Hays, a major recruitment firm, reported a 10% year-over-year decline in net fees for the second quarter, ending December 31, 2025. This downturn was driven by a 14% drop in permanent hiring and reduced average hours worked in Germany, which affected temporary and contracting revenues. Germany, a key market accounting for 31% of group net fees, saw a 14% decline in net fees, with temporary and contracting net fees falling 13% due to a 9% drop in volumes and further 4% impact from negative hours and mix. Permanent net fees in Germany also declined by 20%.

The company's performance in other regions varied. The UK and Ireland reported a 9% decline in net fees, with the private sector declining 5% and the public sector falling 16%. Australia and New Zealand saw a 1% decline in net fees, with a 3% drop in temporary and contracting fees, while permanent fees grew by 2%, marking the first year-over-year growth in the region since early fiscal 2023. The Americas and Asia also showed mixed results, with the Americas declining 10% and Asia showing a 3% decline, except for mainland China, which saw a 3% increase, and Hong Kong, which rose by 26%.

Despite the challenges, Hays reported strong consultant net fee productivity growth of 6% year over year. The company also expects to incur an exceptional restructuring charge of about £10 million in the first half of fiscal 2026 and has secured about £15 million in annualized structural cost savings toward a target of about £80 million by the end of fiscal 2029. CEO Dirk Hahn emphasized the company's operational progress and cost discipline, which have helped offset the lower net fees. Hays anticipates pre-exceptional operating profit in the first half to be about £20 million, demonstrating resilience amidst macroeconomic uncertainty and challenging conditions.

Hays' performance reflects broader trends in the recruitment industry, where economic uncertainties and shifting labor market dynamics have impacted permanent hiring and temporary staffing. The company's focus on operational efficiency and cost savings will be crucial as it navigates these challenges. Investors will be watching closely to see how Hays' strategic initiatives play out in the coming quarters, especially in key markets like Germany and the UK.