Hays consultants bill 61% more than local rivals during COVID crisis

The most recent Hays Australia and New Zealand (ANZ) results, released last Thursday along with the company’s global half-year update, demonstrate, no matter the economic conditions, the local Hays business has no peer when it comes to consultant productivity.

Here are the headline results based on my calculations from historical data and the H2 update (specific financial data was not provided, just percentage changes in selected markets).

Hays ANZ net fee income

SpecialismQ4 2020 FY
(AUD millions)
Quarterly average
2019 FY
(AUD millions)
2020 Q4 decline
compared to 2019
quarterly average
Construction & Property$13.8$2134%
Office Support$6.2$1248%
Accounting & Finance$5.7$1148%
IT$9.6$1113%
Other$29.7$3515%
Total$65$9028%

Note: Q4 2020 official Hays plc market update comprises percentage changes only; net fee income is permanent placement fees plus net temporary/contractor margin; all figures in italics are my estimates based on information provided in Hays plc official releases; all Hays plc official data is based on like-for-like fees, representing year-on-year organic growth at constant currency; the Hays plc financial year (FY) is 1 July – 30 June, Q4 is 1 April – 30 June

Other Hays ANZ 2020 Q4 data:

  • Australia total net fees declined 28%, New Zealand total net fees declined 42% (regional fee spilt: Australia 96%, NZ 4%)
  • All states reported fee declines (NSW 35%, Victoria 31%, Queensland 27%, WA 16%, and ACT 12%)
  • Temp net margin declined 18%, perm fees declined 52%
  • Private sector fees fell 31%, public sector fees fell 37%
  • Total consultant headcount dropped from 1008 to 805 in the twelve months to 30 June 2020 (April 2020 – June 2020 reduction was 125 consultants)

Recent Spencer Lane (SL) research of 180 Australian recruiters shows average recruiter 2020 quarterly gross profit (perm placement fee and/or temp margin) in Australia dropped 31 per cent in the June quarter ($47,496) from the March quarter ($68,889).

The 31% decline in 2020 quarterly average fee income provides a useful benchmark to the Hays Australia quarterly fee income decline of 28%.

However, this comparison is incomplete without an analysis of Hays’s data on a per-consultant basis.

It’s likely that the vast majority of the 125 Hays consultants who left the business in the June quarter did so in April or early May. For the sake of simplicity let’s assume a quarterly average of 850 consultants were responsible for the $65 million of fee income leading to a quarterly average per Hays consultant of $76,470.

The June quarterly average difference between a Hays’s consultant and a respondent to the SL survey is 61 per cent ($76,470 compared to $47,496).

The average SL survey respondent billed $68,889 for the (pre-COVID) March quarter which is still 11% less than the average Hays consultant billed for the COVID-impacted June quarter.

That’s an outstanding result and testament to the strength of the Hays leadership in this region.

 

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