By Prerna Bedi
(Reuters) - Hays (LON:HAYS) and Robert Walters warned of near-term challenges on Tuesday as both UK recruiting firms posted a drop in first-quarter net fees reflecting weak client and candidate confidence.
Hays shares were down 3.3%% and Robert Walters down 5.1% as of 0825 GMT in London as they joined peer PageGroup (LON:PAGE) in reporting a tough start to 2024.
"Client and candidate confidence is at low levels, which we expect to continue to be a headwind to fee income growth in the near-term," Robert Walters CEO Toby Fowlston said.
"We are starting to see some inflation levels come down, which gives a bit more of an incentive to clients to offer the salary levels that need to be offered to create the movement in the market," Fowlston said in an interview with Reuters.
Hays also flagged a drop in average working hours in its largest market, Germany, denting its net fee income.
"We expect overall near-term market conditions to remain challenging, but broadly stable," Hays CEO Dirk Hahn said in a statement.
Hays, which focuses largely on hiring for white-collar roles, reported a 14% drop in like-for-like group net fees for the three months ended March 31, while Robert Walters posted a decline of 16%.
Both firms cut their headcount by 13% each in the quarter in a bid to reduce costs.
Rival PageGroup reported a nearly 13% drop in first-quarter net fees on Monday, reflecting slow hiring across its major markets including France and Germany and said that job flows deteriorated toward the end of the quarter.
Hays' outlook on Tuesday had previously been scheduled on Wednesday.