1 and expected “a similar level in Q3,” with “highly likely” further costs in Q4.
Hilton also addressed governance, saying interim CEO Mark stepped into the role in February and that it is “very much business as usual” while the board evaluates internal and external candidates for a permanent appointment.
Hays said there are no material working day impacts anticipated in Q4 2026. Hilton said the company would provide its next update with Q4 results on July 10.
About Hays LON: HAS
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