Hays rises as temporary contract demand offsets long-term rentals

Hays posted strong second-quarter growth as companies ramped up hiring of temporary contract workers.

Although employer FTSE 250 failed to post record performance in the first quarter, its net fees increased 11%, supported by a weaker pound and a greater focus on high-value territories. Best.

Hays noted that fixed hiring declined slightly during this period, driven by consumer and client uncertainty, particularly in the United States.

While fees in the fixed segment were up 7%, they increased at a faster rate in the temporary and contract business for the first time in seven quarters.

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Similar growth was mainly driven by record results in its largest market, Germany, thanks to a large number of contractors and soaring demand from the human resources, engineering, accounting and finance sectors.

Eight other countries earned the group’s best-ever fees, as well as its tech expertise despite widespread industry-wide layoffs and extremely strong comparative performance. in the previous year.

Since Covid-19 restrictions began to be eased in 2021, the recruitment industry has benefited from a resurgent employment environment but is also experiencing a shortage of candidates in many areas.

Employers have responded to the tightening labor market by raising wages, thereby providing unexpected profits for companies like Hays, whose earnings are often based on a percentage of daily wages. year of successful candidate.

However, as central banks gradually raise interest rates to try to cushion price increases and consumers ease their spending habits, employers are becoming more cautious with their hiring plans.

However, chief executive officer Alistair Cox said structural trends affecting the job market have put the company in a good position to grow further.

He told investors on Tuesday: ‘Our key markets continue to be characterized by acute skills shortages and wage inflation, and our focus is on adding to the margin. costs while strictly managing overheads.

‘I am confident that our globally experienced management team will continue to navigate the short-term macroeconomic challenges while taking advantage of the long-term opportunities that are already evident.’

Operating profit for the six months ended December is forecast to be between £95 million and £97 million, down slightly from the same period last year, but the overall range is in line with company expectations.

Last week, British employers PageGroup and Robert Walters both lowered their annual earnings outlooks due to a tougher economic backdrop.

Shares of Hays rose 1.9% to 121.3p shortly before trading closed, making it one of the ten biggest gainers on the FTSE 250 Index.