Hays sees jobs market remaining under pressure well into 2026

Recruiter Hays said it saw the usual post-summer recovery in hiring activity, but revealed ongoing pressure on trading and cautioned the jobs market is set to remain challenging well into 2026.

The group reported an 8% drop in like-for-like net fees for its first quarter to the end of September, though it said overall trading remained stable, despite the decline.

UK and Ireland net fees fell by 9% and it revealed another cut to its workforce in the region, down by 7% during the quarter and 25% year on year.

Dirk Hahn, chief executive of Hays, said: “Despite ongoing macroeconomic uncertainty and challenging permanent (hiring) conditions, we experienced a normal recovery in post-summer activity levels and trading was stable on a seasonally-adjusted basis through the quarter.”

The firm added: “Given ongoing macroeconomic uncertainty, we expect near-term market conditions to remain challenging and, although we have limited forward visibility, we believe this is likely to persist through 2025-26.”

Hays – which is one of Europe’s biggest recruitment agencies – is cutting costs and reducing its workforce to counter the tougher trading, and said it had plans to strip out around another £45 million in costs by the end of 2028-29.

In the UK and Ireland, it said the public sector in particular was “tougher”, with net fees plunging 20% in the quarter against a 5% drop for the private sector.

Temporary and contracting net fees were “subdued through the quarter, notably in the public sector, and permanent remained challenging but stable”, according to Hays.

Alongside shrinking its UK and Ireland workforce, it has also been working to improve productivity, which increased by 14% year on year.

The group said efforts to drive down costs were ongoing, including plans to “de-layer haysplc.com management” and overhaul its office portfolio.

“As a result of these actions, pre-exceptional operating profit in the UK and Ireland increased year on year in the first quarter,” it said.

Hays recently warned that Britain was becoming a more “unattractive” place to hire people permanently as wage pressures and tax hikes push firms towards automation and offshoring.

In a report earlier this month, Hays UK and Ireland boss Tom Way said “wage pressures and national insurance changes are pushing employers to explore automation and offshoring”.

The national minimum wage rose in April, boosting pay for many workers but driving up labour costs for employers.

It came on top of many businesses having to increase their national insurance contributions as a result of tax changes outlined in last year’s budget.

Hays said the cost pressures have pushed companies to think about work where “humans are essential” and then digitalising or outsourcing the rest.