Hays plc, a UK-based staffing firm, reported net fees, or gross profit, increased 8% year over year on a like-for-like basis — organic growth of continuing operations at constant currency — in its fiscal second quarter ended Dec. 31. However, the sixth-largest global staffing firm did report a decline in the US.

Worldwide, Hays reported gross profit grew faster in its temp and contracting business than in its perm business for the first time in seven quarters. Temp gross profit rose by 9% on a like-for-like basis as the company focused on higher-value markets and amid the effects of wage inflation. Meanwhile, perm gross profit rose by 7% like for like in the quarter. Hays noted that perm volumes fell modestly through the second quarter as clients took more time to hire and several markets saw a reduction in candidate confidence.

Hays’ largest vertical, technology, saw a record performance, according to the company. Gross profit rose by 10% like for like. In addition, gross profit rose across other verticals: accountancy and finance, up 10%; construction and property, up 4%; and engineering, up 23%.

By region, the company reported gross profit rose across geographies except in Australia and New Zealand, where it fell 4% on a like-for-like basis.

In its US operations, Hays reported gross profit fell 9% on a like-for-like basis. The company noted that activity slowed through the quarter, particularly in perm placement. However, Canadian gross profit rose 10%.

Hays categorizes both the US and Canada in its “rest of world” segment, which also encompasses Europe, the Middle East and Africa (excluding Germany); Latin America; and Asia.

Here is gross profit growth by region (growth is like for like):

• Germany: Gross profit rose 22%. Temp and contracting was up 20%; with perm up 32%.
• UK and Ireland: Gross profit rose 4% with temp up 5% and perm up 2%.
• Australia and New Zealand: Gross profit fell 4%; temp was down 6% while perm fell 1%.
• Rest of world: Gross profit rose 6% with temp up 7% and perm up 6%.

“Our forward-looking client and candidate activity remains at good levels in our temp and contracting business, but we have seen modest reductions in perm in several markets as client and candidate uncertainties increase,” Chief Executive Alistair Cox said. “That said, our key markets continue to be characterized by acute skill shortages and wage inflation, and we are focused on further increasing fee margins while closely managing our overheads.”

Share price and market cap

Shares in Hays closed up 2.18% today in London to £121.60 (US$148.56); they were 23.14% above their 52-week low; according to FT.com. The company had a market cap of £1.91 billion (US$2.33 billion).