Hays (LON:HAS) reported weaker year-on-year net fees in its trading update for the three months ended 31 December 2025 (fiscal Q2 2026), with management pointing to reduced average hours worked in Germany as a key headwind and highlighting continued progress on consultant productivity and cost reduction initiatives.
Group performance and profit outlook
Group net fees fell 10% on a like-for-like basis, with TEMP and contracting down 8% and PERM down 14%. Chief Financial Officer James Hilton said “strong consultant net fee productivity growth and cost discipline has broadly offset our lower net fees,” and the company expects pre-exceptional operating profit of around £20 million in the first half of FY26, including year-on-year increases in the UK & Ireland and Australia & New Zealand, and in line with consensus expectations.
PERM net fees fell 14% as volumes declined 14%, while the group average PERM fee was flat.
Productivity, headcount actions, and cost savings
Hays said it continued managing consultant capacity by business line. Despite “challenging markets,” the company delivered 6% year-on-year growth in average consultant net fee productivity in Q2, with notable increases in the UK & Ireland and ANZ. Hilton said, on a seasonally adjusted basis, productivity has now increased for nine consecutive quarters.
Consultant headcount declined 1% in the quarter and 15% versus the prior year. The company reiterated its structural cost savings plans, stating it will deliver circa £18 million per annum structural cost savings by the end of FY29, comprising the £35 million delivered in FY25 and the additional £45 million target communicated at full-year results. Hays said it has secured circa £15 million of annualized savings in H1 2026, with non-consultant headcount down 5% year-on-year exiting the quarter.
In the Q&A, Hilton added that the company expects about £30 million of in-year benefit from cost actions from a P&L perspective, “pretty broadly split” between halves, with roughly £17.5 million in the first half and £12.5 million in the second, reflecting timing and annualization.
Regional results: Germany, UK & Ireland, and ANZ
Germany, Hays’ largest market, saw fees down 14%. TEMP and contracting net fees fell 13% with volumes down 9% and a further 4% impact from “negative hours and mix.” Hilton said a modest decline in average hours worked through the summer accelerated during Q2, driven by cost controls among public sector and enterprise clients, “largely in the energy and infrastructure sectors,” after hiring ahead of fiscal stimulus and as federal budget approval was delayed. PERM fees in Germany declined 20%, with technology and engineering down 10% and 23% respectively; accountancy and finance down 22%; and construction and property up 36%, which management attributed to a focus on infrastructure and the energy sector. Consultant headcount in Germany declined 3% in the quarter and 14% year-on-year, while consultant productivity decreased 1% year-on-year due to reduced hours.
UK & Ireland fees decreased 9%, with TEMP and contracting and PERM both down 9%. Hays said private sector fees fell 5% and public sector fees declined 16%. By specialism, technology rose 4% and returned to year-on-year growth for the first time since Q2 2023, while construction and property and accountancy and finance declined 12% and 10%. Enterprise fees increased 3%. Consultant headcount fell 2% in the quarter and 22% year-on-year. Hilton said UK & Ireland productivity growth accelerated to 15% year-on-year in Q2 and the region returned to profitability on a pre-exceptional basis in H1 2026, aided by a greater focus on “high-skilled roles.” The company also noted year-on-year growth in average candidate salary accelerated from 5% in Q1 to 8% in Q2 in both PERM and TEMP and contracting.
Australia & New Zealand (ANZ) fees decreased 1% year-on-year, with activity improving slightly through the quarter. TEMP and contracting declined 3%, while PERM fees increased 2% and returned to growth for the first time since Q1 2023, driven by enterprise, executive, resources and mining, and banking sectors. Private sector fees rose 2% while public sector fell 6%. Australia was flat year-on-year, while New Zealand was down 15%. Consultant headcount declined 1% in the quarter and 10% year-on-year; productivity growth accelerated to 9% year-on-year. Hilton said ANZ delivered “good year-on-year profit growth” in H1 on a pre-exceptional basis, again citing a focus on higher-skilled roles. Average salary growth in ANZ PERM placements accelerated to 5% in Q2.
Rest of world, enterprise trends, and current trading sensitivities
In the rest-of-world division (26 countries), like-for-like fees declined 11%, with TEMP down 2% and PERM down 17%. EMEA ex-Germany declined 12%, with France down 21%; Hilton said cost and productivity initiatives in France were “being delivered on plan” and he expects an improved performance in H2. Southern Europe was stronger, with Portugal and Spain up 16% and 7%, and Poland up 3%. In the Americas, fees fell 10%, with the U.S. down 9% and Canada down 13%; LATAM declined 8%. Asia declined 3%, with Japan down 3% but “good growth” in TEMP and contracting; mainland China grew 3%, and Hong Kong rose 26%. Hays also noted it announced the closure of operations in Thailand in December. (Like-for-like figures exclude Chile and Colombia, which closed in June 2025.)
Hilton said enterprise client performance was “resilient,” with enterprise net fees down 3% year-on-year as growth in the UK & Ireland and ANZ was offset by contract losses in North America and Switzerland. In response to questions, he cited the loss of the company’s biggest RPO contract in North America, which he said drove an approximate five-point swing in enterprise growth. Hilton said Hays has a “really good pipeline of work,” is bidding selectively, and expects enterprise to “move forward” in the second half.
Looking ahead, management emphasized uncertainty around macroeconomic conditions and highlighted Germany’s reduced working hours and the “return to work” period after the holidays as key indicators for FY26 performance. Hays said consultant headcount capacity is “appropriate” for current market conditions and is expected to remain broadly stable in Q3, while the company continues efforts to structurally reduce its cost base. Hilton also said there are no material working day impacts anticipated in Q3 and Q4.
