Hays ANZ net fees regress nine years and operating profit more than 20 years

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Last month, Hays plc released a full-year update for its 2024 financial year (1 July 2023 – 30 June 2024), and it wasn’t pretty reading.

Group net fees were down 12% to £1,113.6 million; group operating profit was down 46% to £105.1 million, and global consultant headcount was down 18% year-on-year.

Of the company’s four regions, Hays Australia and New Zealand (ANZ) produced the worst year-on-year numbers.

Despite Hays ANZ reducing consultant headcount at an average rate of 29 per month across the year, costs could not be reduced quickly enough to match the speed of decline in net fees (perm placements fees plus net temp/contractor margin). As a result, the conversion rate (% of net fees that convert to operating profit) plummeted from 17% in FY2023 to 8.2% in FY2024.

You have to go back to 2015 to find a lower annual net fees result for Hays ANZ.

Financial year ended 30 June	Net fee income	Operating profit	Conversion rate	Consultant year end head count
2024	$269 m	$22 m	8.2%	729
2015	$270 m	$91 m	33.7%	775

Net fees in FY2024 were down 30% from the previous Hays ANZ record year of 2018, when the conversion rate was 34.7%.

The Hays archive of annual reports goes no further back than 2006, so I can only say with certainty that the current year’s operating profit is the worst result for 18 years.

However, given the 2006 result was almost double the current year’s profit I suspect you would have to go back to the very early days of Nigel Heap’s leadership of Hays ANZ (which commenced in July 1997) to find a comparable annual operating profit (which would be generated from a much lower total of net fees).

The Hays 2006 Annual Report notes the Hays ANZ conversion rate at 48.7%, up from 44.4% the year before. In the same 12-month period, headcount grew 38% from 513 to 707.

The Hays ANZ consultant headcount of 729 on 30 June 2024 is far lower than the 811 on 30 June 2020 (right in the middle of the first wave of COVID lockdowns). You have to go back ten years to find a lower year-end consultant headcount (707 for 30 June 2014).

Here’s what Hays said in the presentation pack for the Preliminary results for the year ended 30 June 2024

Market conditions challenging through year, notably in Public Sector and parts of our Enterprise business
Temp down 16%, driven by volumes down 17% but remained sequentially stable through H2
Perm down 28%, with volumes slowing through the year and down 24%. Overall, New Zealand market tough with fees down 36%
We enter FY25 with positive conversion rate momentum and are well positioned to benefit from market recovery when it comes

Key actions

Change of leadership in May 23 led to restructure of business in Q1
Significant actions taken to align capacity to market conditions, reducing consultant headcount by 32% YoY
Increased productivity by 1% YoY, with Q4 up 13%, closing two underperforming business lines and rationalising our business operations, closing two offices

As Asia Pacific CEO, Matthew Dickason (pictured, right) has been in charge of Hays ANZ since March 2023. After joining Hays in 2003, Dickason worked his way through the ranks, reaching the Director level within six years. By the beginning of 2015, Dickason was the Global Managing Director for Hays Talent Solutions, their RPO business.

Since his return to Sydney, where he previously spent six years building HTS, Dickason has sought to reduce the geographic silos of Hays ANZ and increase collaboration across the business.

Dickason took over the Hays ANZ leadership from Nick Deligiannis, who had been managing director for just over 11 years, when the Australian unemployment rate was just above its record low of 3.5% and national vacancies were 441,000 just 7.5% down on their record high of late 2022). Dickason has had to contend with a rough economic climate in the past 18 months, much rougher than was expected.

The unemployment rate has risen to 4.2% and vacancies have declined more than 20% (the vacancy data, released every four months, is next updated in two weeks). As the recruitment agency with the largest market share in ANZ, Hays’s results have been an unambiguous indicator of how much the labour market has softened.

The slow down in hiring has occured to a much greater extent at larger employers, where Hays is a dominant player, compared to the SME market and the company’s results have suffered accordingly.

I contacted Dickason for comment about the most recent Hays ANZ resuls and he responded (edited for space) as follows:

Our reorganization has driven greater integration across the ANZ region, which has allowed us to be more agile and responsive to client needs. We’ve seen growth in key markets and are building capabilities in strategic segments. For ANZ, this has involved a comprehensive reorganisation, including leadership changes and aligning our capacity with market realities. These adjustments have created positive operational momentum, particularly in more resilient and high-potential sectors.

To support our clients in the anticipated recovery, we have made targeted investments to align our operations and scale our capacity effectively with market conditions. This positions us to quickly seize emerging opportunities as demand improves.

Our commitment extends beyond operational changes; we are also investing heavily in our culture and leadership development to maintain our status as an employer of choice.

A critical part of our strategy has been local investments in Learning & Development to upskill both new and existing colleagues, which is vital not only for immediate client needs but also for sustaining long-term value as the market evolves.

We are seeing green shoots in several critical areas, including larger corporates, HR, Procurement, and Sales—key early indicators of improved confidence.

While the market remains challenging, our focus remains on supporting our colleagues and ensuring we have the capacity and capability to serve our customers effectively, now and into the future.

In person, Matthew Dickason is thoughtful, articulate, and engaging with a steely resolve; it’s not hard to understand how he made rapid progress in a large meritocracy like Hays.

Dickason will need to draw on all his talents to deliver results in the 2025 financial year that are more in keeping with the Hays ANZ tradition than what was delivered in the most recent year.

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