HAYS PLC
ANNUAL
REPORT &
ACCOUNTS
2023
1
Hays plc Annual Report & Financial Statements 2023
HAYS ANNUAL
REPORT FY23
Welcome to Hays’ Annual Report for FY23,
a year in which we made strong operational,
cultural and strategic progress.
Despite increasingly challenging
macroeconomic conditions, we delivered
record net fees, £197.0 million of operating
profit and returned £240.1 million to
shareholders in core & special dividends
and share buybacks.
As a global industry leader in recruitment, our strategy is
designed to capitalise on powerful megatrends which drive the
world of work. These include long-term skill shortages, changing
work habits, new job category creation, continual need for
upskilling and demographic changes. We are also market leaders
in some of the most attractive, long-term structural growth
markets globally. At Hays, we are ‘Working for your tomorrow’,
and via our expertise and unique culture, we benefit many
stakeholders across society. It is a privilege to be able to share
these stories.
During the year, the Board commenced an orderly and
transparent succession process to identify Alistair Cox’s
successor as CEO. Alistair has been a great leader for 16
successful years, transforming Hays from a UK-focused
business to a diverse global leader in recruitment and talent
services across many sectors, with over 80% of our operating
profits now generated internationally. Throughout Alistair’s
leadership, Hays has helped many millions of talented individuals
develop and thrive in their careers, and the Board would like to
express its gratitude to Alistair for an outstanding career at Hays.
The Board was delighted to welcome Dirk Hahn, previously
Managing Director of Hays Germany and CEMEA, as our new
Chief Executive from 1 September 2023. Together, we look
forward to writing many future chapters in ‘Our Hays Story’,
benefiting society by investing in lifelong partnerships which
empower people and organisations to succeed. Our services
have never been as relevant in helping to find, create, retain
and develop diverse talent, powered by our c.13,000 expert
colleagues worldwide.
Andrew Martin
Chair
OUR HAYS
STORY
We are proud to be industry leaders
in recruitment, based on our global
scale and deep expertise.
Our balanced and diverse business across
33 countries empowers our customers,
enabling clients to find the talent they
need to grow and helping people
advance their careers.
The digital revolution is accelerating, and
we will lead our industry through change.
We believe the prize for adding real human
value in a digital world is significant.
Our strong foundations in technology
underpin our Talent Networks, providing
deep and valuable data insights for our
consultants and our clients.
Our speed and agility help us create the
recruiting and talent services experience of
tomorrow… enabling us to become trusted
lifelong partners to millions of people and
organisations. The best people, allied to the
best technology, will deliver the best service.
OUR YEAR
HIGHLIGHTS
FINANCIAL
OVERVIEW
£1,294.6m
Net fee income
FY22: £1,189.4m
£197.0m
Operating profit
FY22: £210.1m
8.59p
Basic EPS
FY22: 9.22p
5.24p
Core & special dividend per share
FY22: 10.19p
£135.6m
Net cash
FY22: £296.2
OPERATIONAL
SUMMARY
8,590
Consultants
FY22: 9,037
c.76,800
Perm jobs filled
FY22: c.83,750
c.245,000
Temp and contracting roles filled
FY22: c.250,000
SUSTAINABLE
BUSINESS
44.3%
Women in senior leadership
FY22: 42.4%
17,673
Hays’ employee volunteering hours
FY22: 9,433 hours
16,778 CO2e
tonnes
Our scope 1, 2 and Business
travel scope 3 GHG emissions
FY22: 13,780 CO2e tonnes(1);
Science-based target (SBT) base year
(2020): 23,527 CO2e tonnes(1)
More information on pages 42 to 47
More information on pages 16 to 19
More information on pages 54 to 67
Note | Unless otherwise stated all growth rates discussed in this Strategic Report are LFL (like-for-like), YoY (year-on-year) net fees and profits, representing organic
growth at constant currency. (1) This is a restated GHG figure. Please see footnote (1) on our GHG table on page 66 for more details.
IN THIS REPORT
01 Strategic Report
A description of our business model,
markets and strategy.
3
Accelerating megatrends
in the new world of work
A broad, diverse and balanced business
Our investment case
Key performance indicators (KPIs)
Chief Executive’s review
4
5 Our business model
6 Our strategic priorities
7
8
10
16 Stakeholder engagement
18 How we create value
19 Value for our stakeholders
20 Our people our culture
26 Life at Hays
28
Customer partnerships, powered
by our people and technology
In focus 1 – Accelerate growth in
34
technology recruitment
36
38
In focus 2 – A great place to work
In focus 3 – Building more partnerships
with clients
In focus 4 – Empowering clients globally
40
42 Finance Director’s review
48 Divisional operating review
54
68
Sustainability in the world of work
Task Force on Climate-related
Financial Disclosures (TCFD)
74 Principal risks
80
Non-financial and sustainability
information statement
02 Governance Report
How our Board of Directors sets strategic
direction and provides oversight and control.
82
Chair of the Board’s introduction
to governance
84 Our Board of Directors
88 Our governance framework
89 Division of responsibilities
90 How the Board works
94 Key activities of the Board
96 Board and stakeholder engagement
98 Workforce engagement
99 How the Board monitors culture
100 Board evaluation
102 Nomination Committee Report
106 Audit Committee Report
110 Remuneration Report
146 Directors’ Report
148 Directors’ responsibilities
03 Financial Statements
Financial statements for the Group, including
a report from the Independent Auditor.
150 Independent Auditors’ Report
157 Consolidated Group Financial Statements
188 Hays plc Company Financial Statements
04 Shareholder Information
Supporting information for investors.
197 Shareholder information
199 Financial calendar
199 Hays online
200 Glossary
200 Country and specialism list
More information online
Our investor website gives you direct access
to a wide range of Company information
More information on haysplc.com/investors
Read our views and advice on the world of work
More information on social.hays.com
1
HAYS’ FUTURE AT
THE HEART OF THE
WORLD OF WORK
The world of work is rapidly changing, with clients
and candidates facing many new challenges
and opportunities. Powerful and accelerating
megatrends shape the world of work.
For more information see page 3
Organisation
challenges
Skill
shortages
Employee
demands
Demographic
challenges
Societal
demands
Hays sits at the heart of this rapidly changing work
ecosystem, and we strongly benefit by solving our
clients’ talent problems
efi t societ y b
n
e
b
e
W
.
.
.
t
h
a
t
e
m
p
o
w
y
i n v e sting in lifelo
n
g p
a
r
t
n
e
r
s
h
i
p
s
.
.
.
d
e
e
a tio n s to succ
er people and o r g a n i s
CLIENTS
Skill shortages
and job churn
Significant new demand
in related talent services
Rapid new job
category creation
Enhanced ESG
requirements
More information on page 16
CANDIDATES
Demands for flexible working
and changing work habits
Ageing population and other
demographic changes
Significant need for
upskilling and reskilling
Material inflation
More information on page 16
Skill shortages
We have deep and
broad Talent Networks
New job creation
Particularly in structurally
growing sectors
Job churn
Helped by faster
hiring decisions
Wage inflation
Our fees benefit
from rising wages
Workforce challenges
Creating, developing
and retaining talent
FIVE REASONS HAYS IS POSITIONED TO WIN IN THE NEW WORLD OF WORK
Global scale and
delivery capability
1
Growing from
a position of
market leadership
2
Strong enterprise
client relationships
3
Our diverse
SME client base
4
Broad Talent
Networks
5
STRATEGIC PRIORITIES
Enable
Our strategy is underpinned
by our continuous investment
in People, Culture, Technology
and Sustainability
OUR PURPOSE
c e
n
e
Social li c
Deep c o m m i t m ent to sustain
a
b
ili
t
Strat
e
g
y
y
S
t
a
k
e
h
olders
e
s
o
p
r
u
P
Hays cu l t u r
e
Action s
Grow
Materially increase core
recruitment fees, particularly
in long-term structural growth
sectors and with Enterprise clients
Diversify
Substantially grow new revenue
streams and partnership-based
areas such as Talent Services
and in Project Services globally
Partner
Nurture lifelong client and
candidate partnerships and build
the deepest and most engaged
Talent Networks worldwide
Enhance
Drive productivity to deliver
profit and cash, fund reinvestment
and enable substantial returns
to shareholders
More information on page 6
Our purpose is to empower people
and organisations to succeed,
through investing in lifelong
partnerships with them. Over many
years, we have helped millions of
talented individuals develop their
careers, and are deeply committed
to helping many millions more in
the future.
Our ‘social licence to operate’ and
reputation are underpinned by this
purpose. We are determined that
‘Our Hays Story’ is a sustainable
one, in terms of our role in our
communities, our business
operations and our ability to
grow profits and cash flow in
the long term.
Our mission to be the world’s
leading recruitment and talent
services provider is based on
forming lifelong partnerships with
clients and candidates, providing
them with a first-class service
and doing the right thing by our
stakeholders. This means putting
sustainability at the heart of our
business (more information on
page 54).
Our stakeholders are central to
how we integrate our strategy
with our responsibilities. We are
committed to open engagement.
Our FY23 sustainability actions
have demonstrated significant,
tangible progress. These include
the 1.9% increase in senior female
leadership to 44.3%, our c.85%
increase in volunteering hours,
conducting our most
comprehensive Greenhouse Gas
(GHG) emission data collection
in support of our Science-based
targets, enhancing our free
learning portals and advancing
our work in DE&I globally, both
internally and with clients via our
Vercida Consulting acquisition.
More information on page 5
INVESTMENT CASE
Driven by our strategic priorities and many structural growth market opportunities, we believe there are three simple and compelling
reasons to invest in Hays
1
Growth
We are market leaders in some of the
most attractive recruitment markets
globally, which offer significant long-
term growth potential. Our ability to
solve our clients’ talent problems
globally and at scale is second to none
and we have increasing opportunities
to grow in related talent services.
Scale
We have unrivalled balance, scale
and diversity. Our deep relationships
with large, medium and small clients are
based on partnerships and trust, built
over many years. Our expertise, people
and culture, brand, infrastructure and
financial strength will help us build the
leading global recruitment and talent
services business.
2
3
Returns
Our growth is increasingly
derived from diverse, partnership-
based revenue streams.
We will return significant cash to
shareholders in the most appropriate
form of core and special dividends,
and via share buybacks.
More information on page 7
STRATEGIC
REPORT
We are leading global
recruiting experts, focusing on
white-collar skilled professionals.
Our business has scale, breadth and
diversity of exposure. It is designed to
capitalise on the megatrends driving
structural growth in our industry.
Our highly cash-generative model
is also built to withstand turbulent
economic times.
2
Hays plc Annual Report & Accounts 2023 ACCELERATING
MEGATRENDS IN THE
NEW WORLD OF WORK
The world of work is being shaped by powerful
long-term megatrends. Our strategy is designed
to capitalise on these, targeting structural growth
opportunities within our cyclical end markets.
Growth in flexible, non-Perm careers
For many years, candidates and clients have been demanding new
ways of working. Skilled workers are increasingly seeking interesting,
and often highly paid, non-Perm roles as they build ‘portfolio’
freelance careers. This trend is also strongly supported by remote
and hybrid working.
We believe higher skill, higher salary Temp and Contracting represent
key structural growth markets, particularly in ‘Technical’ white-collar
specialisms such as Technology, Life Sciences and Engineering.
We use our expert consultants, global network, state-of-the-art
technology and rich data to build deep and broad Talent Networks.
Jobs are changing and skills are short
Digitalisation is changing the face of almost every industry and many
employers are struggling to find the talent they need, particularly
in higher skill, higher salary areas. This has driven meaningful wage
inflation in recent years, which is a net positive for our fees. Also,
our strategy is focused on building the strongest Talent Networks
possible, particularly in the most skill-short markets, such as
Technology, Engineering, Life Sciences or the Green Economy.
Demographic changes and increased
employee demands are driving job churn
Job churn is a key driver of recruitment and talent markets.
The rising cost of living globally creates greater incentive for skilled
employees to change job and increase their earnings. We live in an
era of unprecedented access to training, upskilling and development,
meaning that the routes for candidates’ career progression are more
open than ever. Also, attitudes towards remote and hybrid careers
have materially changed, which can act as a further driver of churn.
Societal demands are changing
For all employers, there is an increasing awareness of the
importance of pursuing business sustainability by addressing
ESG matters in their operations, culture and employee value
proposition. Many employees want to work for a purpose-led
organisation which matches their own values, and new job
categories are being created or expanded.
Our ability to create equitable and diverse Talent Networks is
increasingly a key competitive advantage, as is the ability to
help clients with related talent services such as consultancy,
onboarding, upskilling and total talent solutions.
Organisations increasingly need expert
help to find the talent they need
To help win the battle for talent, organisations increasingly need
partners such as Hays, who can bring a far broader and deeper
pool of talent to them, from a far wider geographic area, much faster.
This equally applies to larger outsourcing deals with Enterprise
clients and transactional ‘spot’ recruitment for SMEs. Importantly,
all client groups have increased demands for related talent services
and we are investing to grow these services. This includes our
acquisition of Vercida Consulting, a UK DE&I consultant, during FY23.
THE WORLD OF WORK IS DRIVEN BY POWERFUL,
INTER-RELATED MEGATRENDS
Organisation
challenges
Skill
shortages
Employee
demands
Demographic
challenges
Societal
demands
Greater
digitalisation
and use of AI
Hiring and
retention of talent
Changing
stakeholder needs
Dealing with
inflation
Driving wage
inflation
Desire/need
for upskilling
Partially solved by
potential for talent
to work from
anywhere
Higher salaries
Desire for flexible/
remote working
Increasing
desire to work for
a purpose-led
organisation
Continual upskilling
Smaller working
populations
Broader
demographics and
lifestyle choices
(e.g. earlier
retirement)
Greater propensity
for Contracting
and Freelance
Importance
of sustainability
and response to
climate change
DE&I
Social Purpose
Social mobility
Regulation
3
Strategic ReportGovernanceFinancial StatementsShareholder Information A BROAD, DIVERSE
AND BALANCED
BUSINESS
We have deliberately built a business which is
balanced and diverse. Our strategy is purposefully
designed to capitalise on the megatrends driving
change in our industry, and also to withstand
turbulent economic times.
A balanced and diverse model
Across our business, we have market-leading positions in long-term
structural growth markets, such as Technology and Engineering
globally, plus the relatively immature markets of Europe and Asia.
We are also leaders in more mature markets, but which still offer
long-term growth potential, such as the UK and Australia. We also
have significant market share opportunities with large Enterprise
clients globally, which we see as a growth area and one where we
have potential to grow in related talent services.
We are leaders in Temporary, Contracting and Permanent recruitment.
We have scale and expertise in 21 specialist areas of skilled
employment. We are predominantly Private sector-focused,
but also serve Public sector clients in some markets. Within our
portfolio of services, we work on high volume, high service, multi-
year outsourcing contracts with many of the largest organisations
in the world, as well as one-off placements for SMEs.
The balance, breadth and scale of our business is unique in the
world of specialist recruitment. This helps to make our business
relatively more resilient to today’s uncertain macroeconomic and
political landscapes.
Net fees by specialism
24%
26%
5%
5%
5%
15%
10%
10%
Technology
Accountancy & Finance
Engineering
Construction & Property
Office Support
Life Sciences
Sales & Marketing
Other
Net fees by contract, job and client type
57%
43%
64%
36%
Temporary
Permanent
Technical
Professional
84%
16%
Private
Public
A global business
33 countries and 21 specialisms
Rest of World
UK & Ireland
Net fees (% of Group)
£458.1m (34%)
Operating profit
£36.0m
Consultants
3,540
Offices
102
Permanent
66%
Temporary
34%
Net fees (% of Group)
£266.1m (21%)
Operating profit
£28.7m
Consultants
1,935
Offices
85
Permanent
44%
Temporary
56%
Germany
ANZ
Net fees (% of Group)
£382.0m (30%)
Operating profit
£100.2m
Consultants
2,044
Temporary
83%
Offices
26
Permanent
17%
Net fees (% of Group)
£188.4m (15%)
Operating profit
£32.1m
Consultants
1,071
Temporary
61%
Offices
39
Permanent
39%
4
Hays plc Annual Report & Accounts 2023 We provide talent management solutions across Perm, Temp and Contracting
We are leading global
recruiting experts, focusing
on ‘white-collar’ skilled or
specialist recruitment. Our
business has scale, breadth
and diversity of exposure.
W O R K F O RCE ADVISORY
C H N O L O GY CAPABILIT
OLIS T I C W O R K FORCE SO
T
I
L
U
T
E
Y
O
N
H
PERM
S
Total Talent
Management
TEMP &
CONTRACTING
Our purpose is to benefit
society by investing in lifelong partnerships that
empower people and organisations to succeed
Our business model
Our strategy is designed to benefit from powerful megatrends
driving structural growth in our industry (more information
on page 3), and to take advantage of opportunities to deliver
complementary talent services. Our highly cash-generative
model is also built to withstand turbulent economic times.
The salary of most candidates we place ranges from c.£30,000
to c.£150,000 per annum. 57% of our FY23 fees came from
Temp and Contracting assignments, while 43% came from
Perm placements. We operate across 21 specialisms, with
64% of our fees in white-collar ‘Technical’, project-led areas
such as Technology, Life Sciences, Engineering and Construction
& Property. We view this as a strength of our business.
We embrace digitalisation; developing technology to help our
consultants match candidates with clients’ roles much faster
than previously possible.
Globally integrated business
By having a single culture, brand and technology platform, we can
drive significant synergies across our network. We can also deliver
leading service to all clients. We are positioned to help clients and
candidates globally, but also understand local needs and challenges.
In most of our 33 countries, we still have significant scope to in-fill
from our current 21 specialisms.
For example, our average RoW country has exposure to only nine
specialisms, while Germany, where we are by some distance the
market leader in white-collar recruitment, has only ten specialisms.
We also have significant growth potential to develop exciting
new sub-sectors in Technology recruitment in all our markets.
An important driver of our growth remains the first-time outsourcing
of recruitment to third parties. This means that these markets are
relatively less cyclical, and relatively less driven by the prevailing
economic backdrop, or short-term sentiment.
Market-leading positions
Over many years, we have purposely built leading businesses in
attractive structural growth markets such as Technology, which
now represents over £330 million in annual fees, large Enterprise
clients and in Germany. We are market leaders in the UK&I and
in ANZ, both of which present long-term growth opportunities,
despite their relative maturity. We also have strong and growing
positions in many other markets where the outsourced use of
agencies is relatively immature, with considerable opportunities
to take share from in-house HR teams.
Lifelong partnerships
Millions of relationships are formed and nurtured by Hays
consultants, which sit at the heart of our business. By becoming
trusted advisers to talented people, helping them navigate their
careers and fulfil their potential, we unlock significant new business
opportunities.
By providing high quality of service, clients can count on us to
provide unrivalled access to top talent, and to provide market
insights to help them scale and flex their evolving workforces.
We add extra stakeholder value as a business committed to
being sustainable and operating responsibly.
5
Strategic ReportGovernanceFinancial StatementsShareholder Information OUR STRATEGIC
PRIORITIES
Our clear strategic priorities are focused on
growth, increasing partnerships and positioning
Hays further up the customer value chain.
Enable
Our strategy is underpinned by our
continuous investment in People,
Culture, Technology and Sustainability
Grow
Materially increase recruitment
fees, particularly in long-term
structural growth sectors and
with Enterprise clients
Diversify
Substantially grow new revenue
streams and partnership-based
areas such as talent services
and in Project Services globally
Partner
Nurture lifelong client and
candidate partnerships and build
the deepest and most engaged
Talent Networks worldwide
Enhance
Drive productivity to deliver profit
and cash, fund reinvestment and
enable substantial returns to
shareholders
Our strategy is based on industry megatrends which drive long-term growth
opportunities in recruitment and related talent services markets.
Our
strategic
priorities
Focus in FY24
– Increase market share with existing and new clients
– Grow non-Perm fees in new/existing markets
Link to relevant KPIs
LFL net fee growth
Basic EPS growth
– Drive structural growth in the most attractive long-term recruitment sectors, including Technology, Engineering and the
Headline Technology fees
Green Economy, and with Enterprise clients more widely
– Given macroeconomic uncertainties, we will closely monitor our activity levels and KPIs, particularly in Perm, and closely
manage our costs accordingly
– Grow non-Perm fees globally
– Improve and develop our services to support our customers more effectively across a broader array of services,
including DE&I via our Vercida Consulting business, training, upskilling and total talent management
– Grow our Project Services offering and revenue
– Continue to evolve and shape our offering to meet clients’ changing needs by providing alternative and innovative
delivery models, including Hays Hub
– Continue to explore and develop relationships with external organisations, enabling us to better understand, respond
to and capitalise on opportunities and/or threats, including AI, and provide in-depth insights to clients and candidates
– Enhance and expand Hays’ learning and development platform to enable more people to upskill or reskill to progress
their careers
– Leverage our market-leading positions and deep sector expertise to deliver highly personalised and easily accessible
services to clients and candidates, utilising the best tools available including AI
– Driving consultant productivity, leveraging our internal systems and generating returns on our investments
– Continued development of our front and back-office capabilities, including AI, data science and analytics, to improve
our service to clients and candidates and increase business efficiency
– Our long-term priorities for free cash flow remain unchanged: fund investment and development, maintain a strong
balance sheet, and deliver a core dividend which is sustainable, progressive and appropriate
– The Board will look to grow core dividend in line with EPS growth (target dividend cover range 2-3x) and, subject
to the economic outlook, distribute surplus cash to shareholders in line with our capital return policy (more information
on page 46)
Contracted Enterprise
client fees
LFL fees per consultant
LFL net fee growth
Headline Technology fees
Contracted Enterprise
client fees
Headline Technology fees
Contracted Enterprise
client fees
LFL net fee growth
Basic EPS growth
LFL fees per consultant
Conversion rate
Cash conversion
All of this is supported and underpinned by our continuous investment
in our people, culture and sustainability. Nurturing the best talent
and cultivating a diverse, equitable and inclusive culture represents
our key foundation.
We look to empower our colleagues to reach their full potential, investing in industry-
leading training and development and providing them with an exciting and progressive
career path. This, combined with how we equip them with technology and tools, is what
enables us to deliver the best service to our clients and candidates, nurturing lifelong
relationships and driving our business forward.
– Continue to drive employee engagement and respond to the findings of our ‘YourVoice’ surveys
– Continue to invest in our people with existing and new leadership and management programmes
– Continue to drive DE&I across our business, including increasing our percentage of senior female leaders
– Continue to invest in our technology and infrastructure to give our people cutting-edge systems, insights and tools
Employee engagement
Percentage of female
senior leaders
GHG emissions
– Reduce scope 1, 2 and 3 GHG emissions in line with our SBTs
– Further drive environmental initiatives across Hays, including via regional Employee Resource Groups (more information
on page 60)
– Further build on the success of ‘Helping for your tomorrow’ giving back to the community (more information on page 58)
6
Hays plc Annual Report & Accounts 2023 Strategic Report
Governance
Financial Statements
Shareholder Information
OUR INVESTMENT
CASE
Driven by our strategic priorities and many
structural growth market opportunities,
we believe there are three simple and
compelling reasons to invest in Hays.
Growth
Scale
We are market leaders in some of the most attractive
recruitment markets globally, which offer significant
long-term growth potential. Our ability to solve our
clients’ talent problems globally and at scale is second
to none and we have increasing opportunities to grow
in related talent services.
– Record Group net fees of £1,295 million, up 6%,
with record performances in 21 countries
– Record fees in our largest market of Germany,
up 19% to £382 million
– Record fees in Technology globally, up 6%
to £333 million
– Record direct and indirect fees with Enterprise
clients up 10% to £234 million
We have unrivalled balance, scale and diversity.
Our deep relationships with large, medium and
small clients are based on partnerships and trust,
built over many years. Our expertise, people and
culture, brand, infrastructure and financial strength
will help us build the leading global recruitment
and talent management business.
– Global network with c.13,000 colleagues worldwide
providing expert service and advice across 33
countries and 21 specialisms
– Highly scalable and digitally enabled business
– Over 76,000 Permanent placements made in FY23
and over 245,000 Temp and Contractors placed
Returns
Our growth is increasingly derived from diverse,
partnership-based revenue streams.
We will return significant cash to shareholders in the
most appropriate form of core and special dividends,
and via share buybacks.
– Highly cash generative business with high
returns on capital
– Proposed 5% core dividend increase
– £35.6 million special divided in respect of FY23
– c.£950 million in core and special dividends
paid between 2017-23
7
KEY PERFORMANCE
INDICATORS
Our aim is to be the global leader in specialist
recruitment and related talent services, and
to deliver well-diversified, profitable and cash-
generative fee growth. We use a combination of
seven financial and three non-financial alternative
performance measures to track our performance,
in line with our strategic priorities.
Like-for-like(1) net fee growth (%)
Measure
How the Group’s business is performing over time, measured as
net fee growth on a constant-currency basis.
Progress made in FY23
Net fees increased by 6% to record levels, driven by our early
management actions to increase fee margins, supported by positive
effects of general wage inflation globally, offset by volume declines,
particularly in Perm. 21 countries produced fee records.
2023
2022
2021
2020 -11
2019
-8
Measured against our strategy
We clearly link each of our KPIs to our four strategic priorities.
More information on page 6
Enable
6
6
32
Basic earnings per share(2) growth (%)
Technology fees (£m)
Measure
The underlying profitability of the Group, measured by the earnings
per share(2) of the Group’s operations.
Measure
The absolute scale of the global Technology business in net
fee terms.
Progress made in FY23
Basic earnings per share(2) down 7% to 8.59 pence. 9% lower PBT
and 350 bps higher Group tax rate (FY22 benefited from positive
one-offs) was partially offset by reduced finance costs and 3.7%
fewer average shares in issue as we bought back 66.2 million shares.
Progress made in FY23
We delivered record Group Technology fees in the year of
£333 million, up 6%. This included Germany up 10%, the UK&I up 5%,
ANZ down 2% and RoW up 6%.
-7
-30
2023
2022
2021
2020 -56
2019
4
151
2023
2022
2021
2020
2019
333
302
229
241
250
Contracted Enterprise client fees(3) (£m)
Like-for-like(1) net fees per consultant (£000s)
Measure
The scale of the global outsourcing business in like-for-like(1)
net fee terms.
Progress made in FY23
We continued to win Enterprise market share and broaden our
service offering, with fees up 10%. Our medium-term ambition
remains to reach £400 million in outsourcing fees. (Note: FY22 fees
have been restated and increased by £8 million to reflect historic
fees from clients where we won direct outsourcing contracts
in FY23.)
Measure
The productivity of the Group’s fee earners. Calculated as total Group
net fees (on a constant-currency basis) divided by the average
number of consultants.
Progress made in FY23
Like-for-like fees per consultant decreased 3.4% YoY to £143.9k,
from record levels. Placements per consultant fell significantly as
market conditions got tougher through the year, notably in Perm.
However, this was largely offset by our actions to increase fee
margins, and by placing candidates on higher average salaries.
2023
2022
2021
2020
2019
8
213
234
2023
2022
2021
2020
2019
166
159
158
143.9
148.9
137.8
131.2
144.5
Hays plc Annual Report & Accounts 2023 Conversion rate(4) (%)
Measure
Calculated as operating profit(2) divided by net fees. Measures the
Group’s effectiveness in managing our level of investment for future
growth and controlling costs.
Progress made in FY23
Conversion rate(4) decreased by 250bps to 15.2%, as tougher market
conditions in Perm lengthened average time-to-hire. Conversion rate
increased in our second half to 15.6%, and our longer-term FY27
aspiration for conversion rate remains 22-25%.
2023
2022
2021
2020
2019
15.2
17.7
10.4
13.6
22.0
Cash conversion(6) (%)
Employee engagement(7) (%)
Measure
The Group’s ability to convert profit into cash. Calculated as cash
generated by operations(5) as a percentage of operating profit(2).
Progress made in FY23
Given 9% growth in our Temp business, including 18% in our largest
and most working capital-intensive market of Germany, with a
related increase in Temp book debtors, 101% cash conversion
was an excellent result. Working capital management continued
to be strong, with debtor days maintained at record low levels of
33 days.
Measure
We work with Culture Amp to deliver our annual employee
engagement survey, delivering actionable insights into our
employees’ experiences of working at Hays. We run two surveys
annually, a shorter ‘pulse’ engagement in November and a more
detailed exercise in May.
Progress made in FY23
84% of all staff completed the survey (FY22: 85%), providing
strong representation of employee opinion. Our engagement
score decreased slightly to 76% (FY22: 80%), which we view
as a solid result given more challenging economic conditions.
2023
2022
2021
2020
2019
101
87
106
138
183
2023
2022
2021
2020(7)
2019
80
76
78
76
79
Percentage of female senior leaders (%)
Greenhouse gas emissions (CO2 tonnes)
Measure
We believe in equality in all forms across our business. This KPI
was introduced in FY21, with a target of reaching 50% by 2030,
and 45% by FY25. We define our senior leadership cohort as
the three management levels below our Executive Board, which
in FY23 represented the top 680 managers in Hays.
Progress made in FY23
Female senior leaders increased by a significant 1.9% to 44.3%,
and we are on track to deliver our ambitious 2030 target.
2023
2022
2021
44.3
42.4
41.6
Measure
Hays is committed to halving its GHG emissions, in line with
the Paris Agreement, and has validated SBTs. Also, in FY23 we
conducted our most comprehensive GHG data-gathering exercise,
identifying emissions not previously measured. We have therefore
restated 2022 and 2020 GHG emissions (more information on
page 66)
Progress made in FY23
Our total emissions directly controlled by Hays (scope 1, 2 and
the selected scope 3 emissions outlined on page 66) increased
by 22% to 16,778 CO2e tonnes, as our headcount increased
and economies reopened. Importantly though, GHG emissions
are down 29% versus our base year (ended March 2020),
and we are on track to deliver our SBTs.
2023
2022
2021
2020
16,778
13,780
7,721
23,527
Like-for-like growth represents organic growth at constant currency.
(1)
(2)
FY20 and FY19 operating profit and basic earnings per share are stated before exceptional charges. There were no exceptional charges in FY21, 22 and 23.
(3) This excludes any fees which originate from preferred supplier arrangements, which represented a further c.30% of Group fees (more information on page 33).
(4)
(5)
Conversion rate is the proportion of net fees converted into pre-exceptional operating profit(2).
Cash generated by operations is stated after IFRS 16 lease payments, as we view leases (mainly on property) as an operating cost. FY21 cash generated by
operations of £130.8 million is also adjusted for £118.3 million of FY20 payroll tax and VAT deferred which was paid in FY21.
Cash conversion represents the conversion of pre-exceptional operating profit(2) to cash generated from operations(5).
(6)
(7) The significant disruption of the pandemic meant we postponed the FY20 survey until November 2020, i.e. in FY21. Given employee engagement is so
important, we ran two surveys in FY21, with one in May 2021.
9
Strategic ReportGovernanceFinancial StatementsShareholder Information Hays plc Annual Report & Accounts 2023
THE YEAR
IN REVIEW,
AND THE
YEARS
AHEAD
Alistair Cox
Chief Executive Hays
10
Alistair Cox discusses the Group’s performance in
FY23 and looks ahead to our areas of focus and
development in the future.
Q1
How did Hays perform in FY23?
A
We delivered record Group fees, up 6% to £1,294.6 million, including
21 individual country records. That’s despite a macroeconomic
backdrop that became progressively more difficult as the year
passed. Our largest business of Temp & Contracting was the main
driver of our growth, increasing by 9% and remaining stable at
good levels through our second half. Our Perm business was more
impacted by the tightening market and while Perm fees increased
by 3% overall, they slowed sharply through the year, up 12% in H1
and down 6% in H2.
Reflecting the increasingly challenging market conditions, our
quarterly fee growth decelerated from 15% in Q1 to (2)% in Q4.
We acted quickly to manage our costs as the markets changed,
while being mindful to protect our key strategic investments.
We entered FY23 with consultant headcount 26% higher than
the prior year and reduced headcount by 5% over the year. However,
with the cost increase of our higher average headcount through
the year against a toughening backdrop, profits declined by 9%
YoY to £197.0 million. Our early cost reduction ensured that Group
operating profit and conversion rate improved slightly in H2 versus
H1, in line with the guidance we gave at our half-year results.
Our average number of placements per consultant materially
declined, particularly in Perm as hiring processes became longer,
driven by reduced client and candidate confidence. However, fee
margins remained strong, and this combined with our reduction in
consultant headcount ensured that overall average fee productivity
per consultant remained very close to FY22’s record levels.
Productivity remains a key management focus in FY24.
Hays plc Annual Report & Accounts 2023 There is no doubt that the world is facing a number of difficult
challenges. With inflation still at high levels and interest rates
continuing to climb, business confidence is understandably
uncertain. The world also faces longer term challenges, whether
they be around decarbonisation or geopolitical changes. What is
clear though is that our clients need help to develop and access the
talented resources they need to manage through these challenges
and thrive. We have entered FY24 with our headcount aligned with
our fee growth and are focused on driving consultant productivity
and managing our costs accordingly. This best positions us to
do our job effectively, ensuring organisations have access to the
very best talent, and talented people have access to the very best
opportunities for themselves. That is why we exist.
“ Against a toughening macroeconomic
backdrop, we delivered a resilient
overall performance.”
Fee growth was broad-based globally, reflected by 21 countries
delivering all-time net fee records. Germany, our largest country,
was a standout performer, with record fees up 19% and operating
profit up 29% to £100.2 million. Performance in our wider EMEA
region, part of our RoW division, was also strong, with fees up
12% and operating profit up 18%.
Conditions were less favourable elsewhere. Fees in ANZ declined by
6%, with operating profit down 39%, driven largely by slower Temp
markets, especially in Public sector and Banking. The UK&I was also
challenging, with fees up 1% and profit down 34%. In both regions we
aligned our capacity to market demand, reducing headcount in ANZ
and UK&I by 6% and 11% respectively during the year.
RoW fees increased by 5%, although profit declined by 14%, largely
due to the effects of the post-pandemic slowdown in Mainland
China, where fees decreased by 46%, and difficult conditions
in the USA, where fees declined 13%.
Our cash performance was strong and we ended the year with
net cash of £135.6 million (FY22: £296.2 million). This was after
paying £165.1 million in core and special dividends through the
year and purchasing and cancelling £75.0 million worth of Hays
shares as part of our share buyback programme. This took our
total share buybacks since we launched our programme in April
2022 to £93.2 million, which reduced our weighted average number
of shares by 3.7%.
Given our financial strength and confidence in the future, the Board
proposes to pay a 5% increased full-year core dividend of 3.00 pence
per share in respect of FY23, plus a 2.24 pence per share special
dividend, subject to shareholder approval.
We never lose sight though that our financial results are the outcome
of everything we do to deliver on our purpose: empowering people
and businesses to succeed. The fact I’m most proud of is that
during FY23 we helped over 300,000 people with their next career
move, and literally millions of others develop their careers through
our advice, expertise and training. At a time when the world faces
acute skill shortages in key sectors, our services have never been
as relevant in helping to create, retain, develop and deploy diverse
talent. I see for myself every day the real difference we are making
to businesses and to people’s lives globally.
Our own business also starts and ends with our people. They are
what set us apart from the competition and they are the heart of
our culture. We aim to recruit diverse talent from across society,
create an inclusive and equitable working environment, provide
the best training and development in our industry, and offer the
most rewarding and fulfilling career opportunities. We measure our
success through our overall employee engagement score, and this
remained strong at 76%, despite the tougher economic conditions.
I’m delighted that 4,506 colleagues were promoted throughout the
year as they developed their own careers, and 112 people moved
internationally within the Hays global network.
11
Strategic ReportGovernanceFinancial StatementsShareholder Information Q2
What were the strategic highlights
of the year?
A
We live in a fascinating world, undergoing great change. People and
skills sit right at the heart of the global economy, but organisations
face a series of complex organisational challenges, chronic skill
shortages, technology-driven revolution, increasing demands from
employees and demographic and societal changes. The sheer scale
of these challenges means that many in-house HR teams struggle
to cope, and we see increasing numbers coming to us for help on
a broader set of issues. Our strategy is based on responding to
megatrends in order to grow the business and our market share,
deepen our client and candidate relationships and position Hays
further up the value chain as their long-term Leadership Partner. This
is a very privileged – and powerful – place to be and we have made
excellent progress developing our propositions in the most attractive
sectors, broadening our services portfolio and extending our client
relationships.
Highlights include our record global fee performance in Technology,
up 6% to £333 million (more information on page 34), and where
we are now established as one of the world’s largest recruiters
of technology talent. This puts us on-track against our five year
aspiration to create a £500 million fee business in Technology by
FY27. Similarly, our Engineering business grew 21% and is now our
third biggest specialism, providing us an excellent foundation to
service a world that needs more engineers, particularly as we target
the Green Economy.
We grew direct and indirect fees in our Enterprise clients by 10%
as we partnered with more large organisations and grew our share
of their recruitment spend (more information on page 8). Again,
this puts us on-track to deliver against our FY27 aspirations to
build a £400 million business in outsourced solutions. We are also
increasingly working with many organisations on a broader set of
talent challenges alongside recruitment. To accelerate this trend,
we hired a Global Head of Advisory Services and made good
progress in designing and rolling out training, upskilling and
re-skilling propositions to our clients as components of our overall
Talent Services. As part of this strategy, we acquired a majority
stake in Vercida Consulting, a leader in UK DE&I consulting, and
we intend to expand that business across our international network.
We also have made excellent progress growing in the most attractive
geographies globally. Germany represents our largest single
geographic opportunity, and we grew fees to a record £382.0 million,
up 19% despite German GDP declining slightly between September
and June. This highlights the structural demand for skilled
contractors and temps, driven by acute skill shortages in Europe’s
largest economy. Our largest German sectors, Technology and
Engineering, increased by 10% and 22% respectively, delivering on
the earlier investments we made in them. Our more recent sectors
including A&F, C&P, the Public sector and Legal all did well, and we
invested in new sub-sectors including Cyber Security, AI and the
Green Economy.
Growing our Contractor & Temp business globally is also a priority
and over the last two years we have added over 3,000 workers in
Germany alone. That is equivalent to creating a top five business in
the German white-collar, non-Perm recruitment market from scratch
and illustrates the brand and momentum we have built in what I
regard as one of the most exciting recruitment markets in the world.
As the far-and-away market leader in Germany, we are ahead of our
plan to at least double the profitability of our German business by
FY27 and I am very optimistic about the scale of our opportunity
and our ability to capitalise on it, just as these results show.
We also made breakthroughs in growing non-Perm fees to a critical
scale in several other European countries including France, Spain
and the UAE.
“ Our fees in Technology
exceeded £330 million
for the first time ever,
having more than
doubled in the past
eight years.”
12
Hays plc Annual Report & Accounts 2023
Q4
How would you summarise
Hays’ sustainability and
societal progress in the year?
A
Our core value is to ‘Do the right thing’, and by doing so we have
delivered another year of strong sustainability and societal progress.
Core to our business is the over 300,000 people whose lives were
positively impacted by us placing them in a new role. We also helped
many millions of others with career advice and training or upskilling.
This takes time and financial investment, but I believe there is real
social value in this. Our ‘Helping for your tomorrow’ community
engagement initiative grew significantly in its second year, with
volunteering hours up over 85% to 17,673 globally. This has
continued into our new year and Hays UK has recently teamed up
with Neighbourly and recorded over 9,000 hours of volunteering in
July 2023 alone. Every Hays employee is given one volunteering day,
which they can use to work with a charity directly related to our
purpose as a business and to helping people advance their careers.
You can read more about this on page 58.
Acting responsibly and sustainably sits at the heart of our strategy.
In FY23 we conducted our most comprehensive GHG emissions
gathering exercise yet, quantifying previously unmeasured
emissions. Consistent with our SBTs in support of the Paris
Agreement, we have updated our base year to reflect this data, giving
us a much better understanding of our impact on the environment.
As expected, our underlying GHG emissions under our control
increased in the year as our average headcount increased,
economies reopened post-pandemic and business travel increased.
However, we aspire to lead our industry in environmental performance
and our emissions are down 29% versus our 2020 base, and by
34% on a per employee basis. We are on track to meet our SBT
of halving emissions under our control by 50% by 2026. We also
remain committed to halving scope 3 emissions by 2030, and we
actively prioritise working with suppliers who share our vision on Net
Zero emissions.
We also made excellent progress in our strategy around Diversity,
Equity & Inclusion. The percentage of females in our senior
leadership group, comprising our top 680 leaders or around 5% of
our workforce, increased by 1.9% to 44.3%, and we are on track to
reach our target of 50% by 2030. We appointed our first global head
of DE&I, and you can read more about our progress on pages 22
to 25. We now have Employee Resource Groups (ERGs) in all
our regions and have employee action groups globally covering
initiatives including Pride/LGBTQIA+, Working Parents, Women
at Hays and Fitness & Wellbeing.
Looking after our people is key to us and we made further progress
in our Wellbeing and Mental Health programmes. Prioritising the
mental health of our colleagues is something the Board takes
very seriously and is committed to. During the year we launched
a scheme to train our managers in mental health awareness and
established a network of mental health first aiders across Hays.
We also launched an award-winning partnership with Finwell to
help colleagues navigate the cost-of-living crisis.
The Board is also considering establishing a Group ESG Committee
in FY24.
13
Q3
Were there any lowlights in the year?
A
While I’m pleased that we hit a record fee performance in FY23,
I also recognise that our operating profit and conversion rate were
negatively impacted by the sharp slowdown in market activity levels.
If we recall, our H2 22 Group fees were up 27% and we had invested
significantly in consultant headcount, up 26%, to meet high levels
of demand and a strong market at the start of the year. The market
however started to slow sharply from Q1 23, particularly in Perm,
and average placement volumes per consultant decreased.
Our average headcount growth in H1 23 was 17%, versus 12%
fee growth, and hence we incurred negative profit leverage.
As ever though, we reacted quickly to the changing conditions and
reduced capacity and costs. We realised savings in travel, property
and via our back-office efficiency projects. Our H2 average
consultant headcount growth was only 1% YoY, and on 30 June 2023
our consultant headcount was down 5% YoY, meaning we ended the
year with our capacity aligned to our fee growth and current market
conditions. This focus also allowed us to maintain our overall fee
productivity per consultant at good levels, down 3% on FY22’s
record levels, and increasing slightly in Q4.
Finally, the one area where we are behind plan on our FY27
aspirations is ANZ where performance was below our expectations,
particularly impacted by weaker Banking and Public sector markets.
We have taken steps to improve performance, including reducing
headcount and restructuring the management team. I expect these
actions to deliver results in FY24, remembering that we have the
leading business in Australia and its economy and labour market
have strong fundamentals. Our long-term ambitions for that business
are therefore undiminished.
Strategic ReportGovernanceFinancial StatementsShareholder Information Q5
How is Hays performing against
the ambitions set out at the
2022 Investor Day?
A
The purpose of our Investor Day, held in April 2022, was to highlight
how the changes in the world of work benefit Hays, what we are
doing to capitalise on these changes and how we will deliver
significant value for all our stakeholders, including substantial
returns to our shareholders.
Our Investor Day was also designed to set out the ‘art of the possible’
within our business. With so much economic uncertainty in our
world and in an industry that is sensitive to economic confidence,
it would be unrealistic to claim to be able to accurately predict a
five-year financial plan. However, we believe it is possible to illustrate
what a feasible outcome may look like and where it will be derived
from, assuming a supportive economy and no significant downturns
in any of our major markets, and no material changes in key
exchange rates. On this basis, our ambition was to broadly double
operating profits from FY22 levels within five years.
We used five key pillars to set out our ambitions, shown in the
graphic opposite. These were increasing our Technology fees
to £500 million, doubling our operating profit in Germany to
€200 million, delivering £350 million in UK&I fees, growing ANZ
to AUD $500 million in fees and doubling fees in Outsourced
Solutions to £400 million.
Obviously, the macroeconomic environment will play a major role in
our delivery against these aspirations, and that is outside our control.
FY23, the first year of our strategy timeframe, saw most of our
markets face worsening backdrops, including recessions. Our view
was that should any material economic downturns occur, we may
well see the achievement of our aspirations pushed out by 1-2 years.
Importantly though, the long-term potential in the business remains
undiminished and this remains the case today.
In Technology, our fees increased by 6% to a new record of
£333 million. This growth level was slightly below the average fee
growth delivered since FY10 of 10% per annum. However, it came on
the back of 32% Technology fee growth in FY22. The Perm market
was markedly harder last year though and resulted in a slowdown
in Technology fees to (2)% in Q4 FY23. Fees in our core Contracting
and Temp business, representing 85% of fees, were stronger and
increased by 11% in FY23, including growth of 3% in Q4. Given the
strong start to the five-year ambition that we have made, we believe
we are currently on track to deliver £500 million in Technology fees.
This would reinforce our position as one of the global leaders in
Technology recruitment (more information on page 34).
Our market-leading business in Germany also delivered record
fees, up 19% to £382 million, driven by volume growth and
positive pricing/mix effects. This drove operating profit up 29% to
£100.2 million, or €130 million excluding Group costs, representing
another year of strong progress toward our five-year ambition to
double operating profit (ex-Group costs) to €200 million. Fee growth
was strong across each of Contracting, Temp and Perm, up 23%,
8% and 22% respectively, and with record fees in both Contracting
and Perm. Sector-wise, we delivered fee growth across all our
specialisms, with standout performances from Engineering (up
22%), Accountancy & Finance (up 26%) and HR (up 82)%. Our largest
specialism of Technology increased by 10%.
14
As noted earlier, we added over 3,000 German Contractors and
Temps in the last two years. This is the benefit of many years of
building infrastructure, expertise, brand and reputation in Germany,
and that’s very hard to replicate. We also have a world-class team
who are true experts in the industry. That’s why I am comfortable
to say we are well on-track today with our aspiration to double our
profits in Germany.
The third pillar of our five-year ambition was to increase UK&I
fees to £350 million. Fees were up 1% in the year to £266 million.
However, with an economy facing rising interest rates, increasing
inflation and higher energy prices, it is understandable that client and
candidate confidence fell, and this led to a sharp slowdown through
the year. Illustrating this, we began the year with 11% fee growth in
Q1, but ended with fees down (7)% in Q4.
I have great confidence in the strength of our business in the
UK though, and I still believe the ambition of increasing fees to
£350 million is entirely valid in a market as large as that of the
UK and where we remain a leader. Undoubtedly, the economic
environment has worsened since we set out our plan, and
as we said in April 2022, a downturn would likely delay the
achievement of our ambition.
The fourth strategic theme was to increase ANZ fees to AUD
$500 million. We are market leaders in Australia, however, FY23
was undoubtedly a difficult year for us, with growth slowing from
12% in Q4 22 to (15)% in Q4 23. The Public sector in particular was
challenging, with Temp volumes under pressure as the newly elected
Federal government shifted away from using contingent staffing,
and State governments looked to reduce budget spending.
However, like the UK&I, I am confident that AUD $500 million still
reflects a realistic ‘art of the possible’, albeit one which will be
delayed. Once end markets stabilise and we see the benefits of the
actions already taken, I fully expect us to return to growth in ANZ.
Finally, our fifth theme was to double Outsourced Solutions fees to
£400 million, having broadly doubled fees in this area in the previous
six years (more information on page 8). Last year was another strong
year, with direct and indirect fees at Enterprise clients increasing
by 10% to £234 million. We continued to win new clients, as well as
increase share of overall recruitment with existing clients. As we
set out at the Investor Day, a prime area for increased outsourcing
is our existing large pool of clients where we already have good
relationships as preferred suppliers (PSLs). As set out on page 33,
we have c.150 direct outsourced contracts and well over 500 PSLs,
so our prospects and pipeline to build bigger relationships, including
full outsourcing, is strong. Overall, we are broadly on track to double
fees to £400 million by FY27, despite the macroeconomic slowdown.
£333m
Record fees in Technology, up 6%
£234m
Record fees in outsourcing with Enterprise clients, up 10%
Hays plc Annual Report & Accounts 2023 Q6
What are your other key priorities?
A
Despite already having market-leading positions in many areas and
being a global leader in our industry, realising the many long-term
structural growth opportunities that we face is our top priority. Step
one in that journey is delivering on the aspirations we set out at our
2022 Investor Day. That will be achieved by building scale on the
foundations we have in key geographies and sectors. It will be
reinforced by expanding our service offerings in adjacent talent
areas, such as DE&I consulting and Project Services. The new
service lines we are considering are related to talent, but clearly
not all are purely recruitment-focused. This means standing by
our marketing message ‘Working for your tomorrow’ (more
information on page 28) as we deliver services to solve today’s
talent challenges.
All of this can only be achieved through the expertise and
commitment of our own people globally. A huge amount of my own
time is focused on identifying, developing and deploying our leaders
to take on bigger businesses and new challenges.
We are very proud of our culture, and we think it sets us apart in our
industry. In every one of our 252 offices worldwide, client service,
integrity, passion, expertise, cherishing a diverse and inclusive
environment and doing the right thing hold true. We continued to
invest in culture, launching our ‘International Leaders of the Future’
programme in FY23, augmenting our existing ‘International
Leadership and Management’ programme. Total classroom and
on-the-job training time was maintained at c.20% of each Associate’s
first year, with managers averaging 12 days of training per year.
I can think of no business where technology is not playing a leading
part. For many years we have focused on the benefits of technology
and have in place a scalable technology stack. I see numerous
opportunities where technology can help us, whether that be in
making our services or support more efficient, by enhancing
customer service or by opening new revenue streams. Embedding
technology solutions alongside our people experts is a core
philosophy of Hays, and one that stands us in good stead given
advances such as the maturing of generative AI (more information
on page 30). Clearly, with a digitally enabled business comes greater
IT security risk. This threat is taken extremely seriously, and we strive
to do everything we can to protect our candidate, client and
employee data, and our system’s integrity. The high level of
engagement and integration across our IT, Legal and Operations
teams gives me significant confidence in this area, but we can
never be complacent.
A CEO’s job is to align Group strategy and investments with the
reality of global economic and geopolitical conditions. We are now
living in a world of significant and increasing macroeconomic
uncertainties, all of which are outside our control. Accurately
predicting the impacts of the many forces at work is impossible.
However, we have built a business that is highly adaptable to changing
circumstances and we run the business based on real-time data,
giving us a competitive advantage in terms of insight and informed
decision-making in a fast-moving world. We are constantly alert to a
wide range of indicators and our management teams worldwide are
expert at responding nimbly as we balance short-term priorities with
our longer-term ambitions. Our active management of consultant
headcount and productivity in FY23 is clear evidence of this.
Undoubtedly, the world has new challenges to face today, but I am
confident our leaders will adjust accordingly as those challenges
unfold. In a world characterised by acute skill shortages, our focus
is on navigating through this uncertain backdrop while continuing
towards our own North Star of reinforcing our position as a world
leader in recruitment and wider talent services.
And finally, this is my last Annual Report as CEO, and I would like
to say it has been a tremendous privilege to have led this great
company for the last 16 years. During that time, we have helped over
four million people around the world secure their next career move.
That is something I am very proud of as it has touched so many lives
for the better.
We have come a long way in the last decade and a half. When I
joined Hays in 2007, over 80% of our fees came from the UK &
Ireland. Since then, we have taken that local success story and
turned it into a global one where over 80% of our fees are now
international, and we operate at record scale. We have created
a powerful brand and digitally enabled our business, building a
global leader in white-collar recruitment. We have also developed
thousands of our own people who are building their own exciting
careers around the world. My heartfelt thanks go to all my
colleagues around the world for their hard work and expertise, as
well as their support, loyalty and friendship. It really has been a team
effort. We have the foundations in place to write many exciting future
chapters of ‘Our Hays Stories’, and I wish Dirk Hahn, whom I have
worked closely with throughout my entire tenure, every success as
the next CEO of Hays.
IN APRIL 2022 WE SET OUT OUR GROWTH AMBITIONS FOR THE NEXT FIVE YEARS
Technology
£500m
net fees
Germany
Double profits
to €200m*
UK&I
£350m
net fees
ANZ
AUD $500m
net fees
Outsourced Solutions
Double net fees
to £400m
WE SEE SIGNIFICANT STRUCTURAL OPPORTUNITIES FOR LONG-TERM GROWTH
For the avoidance of doubt, our total Group FY27 net fee aspiration is not an aggregation of these ambitions as there is significant overlap
between our net fees by country and fees in our large Technology and Outsourced Solutions business.
* Pre central cost allocation.
15
Strategic ReportGovernanceFinancial StatementsShareholder Information
STAKEHOLDER
ENGAGEMENT
Our key
stakeholders
How we
engaged
Employees
We have built strong relationships with a
wide range of stakeholders over many years.
Their trust and support enables us to build
a more sustainable, resilient business which
operates responsibly and creates a wide range
of stakeholder benefits.
More information on page 19
Candidates
Core to Board decision-making is maintaining an open and
effective dialogue with stakeholders. This helps ensure our
strategy is supporting our aim to do the right thing for stakeholders.
Our comment on the Section 172 statement and how the Board has
made key decisions during the year, can be found on page 96.
Clients
Communities
and natural
environment
Shareholders
Our key stakeholders
Employees
Host
countries and
governments
Candidates
Suppliers
Clients
Shareholders
Communities
and natural
environment
Suppliers
Host
countries and
governments
16
We invest substantially in training, development,
diversity and culture to ensure Hays is a great
place to work. This was supported by regular
leadership communication via newsletters,
townhalls and regional Employee Resource
Groups (ERGs). We also undertake bi-annual
global employee engagement surveys. The
results are analysed by regions and executive
management and presented to the Board.
By building long-term relationships with
candidates, we help them fulfil their career
ambitions. Our engagement is multichannel,
working through our website, social media,
flagship publications such as the Hays Salary
Guide, and Hays MyLearning, our free-to-use
Training & Wellbeing platform.
We consult with our clients, helping them find
the talent they need to deliver their growth
plans. Understanding their needs helps us
achieve lasting impact, building deeper and
stickier long-term relationships. We provide
clients with free access to Hays MyLearning,
enabling them to support their employees’
learning, development and mental health needs.
We seek to have a positive impact by engaging
with the communities in which we operate,
actively providing support, career advice and
training. Our ‘Helping for your tomorrow’
programme expanded significantly in FY23
and is a major part of that strategy.
We are committed to becoming a Net Zero
company, setting ambitious targets to halve
our own GHG emissions by 2026 and reducing
our broader environmental impact YoY.
Our Net Zero Working Group is developing
strategies which will underpin our SBT on
reducing carbon emissions.
We actively engage with the investor community
through meetings, roadshows and conferences,
and are very grateful for their long-term support.
The Board receives regular updates on investor
themes and questions and the Chair also hosts
meetings with some of our largest institutional
investors.
We are committed to treating our suppliers fairly
and with respect, and publish a Supplier Code
of Conduct on our website. As part of our
Net Zero journey, we have contacted landlords
and are progressing discussions with suppliers,
to assess their commitment to reducing
environmental impact and increasing
societal engagement.
Hays contributes to economies and society both
directly and indirectly, through the taxes we pay,
the jobs we fill, the candidates we help upskill
and the local business opportunities, education
and community initiatives we support.
What was
important in the year
– Learning and development
– DE&I progress
How we
responded
– Direct actions based on YourVoice findings (more information on page 26)
– Appointment of first global Head of DE&I (more information on page 23)
– Mental health and wellbeing of colleagues
– Enhancements and growth of ERGs
– Clearer communication of our Employee Value Proposition (EVP)
– ERG Leaders training programme developed
– Enhanced working practices with flexible and hybrid working
– Appointment of first Head of Wellbeing in UK&I and our Board
– Promotions and overseas transfers
commitment to employee mental health (more information on page 63)
– Providing career opportunities
– Investment in customer service and user experience
– Market insights, thought leadership and expert career advice
– Career mentoring and volunteering (more information on page 61)
– Provision of training and development via Hays MyLearning (more
– Tailoring learning and development to individual career requirements
information on page 32)
– Helping people back into the workplace
– Identifying and supporting hidden talent
– Protecting customers’ data
– Responding to rapidly changing conditions
– Providing support needed to thrive in recovering markets
– Insight into recruitment trends and market comparisons
– Enhanced advisory and talent services
– Compliance with regulatory matters
(more information on page 32)
– Skills UK and Talent+ initiatives in the UK&I and Germany
(more information on page 39)
– Focus on data protection and responsible AI strategy
(more information on page 30)
with clients and candidates (more information on page 30)
– Investment in client relationship managers
– Provision of training and compliance services
– Growth in DE&I consulting, including our Vercida acquisition
(more information on page 39)
– Delivering a professional service and helping solve skill shortages
– Focus on customer services and building lifelong partnerships
– Ongoing growth of ‘Helping for your tomorrow’ and our volunteer/
– Each Hays colleague is entitled to one day of volunteering each year
community programmes worldwide
– Volunteering increased by over 85% YoY, with our efforts targeted
– Increased internal awareness of our environmental impact and
on helping people in the world of work, and the environment (more
– Maintaining a trajectory to deliver on our SBTs, as part of our
– Post year-end, ‘Neighbourly’ initiative in the UK delivered over 9,000
our GHG abatement strategy
– Remaining carbon neutral
Net Zero journey
– Fee growth in the Green Economy
information on page 58)
– Significant local charity fundraising
hours of volunteering in July 2023, as the UK&I extended its
volunteering programme to two days per colleague
– Engaged in our most comprehensive ever GHG data gathering exercise,
giving greater understanding of our environmental impact (more
information on page 65)
– Clear and consistent communications and transparent reporting
– Regular engagement with shareholders and analysts
– Focus on embedding sustainability in our strategy and investment case
– Enhanced sustainability reporting in the Annual Report (more
– Successful Group Finance Director transition to James Hilton
– Transparent communication around our CEO succession
information on page 54)
– Clear communication around capital returns (more information on page 46)
– Board case study around CEO succession process
– Clear Supplier Code of Conduct
– Communication of our environmental standards and requirements
– Partnership in reducing environmental impact, including stating our
to customers
preference to work with partners that are also on a Net Zero journey
– Working with landlords around our own GHG reduction plan
– Supporting Public sector administrations
– Regular and open dialogue with governments and tax authorities
– Ensuring worker tax and regulation compliance
– Payment of taxes in a timely tax contributions
– Community involvement and initiatives as part of ‘Helping for your
tomorrow’ (more information on page 58)
– Continued enhancement of training courses on Hays MyLearning
(more information on page 32)
– Skills UK and Talent+ initiatives (more information on page 39)
Hays plc Annual Report & Accounts 2023 Our key
stakeholders
How we
engaged
We invest substantially in training, development,
diversity and culture to ensure Hays is a great
place to work. This was supported by regular
leadership communication via newsletters,
townhalls and regional Employee Resource
Groups (ERGs). We also undertake bi-annual
global employee engagement surveys. The
results are analysed by regions and executive
management and presented to the Board.
By building long-term relationships with
candidates, we help them fulfil their career
ambitions. Our engagement is multichannel,
working through our website, social media,
flagship publications such as the Hays Salary
Guide, and Hays MyLearning, our free-to-use
Training & Wellbeing platform.
We consult with our clients, helping them find
the talent they need to deliver their growth
plans. Understanding their needs helps us
achieve lasting impact, building deeper and
stickier long-term relationships. We provide
clients with free access to Hays MyLearning,
enabling them to support their employees’
learning, development and mental health needs.
We seek to have a positive impact by engaging
with the communities in which we operate,
actively providing support, career advice and
training. Our ‘Helping for your tomorrow’
programme expanded significantly in FY23
and is a major part of that strategy.
We are committed to becoming a Net Zero
company, setting ambitious targets to halve
our own GHG emissions by 2026 and reducing
our broader environmental impact YoY.
Our Net Zero Working Group is developing
strategies which will underpin our SBT on
reducing carbon emissions.
We actively engage with the investor community
through meetings, roadshows and conferences,
and are very grateful for their long-term support.
The Board receives regular updates on investor
themes and questions and the Chair also hosts
meetings with some of our largest institutional
investors.
We are committed to treating our suppliers fairly
and with respect, and publish a Supplier Code
of Conduct on our website. As part of our
Net Zero journey, we have contacted landlords
and are progressing discussions with suppliers,
to assess their commitment to reducing
environmental impact and increasing
societal engagement.
Hays contributes to economies and society both
directly and indirectly, through the taxes we pay,
the jobs we fill, the candidates we help upskill
and the local business opportunities, education
and community initiatives we support.
Employees
Candidates
Clients
Communities
and natural
environment
Shareholders
Suppliers
Host
countries and
governments
What was
important in the year
– Learning and development
– DE&I progress
How we
responded
– Direct actions based on YourVoice findings (more information on page 26)
– Appointment of first global Head of DE&I (more information on page 23)
– Mental health and wellbeing of colleagues
– Enhancements and growth of ERGs
– Clearer communication of our Employee Value Proposition (EVP)
– ERG Leaders training programme developed
– Enhanced working practices with flexible and hybrid working
– Appointment of first Head of Wellbeing in UK&I and our Board
– Promotions and overseas transfers
commitment to employee mental health (more information on page 63)
– Providing career opportunities
– Investment in customer service and user experience
– Market insights, thought leadership and expert career advice
– Career mentoring and volunteering (more information on page 61)
– Provision of training and development via Hays MyLearning (more
– Tailoring learning and development to individual career requirements
information on page 32)
– Helping people back into the workplace
– Identifying and supporting hidden talent
– Protecting customers’ data
(more information on page 32)
– Skills UK and Talent+ initiatives in the UK&I and Germany
(more information on page 39)
– Focus on data protection and responsible AI strategy
(more information on page 30)
– Delivering a professional service and helping solve skill shortages
– Focus on customer services and building lifelong partnerships
– Responding to rapidly changing conditions
– Providing support needed to thrive in recovering markets
– Insight into recruitment trends and market comparisons
– Enhanced advisory and talent services
– Compliance with regulatory matters
with clients and candidates (more information on page 30)
– Investment in client relationship managers
– Provision of training and compliance services
– Growth in DE&I consulting, including our Vercida acquisition
(more information on page 39)
– Ongoing growth of ‘Helping for your tomorrow’ and our volunteer/
– Each Hays colleague is entitled to one day of volunteering each year
community programmes worldwide
– Increased internal awareness of our environmental impact and
our GHG abatement strategy
– Remaining carbon neutral
– Volunteering increased by over 85% YoY, with our efforts targeted
on helping people in the world of work, and the environment (more
information on page 58)
– Significant local charity fundraising
– Maintaining a trajectory to deliver on our SBTs, as part of our
– Post year-end, ‘Neighbourly’ initiative in the UK delivered over 9,000
Net Zero journey
– Fee growth in the Green Economy
hours of volunteering in July 2023, as the UK&I extended its
volunteering programme to two days per colleague
– Engaged in our most comprehensive ever GHG data gathering exercise,
giving greater understanding of our environmental impact (more
information on page 65)
– Clear and consistent communications and transparent reporting
– Regular engagement with shareholders and analysts
– Focus on embedding sustainability in our strategy and investment case
– Enhanced sustainability reporting in the Annual Report (more
– Successful Group Finance Director transition to James Hilton
– Transparent communication around our CEO succession
information on page 54)
– Clear communication around capital returns (more information on page 46)
– Board case study around CEO succession process
– Clear Supplier Code of Conduct
– Communication of our environmental standards and requirements
– Partnership in reducing environmental impact, including stating our
preference to work with partners that are also on a Net Zero journey
to customers
– Working with landlords around our own GHG reduction plan
– Supporting Public sector administrations
– Regular and open dialogue with governments and tax authorities
– Ensuring worker tax and regulation compliance
– Payment of taxes in a timely tax contributions
– Community involvement and initiatives as part of ‘Helping for your
tomorrow’ (more information on page 58)
– Continued enhancement of training courses on Hays MyLearning
(more information on page 32)
– Skills UK and Talent+ initiatives (more information on page 39)
17
Strategic ReportGovernanceFinancial StatementsShareholder Information HOW WE
CREATE VALUE
Hays helps organisations find and nurture the
talent they need to grow, and supports people
as they build their careers. As people choose
new ways to work, and use new technologies
to access job markets, we are also evolving.
y
m
Macroec o n o
C
o
m
p
e
titiv
Understanding
client needs
e
e
n
v
i
r
o
n
m
e
n
t
Market
expertise
Lifelong
partnerships
Engaged
data
Finding clients
great talent
Upskilling and
reskilling
Connecting with
communities
Sustainability
and environmental
transition
Recruitment market m e g a t
r e n d s
Our people, candidates and society
We help hundreds of thousands of people each year in their career
journey, and tens of thousands of organisations source the skills they
need to grow. We also help talented people gain the skills they need
to thrive in the rapidly changing global job market. This all contributes
to the wider growth and success of the economies and communities
in which we operate, and helps maximise tax revenues.
Technology and data
We have built a sector-leading global technology infrastructure which
is able to interact with other applications and third-party technologies.
This, together with our investment in data analytics and digital
marketing, enables our consultants to source real-time, accurate
information on their market and ultimately to get the best candidates
to clients faster than our competitors.
Partnerships and collaborations
Our philosophy is not just to invest in our own technology solutions,
but also to build strong collaborations with leading innovators and
influential organisations. This creates mutually beneficial relationships
which help us better understand and serve our clients and candidates,
and enhances our ability to better respond to fast-moving market
developments.
Brand
Our reputation as a world leader in specialist recruitment is supported
and reinforced by our newly refreshed, globally consistent brand
‘Working for your tomorrow’. We constantly focus on building wider
recognition of Hays as a market leader through partnerships with
other organisations and by building a portfolio of high-quality,
respected publications that demonstrate the thought leadership
of Hays and our people.
18
Hays plc Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
Shareholder Information
VALUE FOR OUR
STAKEHOLDERS
Employees
Candidates
Of our c.13,000 colleagues, 4,506 colleagues were promoted
in FY23. We have a target of 50% female leaders in our top 680
managers by 2030. In FY23 our percentage increased by 1.9%
to 44.3%. The Group also undertakes regular global employee
engagement surveys, and the results are analysed by regional
and executive management and presented to the Board.
In FY23, 81% of colleagues said they would recommend
Hays as a great place to work.
We helped c.300,000 candidates secure their next role.
c.800k online learning courses were consumed on our
portals, with over 20 million minutes of training undertaken.
c.300,000
candidates secured their next role with our help
Communities and natural environment
Hays ‘Helping for your tomorrow’ volunteering hours increased
by over 85% YoY to 17,673 hours. We work with charities and
initiatives that align with our Purpose.
We are a carbon neutral company and our SBTs for reducing
GHG emissions are approved by the SBTi.
4,506
colleagues were promoted, while
112 moved internationally within Hays
44.3%
senior female leaders, up 1.9% YoY.
Clients
We worked with c.40,000 clients to help them find, retain
and upskill the talented people they need to prosper.
c.40,000
clients worked with
Shareholders
Our highly cash-generative business model is focused on
creating superior value for shareholders through the cycle.
£240.1 million
cash returned to shareholders in 2023.
Core DPS up 5% and further £35.6 million
special dividend proposed
Host countries and governments
Suppliers
Hays contributes to economies and society both directly
and indirectly, through the taxes we pay, the jobs we fill,
the candidates we help upskill and the local education and
community initiatives we support. During the year, Hays
collected c.£1.3 billion of VAT and payroll taxes on behalf of
governments globally, in addition to having borne and paid
c.£0.4 billion taxes itself (more information on page 64).
Our Code of Conduct is designed to ensure high ethical
standards and foster long-term relationships.
19
OUR PEOPLE
OUR CULTURE
We are deeply proud of our
unique culture, which is based
on deep sector expertise,
training, collaboration, inclusivity
and doing the right thing.
To hear Sandra Henke talk about International Women’s Day
visit https://bit.ly/45GG7TM
“Our mission in People & Culture is to
ensure that our people are equipped
with the mindset, skills and behaviours
to build lifelong partnerships that
empower people and organisations
to succeed. This requires us to be
continuously shaping innovative and
creative solutions to our customers’
talent and career challenges. Enabling
that innovation starts with our culture,
shaped by a commitment to world-
class leadership development with
inclusivity at its heart, in an increasingly
diverse workforce.”
Sandra Henke
Global Head of People & Culture, Hays
Our people are the heart of Hays
Every day, our c.13,000 colleagues nurture lifelong partnerships that
empower people and organisations to succeed. This is our Purpose.
Attracting and retaining the best talent is fundamental to our ability
to deliver for our customers as Leadership Partners, and to grow
our business. The unique culture we have nurtured at Hays flows
throughout our business, no matter where you are in the world.
A strong employer brand helps to differentiate Hays. Our EVP,
known as ‘Create Tomorrow Together’, provides our people with
a high energy culture of belonging, exciting careers, world-class
training and development, and opportunities to contribute to the
communities in which we operate. It is designed to help us recruit
and retain the best talent in our industry. We also enable colleagues
to reach their full potential through industry-leading training and
development. Most of our new recruits join us from university on
our graduate scheme, or from a vocational career.
We train them in the ‘art’ of recruitment, building expertise and the
insights required to find the best person for a role, both in terms of
skills and cultural fit. We equip our consultants with the best tools to
do the job, embracing new technologies; the ‘science’ of recruitment.
Talented people want to work with the best: people, brand, tools,
technology and infrastructure. They also want career development.
Our culture is shaped and created by these features. We believe
this is very special, and of great value to our stakeholders.
We often refer to the ‘Hays Spirit’. When we ask people to define
it, they use terms such as ‘high energy’, ‘growth mindset’, ‘get great
things achieved at pace and together’, ‘great people’ and ‘fun’.
20
Hays plc Annual Report & Accounts 2023 EMPLOYER VALUE PROPOSITION
HAYS CULTURE
Growth
& Ownership
The future is
what you make it
Culture
& Belonging
Energised by
the Hays culture
– Enabling individuals
to take control and
shape their future
– Providing many
diverse opportunities
for progress
– Become part of an
inclusive, trusting and
high energy culture,
driven by our core
value of ‘Do the
right thing’
Enablement
& Partnership
Deep
understanding
– Supported by leaders
who help our people
to succeed
– Providing access
to market-leading
personal development,
tools and technology
to enable our people
to be successful
nique
U
Team-
oriented
High
energy
Entrepreneurial
V
a
l
u
a
b
l
e
Growth
mindset
Supportive
Ambitious
Fun
Deliver
at pace
Precio u s
Our values
Underpinning our Purpose is our core value that we must always
strive to do the right thing. This protects and enhances our
reputation, and builds trust with all our many stakeholders.
Our values are:
Intermediate managers
During FY23 we designed a new management development
programmes for intermediate managers, focused on key skillsets
and behaviours, our International Leaders of the Future (ILF)
programme. 20 colleagues attended as the initial cohort.
01
02
03
Do The
Right Thing
Build
Partnerships
Think
Beyond
We also know our people want to do interesting and meaningful
work, increasingly in an organisation that is purpose-led.
This is demonstrated in the work we have done through our
deep commitment to DE&I, Net Zero and our global volunteering
and fundraising programme, ‘Helping for your tomorrow’
(more information on page 58).
Promoting growth and development through training
Investing to train and develop all our colleagues is central to our
strategy and culture. This has also been adapted to thrive in flexible
and hybrid ways of working, including using blended, online learning
solutions, while also connecting people in person.
Typically, a first-year joiner will spend on average 46 days in training,
helping them to climb the ‘productivity curve’ while embedding the
Hays culture. Demonstrating the ability to progress a career at Hays,
4,506 colleagues were promoted in FY23, and 112 people transferred
internationally within Hays.
The quality of our leadership has always been a key strength.
As the world of work changes, we recognise our leaders are running
more complex businesses. We have therefore made a significant
investment in our leadership programmes, designed to build the
skills, mindset and behaviours to drive the business.
Our leadership development strategy is based on:
– building better strategic and operational thinking skills
and deeper psychological safety and stronger relationships
– expanding our ability to lead inclusively
– developing stronger operational execution capability.
Managing Directors and Senior Leaders: International
Leadership and Management Programme (ILMP)
Our world-class ILMP course has been running for six years, helping
leaders face the challenge of leading increasingly complex business
and diverse teams.
Through an intense residential course, we help to develop the skills
our leaders need to best position Hays to capitalise on rapid change
in our markets.
PEOPLE & CULTURE IN FOCUS
ILMP Case Study
As a new Managing Director, the timing and more
importantly the impact of ILMP has been significant.
Three key aspects stand out for me.
Hays appreciates the importance of people, who are
our real assets. We instinctively know the importance
of feeling empowered, having a purpose and acknowledging success.
And while these are important, ILMP revealed to me that the most
impactful thing you can do as a leader is to spend time getting to
know each person, often with no agenda, empowering them and their
importance to the organisation, and to me as their MD.
Second, as a newly promoted female leader, the programme has
given me the confidence to trust myself and my ability to succeed.
This is endorsed by a shift I see culturally across Hays towards a more
inclusive style of leadership – which is what ILMP clearly emphasises.
Finally, I was inspired by the international nature of my ILMP cohort,
reinforcing the global nature of Hays. Not just because of the talent
and insights that each brought individually, but also the demonstration
that when you enable people from Hays to work together, we are a
powerful force. This is hugely positive for Hays and all its stakeholders.
This point was emphasised soon after when our Danish MD, who was
in my cohort, contacted me regarding an Irish client seeking to work
with us in Denmark. Because of the close relationship we developed,
we were able to meet the client’s needs in two countries seamlessly.
Maureen Lynch
MD of Hays Ireland
21
Strategic ReportGovernanceFinancial StatementsShareholder Information OUR PEOPLE
OUR CULTURE
CONTINUED
Putting DE&I at the heart of our culture
We are committed to attracting diverse talent and maximising our
people’s potential, and our commitment to DE&I is fundamental
to unlocking that potential. In the prior year, we partnered with an
external specialist to help identify any barriers – real or perceived
– to getting in and getting on at Hays. In FY23, we have put those
insights to work, shaping global and regional DE&I plans. These
include hiring DE&I specialists across the business, including a
new global head, and we are implementing diverse hiring strategies
and inclusive recruitment practices. And by progressing our own
DE&I agenda, together with our acquisition of Vercida Consulting
(more information on page 39), we are better equipped to help clients
address their DE&I challenges.
Our vision
“ By creating tomorrow together – our
EVP promise – diversity and inclusion
will drive and enable our future.”
Our promise
“ To do the right thing around people,
thinking beyond on diversity, putting
inclusion first and building partnerships
with clients and candidates to create
an inclusive and diverse tomorrow for
Hays and the communities we serve.”
Do The Right Thing
Build Partnerships
Think Beyond
– Build diversity at all levels
– Be an employer of choice and
– Create a culture of inclusion
and geographies
DE&I thought partner
and allyship
– Access diverse talent pools
– Access new clients and markets
– Higher retention and productivity
through DE&I
Our Purpose
We benefit society by investing in Lifelong Partnerships
that empower people and organisations to succeed
Our DE&I vision
Creating Tomorrow Together – diversity and inclusion will drive and enable our rapidly evolving future
Our DE&I promise
To do the right thing on diversity, think beyond on inclusion, bringing to life the skill, talent and potential of
everyone at Hays, enabling lifelong partnerships with the communities we serve
DE&I Strategic
Pillars
Strategic Goals
KSPs
People
Workplace
Markets
Diversity at all levels, everywhere
Culture of inclusion and allyship
– Inclusive hiring
(senior appointments process)
– Targets, data, tracking
– Family friendly policies
– Global ERGs and leadership
– Allyship communication
and initiatives
– Wellbeing
Employer of choice and DE&I
thought partner
Clients, partners and services
Future Thinking
– Global recruitment methodology
– Caring, friendly culture
Allyship in action
Systemic inclusive impact
Our values
Do The Right Thing, Think Beyond, Build Partnerships
22
Hays plc Annual Report & Accounts 2023 Strategic Report
Governance
Financial Statements
Shareholder Information
How do you see inclusion
happening at Hays?
“ Inclusion to me is a daily choice we make
as leaders and employees within an
organisation, and is woven into our values
and culture. As someone with dual identities,
in being both gay and quite recently
diagnosed with ADHD, I belong to two
hidden minority groups. My experience at
Hays having worked across multiple teams
over eight years, is that we are always open
to learning and creating space. I have the
flexibility that allows me to have boundaries
to enable me in being successful in my work,
and I have never felt that my neurodiversity
or sexuality has ever been a limiting factor
in my career.”
David Butler-Smith
Flourish Committee member ANZ
“ The focus on inclusion can be clearly seen
and felt at Hays. The communication around
inclusion is clear, encouraging everyone
to be themselves. Previously I never felt
comfortable voicing challenges when
juggling work and my three children. Now I
don’t hesitate to share any challenges I may
encounter, knowing I am heard, listened to
and supported throughout. Hays has truly
created an environment that makes us all
feel comfortable being who we are.”
Tammy Stellini
Managing Director, Hungary and CEMEA DE&I Sponsor
“ I have always perceived Hays as an open,
tolerant organisation. With the focus and
implementation of our DE&I strategy, I
feel very strongly that we have been able
to move beyond tolerance and openness.
Our culture is accepting and embracing
diversity, and there are less structural
barriers limiting people to bring their full
self to work. My best example for this is
the Employee Resource Groups, which
empower and bring to life different aspects
of our diverse Hays population.”
Anna Lüttgen
Women Empower & Leadership team member – GSCN
“ I see inclusion in action at Hays through the
communications, activities and strategies
we adopt and promote. I see the great
people that we are now lucky to have, in
dedicated DE&I roles, helping us become
more inclusive. I hear conversations of
people comfortably challenging people
at all levels to be better and to think more
inclusively. I also see the impact of our
Employee Resource Groups creating a
greater level of awareness and as Co-Chair
for the Black Network I know we are creating
opportunities for sharing, learning and
celebrating cultural diversity.”
Jason Dunwell
Co-Chair UKI Black Network
THREE-YEAR DE&I PLAN
Diversity at
all levels and
geographies
– Increase diversity pool,
both internal and external
– Inclusive hiring processes
– Equity standards
(e.g. Carers, Wellbeing)
Create a culture
of inclusion
and allyship
– Inclusion champions
& sponsors
– Employee Resource
Groups (ERGs)
– EVP and global
communications calendar
Be an employer
of choice and DE&I
Thought Partner
– to clients and partners
via Vercida
– via our ERGs
– via thought leadership
content
Watch Supporting Diversity with Pride
on http://bit.ly/486FSDz
23
The experts’ view
Bianca Stringuini joined Hays during
FY23 as our first Global Head of Diversity,
Equity & Inclusion.
With a leadership background in the areas
of DE&I, wellbeing and broader People
& Culture roles, Bianca brings to Hays
her extensive experience working in global
organisations including professional
services, banking and insurance.
She also brings her passion for evolving
organisational culture, practices and
behaviours through practical human-centred
action, and about connecting with the
external marketplace on DE&I issues.
“ I have been highly
energised by my first year
at Hays. I believe our work
to create a pervasive,
inclusive culture will help
Hays reach its long-term
ambitions to double profit,
and diversify its business
as we leverage diverse
talent pools at all levels.”
Bianca Stringuini
Global Head of Diversity, Equity & Inclusion
“ Diversity profoundly enriches my Hays
experience. Cultural diversity enhances
my understanding and connection with
colleagues. Being an ally to equity-deserving
groups brings me fulfilment and hopefully
fosters a safe environment for their
authentic selves. Moreover, understanding
neurodivergent individuals equips me to
be a more effective facilitator. The diverse
tapestry of experiences, thoughts and
identities fuels personal growth and drives
professional success. At Hays, embracing
diversity is not just a commitment but
an opportunity to learn, connect and
create a thriving community that
celebrates individuality.”
Jason Motley
Co-Chair Black Excellence Council Americas
Hays plc Annual Report & Accounts 2023
OUR PEOPLE
OUR CULTURE
CONTINUED
How does diversity enhance
your day-to-day life at Hays?
“ Diversity makes my work easier. The more
thoughts and perspectives we have, the
better we can serve our customers, both
candidates and clients.
On a personal level, I’ve never felt more
comfortable at Hays. I’ve spent 21 years
here, of which four I’ve been fully ‘out’ and
happy to talk about my personal life. The
‘show’ that I put on before that, was tiring
and unnecessary. And that isn’t because
I ever faced any discrimination here, but
simply because I didn’t know many other
people like me at Hays. Running the Pride
network has given me a network of other
LGBTQIA+ people to lean on, and frankly,
make me feel like I’m not the odd one out.”
Louisa Bendicto
Americas DE&I Lead
“ When I joined Hays in the late 90s, I had
this preconception that to be successful,
you needed to be a white straight man
and thought that the best thing that I
could do was to just hide certain aspects
of my personal life outside of work. Hays
championing inclusion in the workplace
makes me feel as though I’m treated
as an individual, and that my identity,
my sexuality, or my point of view, is
recognised and celebrated.
In my team, I have people from numerous
different cultures, different nationalities,
different religions etc… and in my eyes this
wide range of diversity not only increases
innovation and strategic thinking in a work
context, but also benefits me in my own
personal development, as I learn from
people whose backgrounds and experiences
are different from my own.”
Nick Sakrani
Director, Hays Paris and DE&I sponsor for France
and Benelux
“ Diversity is imperative to ensure we do not all
think in the same way. Diversity in cultures,
age, personality etc. ensures we have
opinions and viewpoints based on various
background. This means we are challenged
into not thinking only in one way and thus we
have different and creative ways of problem
solving and strategic thinking. Our biases
and preconceptions are challenged for a
better, more wide-angled view on decisions
we make both internally and externally.”
Neem Lock
Asia DE&I Council Member
24
Hays plc Annual Report & Accounts 2023 Strategic Report
Governance
Financial Statements
Shareholder Information
Life at Hays
“ There’s a term that society uses nowadays,
which is third culture kid. What was really
refreshing to see when I first joined Hays
was that I wasn’t the minority. There were
so many other people like me. But it’s also
about being yourself and being able to share
ideas that you truly feel passionate about.
I’ve always felt like there was a sense of
safety, to do that in the workplace.”
Genzo Yamamoto
Senior Manager L&D and T&A, Japan
“The person that I was before I joined
Hays was a completely different person.
I’ve grown so much with Hays and it’s
all in the best ways. It’s helped me really
communicate better, become a lot more
articulate, have confidence in the person
that I am, and in the skin that I wear,
allowing me the space to be myself.”
Bringing our DE&I mission
to clients and candidates
“ Bringing neurodiverse candidates into
one of our clients. I’ve learned that 85%
of candidates with autism are either
unemployed or underemployed. So we’ve
partnered with our client to educate the
hiring staff. Let them understand that these
are fantastic candidates and should be given
true opportunities. So we’ve just placed
our first candidate over the summer. She is
thriving. She’s doing absolutely wonderfully.
And now word’s getting around the client,
they want to hire even more.”
Allison Calderon
Client Director, USA
Natasha Ishak
Regional Director, Malaysia
FEMALE REPRESENTATION
IN SENIOR LEADERSHIP
In FY23, 44.3% of our top 680 leaders
were women, a significant increase of
1.9% YoY. This represents the Executive
Board and the three management levels
below this, and we are on track to reach
our target of 50% by 2030. Senior female
leadership, as defined by the UK Corporate
Governance code, was 36.6%.
FEMALE LEADERSHIP
WITHIN HAYS TOP
680 LEADERS
1
2
Y
F
41.6%
58.4%
2
2
Y
F
42.4%
57.6%
PEOPLE & CULTURE IN FOCUS
3
2
Y
F
55.7%
44.3%
GENDER REPRESENTATION
AT HAYS
Directors of the Company
44.4%
55.6%
Employees in other
senior executive positions(1)
36.6%
63.4%
Other employees of the Group
61.5%
38.5%
Female
Male
(1)
As defined under the UK Corporate
Governance Code.
25
LIFE AT HAYS
Attracting and retaining the best talent is
fundamental to our ability to deliver for our
customers as Leadership Partners, and to
grow our business. We are proud of the unique
culture we have nurtured at Hays, which flows
throughout our business, no matter where you
are in the world. A strong employer brand helps
to differentiate Hays.
Watch Life at Hays on https://bit.ly/44ORokj
YourVoice, our employee engagement forum
Our main forum for engaging with colleagues globally is our
YourVoice survey.
We conduct two global employee surveys annually, a main survey
in May and a pulse survey in November, which can be used to
explore key issues raised in the previous main survey. YourVoice
is translated into 12 languages, and is completely confidential
which allows colleagues to share their honest views with
anonymity. Feedback is reviewed closely by the Executive
Board and Senior Managers to identify and inform actions.
Where possible, we also measure specific quantitative goals where
we can set sensible measurements of success. We also use other
communication channels to ensure colleagues are kept informed
of key developments, including Town Halls, ‘Ask Alistair’ and
Regional MD email campaigns. These have enabled us to engage
with a broader cross-section of our people and provided more
opportunities to listen directly to their challenges, opinions and ideas.
“Hays doesn’t conflict
between my personal life
and my career. The trust is
there – they allow me to be
a mum while also managing
my accounts and my team.”
Allison Calderon
Client Director, USA
YourVoice favourability score
Overall Employee Engagement
2023
76%
2022
80%
2021
78%
Commentary
Our overall engagement score decreased slightly in FY23, although
remains at a very good overall level. We attribute the reduction mainly
to slowing economies and job markets
I believe that at Hays we positively
impact organisations and people
81%
84%
81%
81% is a strong score in this category, which is closely aligned to our
purpose of building lifelong partnerships with people and organisations
I would recommend Hays as a great
place to work
81%
86%
80%
Over 4 out of 5 employees recommend Hays as a great place to work,
which is highly encouraging
At Hays, I feel a strong sense
of belonging
70%
75%
69%
Creating an environment where colleagues are aligned and feel like they
belong is a great enabler of culture and growth
People from all backgrounds have an
equal opportunity to succeed at work
82%
84%
80%
We are determined to nurture a culture where every person who joins
Hays has an equal chance to build a successful career
Hays creates an inclusive workplace,
recognising and respecting every
employee as an individual
80%
83%
78%
Having a diverse, equitable and inclusive culture where everyone feels
valued sits at the heart of our strategy, and a score of 82% represents a
strong result
Hays is committed to benefiting the
societies in which we operate
76%
72%
Question
added in
2022
Initiatives like ‘Helping for your tomorrow’, our Net Zero journey and
greater internal profile have helped to increase this score
I have a positive working relationship
with my manager
90%
92%
90%
As the ultimate people business, we are delighted that 90% of our
colleagues describe their relationship with their manager as positive
26
Hays plc Annual Report & Accounts 2023 “ Our culture is about being there
for each other, being collaborative,
passionate and solution orientated.
It’s about making sure we are listening
and motivated on a day-to-day basis.
And it’s actually never felt like a job
for me personally, because if you love
what you do, it’s an absolute joy to
rock up to work.”
Peter Marinis
Senior Manager Technology, Australia
Board involvement and responsibility
The Board has overall responsibility for the welfare and interests
of the workforce, and during the year Non-Executive Director
MT Rainey continued her work as designated workforce
engagement director. MT’s role serves as an additional and
independent channel for the Board to hear directly from Hays’
diverse workforce.
FY23 awards for excellence
For the first time, Hays ranked in the top 1% in the ‘Leading
Employers’ 2023 survey. 85,000 companies were examined,
so we were delighted to be highly ranked in this prestigious
global award.
In Germany, Hays ranked sixth in the Women’s career index and
our score has increased by c.50% since 2018. In ANZ, our Learning
& Development team was nominated as a finalist by the Australian
HR Awards 2022 for Best Learning & Development Program.
Several Hays entities won ‘Great Places to Work’ awards, including
Japan, Belgium and the Netherlands. Spain also won a top 100
places to work award.
“ Everything that happens
at Hays is up to you.
It’s highly rewarding
– you feel that you are
the owner of your own
business, and everything
that happens in it.”
Carlos Fuente
Team Manager, Spain
Hays Ireland has been awarded Gold Accreditation from the Irish
Centre of Diversity, one of only 11 organisations across Ireland to
achieve Gold. Hays UK placed 10th in the Job Crowd’s top graduate
employer award, up from 15th in FY22. We were also the top ranked
Business Services company and ranked third overall in “Career
Progression”. We are also committed to supporting military veterans
by providing them with access to the best career opportunities.
We achieved the Armed forces gold covenant accreditation, one
of only two major recruitment companies to do so.
Also in the UK&I, we were awarded ‘Best Financial Wellness Initiative’,
which celebrates organisations and individuals which showcase
leadership, innovation and best practice in focusing on the mental
health agenda at work.
Hays Enterprise Solutions won the ‘Nétive VMS Best Use of
Technology Tiara Award’, for its Inspire programme, working with
employers and schools to positively engage young people with
careers. Enterprise Solutions were also highly commended by Tiara
for our ESG submission. Our Net Zero commitment, the launch of
‘Helping for your tomorrow’, the free training available on our learning
portals and enhancing our DE&I policies are just a few ways we are
working towards building a business which is not only sustainable
and stronger, but which has a positive impact on our clients,
candidates, employees, communities and other stakeholders.
27
Strategic ReportGovernanceFinancial StatementsShareholder Information CUSTOMER PARTNERSHIPS,
POWERED BY OUR PEOPLE
AND TECHNOLOGY
We are building longer-term relationships
with clients and candidates, moving Hays
up the value chain.
Our Values
Do The Right Thing
We always act in the best interests of our candidates,
our clients, our colleagues and our communities.
We want to find the right solution every time, because
every person and situation is different. We stand by
our commitments, we keep our promises and we
treat everyone with the respect they deserve. This is
what earns trust.
Build Partnerships
Partnerships power what we can achieve. We take
the time to listen and understand people’s needs and
aspirations so that we can meet them. Collaboration
and inclusivity are at the heart of our approach,
creating solutions together, learning from each other
and sharing our knowledge and experience. That’s
what supports strong relationships and enables
shared success.
Think Beyond
Our knowledge and ambition drives us forward.
We challenge ourselves and our customers as we
bring open, inquisitive minds that consider every angle.
We aren’t held back by ‘that’s the way we’ve always
done it’. We see the big picture today while we build
a long-term perspective of tomorrow, anticipating
change and enabling us to be confident and agile
with our advice. That’s what makes us experts.
Working for your tomorrow
‘Working for your tomorrow’ is our promise to customers, by which
we mean both our clients and candidates, that their continued
success is at the heart of what we do.
Our purpose is to benefit society by investing in lifelong partnerships
that empower people and organisations to succeed. We do this by
combining knowledge through scale, meaningful innovation and
deep understanding. We have the depth and breadth of a global
network, and deep expertise driven by c.8,500 consultants and
data points across multiple industries.
Our broad global network, powerful data-driven workplace insights,
unrivalled market expertise and tailored people solutions, allow us
to be a true Leadership Partner to our customers, helping them to
achieve their goals today and tomorrow.
We challenge ourselves to continually provide customers with
greater insights on exactly what is going on in the world of work,
both now and in the future.
We believe professionals need different forms of support throughout
their career. Our commitment to building lifelong partnerships
with candidates is a key priority and we continually invest in our
community of professionals, helping them to achieve their
career ambitions.
Hays is focused on being a truly customer-centric business.
By offering our customers an unrivalled service, we can set
Hays apart from our competition and create long-term value
by delivering the recruiting experience of tomorrow.
28
Hays plc Annual Report & Accounts 2023 Our customers are increasingly looking for
Leadership Partners – those who have the scale
and capability to provide deep insights and value
Customer expectations and demands have significantly increased
in recent years, moving away from traditional transactional
relationships towards much deeper partnerships. Success is
increasingly driven by our ability to help solve complex problems and
provide valuable insights around clients’ talent needs and solutions.
Clients want a partner who drives their thinking forward, and
who provides the data and insights they need to make decisions
for today and their future. They need a partner who can challenge
and augment their strategy and who understands their business
in detail, helping them improve and accelerate decision-making.
By becoming Leadership Partners we open a wealth of new
opportunities to take market share and move up the value chain.
This enables us to support our customers more effectively across an
increasingly broad array of talent services, such as DE&I consulting,
assessment & development, training, and workforce advisory.
Three pillars of Leadership Partner status
We believe there are three pillars which enable us to become
Leadership Partners. The process is also dynamic, with new
services and criteria likely to be added over time.
Our clients and candidates now require a broader, more holistic
partnering relationship that can provide deep insights and value
Transactional delivery partner
Leadership Partners
Characteristics sought by customers
Hays’ delivery in practice
– A partner who drives my thinking forward in ways I could
not have done alone
– A partner with deep expertise and best practice of today –
and tomorrow
– A partner with clear knowledge of the issues affecting my
business, and whose greatest impact is in how they tailor their
understanding to help me make the right decisions, quickly
– Highly personalised services for both clients and candidates,
driven using technology at scale to inform and enhance the
human elements of the process
– Deep expertise on the best practice of today and the future
– Scale and depth of insights to drive better decision-making
– Building large, highly focused, engaged Talent communities
Knowledge through scale
Deep understanding
Meaningful innovation
Broader Talent Networks
Provide valuable market
data insights
Personalised marketing
technology
Use of quality BI dashboards
and applications
Understanding challenges
and solutions
Market trends and changes
Career pathways
Access to learning
Has a long-term relationship
perspective
Unique talent sources
and solutions
Hire-Train-Deploy
HR services’ evolution
Hays Hub
In-house Hays portal
29
Strategic ReportGovernanceFinancial StatementsShareholder Information CUSTOMER PARTNERSHIPS,
POWERED BY OUR PEOPLE
AND TECHNOLOGY CONTINUED
The Hays data funnel: Driving more value from data than HR teams and our competitors
Access to more and better data
Convert data effectively into insights
Drive real actions from insight
CLICK
LIKE
TWEET
REVIEW
DOWNLOAD
SHARE
COMMENT
LOG-IN
SEARCH
APPLY
CALL
VISIT
MILLIONS
OF NEW
DATA POINTS
EACH DAY
DATA QUALITY
& COMPLIANCE
INSIGHTS
REAL-TIME FEED
INTO CONSULTANT
TOOLS, DRIVING FEES
Multichannel
engagement
signals at scale
Captured
via Hays’ Tech
ecosystem
Hays’ proprietary
data infrastructure
and raw data asset
Insights from analytics based on Hays’
expertise and data
Integrated into our Talent
Networks and consultant
tools, which drives fees
Our long-term investment and commitment to
technology places data at the heart of our business
We have invested to build cutting-edge data systems for well over
a decade. An earlier iteration of our strategy was our ‘Find & Engage’
recruitment marketing model, which over time evolved into our
‘data funnel’, which automatically captures millions of data points
accurately across many channels each day. Our data ecosystem
has been further enhanced. Today, we operate a highly automated
solution designed to solve – and anticipate – the rapidly growing list
of client needs.
This enables us to process these tens of millions of data points daily,
turning them into meaningful signals and actionable insights for our
clients and consultants, at a scale and depth previously impossible.
These insights in turn drive our Talent Networks, which we believe
are a competitive advantage.
Generative AI in recruitment
Our vision is to be recognised as a recruitment market leader in the
use and optimisation of Artificial Intelligence (AI). We will do this by
delivering a responsible AI strategy globally.
The rapid pace of developments in generative AI brings a wealth
of new possibilities for Hays and our customers. In time, it is our
ambition to deliver enhanced customer service using AI across
all of our processes.
AI also brings significant challenges around data, data protection,
legal compliance and ethics. We believe the use of AI tools and
resources will present great service and productivity opportunities
going forward, and we are building our strategy around driving
efficiencies in a highly responsible and compliant way.
30
Hays plc Annual Report & Accounts 2023 During FY23 we established a senior working group to evaluate all
aspects of AI. We have already identified numerous positive use
cases, and we are working closely in partnership with key suppliers
to evolve business tools and identify opportunities to incorporate
generative AI into key workflows across Hays.
We are continuously evaluating our processes and the technology
that we use, with the aim of ensuring our colleagues have the best
tools available, boosting productivity and helping provide clients
and candidates with the best service possible.
AI has significant potential to improve all stages of the recruitment
process for clients and candidates, and our consultants, including:
– summarising job requirements
– creating job descriptions and web adverts
– curating Talent Networks
– analysing key market trends and developing appropriate strategies
– identifying skill shortages for candidates and offer training.
More specifically, the graphic below shows some practical use cases
which are already in progress:
Sales & Targeting
Developing sales and proposal materials
Job Intake & Advertising
Creating/translating job ads and descriptions
Candidate Search
Writing effective Boolean search strings
Screening, Longlisting/Shortlisting
Assessing suitability against job requirements
Interviews & Selection
Preparing questions against required skills profile
We believe the scale of information we bring is a differentiating
asset. We add value by presenting customers with real-time
information to significantly enhance their decision-making, and
their ability to engage the right talent to grow. Consultants can also
demonstrate to a customer, in real time, where a particular role sits
in terms of supply and demand, salary and local market knowledge.
Supported by our automated marketing technology, we constantly
source skills that our customers need, building relationships with
candidates from their first digital interactions with Hays.
“The greatest advantage of using Talent
Networks is the time saved in identifying relevant
candidates. It allows me to save and also rework
a specific and dynamic search for each job, which
is invaluable as it saves time recreating different
searches. This can even be done while the client
is on the phone providing the brief. Speed is
everything in securing talent for our clients
– the fact that Talent Networks show new
or updated candidates each day is invaluable.
I save Talent Networks for each role so that I
can quickly reuse them when I get a similar role.
I also use Talent Networks to be very specific
about location, I am able to quickly see who is
in a certain area. I can search both registered
and holding candidates at the same time, and
am able to call my clients to advise on new talent,
giving them opportunities for proactive hiring
and workforce planning.”
Caroline Edwards
Client Director, Hays Australia
We have set up strong internal governance structures to validate
all business use cases. We believe it is essential that all our
development occurs safely and behind Hays’ robust security
firewalls. We will not expose or release any client or candidate
data to an external generative AI model. Our AI strategy is focused
on our core value of ‘Do the right thing’, aiming to delivering strong
internal efficiencies while minimising any risk to our business, our
people or our customers.
Talent Networks offer clients unique insights
and solutions – and help to find candidates faster
The transition from delivery excellence to Leadership Partner relies
on us identifying and connecting with the right candidates at the
right time, and fully understanding what’s right for them and their
careers. Talent Networks are the community ecosystems we have
built to support our consultants, built on top of our vast ‘digital data
lake’. They optimise our digital candidate sourcing strategies, largely
operating in real time, and reducing our time to shortlist.
31
Strategic ReportGovernanceFinancial StatementsShareholder Information CUSTOMER PARTNERSHIPS,
POWERED BY OUR PEOPLE
AND TECHNOLOGY CONTINUED
Our engagement strategy has developed over many years and underpins Talent Networks
Engagement Activity
Approachability
Personalisation
Data & Insight Platform
Personal Insights
Leads & Shortlists
Hiring Workflow
Maximise early-stage and long-term
engagement with candidates and clients
Deep, unified and proprietary data assets,
built up from engagement data over time
Deliver outstanding customer experience
and hiring outcomes
Focus on automation & programmatic
advertising to maximise scale
and optimise consultant
workload
Data science techniques
including machine learning
to power insights
Focus on enhancing the
productivity & performance
of our consultants
Placing candidates better, faster and more efficiently than in-house HR teams or competitors
Upskilling and reskilling via Hays MyLearning
A key part of our strategy has been the creation of a specific portal,
MyLearning, to help candidates upskill. This has been made possible
due to our deep understanding of specific career journeys made
across hundreds of thousands of roles.
It is no longer enough just to offer candidates advice. Leadership
Partnership means we need to demonstrate personalised insights
on how they can develop the skills to thrive – better equipping
themselves for future success.
Our complex ecosystem uses millions of data points amassed
over many years, and our complex algorithm enables us to map
skills against roles dynamically. We can offer candidates a range
of pathways for their careers, based on the successful careers
of others with similar skills.
We have made substantial progress in improving our customer
experience. However, these ecosystems are organic and dynamic.
HAYS MYLEARNING IN FOCUS
Training, upskilling and reskilling
Via Hays MyLearning, candidates can access training and upskilling
resources, consuming it in the format best suited to their needs.
MyLearning enables us to identify the skills each candidate needs
to progress in their career. We can then provide them with a bespoke
playlist of learning content, curated for them, which helps them gain
the necessary skills, whether they be technical skills or softer skills
such as problem-solving, to advance.
They can then choose from a large array of content and consume
it in their own time as a free value-added service. In FY23 nearly
20 million minutes of content was consumed on MyLearning.
c.20 million
minutes of training
consumed
c.800,000
unique enrolments on
Hays’ learning platforms
32
We continue to invest in them, framed by feedback from our
customers and consultants, combined with market insight from
our innovation team, who are constantly monitoring the technology
landscape, identifying new trends, opportunities and threats.
“ The reskilling of the workforces throughout
the world is one of the biggest challenges facing
every country. We are constantly evolving our
ecosystem to be a leader in insight-driven
reskilling – only possible because of our deep
understanding of how the market is reacting.”
Steve Weston
Chief Customer Officer
Hays plc Annual Report & Accounts 2023 Conclusion: differentiating through customer service
Today, our customers rightly demand more than ever. However,
these demands create opportunities to win recruitment market share
and grow in related talent services, by delivering outstanding service.
We have significantly enhanced our customer offering by creating
market leading ecosystems and communities which support deeper,
more meaningful partnerships. This allows us to engage with
millions of people, build stickier long-term client relationships and
ultimately fill more skilled roles. Our Talent Networks also deliver
significant benefits for candidates – automation ensures they are
able to access every suitable role across Hays’ global ecosystem.
Our networks work at speed and scale due to the breadth and
depth of millions of data points we capture in real time globally.
The investment to build these data points began many years ago
– we believe it is simply not possible to short circuit that process,
and that we have created a tangible competitive advantage for Hays.
Our mix of technology, automation/AI and expert people means
we can tailor service to the individual requirements of each
customer. This delivers the knowledge they need through scale,
deep understanding and meaningful innovation, and allows Hays
to be their Leadership Partner.
TECHNOLOGY IN FOCUS
Building stickier and more meaningful
partnerships with our clients
“ We invest time, expertise and resources in these partnerships.
We view each partnership as a strategic alliance to reach
reciprocal success. We fully commit ourselves to:
– framing and scoping the needs, vision and culture of
our clients
– co-designing innovative solutions to meet their demands
– selecting and dedicating the best resources to deliver
our services
– keeping track of our performances, and looking for
constant improvements
– exchanging critical insights to keep our partnership alive
and expand it.
The more we learn about our clients and their needs,
the better we can serve them and in turn move up their
value chain. It can then become a virtuous circle.”
Frédéric Béziers
Regional Director, France
Hays’ broad client types and key characteristics
Client type
Spot/one-off
transaction
Multiple placements
per year
Preferred Supplier List
(PSL)
Full outsourced
Key customer needs
Typically SME clients, but also some larger clients,
who need to access deeper pools of available talent,
faster and more accurately than they can do
themselves
Some clients may use Hays only once, others may
use Hays many times each year
Customers who need
a partner to help with
broader talent solutions
Dozens or even
hundreds of placements
each year
Requires a deep, trusted
relationship to deliver
all (or part) of their
HR function
Hundreds or thousands
of placements each year
Proportion of Hays fees
c.20%
c.30%
c.30%
c.20%
Customer’s service
requirement
Serviced by Hays’ global
network
Known Hays contact and
Hays’ global network
Account Management
team
Dedicated client
engagement managers
New company formation
Win new customers
Scope to win increased
market share with
existing clients
Growth opportunities
for Hays
(note: all categories
benefit from the positive
impacts of wage
inflation, and also in
FY23 benefited from
rising Temp & Perm
fee margins)
Win new customers
– many thousands of
organisations we do
not deal with today
Deliver recruitment
across more specialisms
Scope to convert
multiple placements into
a PSL arrangement
Win market share as
Preferred Suppliers (PS)
(we have c.1,200 PS
clients; typical share of
their spend is 20-50%)
Win more client
contracts
Convert to full
outsourced contract
Opportunities to offer
selected talent services
Add new, value-added
talent services
Win more outsourced
contracts with c.80-90%
of client spend. We
currently have c.150 fully
outsourced contracts
with some of the largest
employers globally
Add new regions to
existing contracts
Add new, value-added
talent services
33
Strategic ReportGovernanceFinancial StatementsShareholder Information Hays plc Annual Report & Accounts 2023
IN FOCUS ONE
HAYS IS IDEALLY
POSITIONED TO ACCELERATE
GROWTH IN TECHNOLOGY
RECRUITMENT
We believe we are ideally placed to outperform the market.
Boosted by our strong brand, global scale, expertise and
cutting-edge systems, our clear growth strategy has five pillars:
PILLAR 1
PILLAR 2
PILLAR 3
PILLAR 4
Grow fees in our core Tech sub-specialisms,
capturing rapid structural growth trends
Expand Hays’ Tech capabilities geographically
and infill existing areas of global expertise
Expand into new, structurally growing
technologies
Win new clients and deepen our relationships
with existing clients by broadening the services
we offer beyond recruitment
PILLAR 5
Grow our Technology Project Services business
in existing and new markets
Our growth strategy in action
We have a strong track record of growth within the Technology
sector. We have a market-leading position in Germany, UK&I and
ANZ and have experienced significant growth in countries where
Hays has a footprint but has not historically focused on the
Technology sector.
We believe we can outperform our competitors because:
– we have Talent Networks delivering high levels of candidate
engagement
– we have the breadth of customers in Public and Private sectors
from large Enterprises through to ambitious start-ups
– we have market-leading experts in each geography, sector,
technology and service line
– we are collaborating with partners who are driving the most
exciting growth technologies
– and finally, we have the global leadership team to deliver.
Our Technology business has grown net fees
at c.10% CAGR since 2012, and is a global leader.
Yet our overall market share still remains very low.
We have a highly scalable global platform and a
clear growth strategy. We are on-track with our
Investor Day ambition to drive fees to £500 million
and beyond by FY27 in this rapidly growing market.
Our Technology business is a global leader in a market with
significant long-term opportunities. The global technology
recruitment market size by contract revenue and permanent fees
according to SIA data is over US$100 billion, which equates to Hays
having a c.3% market share. This market has grown by more than
60% over the past 20 years.
Importantly, and despite some near-term economic headwinds,
tech job categories are being created at a faster rate than candidates
become skilled. This is helping create a talent gap in a market with
over 60 million workers.
Over the past decade, Hays Technology net fees have increased
from £121 million to £333 million in FY23. Our growth has been
underpinned by strategic investment in scaling the business and
established a clear global growth strategy, supported by a strong
leadership team to ensure we have the management infrastructure
to deliver – and then exceed – our £500 million FY27 fee ambition.
Hays Technology net fees* (£m)
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY12-23 CAGR: 10%
199
30
169
183
29
154
163
25
138
121
19
102
125
18
107
133
21
112
250
46
204
241
44
197
229
38
191
225
38
187
333
53
280
302
60
242
Perm
Contracting & Temp
* Net fees and fee growth shown on a constant currency basis. The Veredus
acquisition in FY15 added c.£17 million in Technology fees and is excluded
from the CAGR, which is shown on an organic basis.
34
Hays plc Annual Report & Accounts 2023 Strategic Report
Governance
Financial Statements
Shareholder Information
Sub-specialism coverage by geography
2023
2027
Core
Scaling
Greenfield
y
n
a
m
r
e
G
K
U
A
S
U
a
i
l
a
r
t
s
u
A
e
c
n
a
r
F
d
n
a
l
r
e
z
t
i
w
S
i
n
a
p
S
n
a
p
a
J
a
d
a
n
a
C
i
a
n
h
C
3
3
-
1
1
s
e
i
r
t
n
u
o
C
y
n
a
m
r
e
G
K
U
A
S
U
a
i
l
a
r
t
s
u
A
e
c
n
a
r
F
d
n
a
l
r
e
z
t
i
w
S
i
n
a
p
S
n
a
p
a
J
a
d
a
n
a
C
i
a
n
h
C
3
3
-
1
1
s
e
i
r
t
n
u
o
C
Project & Change Mgmt.*
DevOps & Cloud
Software Development
Data & Analytics
SAP
Cloud Development
Cyber
Salesforce
ServiceNow
Workday
RPA/AI/ML
Project Services
* Incorporating Product & Customer Success.
THE
EXPERTS’
VIEW
We made strong progress in aligning our
global operations in Technology in FY23.
Whilst Perm recruitment has slowed sharply,
Technology non-Perm, 85% of our Tech fees,
has remained solid. Non-Perm is a key
strategic priority, and we continued to scale
our Contracting & Temp business, with fees
up 11% including Germany up 10%, and
EMEA ex-Germany up 25%. Our account
managers have developed a focused
approach which segments key sub-sectors,
targeting the fastest growing areas. We are
increasingly aligned to the most in-demand
skills, allowing us to scale faster, while
sustainably building delivery capability
and capacity.
Demand for non-Perm talent continues
to be strong in Projects and Change, Cloud
Infrastructure and Software Development
skills. We also continued to invest in
structurally growing areas like Data,
Advanced Analytics and Cyber, which
grew by c.30% and represented c.13% of
our global placements in FY23. We also
anticipate an increase in demand for skills
in large enterprise platforms such as
Oracle, SAP and Dynamics as organisations
migrate to cloud-based solutions. Although
technologies such as ServiceNow,
Salesforce and Workday have seen some
hiring slowing, we believe the medium-term
fundamentals are strong and we are
protecting our investments.
Project & Change Mgmt.*
DevOps & Cloud
Software Development
Data & Analytics
SAP
Cloud Development
Cyber
Salesforce
ServiceNow
Workday
RPA/AI/ML
Project Services
Customer diversification and candidate
acquisition continue to be core themes and
we are developing an ecosystem approach.
Firstly, we actively engage with scaling,
digitally native organisations, including
our partnership with Empact Ventures
and our co-designed ‘Superconnect’
(www.haystechnology.com/super-connect-
for-good) competitions, linking high growth
Technology businesses with global
candidate audiences.
We have launched a software developer
ecosystem focused on early careers,
CodeCo. This allows coding school
graduates and hobbyists to participate in
code challenges and hackathons, to build
their technology portfolio and participate
in online learning as well as access career
advice and jobs. In CodeCo’s first nine
months, we have built a community with
over 1,400 active members and our focus
is now to scale the audience, linking our
communities with those looking to
hire talent.
James Milligan
Global Head of
Technology Recruitment
More information on
www.haystechnology.com/
super-connect-for-good
35
Strategic ReportGovernanceFinancial StatementsShareholder Information
Hays plc Annual Report & Accounts 2023
IN FOCUS TWO
OUR CULTURE IS
PART OF WHAT MAKES
HAYS A GREAT PLACE
TO WORK
THE
EXPERTS’
VIEW
“The Company’s inclusive culture and the
people that work here make it a great
place to work. Hays is a people business
with cheerful, ambitious and dynamic
employees. We have a healthy work-life
balance and have open and transparent
communication from both top-down
and bottom-up within the Company.
We also have a culture of appreciation
and employees get recognised for
their work. As a result we are engaged,
motivated and have a strong sense
of purpose in our daily work.”
Shogo Fujii
Japan
“I definitely feel trusted by Hays. I have a great
relationship with my management and my
leadership teams. I’ve proven that I can run a
successful account. I have an amazing team
behind me that allows me to step away if I
need or focus on different areas. And I know
that they’re there to jump in where needed.
So that’s completely empowering in my role.”
Allison Calderon
USA
Attracting and retaining the best talent in the market is central
to delivering for our clients and to growing Hays’ business.
We work hard at nurturing our unique culture, which underpins
this attraction and retention.
We are proud of the culture we have
nurtured, and how it frames the success
of our business.
Although traditionally our strategy has been
to hire mostly at entry-level and we continue
to do so, we supplement this strategy by
hiring more experienced talent in those
parts of our business that require greater
specialist and technical expertise. We have
also seen a recent increase in the number
of people choosing to re-join us.
Asking these three groups of talent why
they chose to work for Hays identifies:
➊ Our commitment to innovation
for their sector
➋ The energy and growth mindset
of our leaders
➌ Our systems and infrastructure
which support our world-class
delivery for clients
“ The beautiful thing is that
everybody in the business
really supported our ambition
– everything we do is about
the future of Hays Malaysia.
My business went from two
people, to five, to nine, to
seventeen and the next thing
I know, I was running an
office then running a country.”
Natasha Ishak
Malaysia
36
Hays plc Annual Report & Accounts 2023 Strategic Report
Governance
Financial Statements
Shareholder Information
“People are entrepreneurial in Hays. We’re
goal orientated. We want to win. We want
to be the best. If you have a goal and a
vision and you are willing to put yourself
out there and say what it is, Hays will
support you 100%.”
“One of the best things with working at
Hays, from my perspective, is that you
are given a specific market and all the
information and insight from that market.
You then have the tools and resources
to develop it, which is highly rewarding.”
Orlagh Reynolds
Ireland
Carlos Fuente
Spain
“What was really refreshing when I first
joined Hays was that I wasn’t the minority.
There were so many other people like me.
But it’s also about being yourself and being
able to share ideas that you truly feel
passionate about. I want to explore, but I’ve
always felt like there was a sense of safety,
to do that in our workplace.”
Genzo Yamamoto
Japan
“I like working at Hays mainly because of
my Team and my Manager: we develop
in an environment of collaboration,
commitment, freedom to propose new
ideas, closeness and trust. And we have
a lot of fun! Hays is a great company,
which is constantly updating, proposing
new challenges and provides access to
excellent clients and projects.”
Lucia Sanchez
Spain
“Hays has helped me make my role my
own by allowing me to bring my best self
to work. I’m encouraged to be creative,
and that’s who I am. I have direct
communication with my Director
and Manager. I can have those open
conversations, and then drive my
career in the direction that I want.”
Jasmine Mughal
Canada
37
Strategic ReportGovernanceFinancial StatementsShareholder Information Hays plc Annual Report & Accounts 2023
IN FOCUS THREE
BUILDING MORE
PARTNERSHIPS
WITH CLIENTS
We are building longer-term and stickier relationships with
clients and candidates, moving up the value chain and focusing
on structural growth opportunities. Our experts share examples
of how they are doing this.
Whether we are advising on Talent
Acquisition Strategy, or running the
entire talent acquisition process on
an outsourced basis via our Managed
Service Provision (MSP) offering in
Temp & Contracting or our Recruitment
Process Outsourcing service in Perm, our
highly experienced and passionate teams
help to ensure consistency of approach,
quality of engagement and business
growth focused outcomes.”
Nigel Kirkham
Managing Director of
Hays Enterprise Solutions
“Hays Enterprise Solutions has continued to
positively impact our clients’ growth, and
their growth ambitions. We do this via our
pragmatic approach, assessing the best
workforce talent solutions for each client
situation, driving the talent acquisition
strategy which then delivers high-quality
talent when it’s needed. Our clients face
many tough challenges including skill
shortages, the need for more agile working
practices, the impact of Generative AI, rising
socio-economic pressures, all the while
dealing with economic uncertainty and
inflation. We can help them in each of
these areas, in an increasingly global way.
I am proud to have joined Hays to lead our
Enterprise Solutions business on the next
phase of its journey. Our vision is to ensure
clients see ‘One Hays’, wherever in the world
they need us, with consistency of process,
market-leading innovation, ideas and
business-focused outcomes.
THE
EXPERTS’
VIEW
How are you building
stickier and more
meaningful partnerships
with your clients?
“Clients come to us with a problem
statement, which can be large or small,
strategic or tactical. It can be related
to day-to-day operations, or it can be
tangential. The statement may be articulated
clearly, or it might be intangible. Often our
clients will know something is wrong, but
may not be able to distil it down to a single
event, or series of intersecting factors
which are causing the problem.
As an example, in FY23 we have helped one
client simultaneously implement a new
vendor management system, adopt new
working practices and condense their supply
chain. For another, we helped innovate how
they recruit, refreshed their EVP message
and are now partnering to help make them
more efficient through automation and
streamlining processes. And for a third
client, we built a bespoke, visualised,
automatic and real-time reporting suite
which they can access directly from inside
Hays’ technology environment.
All of these problem statements are unique.
What was constant is the collaborative and
non-judgemental approach that we took
to understand our clients’ challenges and
then iteratively and pragmatically worked
in partnership to solve the problems
together. No magic wands. Just listening,
understanding, designing, developing and
then executing on the best answers for the
customer – as they, not Hays, require.”
Scott Cameron
Global Head of Service Delivery
38
Hays plc Annual Report & Accounts 2023 Strategic Report
Governance
Financial Statements
Shareholder Information
“In Germany, we launched our ‘Talent+’
initiative in FY23 to help sustainably manage
talent shortages. We focus on the early
attraction of young talent, i.e. students and
graduates, helping them successfully into
professional life via our clients.
By helping someone at the start of their
career, Hays can begin a lifelong relationship
with talented people. We design targeted
marketing campaigns with clients, and in
FY23, we increased our talent pool by 50%.
Over 500 candidates began their career with
Hays in Talent+ FY23. It is highly scalable,
creating value for candidates, clients and
Hays. In the future, we aim to grow Talent+
to connect many more clients with the best
trained graduates in the market.”
Aleksander Amidzic
Managing Director, Technical Solutions
“During FY23, we launched our new UK&I
Skills & Learning business, designed to help
our clients become Talent Creators by
targeting undiscovered talent within our
society. Hays Skills also addresses skills
shortages in the Technology market. We
help identify high-potential, previously
undiscovered talent and train them in
sought-after technical skills, and support
them as they begin their careers.
Our first programme, a partnership with
the Department of Environment, Food
and Rural Affairs (DEFRA), is in Cloud
Engineering and Security Analysis.
We supported DEFRA to identify learners
from a wide range of backgrounds.
After training, we have supported them
into roles with onsite coaching and support.
We attracted 1,337 applications for this
initial 17-person Academy.
By 2030, we aim to have developed and
supported >6,000 learners to realise their
potential, and turned >250 organisations into
Talent Creators, eventually supporting
c.200,000 people in upskilling. Hays is
uniquely placed to use Apprenticeship
programmes to deliver some of the training.
We have recently become a Flexi-Job
Apprenticeship Agency, allowing us to
support learners to achieve Academic
qualifications via our Academy programmes.
We are now working with organisations in
multiple skill areas, supporting them to create
bespoke Academy programmes. We have
ambitious growth plans for this, including
supporting 160 people on our Academy
programmes in FY24.”
Harry Gooding
Director, Hays Skills
Expanding our service offering:
DE&I consultancy
During FY23, Hays purchased a majority
stake in Vercida Consulting, a UK-based
DE&I consulting business which provides
organisations with advisory services to
improve their ability to attract, retain and
progress talent from diverse backgrounds.
Our initial investment was c.£1 million,
with additional amounts payable based
on achieving our ambitious growth plans.
Our customers are increasingly facing a
range of complex HR and talent issues.
We can increasingly help clients in areas
beyond our core recruitment expertise,
including talent attraction, retention and
progression strategies that are innovative
and inclusive in design and application
and which attract the widest talent pools.
Lead by its founder, Dan Robertson, our
shared vision is to create a global DE&I
service offering. Hays will immediately
seek to leverage our newly acquired DE&I
expertise as part of our wider Talent
Advisory Service. Initially, we are focusing
on four key target regions:
1) United Kingdom; 2) North America;
3) Germany and Europe; and 4) Australia
and New Zealand.
We will develop our current service
offerings to cover:
– Inclusion at Work programmes:
We will design and deliver innovative
programmes that focus on strategic
inclusion at work topics, plus design
programmes that address the
needs of specific stakeholder
groups – race, gender, disability
and LGBTQIA+ inclusion.
– Strategy and Consulting: We will
build our strategy and consulting
service offering by developing in-region
knowledge, skills and capabilities. This
will be supported by a global roll-out of
knowledge exchange workshops and
thought-piece papers; helping build
Vercida as Hays’ international brand
in dynamic DE&I consultancy.
– Leadership Development:
Our programmes will build on the latest
research in social psychology and
behaviour science. These will support
our growing global client based to
retain, develop and grow diversity talent.
Our work will be underpinned by a set of
innovate assessment tools, such as our
inclusive leadership framework.
We are excited by the acquisition of
Vercida Consulting and the opportunities
it will provide to significantly up-scale
Hays’ DE&I service offering, and by the
value it adds to our Hays brand.
39
Strategic ReportGovernanceFinancial StatementsShareholder Information
Hays plc Annual Report & Accounts 2023
IN FOCUS FOUR
EMPOWERING
CLIENTS GLOBALLY
1
Canada
Hays began our relationship with BASF Inc.
in late 2021. We signed a two-year Perm
recruitment outsourcing contract to assist in
building out their Digital Hub in Mississauga,
ON. After 12 months, BASF extended the
contract for a further two years and to date
we have filled 30 Technology positions
including AI Solutions, DevOps Engineers,
Internet Web Security, Analysts and Digital
Solutions. We are currently working with
BASF to revamp their recruitment microsite
to help them attract talent, particularly as
they are growing in Canada.
Our trusted partnership helped BASF
navigate the competition for talent, allowing
them to leverage market insights, connect
on the importance of DE&I initiatives and
broaden our alliance and explore new ways
of working that will attract the best talent
and address their most compelling
skill shortages.
“Hays has been BASF Canada’s strategic
recruitment partner and instrumental in
building our Digital Hub talent pool. Hays
prioritized understanding our organizational
needs and used their expertise of the labour
market to source top talent for unique
roles while collaborating with us to identify
rewards and development plans for our
new hires.”
Beatriz Gaytán
BASF Digital Hub Toronto
Director of Services and Core Systems
40
2
UK
Amey is a leading infrastructure services
company employing 11,000 people and
is the leading provider of full life-cycle
engineering, operations and decarbonisation
solutions for transport infrastructure and
complex facilities in the UK.
Hays has been a contingent labour partner
for Amey since 2014 and in 2022 placed
c.1,500 new workers, primarily in the Specialist
Engineering, Construction & Property and
Infrastructure sectors. We have recently taken
our partnership to the next level, launching the
‘Amey & Hays Social Enterprise Initiative’ to
support four voluntary, community or social
enterprise organisations with financial support
and a bespoke mentoring plan to enable them
to scale up and support an even greater
number of people.
“ I am very pleased that
the programme has
launched and is now
funding so many
entrepreneurial
organisations that
look to help train and
support people into
the workplace.”
Michael Burgess
Amey Chief People Officer
Hays plc Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
Shareholder Information
“With Hays, we have a trusted partner by
our side who meets our needs, expands
our capacity and enriches our team with
new knowledge. The supporting team
works extremely professionally and
quickly, providing us with skilled candidates.
Because of our strong relationship and
exceptional performance, Hays has become
a value-added partner that helps us meet
the dynamic demands in our business.”
Patrick Oppel
Head of Business Solutions at PERI
4 Germany
With sales of €1.8 billion, Peri is a leading
global manufacturer of formwork and
scaffolding systems. With around c.9,100
employees and 160 locations in more than
65 countries, the family-owned company
is headquartered in Weißenhorn (Germany)
and serves customers with innovative
system equipment and comprehensive
services relating to all aspects of
formwork and scaffolding technology.
3 Asia/ANZ
Hays has supported all aspects of Perm and
contingent recruitment at Resolution Life
Australia (RSLA) since its establishment
in February 2020. Our onsite team provides
full cycle recruitment support for various
business phases, including business
separation, acquisition and transformation.
Over time, we have expanded our service
offering to include supplier management,
contract generation and onboarding.
Throughout our partnership, we have
successfully placed over 1,600 employees
across a wide range of professional service
areas, with a particular focus on niche
technical skills. RSLA leads the way as a
data-driven organisation and we are excited
to continue our successful partnership.
“Hays have been a valued partner to
Resolution Life ever since our inception.
Supporting our talent attraction strategy
from senior appointments, to the
management of our contingent workforce,
Hays’ understanding of our business,
collaborative approach and flexibility
to adapt makes them a critical addition
to our internal talent team.”
Amy Greenaway
Chief HR Officer & Chief of Staff,
Resolution Life Australasia
5
EMEA Enterprise clients
“The pace of change and talent shortages
means that our strategic clients often need
to pivot and explore new solutions to their
workforce challenges; with our input they
can sustain their access to talent, remain
competitive and serve customer needs.
In FY23 our role has included advice in
key strategic areas. For example, location
of diverse talent geographically, supporting
a client to relocate from a traditional
automotive skills market to a new
technology-focused location. This enables
them to manufacture EVs and batteries
where skills are more readily available.
We also developed a hiring strategy to
enable another client to attract developers
for clean air hydrogen technology. For
another, we are collaborating on strategy
and tech solutions to ensure a very large
manufacturing and assembly programme
can be sustained for the next two years.
Other clients have relied on us to support
significant business changes, including
acquisitions and variable hiring patterns
post-pandemic.
To deliver all this, our Hays client
teams proactively consult on the optimum
technology strategies and effective hiring
channels. Our consultative approach helps
solve complex talent attraction problems.”
Tina Millis
Hays EMEA Head of Delivery Services
6
Japan
“Scoville is a successful startup based in
Tokyo, Japan. Our primary business is in
Human Capital and we take great care to
attract, engage and retain the best talent.
Due to rapid business expansion, we have
grown our workforce to over 180 staff with
further hiring underway. Hays has assisted
us throughout this process, and built trust
and credibility as a dependable Talent
Acquisition Partner.
Our Hays team understand our culture,
and are able to source, screen and prepare
specialist talent for permanent positions.
Using an ever-green retained search seat
model, we’ve been able to continuously
place high-quality talent into key roles.
The results speak for themselves. Today, we
have an engaged and productive workforce,
and minimal resourcing headaches despite
the challenges of ongoing expansion.”
Richard Seldon
Managing Director, Scoville
41
Strategic ReportGovernanceFinancial StatementsShareholder Information
Hays plc Annual Report & Accounts 2023
FINANCE DIRECTOR’S
REVIEW
Growth in Group
net fee income
6%
FY22: 32%
Growth in Group
operating profit
(9)%
FY22: 128%
Conversion rate(3)
15.2%
FY22: 17.7%
Consultant
headcount
8,590
FY22: 9,037
Year-end
net cash
£135.6m
FY22: £296.2m
Cash conversion(8)
101%
FY22: 87%
James Hilton
Group Finance Director
Hays plc
James Hilton was appointed as Group Finance Director in October
2022, succeeding Paul Venables who retired at that time. James
has held numerous roles during his 15 years with Hays, including
European Finance Director and most recently Group Financial
Controller. Prior to joining Hays, James qualified as a Chartered
Accountant at KPMG and worked in Investment Banking with
Dresdner Kleinwort.
“I am deeply honoured to become Group Finance Director and
to have succeeded Paul Venables, who worked tirelessly on
behalf of shareholders over 16 years. I would like to thank Paul
for his immense contribution to Hays and I am excited about the
opportunity to help drive our continued success. By executing our
strategy, together with the exceptional talent within our organisation,
I am confident we will achieve our shared goals as a business.
I am a firm believer that maintaining a strong balance sheet and
consistently applying prudent accounting principles are the bedrock
upon which solid financial foundations are laid, and are what enable
organisations to thrive and prosper.
Looking ahead, we remain focused on delivering sustainable value
for our shareholders. We will do this in a responsible way, taking into
account the interests of key stakeholders such as our employees,
clients, candidates, plus communities and the natural environment.
We will continue to focus on long-term strategic growth markets,
leverage emerging technologies, embrace innovation and pursue
strategic partnerships to drive long-term growth and enhance
shareholder returns.”
42
Hays plc Annual Report & Accounts 2023 Operating performance
Year ended 30 June (£m)
Turnover(1)
Net fees(2)
Operating profit
Cash generated by operations(4)
Profit before tax
Basic earnings per share
Core dividend per share
Special dividend per share
LFL growth
12%
6%
(9)%
2023
7,583.3
1,294.6
197.0
199.3
192.1
8.59p
3.00p
2.24p
2022
6,588.9
1,189.4
210.1
182.9
204.3
9.22p
2.85p
7.34p
Actual growth
15%
9%
(6)%
9%
(6)%
(7)%
5%
Note: unless otherwise stated all growth rates discussed in the Finance Director’s Review are LFL YoY net fees and profits, representing organic growth of
operations at constant currency.
Financial overview
Trading in the year to 30 June 2023 represented a fee record for
the Group and included 21 individual country records. Net fees
increased by 6% on a LFL basis, and by 9% on a reported basis, to
£1,294.6 million. This represented LFL fee growth of £72.5 million
versus the prior year. However, fee growth slowed sharply through
the year, with H1 up 12% and H2 up 1%, as the economic backdrop
deteriorated across our markets. Fee growth in our fourth quarter
was (2)%, as was our June net fee exit rate.
Turnover increased by 12% (15% on a reported basis). The higher
turnover growth compared to net fee growth was due to stronger
growth in Temp fees versus Perm, together with the first full year
of a large Temp outsourcing contract in our RoW division, where
we manage a supply chain which includes a significant volume
of third-party agency supply. Over time, we expect to increase our
direct fill proportion, driving fee growth.
Temp fees (57% of Group) grew 9%, including H2 up 6%. Our
underlying Temp margin(6) benefited from a 40 bps increase, plus
we saw 8% growth from positive mix effects and wage inflation.
We expect to see some continued pricing benefit in our fees in H1 24.
Perm fees (43% of Group) grew 3%, however activity slowed sharply
through the year, with fees up 12% in H1 and down 6% in H2. Overall,
volumes decreased by 8%, including H2 down 15%, as job inflow
decreased and hiring processes extended. This was partially offset
by strong growth in our average Perm fee, up 11%.
Our growth in underlying Temp margin(6) and average Perm fee are
the direct results of management actions to increase fee margins
in skill-short markets and focus on higher value roles in in-demand
markets, reinforced by the positive effects of wage inflation globally.
200
150
100
50
0
Operating profit decreased by 9% to £197.0 million, with costs up
9% YoY driven by increased average headcount of 9%, following
significant headcount investment in FY22. This drove a 250 bps
decrease in the Group’s conversation rate(3) to 15.2% (FY22: 17.7%).
Our cash performance was strong and we ended the year with
net cash of £135.6 million. We converted an excellent 101%(8)
of operating profit into operating cash flow(4), helped by another
strong performance from our credit control teams, with debtor
days remaining at last year’s record low level of 33 days. Our
business model remains highly cash-generative and together
with the Group’s profitability and financial strength, supports our
proposed 5% FY23 core dividend increase to 3.00 pence per share.
The Board also proposed a further £35.6 million special dividend,
equating to 2.24 pence per share.
Operating profit(5)
(£m)
250
211.5
243.4
248.8
Conversion rate(3)
(%)
210.1
197.0
135.0
95.1
FY17
FY18
FY19
FY20
FY21
FY22
FY23
Conversion rate
(1)
Net fees of £1,294.6 million (FY22: £1189.4 million) are reconciled to statutory turnover of £7,583.3 million (FY22: £6,588.9 million) in note 5 to the
Consolidated Financial Statements.
(2) Net fees comprise turnover less remuneration of temporary workers and other recruitment agencies.
(3)
(4)
(5) FY20 and FY19 operating profit and basic earnings per share are stated before exceptional charges. There were no exceptional charges in FY18, FY21,
Conversion rate is the proportion of net fees converted into pre-exceptional operating profit.
Cash generated by operations is stated after IFRS 16 lease payments, which we view as an operating cost.
(6)
FY22 and FY23.
The underlying Temp margin is calculated as Temp net fees divided by Temp gross revenue and relates solely to Temp placements in which Hays
generates net fees and specifically excludes transactions in which Hays acts as agent on behalf of workers supplied by third-party agencies and
arrangements where the Group provides major payrolling services.
(7) FY20 net cash excludes £118.3 million of deferred tax payments.
(8) Operating cash conversion represents the conversion of pre-exceptional operating profit(3) to cash generated from operations(4).
25
20
15
10
5
0
43
Strategic ReportGovernanceFinancial StatementsShareholder Information Operating profit and conversion rate
FY23 Group operating profit of £197.0 million represented a LFL
decrease of 9%. In line with the guidance given at our H1 FY23
results, in H2 both operating profit (£100.0 million) and conversion
rate (15.6%) increased versus H1 as we controlled costs and drove
consultant productivity. Overall in FY23, Group conversion rate
decreased by 250 bps YoY to 15.2%.
LFL costs increased by 9% YoY or £91.2 million (£118.2 million on a
reported basis). This comprised a 9% increase in average consultant
headcount, with H1 up 17% and H2 up 1% YoY, and our own cost
inflation, including base salary increases and our long-term strategic
investments. Consultant commissions decreased slightly YoY
primarily reflecting the slowdown in Perm markets.
Prior to the start of our financial year, we had invested significantly
in consultant headcount to meet current and expected levels of
demand and to further strengthen our position in long-term strategic
growth markets such as Technology and Enterprise clients. As a
result, we entered FY23 with consultant headcount up 26% YoY.
However, market conditions became more challenging through the
year, particularly in Perm, resulting in a decrease in average
placement volumes per consultant and a consequential negative
profit leverage. Accordingly, we moved quickly to align capacity to
underlying market demand and reduce costs, reducing consultant
headcount in several markets, while protecting our investments in
key structural areas.
Overall, Group consultant headcount in FY23 decreased by 447, or
5% versus June 2022. Although more challenging market conditions
meant that Group average volume productivity per consultant was
down significantly versus the prior year, and pre-pandemic peak
levels, average fee productivity per consultant remained at good
overall levels, driven by our actions to increase fee margins and
focus on higher value roles. We remain focused on driving
productivity in FY24.
We closely managed our overhead costs, including travel,
advertising, entertainment and property, together with savings
realised from our back-office efficiency projects.
Net finance charge
The net finance charge for the year was £4.9 million (2022:
£5.8 million). Net bank interest payable (including amortisation of
arrangement fees) was £1.7 million (2022: £0.5 million). The interest
charge on lease liabilities under IFRS 16 was £4.2 million (2022:
£3.9 million), and the credit on defined benefit pension scheme
obligations was £1.1 million (2022: charge of £1.4 million). The
Pension Protection Fund levy was £0.1 million (2022: £0.1 million).
We expect the net finance charge for FY24 to be c.£6 million, of
which c.£4 million is non-cash.
Taxation
Taxation for the year was £53.8 million (2022: £50.1 million),
representing an effective tax rate (ETR) of 28.0% (2022: 24.5%).
The increase in the ETR YoY is primarily driven by the non-recurrence
of positive one-off settlements with certain tax authorities in FY22,
plus the recognition of deferred tax assets driven by the positive
movement in the Group’s defined benefit surplus in the prior year.
We expect the Group’s ETR will be c.29% in FY24, with the increase
resulting from the rise in UK corporation tax rate which was effective
from April 2023.
44
Hays plc Annual Report & Accounts 2023 Earnings per share
The Group’s basic earnings per share (EPS) of 8.59p was 7% lower
than the prior year. The reduction was primarily driven by 6% lower
profit before tax, and as we incurred a higher ETR of 28% in FY23,
given the prior year ETR of 24.5% had benefited from positive
one-off settlements with certain tax authorities. The impact on EPS
was partially offset by a 3.7% reduction in average shares in issue,
resulting from our share buyback programme.
Earnings per share(5)
(p)
e
r
a
h
s
r
e
p
e
c
n
e
P
15
10
5
0
11.44
11.92
9.66
9.22
8.59
5.28
3.67
FY17
FY18
FY19
FY20
FY21
FY22
FY23
Cash flow and balance sheet
Conversion of operating profit into operating cash flow(4) was
an excellent 101% (2022: 87%(8)). Working capital increased by
£28.7 million as our Temp debtors increased in line with our Temp
fee growth. We continued to see a strong performance by our credit
control teams globally, with debtor days of 33 days (2022: 33 days),
versus 39 days pre-pandemic.
Net capital expenditure was £29.1 million (2022: £24.4 million),
with continued investments in technology infrastructure and cyber
security, with an additional £1.0 million investment acquiring the
majority stake in Vercida Consulting, a UK-based DE&I advisory
business. We expect capital expenditure will be c.£30 million in FY24.
We paid £165.1 million in core and special dividends in the year
(2022: £186.4 million) and company pension contributions were
£17.7 million (2022: £17.2 million). Net interest paid was £1.7 million
(2022: £0.5 million) and corporation tax payments were £65.8 million
(2022: £39.0 million).
During the year we purchased and cancelled 66.2 million shares at
an average price of 113.3 pence per share and cost of £75 million,
which completed our £93.2 million initial share buyback programme.
We ended the year with a net cash position of £135.6 million (2022:
£296.2 million).
45
Strategic ReportGovernanceFinancial StatementsShareholder Information
Free cash flow priorities
Our business model remains highly cash generative. The Board’s
free cash flow priorities are to fund the Group’s investment and
development, maintain a strong balance sheet, deliver a sustainable,
progressive and appropriate core dividend and to return surplus
cash to shareholders through an appropriate combination of
special dividends and share buybacks.
Our first priority is investment in our business. This will mainly be via
organic means – however we also reserve the right to make selective
bolt-on acquisitions to broaden our service offerings should we
identify appropriate opportunities. As an example, during FY23
we purchased Vercida Consulting, a UK DE&I consultancy. Vercida
provides organisations with advisory services to improve their ability
to attract, retain and progress talent from diverse backgrounds.
Our initial investment was c.£1 million, with further amounts payable
based on achieving our ambitious growth plans.
Given the Group’s profitability, strong balance sheet and confidence in
our long-term strategy, the Board has proposed a final core dividend of
2.05 pence. When added to the interim dividend of 0.95 pence paid in
April 2023, the Group’s total FY23 core dividend is 3.00 pence
per share (2022: 2.85 pence), representing dividend cover of 2.9x
when compared to our EPS of 8.59 pence per share, and a 5%
increase versus FY22.
OUR PRIORITIES FOR
USES OF FREE CASH FLOW
Fund Group
investment and
development
Maintain a strong
balance sheet
– Invest in headcount,
training, systems and
brand to support
organic growth
– Assess potential
M&A opportunities
where appropriate
– Maintain a net
cash position
of £100 million
– Funding of defined
benefit pension
scheme and long-term
consideration of
buy-out
Core dividend
policy
Excess cash
returns policy
– Deliver a core dividend
which is sustainable,
progressive and
appropriate
– Target core dividend
cover of 2 to 3x EPS
– Subject to supportive
economic outlook,
return cash >£100
million to shareholders
via special dividends
and disciplined share
buybacks as
appropriate
The ex-dividend date is 5 October 2023, and the dividend payment
date will be 17 November 2023. Our core target dividend cover
remains 2 to 3 times EPS.
The Board will continue to retain a cash buffer of £100 million at
our financial year-end. Above this level, and subject to the economic
outlook, the Board intends to return capital to shareholders via a
combination of special dividends and disciplined share buybacks.
The Board is pleased to propose a further £35.6 million return of
surplus cash to shareholders, via a special dividend of 2.24 pence
per share, which will be paid alongside the final dividend. We have
established a track record of paying cash to shareholders, with
c.£950 million in core and special dividends paid in respect of FY17
to FY23, plus £93.2 million in share buybacks since April 2022.
The Board expects the combined value of core and special dividends
to represent the majority of capital returns in normal years. However,
we reserve the right to undertake share buybacks, according to
market conditions.
Operating profit to free cash flow
(£m)
Cash from operations(4)
£199.3m (FY22: £182.9m)
80.9
(28.7)
197.0
(49.9)
(65.8)
(1.7)
131.8
Operating
profit
Non-cash
(including
IFRS 16)
Working
capital
Lease
payments
Tax
paid
Net
interest
paid
Free cash
flow
300
250
200
150
100
50
0
Closing net cash/(net debt)(7)
(£m)
500
400
300
200
100
410.6
366.2
296.2
111.6
122.9
129.7
135.6
0
FY17
FY18
FY19
FY20
FY21
FY22
FY23
46
Hays plc Annual Report & Accounts 2023 Retirement benefits
The Group’s defined benefit pension scheme position under IAS 19
at 30 June 2023 has resulted in a surplus of £25.7 million, compared
to a surplus of £102.0 million at 30 June 2022. The decrease in
surplus of £76.3 million was driven by a decrease in expected
returns from scheme assets, partially offset by the favourable
impact of changes in financial assumptions, most notably an
increase in the discount rate as interest rates increased, and
company contributions. In respect of IFRIC 14, the Schemes’
Definitive Deeds and Rules are considered to provide Hays with an
unconditional right to a refund of surplus assets and therefore the
recognition of a net defined benefit scheme asset is not restricted.
Agreements to make funding contributions do not give rise to any
additional liabilities in respect of the scheme.
During the year, the Group contributed £17.2 million of cash to the
defined benefit scheme (2022: £16.7 million), in line with the agreed
deficit recovery plan. The 2021 triennial valuation quantified the
actuarial deficit at £23.9 million on a Technical Provisions basis.
Our long-term objective continues to be reaching full buy-out of the
scheme and therefore our recovery plan remained unchanged and
comprised an annual payment of £16.7 million from July 2021, with
a fixed 3% uplift per year. The scheme was closed to new entrants
in 2001 and to future accrual in June 2012.
Treasury management
The Group’s operations are financed by retained earnings and cash
reserves. In addition, the Group has in place a £210 million revolving
credit facility, which reduces in November 2024 to £170 million and
expires in November 2025. This provides considerable headroom
versus current and future Group funding requirements.
The covenants within the facility require the Group’s interest
cover ratio to be at least 4:1 (ratio as at 30 June 2023: 174:1) and
its leverage ratio (net debt to EBITDA) to be no greater than 2.5:1
(as at 30 June 2023 the Group held a net cash position). The interest
rate of the facility is on a ratchet mechanism with a margin payable
over Compounded Reference Rate in the range of 0.70% to 1.50%.
The Group’s UK-based Treasury function manages the Group’s
currency and interest rate risks in accordance with policies and
procedures set by the Board and is responsible for day-to-day cash
management; the arrangement of external borrowing facilities; and
the investment of surplus funds. The Treasury function does not
operate as a profit centre or use derivative financial instruments
for speculative purposes.
James Hilton
Group Finance Director
23 August 2023
47
Strategic ReportGovernanceFinancial StatementsShareholder Information DIVISIONAL
OPERATING
REVIEW
48
Hays plc Annual Report & Accounts 2023 GERMANY
Record fees and strong underlying profit
growth, including H2 conversion rate of 28.2%
Net fees
Operating profit
£382.0m
£100.2m
Consultants
2,044
Offices
26
Share of Group net fees
Operating performance
Year ended 30 June
Net fees
Operating profit
Conversion rate(1)
Period-end consultant
headcount(2)
2023
2022
£382.0m £313.9m
£100.2m £75.6m
Actual
growth
22%
33%
24.1% +210bps
1%
2,016
26.2%
2,044
LFL
growth
19%
29%
Note: unless otherwise stated, all growth rates discussed on this page are
LFL YoY net fees and profits, representing organic growth of operations
at constant currency.
(1)
Conversion rate is the proportion of net fees converted into
operating profit.
(2) Closing consultant headcount as at 30 June.
Net fees by specialism
Technology
Engineering
Accountancy & Finance
Germany 30%
UK & Ireland 21%
Australia & New Zealand 15%
Rest of World 34%
Life Sciences
Sales & Marketing
Construction & Property
Other
Net fees by contract type
17%
Permanent
83%
Temporary
Net fees by sector
14%
Public
86%
Private
Our largest market of Germany saw net fees increase by 19%
to a record £382.0 million. Operating profit increased by 29%
to £100.2 million, despite three fewer working days in H1 FY23 YoY,
which reduced fees and profit by £5.0 million. Adjusting for working
days, operating profit growth was 36%. Conversion rate was 26.2%
(2022: 24.1%), or 27.2% on a working-day adjusted basis, and
included an H2 FY23 conversion rate of 28.2%. Currency impacts
were positive in the full year, increasing net fees by £8.3 million and
operating profit by £2.0 million. Cost increases were driven by 15%
higher average headcount YoY, together with the impact of pay
increases effective from 1 July 2022.
At the specialism level, our largest area of Technology, comprising
35% of Germany net fees, increased by 10%, with Engineering, our
second largest, up an excellent 22%. Accountancy & Finance and
Construction & Property increased by 26% and 6% respectively,
while HR grew by an excellent 82%. We also produced record fees
in our Public sector business (14% of Germany fees), up 30%.
Temp and Contracting, which represented 83% of Germany fees,
increased by 18%. Within this, Contracting (58% of Germany) grew
by 23%, driven by 14% growth in contractor volumes, to record levels.
Margin, mix and increased contractor rates added a further 11%,
which was partially offset by three fewer working days and slightly
lower average hours worked.
Our Temp business, 25% of Germany fees and where we employ
temporary workers as required under German law, increased fees
by 8%. Underlying Temp volumes increased by 11%, margin, mix and
increased Temp rates added a further 4%, offset by 7% from three
fewer working days YoY and modestly lower average hours worked.
Perm, 17% of fees, also delivered a fee record and increased by an
excellent 22%. This included a 13% increase in our average Perm fee.
Consultant headcount increased by 1% YoY.
35%
26%
17%
5%
5%
4%
8%
49
GovernanceFinancial StatementsShareholder InformationStrategic Report Operating performance
Year ended 30 June
Net fees
Operating profit
Conversion rate(1)
Period-end consultant
headcount(2)
2023
2022
£266.1m £263.3m
£28.7m £43.4m
Actual
growth
1%
(34)%
16.5% (570)bps
(11)%
2,175
10.8%
1,935
LFL
growth
1%
(34)%
Note: unless otherwise stated, all growth rates discussed on this page are
LFL YoY net fees and profits, representing organic growth of operations
at constant currency.
(1)
Conversion rate is the proportion of net fees converted into
operating profit.
(2) Closing consultant headcount as at 30 June.
19%
18%
16%
10%
7%
4%
26%
32%
24%
17%
13%
6%
8%
Net fees by specialism
Accountancy & Finance
Technology
Construction & Property
Office Support
Education
HR
Other
Net fees by region
London & South East
North & Scotland
Midlands & East Anglia
South West & Wales
Ireland
Enterprise Solutions
Net fees by contract type
44%
Permanent
56%
Temporary
Net fees by sector
30%
Public
70%
Private
UK & IRELAND
Markets slowed sharply, particularly in Perm,
driving negative profit growth
Net fees
Operating profit
£266.1m
£28.7m
Consultants
1,935
Offices
85
Share of Group net fees
Germany 30%
UK & Ireland 21%
Australia & New Zealand 15%
Rest of World 34%
In the United Kingdom & Ireland (UK&I), net fees increased by
1% to £266.1 million. Operating profit of £28.7 million represented
a decrease of 34% versus the prior year, and a conversion rate of
10.8% (2022: 16.5%). Perm markets slowed materially through the
year as client and candidate confidence levels decreased, while
Temp markets remained broadly stable. Net fee growth slowed
from 7% in H1 to down 5% in H2.
Cost increases were driven by 7% higher average headcount YoY,
together with the impact of pay increases effective from 1 July 2022,
which led to negative profit growth. Having entered FY23 with
significant headcount investment, up 24% YoY, as markets slowed
we took action to reduce headcount and importantly ended the year
with headcount down 11% YoY, versus fees down 7%.
Temp, 56% of UK&I, increased by 4%. Growth was entirely driven
by improved fee margin and positive salary mix, with Temp volumes
down 6%. Our Perm business saw fees decrease by 3%, again
all driven by higher average Perm fee, with volumes down 13%,
including H2 volumes down 23%. The Private sector, 70% of UK&I
net fees, declined by 1%, with the Public sector up 7%.
All regions traded broadly in line with the overall UK&I business,
except for Northern Ireland, up 9%, and the North West, down 4%.
Our largest region of London decreased by 3%, including London
City up 1%, while Ireland grew by a strong 13%.
Technology delivered a record fee performance, up 5%, with
Accountancy & Finance up 2%. Conditions were tougher in
Construction & Property, down 3%, and Office Support, down 10%.
We saw strong growth in Enterprise clients, up 15%, and Engineering
increased by an excellent 32%, driven by our longer-term
investments in the Green Economy.
Consultant headcount in the division decreased by 11% YoY and
decreased by 7% in H2.
50
Hays plc Annual Report & Accounts 2023 AUSTRALIA &
NEW ZEALAND
Tough market conditions, particularly in the
Public sector and Banking
Net fees
Operating profit
£188.4m
£32.1m
Consultants
1,071
Offices
39
Share of Group net fees
Germany 30%
UK & Ireland 21%
Australia & New Zealand 15%
Rest of World 34%
In Australia & New Zealand (ANZ), net fees decreased by 6% to
£188.4 million, with operating profit down 39% to £32.1 million.
This represented a conversion rate of 17.0% (2022: 26.4%). Currency
impacts were positive, increasing fees by £4.5 million and operating
profit by £1.3 million. Market conditions deteriorated through the
year, with fee growth slowing from (1)% in H1 to (11)% in H2.
Cost increases were driven by 5% higher average headcount in the
year, together with the impact of pay increases effective from 1 July,
leading to negative profit growth. Having entered FY23 with
significant headcount investment, up 20% YoY as markets slowed,
we took action to reduce headcount and importantly ended the year
with headcount down 6% YoY, including a reduction of 8% since
October. We also restructured our ANZ leadership team.
Temp (61% of ANZ) decreased by 6%, with volumes down 13%.
This was impacted by an overall candidate scarcity in Temp markets,
the Federal government’s policy to reduce the use of Temps in the
Public sector and by reduced activity in Enterprise clients, particularly
in Banking. Perm fees decreased by 5%, with volumes down 16%,
partially offset by higher average Perm fees. The Private sector, 65%
of ANZ net fees, declined by 7%, with Public sector fees down 4%.
Australia, 91% of ANZ, saw net fees decrease by 7%. New South
Wales and Victoria decreased by 6% and 12%. Queensland fell by 4%,
with ACT down 13%. At the ANZ specialism level, Construction
& Property, 21% of fees, increased by 2%, with our second largest,
Technology, down 2%. Accountancy & Finance increased by 5%,
although conditions in Banking were tough, down 36%.
New Zealand delivered a record performance, with fees up 9%.
ANZ consultant headcount decreased by 6% YoY and decreased
by 4% in H2.
Operating performance
Year ended 30 June
Net fees
Operating profit
Conversion rate(1)
Period-end consultant
headcount(2)
2023
2022
£188.4m £195.7m
£32.1m £51.6m
Actual
growth
(4)%
(38)%
26.4% (940)bps
(6)%
1,136
17.0%
1,071
LFL
growth
(6)%
(39)%
Note: unless otherwise stated, all growth rates discussed on this page are
LFL YoY net fees and profits, representing organic growth of operations
at constant currency.
(1)
Conversion rate is the proportion of net fees converted into
operating profit.
(2) Closing consultant headcount as at 30 June.
Net fees by specialism
Construction & Property
Technology
Office Support
Accountancy & Finance
HR
Sales & Marketing
Banking
Other
Net fees by country/sub-region
New South Wales
Victoria
Queensland
Western Australia
New Zealand
Australian Capital Territory
Other
Net fees by contract type
39%
Permanent
61%
Temporary
Net fees by sector
35%
Public
65%
Private
21%
16%
11%
11%
5%
4%
2%
30%
26%
21%
14%
9%
9%
8%
13%
51
GovernanceFinancial StatementsShareholder InformationStrategic Report REST OF WORLD
Strong performance in EMEA. Tougher market
conditions in China and the USA
Net fees
Operating profit
£458.1m
£36.0m
Consultants
3,540
Offices
102
Share of Group net fees
Germany 30%
UK & Ireland 21%
Australia & New Zealand 15%
Rest of World 34%
Operating performance
Year ended 30 June
Net fees
Operating profit
Conversion rate(1)
Period-end consultant
headcount(2)
2023
2022
£458.1m £416.5m
£36.0m £39.5m
Actual
growth
10%
(9)%
9.5% (160)bps
(5)%
3,710
7.9%
3,540
LFL
growth
5%
(14)%
Note: unless otherwise stated, all growth rates discussed on this page are
LFL YoY net fees and profits, representing organic growth of operations
at constant currency.
(1)
Conversion rate is the proportion of net fees converted into
operating profit.
(2) Closing consultant headcount as at 30 June.
Net fees by specialism
Technology
Accountancy & Finance
Life Sciences
Construction & Property
Sales & Marketing
Engineering
Other
Net fees by region
EMEA*
The Americas
27%
11%
8%
9%
6%
6%
33%
60%
24%
16%
Our Rest of World (RoW) division, which comprises 28 countries,
delivered record fees, up 5% including 19 individual country records.
Fee growth was led by Temp, 34% of RoW, which increased by 9%,
with Perm up 3% as markets slowed across RoW, especially in H2.
Asia
* Excluding Germany.
Net fees by contract type
66%
Permanent
Net fees by sector
2% 98%
Public Private
34%
Temporary
Operating profit decreased by 14% to £36.0 million and RoW
conversion rate was 7.9% (2022: 9.5%). Our business in Mainland
China, which was significantly impacted by the COVID-19 pandemic,
saw operating profit £6.1 million below prior year. Partially offsetting
this, FY22 included the one-off costs of closing our Russia business,
which had a positive impact of £3.3 million YoY. Currency impacts
were positive in the year, increasing net fees by £19.6 million and
operating profit by £2.3 million.
EMEA ex-Germany (60% of RoW) fees increased by 12%, with
11 country records including France, our largest RoW country,
up 18%, and Switzerland, Poland and Spain up 16%, 12% and
11% respectively. Belgium increased by 9%, while Portugal,
up 28%, and the UAE, up 53%, also produced fee records.
The Americas (24% of RoW) fees decreased by 6%. Conditions were
tough in the USA and declined by 13%, including H2 down 26%.
Latin America grew by 14% overall, and Canada increased by 1%.
Asia (16% of RoW) was flat YoY, with tough conditions in China,
down 21%, including Mainland China down 46%, materially
underperforming Hong Kong, which grew by 16%. Japan and
Malaysia delivered fee records, both up 21%.
Consultant headcount in the RoW division decreased by 5% YoY.
EMEA ex-Germany consultant headcount increased by 4%, the
Americas decreased by 22% and Asia was down 4%.
52
Hays plc Annual Report & Accounts 2023 HISTORICAL COMPARISONS
FY15–23
To assist investors in their analysis of Hays, we present our net fees,
operating profit, headcount and conversion rate since FY15.
Closing consultant headcount
10,000
7,500
6,113
6,268
5,000
2,049
2,219
773
812
2,500
2,203
2,024
1,088
FY15
1,213
FY16
0
7,464
7,782
2,847
3,013
6,884
2,522
911
1,000
1,948
1,917
1,008
1,960
6,900
7,190
2,689
2,866
811
945
1,840
1,759
9,037
8,590
3,710
3,540
1,136
2,175
1,071
1,935
1,503
1,700
1,801
1,560
1,620
2,016
2,044
FY17
FY18
FY19
FY20
FY21
FY22
FY23
Germany
UK & Ireland
Australia & New Zealand
Rest of World
Net fees by division
(£m)
Operating profit by division(1)
(£m)
1,500
1,125
750
375
764
196
139
272
158
810
230
134
272
175
1,073
1,130
339
199
258
276
368
199
264
300
996
340
171
226
260
955
291
181
253
230
1,189
417
196
263
314
918
312
160
201
245
1,295
300
458
188
266
382
200
100
164
15
44
46
60
181
22
44
52
63
243
41
69
47
86
249
42
66
49
91
212
27
63
42
81
210
40
52
43
76
197
36
32
29
100
135
17
48
17
53
95
13
12
40
31
0
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
0
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
Germany
UK & Ireland
Australia & New Zealand
Rest of World
Germany
UK & Ireland
Australia & New Zealand
Rest of World
Conversion rate(2)
(%)
Net fees by specialism
(%)
21.5
22.3
22.2
22.7
22.0
13.6
10.4
17.7
15.2
40
30
20
10
0
-10
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
100
80
60
40
20
0
33
8
8
15
16
20
34
7
9
15
15
20
33
7
10
14
15
21
33
7
9
14
15
22
33
7
9
13
15
23
33
6
9
12
15
25
34
5
9
12
14
26
34
6
9
11
14
26
36
6
8
11
14
25
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
Germany
UK & Ireland
Australia & New Zealand
Rest of World
Technology
A&F
C&P
Engineering
Office Support
Other
Group
(1)
There were no exceptional charges in FY23, FY22 or FY21. FY20 operating profit is stated before exceptional charges of £39.9 million. FY19 is stated
before exceptional charges of £15.1 million. There were no exceptional charges between FY15 and FY18.
(2) FY20 and FY19 conversion rates are shown on a pre-exceptional basis.
53
GovernanceFinancial StatementsShareholder InformationStrategic Report SUSTAINABILITY
IN THE WORLD
OF WORK
Hays aspires to be a purpose-led organisation.
Our values help define how we do business,
and how we interact with our many stakeholders.
Our commitment and Sustainability Framework
Hays aims to be a purpose-led organisation, benefiting society
by investing in lifelong partnerships that empower people and
organisations to succeed. Our values help define how we do
business, and how we interact with our many stakeholders
(more information on pages 16 to 17 on how we engage).
Our core company value is ‘Do the right thing’ and is a central
pillar both of our strategy and our ‘Working for your tomorrow’
brand (more information on page 28).
We are committed to being a sustainable business in its widest
sense, driven by our Social Purpose and business values, and as
defined by the United Nations Sustainable Development Goals
(UN SDGs). The graphic below sets out our new Sustainability
Framework, which is focused on the areas of highest materiality
to Hays across Environmental, Social and Governance (ESG) issues.
Focusing on social impact
As a company focused on helping people with their careers and skill
development, and organisations find the talent they need to thrive,
we have deliberately increased the proportion of societal categories
within our framework below. We seek to positively contribute and
add value to society through employment and the world of work.
While we have made strong progress in Environmental and are
striving to lead our industry to Net Zero, we believe Hays can have
the greatest impact for stakeholders in the societies we operate in
via our social initiatives.
Our vision is to provide clients with access to the most diverse,
equitable and inclusive talent pools in skilled recruitment globally.
Achieving this will require progress in numerous areas, and will take
time and continuous investment in People, Culture, Technology and
Sustainability. At its foundation is making Hays an entirely inclusive
place of work, one which makes positive social impacts everywhere
we operate and which then shares our experiences and expertise
with the wider world. Sustainability is a key enabler of our strategy,
and by definition our long-term profit growth, all while focusing on
a just and effective transition for the environment.
Our policies and actions are designed to materially – and
permanently – reduce our environmental impact, ensure fair rates
of tax are paid, nurture an equitable and fair culture, and ensure
discrimination and labour exploitation are not tolerated.
OUR SUSTAINABILITY
FRAMEWORK
WORKING FOR
YOUR TOMORROW
54
TAKEH OLD E R P
Diversity &
clusion
In
L S
CIA
O
S
S H I P S
R
y
n it
m u
n
c ti o
A
R
A
E
m
N
o
T
C
Inclusive
E mployment
Sharing expertise to
make a positive
social impact
Charita
Partnership
ble
s
E
N
V
I
R
C
A
l
i
m
O
N
c
t
i
o
a
t
e
n
M
E
N
T
A
L
&
g
n
e
b
i
l
l
e
W
t
n
e
m
e
g
a
g
n
E
Having a clear
people agenda
as a business
HAYS
PURPOSE
Transitioning
for the
environment
E
c
o
n
o
m
y
G
r
e
e
n
t
n
e
m
t
n
p
e
o
l
l
a
e
T
v
e
D
G
o
v
O
ernance &
versight
G
O
V
Driving standards
for marketplace
excellence
Business
Ethics
C li e
C a
n
SHIPS
Im
Minimising
pacts
n t s &
d i d
a te s
S
H I P
S
R
ERNANCE STAKEHOLD E R P A R T N E
S
T
A
K
E
H
O
L
D
E
R
P
A
R
T
N
E
R
Hays plc Annual Report & Accounts 2023
Assessing our business versus the UN SDGs
To enhance our Sustainability Framework, in FY23 we have
undertaken a deep and broad appraisal of each of the UN SDGs,
in the context of Hays’ global operations. Our aim is to focus on
those goals where Hays can have the greatest impact, given our role
in economies and societies. We have based this appraisal on how
we operate in our key specialisms, our strategic priorities and given
stakeholder feedback. Our aim is to use the analysis to maximise
our positive contributions, and drive our sustainability objectives.
Alignment to the UN SDGs
We recognise the importance of the UN SDGs, having first adopted
three in FY21. We also believe they present an opportunity in terms
of pursuing a fairer, more equitable and sustainable economic future.
In mapping and considering the materiality of each UN SDG we
considered all 17 goals, however there are nine which we believe
are material in terms of our business activities, and in relation to
our stakeholder expectations and value creation. The table below
provides an explanation and examples of our contributions to
the nine most material UN SDGs for Hays.
UN SDG
Relevance in our business and stakeholder context
Climate action focuses on strengthening resilience and adaptive capacity to
climate-related hazards and natural disasters, and integrating climate change
measures into policies, strategies and planning. It is also about improving
education and awareness.
Addressing climate change is a significant element of our Sustainability
Strategy, and we also present Hays’ risks and opportunities in our TCFD report.
By delivering on Science-based target, we can establish credibility as a leader
in ‘Green collar’ recruitment.
Key sectors include Sustainability, Technology, Construction & Property
and Engineering.
This SDG is also about how we engage our people and help raise awareness
and collaborate with other stakeholders, particularly clients and suppliers.
Sustainable cities and communities focuses on safe and equitable access
to housing and safe and sustainable transport systems. The goal seeks to
safeguard cultural and natural heritage, reduce the negative impacts caused
by disasters and promote environmental protections. It is also about access
to safe, inclusive and green public spaces.
Our c.13,000 colleagues work from 252 offices globally predominantly in city
locations. We have a role to play in terms of our contribution, particularly
through our community engagement programmes.
As the global leader in Construction & Property recruitment, Hays is well placed
to help supply much of the talent that will help to make cities more sustainable,
including energy efficiency, building retrofit and civil engineering projects to
protect communities from flooding and other natural disasters.
Our Contribution in Action
(also see pages 60 to 62)
Conducting our most
comprehensive GHG data
gathering exercise with Climate
Partner (more information on
pages 65 to 66)
Growth in the Green Economy
France limited the use of heating
and aircon, reducing energy
consumption by 50%
TCFD report (more information
on page 68 to 73)
Partnership with Trees for Cities
led to Hays UK funding and
planting c.12,000 trees (more
information on page 62)
EMEA/Americas planted a tree
for every placement in May 2023
Colleagues in France collected
260kg of waste as part of World
Cleanup Day initiatives
Reduced inequalities focuses on levelling up, inclusion and the empowerment
and promotion of all, irrespective of age, sex, disability, race, ethnicity, origin,
religion, economic or other status. It’s about equal opportunity and reducing
inequalities of outcome. This is a strategic priority in terms of our DE&I agenda,
as well as linked to how we access the widest pool of talent to serve clients.
The SDG calls for improved regulation and monitoring of financial markets and
greater representation in global politics from the developing countries. It seeks
to facilitate the safe and responsible migration and mobility of people. This SDG
is linked with our respect of human rights and our approach to mitigate modern
slavery and human trafficking risk.
Increasing our percentage of
female senior leaders by 1.9%
YoY to 44.3% (more information
on page 25)
Skills UK – helping hidden talent
into work (more information on
page 39)
DE&I at Hays (more information
on pages 22 to 23)
It also links to our Finance, HR, Legal and Technology specialisms.
55
GovernanceFinancial StatementsShareholder InformationStrategic Report UN SDG
Relevance in our business and stakeholder context
Industry, innovation and infrastructure focuses on the development of resilient
infrastructure to support economic development, human wellbeing, increased
efficiencies and environmental sustainability. It is about raising industry’s share
of employment.
The goal has a further focus on improving and further the use of technology,
including for information access and communications.
This directly links with our core recruitment business in all our specialisms,
how we innovate internally and our focus on sustainability in its widest sense.
Our Contribution in Action
(also see pages 60 to 62)
Client case studies (more
information on page 40)
How we partner with clients
(more information on page 38)
Growth in Technology specialism
and CodeCo partnership
(more information on page 34)
Decent work and economic growth focuses on driving economic growth
by enabling productivity and growth through diversification, technology
and innovation.
Our stakeholders and how we
create value (more information
on pages 16 to 19)
It is about job creation and entrepreneurship, focusing on resource efficiency
as part of the environmental agenda. The SDG also focuses on inclusive
employment with equal pay for equal work, and seeks to promote labour rights,
avoid child and forced labour.
Ambition to create the most
diverse, equitable and inclusive
Talent Networks (more information
on page 23)
As a recruitment business, this SDG is the fundamental reason we operate and
is reflected in our growth strategy as we continue to develop the breadth of our
client services. It relates to the candidates we place, our own labour practices
and how we influence for the respect of human rights in our supply chain.
It is linked to our community engagement programme ‘Helping for your tomorrow’
which is about driving inclusive employment with less advantaged groups.
‘Helping for your tomorrow’
(more information on page 58)
Gender equality focuses on female empowerment and ending discrimination,
violence and exploitation of women and girls. It is about improving access to
healthcare and recognising and valuing unpaid care and domestic work,
largely delivered by females. It is about female leadership and giving women
equal rights.
This is a key part of our DE&I agenda, noting targets for female leadership and
our pay gap reporting commitments. It links with our Health & Social Care
Specialism and the sourcing of talent for leadership roles.
Increasing our percentage of
female senior leaders by 1.9%
YoY to 44.3% (more information
on page 9 and 23)
Providing greater flexibility
for parents and care givers
Quality education focuses on equal access to education from early years
through to technical, vocational and higher education. It seeks to increase
skills in both youths and adults for decent jobs and entrepreneurship.
It is about eliminating gender disparities, improving literacy and numeracy,
safe learning environments, scholarships and the provision of teachers.
This SDG is relevant to Hays in terms of the development of candidates,
service offering to clients, our people and our community engagement
focus, plus our Education Specialism.
Smith Family partnership, helping
young Australians overcome
educational inequality caused
by poverty (more information
on page 59)
Hays’ MyLearning, where
c.800,000 free training courses
were consumed in FY23
(more information on page 32)
56
Hays plc Annual Report & Accounts 2023 UN SDG
Relevance in our business and stakeholder context
Good health and wellbeing focuses on improving health outcomes in relation
to family planning, communicable and non-communicable diseases. It is also
about supporting people with mental health, the avoidance and treatment of
substance abuse and road safety. It recognises the need to access healthcare
services and affordable medicines.
As a people business, good health and wellbeing is an important focus for Hays.
It links through to our benefits packages which covers things like parental leave
and access to private medical cover. It is relevant to a number of our specialisms
including Healthcare, Life Sciences, Social Care and Sustainability.
Access to decent work is an important factor in an individual’s wellbeing,
as well as noting how employment positively impacts their own life and
their dependants.
Our Contribution in Action
(also see pages 60 to 62)
Hays mental health commitment
and case study (more information
on page 63)
German colleagues have access
to a health app, supporting fitness,
mindfulness and nutrition
Financial wellbeing advice for
employees (more information
on page 63)
In addition to the UN SDGs listed above, we also recognise the importance of UN SDG 17, Partnership for the Goals. This is a holistic goal,
capturing much of the ethos of the other 16 UN SDGs. It focuses on the benefits of greater collaboration between organisations to strengthen
the foundations of, and mindset for, sustainable development. This SDG resonates with our Purpose, which is to invest in lifelong partnerships.
We recognise that when we collaborate with our stakeholders we can have a greater positive impact. This is particularly relevant in terms of
our clients, small or large. We have a role to play in terms of sharing insights, thought leadership, open access resources like training and
upskilling and how we are developing and deploying technological solutions. This goal is also relevant in terms of our corporate
memberships and affiliations, community organisations and the not-for-profits we support and align with.
Our analysis of the UN SDGs reinforces our view that Hays can have the greatest impact through our societal actions. This may be via our
internal actions to create an inclusive and engaging workplace for colleagues (see page 26 for our engagement with colleagues), externally
consulting on DE&I issues via Vercida Consulting, providing free training and upskilling via Hays MyLearning, helping people back into the
workplace via our volunteering initiatives or working to identify hidden talent within society.
57
GovernanceFinancial StatementsShareholder InformationStrategic Report Social
HAYS HELPING FOR
YOUR TOMORROW
Hays’ volunteering programme,
‘Helping for your tomorrow’, celebrated
its second anniversary in May 2023.
Our aim is to provide a direct link between our core skills and
expertise, to help improve the employability of people who may
not have had the same opportunities as others. We aim to create
a better tomorrow for our local communities. We also believe that
HFYT helps to nurture Hays’ culture and will increasingly become
part of our Employer Value Proposition.
HFYT focuses on six sectors of society, as well as the natural
environment. The six sectors have been chosen to complement
Hays’ core skills, and are also linked to the UN SDGs.
In FY23, Hays colleagues volunteered for 17,673 hours, up c.85%
YoY, assisting 73 charities. We also raised over £650,000 for our
core charities, and in FY23 introduced an initiative to donate all
unclaimed Hays dividends to charity. This led to a further £100,000
being donated.
HFYT six sectors of society
Hays colleagues
volunteer hours
17,673
Hours
t o
e ri n g
g y
ct volu nte
r Group S tr a t e
nd E V P
a
e
n
n
o
C
u
o
THE THREE PIL
L
A
R
S
G
e
O
F
t
n
h
e
v
o
l
r
r
o
a
u
t
u
n
e
t
g
e
h
o
u
r
i
m
p
a
c
t
e
r
i
n
g
h
g
l
o
B
c
a
b
uild a global
al community w h i c
n also operate loc a l
l y
R T OMO
R
R
O
W
U
R Y O
O
F
G
N
I
P
L
E
H
01
02
Workers with
disability
Ethnic
minorities
06
Youth
engagement
03
LGBTQIA+
communities
S
U
C
O
Y F
T
CIE
R S O F SO
05
04
Mature-age
workers
Under-utilised
talent
O
T
C
E
H F Y T S I X S
58
H
F
Y
T
+85%
Year on year
Our volunteering in FY23 was split as follows
42%
26%
32%
The Environment
Other*
Skill-based
Ethnic Minorities
LGBTQIA+ Communities
Mature-aged Workers
Underutilised Talent
Workers with a Disability
Environment
Youth Engagement
13%
23%
2%
2%
9%
13%
38%
* Other includes working in local food banks, Christmas actions,
working with Ukrainian charities and Youth Engagement.
Hays plc Annual Report & Accounts 2023
HAYS HELPING
FOR YOUR
TOMORROW
IN ACTION
In Germany, Hays supports JOBLINGE
with volunteering, mentoring and job
application training for unemployed
youths. Hays Germany also supported
in mentoring young adults from the
LGBTQIA+ community, and volunteered
with Haus des Stiftens, offering corporate
expertise to non-profit organisations. We
also volunteered worked with Socialbee, a
project which helps to integrate refugees
and migrants into the German labour
market and further education.
In Italy, Hays partnered with Sistech,
sponsoring refugee and displaced
women in the Technology sector.
Hays France partnered with Telemaque,
with volunteering, helping to advocate
equal opportunities in education. Ten
mentors from Hays supported young
students, from middle school to college
and from less privileged backgrounds,
to find opportunities in the workplace.
France also worked with MaMaMa to
help women in precarious situations such
as unemployment and homelessness.
In the UK, we worked with EveryYouth,
using Hays MyLearning and our
Technology systems, to create a learning
Management System for the member
charities of EveryYouth. This helps young
people to access training, often free of
charge, and helps to match them with
volunteer Hays job coaches.
The opening of the Ukraine School in Warsaw, which Hays staff helped furnish
“Taking on the 3 Peaks Challenge last year
was something totally out of my comfort
zone, but as soon as it was finished, I was
already asking around the 2023 challenge!
The drive from everyone involved to not
only complete the challenge but also to
raise substantial funds for EveryYouth was
absolutely electric.
It is not often that one can be part of such a
combined effort to achieve a common goal
and that energy brought about such a sense
of camaraderie. I am excited to take on the
Hays Reach your Peak challenge this year
to again team-up with colleagues across
the business to raise funds to support young
people facing homelessness to overcome
their ‘mountain’ and chase their dreams.”
Anna Winters
L&D Partner, Hays
Partner
Partnership with EveryYouth
in the UK, including the 10 Peak
Lake District Challenge
Also with EveryYouth in the UK, we launched
Hays Flourish, an online learning platform
developed in tandem with EveryYouth.
Flourish aims to give support and access
to young homeless people seeking to
enter the workplace.
In Poland, colleagues volunteered and
fundraised to help furnish the Ukraine
School in Warsaw, providing education
to 300 refugee students. This continued
the work of our Hays Helps Ukraine fund,
which supported refugees with volunteering
and provided furniture, food and medical
supplies for families in temporary
accommodation. We have also helped
provide careers advice to refugees.
In ANZ, Hays launched a partnership with
The Smith Family, helping young Australians
overcome educational inequality caused
by poverty; and helping them unlock better
futures for themselves. We set a fund-raising
target of a huge $25,000, matched by Hays,
and we exceeded this target with a total of
$53,684. Volunteering activities with Smith
Family have included mentoring through
their iTrack online student mentoring,
Christmas toy appeal box packing, and more
recently content design for the government
funded Growing Careers Programme.
Post year-end, Hays colleagues in the UK
logged over 9,000 hours of volunteering
throughout July 2023 at 350 events with
our partner ‘Neighbourly’, getting involved
in community projects all over the country.
59
>300
We have worked closely with the new
Ukraine School in Warsaw, which now
has >300 students
c.40
‘Big Brother Big Sister’ in North America
– which led to c.40 clients signing up
alongside Hays
Trees for Cities
in the UK
Special Olympics
in LATAM
JOBLINGE
in Germany
Happy Way
in Poland
GovernanceFinancial StatementsShareholder InformationStrategic Report Hays plc Annual Report & Accounts 2023
Social
GLOBAL ESG
IN ACTION
Environmental
– Electric/hybrid cars are now available to all employees
– Training and webinars for employees to better understand
in our largest car fleets
how they can do more to help the environment
– Hays Spain partnered with major car sharing providers,
– Hays France introduced limits on heating and air conditioning
ensuring Hays consultants can use hybrid/electric vehicles
to avoid business commuting in individual cars
across FY23, saving significant amounts of energy. Colleagues
also collected 260kg of waste as part of World Cleanup Day
– Colleagues in Spain also volunteered to help clean garbage
– In the UK, our switch to responsible procurement supplier
from beaches in the Albufera Natural Park in Valencia
– Phase-out of desktop PCs to more energy-efficient laptops
‘Commercial’ led to over £165,000 of social value being created
through their community ‘Products with Purpose’ basket
across Hays
– Hays UK funded, and our colleagues helped to plant, c.12,000
trees in conjunction with its environmental partner, Trees for
Cities. Projects were based in 11 different UK cities
– All EMEA and Americas countries committed to planting
a tree for every placement in May 2023
– Single use plastics have been banned across Hays Americas
and CEE countries now only use eco-friendly paper
– In China, 105 employees participated in ‘Walk for your
tomorrow’. This involved a combined 223 hours of walking
while collecting litter along Beijing waterways
– In Japan, 75 colleagues participated in International
Coastal Clean-up. Hays contributed the largest number
of volunteers
Colleagues
– We launched Employee Resource Groups globally, including
DE&I, Women in Leadership, Pride and Black Excellence
– Education of Mental Health First Aiders as support for
colleagues facing mental challenges
– DE&I Ambassadors nominated across the Group
– Germany/UK appointed their first dedicated Heads of Wellbeing
– ERG leadership development programmes established
– In Asia and ANZ, we consulted with employees to understand
– Parents at Hays policies and Groups set up globally during
the year, with internal communications channels established
– Initiatives on disability inclusion set up, including a visibility
series sharing stories of Hays colleagues with disabilities
– In Asia, we ran a campaign to encourage people to bring their
true selves to work. This included conscious inclusion training
– Hays UK launched a partnership with Finwell, helping
colleagues to navigate the cost-of-living crisis
lived experience and interactions with disability in the
workplace. These insights have led to four important
recommendations that will support workplace accessibility and
help employees with a disability to achieve their full potential
– In ANZ, we have developed a family and domestic violence
awareness and prevention strategy, and increased our paid
parental leave benefits
60
Community and charity (more on page 59)
– We began working with Reconciliation Australia on a two-
year strategic plan to promote reconciliation, focusing on
strengthening relationships with Aboriginal and Torres Strait
Islander peoples. Hays colleagues have engaged in the
reconciliation journey, and are piloting strategies to
empower Aboriginal and Torres Strait Islander peoples
– We worked with Youthline in New Zealand, supporting young
people struggling with mental health via counselling,
mentorship and community outreach programmes. As part of
this Hays employees responded to over 1,500 text messages
and provided 67 hours of phone counselling support
– In Canada, we worked with ‘Big Brothers Big Sisters’, recruiting
36 new mentors for children. We also contributed twenty $250
bursaries and career coaching sessions to high potential youth
– In Germany, our JOBLINGE programme provided support for
unemployed young people to enter the job market. This was
done via a combination of volunteer partnerships, mentoring,
help with applications and fundraising
– In Germany we also partnered with a leading LGBTQIA+ charity,
providing career mentoring for young adults from the
LGBTQIA+ community
– In Hungary we supported two summer camps for Ukrainian
refugees and ethnic minorities
– Partnership in Italy with Sistech to sponsor uprooted
and displaced female refugees in the IT sector
– Ongoing cooperation with non-profit organisation ‘Nadání a
dovednosti’ in Czechia, which delivered workshops and open
days for children and students from foster homes
– Hays UK&I raised over £250,000 for our partner charity
EveryYouth. As part of our support, 32 colleagues participated
in the 3 Peaks mountain challenge and 50 in Hays ‘Reach your
Peak’ challenge
– Also in the UK&I, we launched Hays Flourish, an online learning
platform developed in tandem with EveryYouth. This provides
training and support to young homeless people seeking to
enter the workplace
– UAE ran several events to raise money for Syria and Turkey
– France and Luxembourg partnered with multiple charities
to provide mentors to young people from less fortunate
backgrounds
– In Mexico, an activity day was held with the participation of
33 Hays employees and 14 Special Olympics athletes. Hays
was also awarded a Special Olympics ‘Top Supporter’ award
– Post year-end, Hays colleagues in the UK logged over
9,000 hours of volunteering at 350 events with our partner
‘Neighbourly’, in community projects all over the country
– In Japan, we conducted resume sessions as part of
the ‘Life Skills’ programme, aimed at enhancing the
job readiness of individuals with disabilities
Clients and candidates
– Hays US collaborated with ‘Think Big for Kids’ to organise and
facilitate 11 career showcases and field trips. This helped to
introduce 370 under-represented middle school students to the
potential for careers in STEM industries
– In Germany, we supported specific groups via partners such as
Businettes (for women in start-ups), herCAREER (career fairs
for women) and SticksNStones (LGBTQIA+ talents)
– We purchased Vercida Consulting, a UK-based DE&I consulting
– In the UK, our Social Enterprise Initiative with client Amey was
launched, helping to train and support former homeless people
into the workplace
business. Vercida provides organisations with advisory
services to improve their ability to attract, retain and progress
talent from diverse backgrounds
– Globally, we have conducted workshops to promote inclusive
recruitment approaches. This includes helping candidates
prepare CVs and training them to succeed in job interviews
– Partnership with ‘handicap.fr’ in France, an inclusive job board
for people living with disability. In FY23, this led to c.7,000 CVs
being received by Hays
– Colleagues from Hays Hungary participated in a programme
to help equip ethnic minorities with the skills necessary
to attend their first job interview
– Hays sponsored and participated in events with ‘Rethink’ and
the British Chamber of Commerce. These included ‘Bridging
the Green Skills Gap: Building a Skilled & Sustainable
Workforce’ and the Hong Kong Sustainability Summit
– We sponsored the ESG China Awards organised by
British Chamber Commerce of Shanghai
61
GovernanceFinancial StatementsShareholder InformationStrategic Report In focus: Paralympics Ireland
Hays Ireland have been official partners of
Paralympics Ireland since 2022, providing
recruitment and key hire support to the team
while assisting Paralympic athletes as they
transition from their sporting career into
the workplace.
To date, we have placed nine professionals
on the Paralympics Ireland team, while
launching a variety of partnership activity
to progress a positive inclusivity agenda
for those living with disabilities in Ireland.
Further developing the partnership, we are
now in the process of rolling out our athlete
transition programme where we’re running
LinkedIn classes and mentoring sessions
for athletes who are looking to develop
their professional careers for the future.
Our network of clients and candidates
positions Hays as a key change maker in
progressing the DE&I agenda, and we look
forward to further positively impacting the
inclusivity agenda in Ireland and abroad with
Paralympics Ireland.
Hays staff partnership with Paralympics Ireland
Social
In focus: UK&I Trees for Cities
Trees for Cities is the only UK charity
working at a national and international
level to improve lives by planting trees and
enhancing green spaces in towns and cities.
The charity has planted over 1.5 million
trees, engaging over 140,000 volunteers.
A key focus is educating the community,
raising awareness about sustainability,
social mobility, community cohesion,
education and health initiatives.
This year, Hays has funded and help plant
c.12,000 trees. Projects were based in
11 different UK cities, and 90 colleagues
have volunteered, empowering communities
to look after green spaces. Hays UK&I has
also this year introduced a new tree-planting
employee benefit to help colleagues
safeguard our natural environment by
reducing personal carbon footprint.
62
Hays UK&I staff at a Trees for Cities project
Hays plc Annual Report & Accounts 2023 As part of this vision, we were also delighted
to welcome a panel of senior leaders to our
live discussion on stress management to
support ‘Stress Awareness’ month in April
2023. The panel openly discussed their lived
experience of stress and their top tips for
stress management.
We are also focused on colleagues’ financial
wellbeing, and we were proud to receive
an ‘Inside Out’ Award for Best Financial
Wellness Award in June 2023. The award
was based on a pilot we ran with external
partner FinWell, who have helped us focus
on the financial wellbeing of our employees,
recognising how intrinsically linked this is to
mental wellbeing. FinWell have worked with
us to deliver a series of financial wellbeing
literacy webinars and one-to-one financial
wellbeing coaching sessions in targeted
locations. This project has not only resulted
in an improvement in financial wellbeing
but also in stress reduction and confidence
in how to maintain financial wellbeing
moving forward.
We have continued to partner with ‘Let’s
Improve Workplace Wellbeing’ (LIWW),
a not-for-profit community interest
company. LIWW are an employer led
membership company facilitating a forum
for HR Managers and Wellbeing leads
to come together to learn, share and
implement best practice. Hays’ UK&I Head
of Wellbeing, Hannah Pearsall plays an
active role in this leadership team, and this
has provided a rewarding opportunity to
support positive mental health and wellbeing
across the workplace more broadly than
just within Hays. Hannah is an accredited
Wellbeing Coach, Mental Health First Aider
and Instructor.
We believe we have made good progress in
the first year of our plan and recently invited
employees with lived experience of mental ill
health to participate in a focus group to help
us better understand how we can continue
to improve our plan moving forward. In
FY24, we will launch our Mental Health First
Aid (MHFA) roll-out, which includes specific
policies in relation to mental health. Our goal
is to make fully qualified MHFAs an integral
part of our commitment to provide better
access to support, advice and signposting,
and also to offer licensed training to
empower people to notice the signs of
mental ill health and encourage them to
break down barriers. We have set a target of
successfully training 50 MHFAs by the end
of FY24.
“I am deeply passionate about workplace
wellbeing and my recent appointment
demonstrates how committed Hays are to
the ongoing priority of health and wellbeing.
Supporting employee wellbeing is critical to
achieving, and sustaining, high performance.
I believe that work should be a determinant
of positive wellbeing. I am ambitious about
our journey to develop and implement an
industry-leading wellbeing programme.
For me, that starts by acknowledging
wellbeing as a shared responsibility, which
requires an environment that supports
positive choices in relation to all aspects
of health and wellbeing.”
Hannah Pearsall
Head of Wellbeing, UK
Mental health and wellbeing
We recognise the interlinkages between
employee engagement, DE&I, reward,
development and how these contribute
to general wellbeing and mental health.
These are also important factors in shaping
an organisational culture that enables
people to thrive. For more information
on our People & Culture, see page 20.
In July 2022, Hays commenced a wellbeing
plan which included a central focus on our
colleagues’ mental health, underpinned by
the principles of the ‘Mental Health At Work
Commitment’ standards.
As part of this, in September 2022, during
National Inclusion Week, we relaunched our
‘UK&I Wellbeing Ambassadors’ network to
become ‘HUMAN’ champions. ‘HUMAN’
represents Healthier, Unique, Mentally Aware
and Nurtured, and we believe captures our
ambitions to both help normalise talking
about mental health, and the work our
ambassadors are supporting. Our HUMAN
champions conduct open and honest
dialogue about stress and mental health
in the workplace and share stories of their
lived experiences, supporting our culture of
positive wellbeing inclusion and aiming to
banish any stigma often associated with
mental health. We also welcomed external
speakers to share their knowledge and
expertise, delivering well-attended session
to all employees on taking care of your
own wellbeing.
Further, in support of World Mental Health
Day in October 2022, a series of internal
‘Managing Well’ webinars were run for all
line managers to learn more about their own
wellbeing and how their role as managers
impacts the wellbeing of the team around
them. Over 500 managers attended and
given its success, this webinar has grown
to become a half day workshop for all new
managers, as part of our people leadership
programme. We have set targets to further
increase participation, including a further
50 managers in the UK.
Recognising that our personal diversity
data and life stage impacts our experience
of stress and mental health, this year we
are proud to have launched several regular
drop-in sessions in conjunction with our
employee network groups for Menopause,
Carers and REACH (recognising and enabling
all colleagues and conditions at Hays).
The drop-in sessions provide a safe space
to explore lived experience, share ideas and
resources, and support our commitment
to an open and inclusive culture.
63
GovernanceFinancial StatementsShareholder InformationStrategic Report Governance
Governance
Strong governance is our foundation for the delivery of stakeholder
value and in our delivery of leading recruitment and talent services.
It is about nurturing the right behaviours and having the right
policies, processes and training in place. It is fundamental to
our reputation and underpinned by our value ‘Do the right thing’.
Business ethics
As a people business we respect internationally recognised human
rights in line with the principles and guidance of the UN Universal
Declaration of Human Rights, the core conventions of the
International Labour Organization (ILO) and the UN Guiding
Principles on Business and Human Rights. This applies to our
relationships with clients, candidates, employees, business partners,
suppliers and the communities within which we operate.
We expect our suppliers and potential suppliers to also aim for high
ethical standards and to operate in an ethical, legally compliant and
professional manner by adhering to our Supplier Code of Conduct.
We expect our suppliers to promote similar standards and exert
influence within their own supply chain. Our Modern Slavery
Statement is available to view on our website.
At Hays we are committed to our own Code of Conduct and our
Ethics Policy. All staff within Hays are expected to act with integrity
and honesty and behave in a way that is above reproach, and to treat
people fairly, with courtesy and respect, be responsible, respect
diversity and communicate openly.
We encourage our people to speak up and raise any concerns.
We offer employees a confidential reporting line, managed by an
independent third party, accessible by telephone or online 24 hours
a day, 365 days a year (as allowed under applicable law, employees
may submit reports to the confidential line anonymously in over
100 languages).
We have a zero tolerance approach to bribery and corruption.
All employees are required to comply with the Hays Anti-Bribery and
Corruption Policy and undertake training on it annually. The policy
prohibits the giving or receiving of bribes in any form. The offer or
acceptance of any form of bribery is prohibited, including facilitation
payments. Hospitality, gifts and improper offers or payments that
seek to induce or reward improper performance or might appear
to place any person under an obligation are prohibited.
As part of our policy on anti-bribery and corruption, we have a zero
tolerance approach to tax evasion and the facilitation of tax evasion.
We expect all Hays employees to adhere to the highest ethical and
legal standards in business dealings throughout the world. Conflicts
of interest that interfere with proper performance or independent
judgement are prohibited. We expect our staff to communicate
transparently and honestly with our clients, candidates, business
partners, suppliers, governments and regulatory bodies, within
the framework of privacy and confidentiality.
Our approach to tax
Taxation is essential to fund vital public services and when paid fairly
ensures a level playing field for businesses, regardless of size.
We manage our tax affairs to ensure that the correct amount of tax
is paid in the appropriate jurisdiction at the right time. Hays does
not pursue any artificial or aggressive tax planning arrangements,
defining such measures as transactions not driven by a valid
commercial outcome or transactions that lack significant economic
substance. Hays strives to remain competitive by seeking to mitigate
tax costs by reviewing commercially motivated activities, whilst
having full regard for corporate reputation and responsibilities.
We do not condone the criminal evasion of tax nor the facilitation of
tax evasion, whether undertaken by an employee or an associated
partner. Controls are in place to detect and prevent such activities,
whilst guidelines and training are provided to ensure all employees
are aware of their responsibilities to report suspicious activities.
64
Tax risk is managed through internal control policies and procedures,
training and compliance programmes, and proactive engagement
between the Group Tax team and the broader business.
Hays adopts a transparent, proactive approach with tax authorities.
We comply with our tax filing, reporting and payment obligations
globally on a timely basis. From time to time a tax authority may
have interpreted tax legislation, and therefore tax treatment, in
a different manner to Hays. Where this occurs, we aim to work
collaboratively with the tax authority to achieve an early resolution.
The total amount of taxes we pay and collect is significantly more
than the tax we pay on our profits. We present below our total tax
contribution for 2023 across the Group. This includes taxes borne
by the Group and taxes collected by the Group in relation to our
economic and employment activities.
Taxes collected by Hays are not a cost to the Group but instead
are collected by the Group from our customers and employees
on behalf of the government and comprise
– indirect taxes: VAT collected represents net VAT. We are charged
VAT (Input VAT) on our purchases of goods and services and we
charge VAT (Output VAT) in turn on our services and account for
this value add or net VAT to the government.
– employee taxes: These include employee income taxes,
employee social security contributions and similar payments.
Taxes collected
£542m
£709m
VAT/GST collected
Employment taxes collected
Taxes borne by Hays are a cost to the Group and comprise:
– employer taxes: Employment-related taxes borne by Hays
in respect of its role as an employer and include employer
social security contributions and similar payments
– corporate income taxes: Corporate income taxes paid on
our Group profits and withholding taxes
– other payments: These are other payments including
stamp duty and apprenticeship levy
Taxes borne
£4m
£66m
Employment taxes borne
Corporate taxes borne
Other taxes borne
£379m
Our tax strategy is available at haysplc.com/sustainability.
More information on our corporate governance is on page 83.
Hays plc Annual Report & Accounts 2023 Environmental
Transitioning for the environment
Ultimately, our vision is for an environmentally sustainable future
through greener ways of working, the growth of the Green Economy.
In pursuing this vision we seek to reduce our own impacts as well
as working for clients in relation to our Sustainability specialism.
We are taking action in our own business through the application of
our Environmental and Sustainability Policy and by delivering on our
ambitions and public commitments, which include our SBTs, our
commitment to renewable sources for electricity supply and carbon
neutrality for our scope 1, 2 and elements of scope 3 GHG emissions.
Our SBTs were approved by the SBTi in FY22, and we are making
good progress. As an office-based business with no manufacturing,
our environmental impacts are lower than some other business
sectors. However, we firmly believe that it will take a collective global
effort to limit the worst effects of climate change, in line with the
Paris Agreement’s 1.5°C trajectory in relation to global warming.
As a business with c.13,000 employees and over 40,000 clients in
FY23, we believe our actions as an advocate for climate action can
have an amplifying impact on the transition to a more sustainable,
low carbon economy. We can also play a role in sourcing the
talent needed to drive the Green Economy.
Our FY23 environmental highlights include:
FY23 highlights include:
Appointing our first ever full
time Global Head of
Sustainability
Conducting our most
comprehensive GHG data
gathering exercise
Updating our TCFD disclosure
and scenario analysis
Linking sustainability to executive
remuneration
Ongoing reporting against
our SBT
Increasing awareness through
communications and Employee
Resource Groups
Hays has committed to:
– 50% reduction in absolute scope 1 & 2 emissions
by 2026 against a 2020 baseline, as approved
by the SBTi in line with a 1.5°C trajectory
– 50% reduction in absolute scope 3 emissions from
purchased goods and services and capital goods
2030 against a 2020 baseline, as approved by the
SBTi in line with a 1.5°C trajectory
– 40% reduction in absolute scope 3 emissions from
business travel by 2026 against a 2020 baseline,
as approved by the SBTi in line with a 1.5°C
trajectory
– transition to 100% renewable energy where there
is a feasible market solution for electricity supply
– carbon neutrality for scope 1 & 2, scope 3
business travel and scope 3 transition and
distribution losses.
Companies with approved SBTs are encouraged by the SBTi
to strive to obtain better data around GHGs. Therefore, in FY23
Hays conducted its most comprehensive data collection exercise
ever, bringing in a new external expert, Climate Partner, to assess
Hays’ GHG and wider environmental impact more accurately,
so that we can better manage reductions.
This exercise identified GHG emissions that we were previously
unaware of, such as emissions from heating and cooling, additional
travel previously not captured and a more robust review of renewable
energy certificates. This gives us a more complete measure of
scope 1, 2 and 3 emissions. In the interest of completeness and
transparency to our stakeholders, we consider the data changes
significant enough to restate our GHG emissions data for 2020 and
2022. As 2021 was highly impacted by the pandemic, we have not
restated our GHG emissions for this year.
The emissions discovered were mainly refrigerant and coolant
related gases, plus some additional travel data. Also, we identified
some anomalies and outliers in our historic GHG data, which
ClimatePartner have helped to recalculate.
Climate action
Our reporting for GHG emissions is 1 April 2022 to 31 March 2023.
We gather data from every office globally to calculate our GHG
emissions, working with our external experts. Our GHG emissions,
methodology and calculations are in alignment with the GHG
Protocol corporate reporting standard.
We report as shown in our GHG emissions table across scopes 1,
2 and relevant categories of scope 3 and in accordance with
obligations under The Companies (Directors’ report) and Limited
Liability Partnerships (Energy and Carbon Report) Regulations 2018,
whereby we follow an operational control approach.
Our scope 1 emissions have slightly increased YoY by 4%. This
has been due to our 9% higher average headcount in the year, an
increase in business activity as evidenced by our record fees and
as our company fleet vehicles increased in line with headcount.
Our scope 2 emission have decreased by 11%, driven by continued
transition to green energy tariffs for electricity supply, which are
now in place for 132 of our offices globally, as well as local initiatives
to adjust office heating and cooling, such as France limiting winter
temperature in our offices to 19 degrees.
65
GovernanceFinancial StatementsShareholder InformationStrategic Report Environmental
Our overall scope 3 emissions have increased by 13%, largely
reflecting a 3% increase in purchased goods and services given
the increased scale of the business. Business travel also increased
by 254% YoY as pandemic-related travel restrictions were removed.
With all scope 3 emissions considered, our total Group GHG emissions
increased by 10% YoY to 58,857 tCO2e, and have reduced by 11%
versus our base year to March 2020. On a per full time employee
basis, total GHG emissions are down 18% versus our base year.
Relative to our 2020 base year, our scope 1 emissions are down
1%, scope 2 down 54% and our business travel scope 3 down 19%.
These are the categories on which Hays is carbon neutral and
offsets our GHG output, and in total are down 29% versus our
base year, or down 34% on a per full time employee basis. This said,
we recognise that we still have work to do, and that GHG reductions
will then become a continual part of our operational focus through
our global Net Zero Working Group. Our key priorities are reducing
travel where possible by using video, the transition of fleet vehicles
to electric vehicles and engaging with our suppliers. Where travel
is required, we are enabling and encouraging our employees in
more sustainable travel options.
Hays Scope 1, 2 and 3 emissions (1 April-31 March reporting year)
2023
2022(1)
2020(1)(2)
Emissions Source
Scope 1
Operational Fuel
Vehicle Fuel
Scope 2
Purchased Electricity
and District Heating
Electric Vehicles
Scope 3
Business Travel*
Fuel and Energy related activities
Global
(excluding
UK and
offshore)
Global
(including
UK and
offshore)
Global
(excluding
UK and
offshore)
Global
(including
UK and
offshore)
UK and
offshore
UK and
offshore
645
4,763
5,408
666
4,527
5,193
11
634
345
297
779
3,984
3,580
3,541
790
4,618
3,925
3,838
11
655
163
135
807
3,720
4,248
4,214
818
4,375
4,411
4,349
48
39
87
28
34
62
8,544
40,980
49,524
7,738
36,230
43,968
372
282
4,545
2,246
4,917
2,528
74
1,316
338
2,448
1,390
2,786
Purchased Goods and Services(4)
3,455
23,077
26,532
3,365
22,480
25,845
1,148
3,992
5,140
1,054
3,666
4,720
71
317
388
71
322
393
3,216
6,803
10,019
2,836
5,998
8,834
Capital Goods
Waste(5)
Employee Commuting
and Homeworking
Total tonnes of CO2e
Scope 1, 2 and selected Scope 3
which are offset(3)
S1, S2 and selected
S3 intensity ratio per FTE
% Change
in total
emissions
(vs 2022
year)
4%
-3%
6%
-11%
-12%
40%
13%
254%
-9%
3%
9%
-1%
13%
Global
(excluding
UK and
offshore)
Global
(including
UK and
offshore)
UK and
offshore
807
4,635
5,442
12
795
1,815
1,815
743
3,892
6,726
6,716
755
4,687
8,541
8,531
% Change
in total
emissions
(vs 2020
base year)
-1%
5%
-1%
-54%
-55%
–
10
10
770%
9,718
42,385
52,103
757
503
5,320
2,964
6,077
3,467
3,045
20,337
23,382
1,582
5,505
78
322
7,087
400
3,753
7,937
11,690
-5%
-19%
-27%
13%
-27%
-3%
-14%
-11%
-29%
9,534
49,323
58,857
8,567
45,005
53,572
10% 12,340
53,746
66,086
1,644
15,134
16,778
1,241
12,539
13,780(1)
22%
3,882
19,645
23,527(1)(2)
0.54
1.45
1.25
0.45
1.32
1.13
10%
1.23
2.13
1.90
-34%
Total intensity ratio per FTE
3.16
4.72
4.37
3.12
4.75
4.39
Overall Group Energy
Consumption (MWhr)(7)
5,846
30,652
36,498
5,930
30,305
36,235
0%
1%
3.90
5.82
5.33
8,763
33,411
42,174
-18%
-13%
FTE
(1)
(2)
(3)
(4)
3,021
10,455
13,476
2,746
9,468
12,214
10%
3,162
9,236
12,398
As explained on page 65, in FY23 we undertook our most comprehensive GHG emissions data gathering exercise yet. In the interest of
completeness and transparency, we consider the data changes significant enough to restate our GHG emissions data for 2020 and 2022.
The restatement is driven by additional travel data, updated emissions factor assumptions, discovery of emissions associated with heating
and cooling and a more conservative assessment of energy consumption previously identified as 100% renewable. This has led to our 2020
base year emissions being restated, with scope 1 decreasing from 5,928 tonnes (-8%), scope 2 increasing from 6,165 tonnes (up 39%) and
selected scope 3 increasing from 6,630 (up 44%). FY22 emissions are also restated, with scope 1 increasing from 3,989 tonnes (up 30%),
scope 2 increasing from 1,390 tonnes (up 217%) and selected scope 3 increasing from 1,660 (up 152%).
The restated figures for Base Year 2020 will now be used for measuring Science Based Targets and our other commitments on reducing emissions.
Selected scope 3 emissions designated for carbon offsets are scope 3 business travel and scope 3 fuel and energy related activities.
Supplier specific data has been used to calculate emissions for the top 30 suppliers (which represent around 75% of Hays spend). For 11 of these
top 30 suppliers no public data was available, so EPA supply chain factors were applied instead. Also for the rest of the suppliers (representing the
remaining 25% of Hays spend) EPA factors have been applied. Group PG&S emissions rose slightly in 2022.
(5) Where primary waste type data was unavailable, municipal, plastic, glass, biowaste and paper waste at each site was assumed using office
(6)
footprint estimates.
Homeworking only started to be calculated for 2021. Emissions have been calculated based on ClimatePartner homeworking model as per above.
Emissions from 2020 have been restated to include homeworking emissions.
(7) Total energy consumption includes energy consumed for heating (natural gas, district heating), power (electricity) and transport (company leased
vehicles, expensed mileage claims) across scope 1, 2 and 3.
66
Hays plc Annual Report & Accounts 2023 We have continued our participation in the Carbon Disclosure Project
(CDP) Climate Change Survey. In 2022 we retained our score at B
management level in relation. We await the results of our 2023
submission, which are expected to be released in early 2024.
In 2021 we invested in a carbon offset project for the residual
emissions we can’t avoid, securing 60,000 tCO2e. This is for our
scope 1, scope 2, scope 3 (business travel) and scope 3 (fuel and
energy related activities). Based on this, our offset requirements for
this and the past two years totals 38,278 tCO2e. We are therefore
carbon neutral on this basis.
Carbon offsetting
The certified carbon offset credits we have purchased are
generated by an afforestation project in eastern Uruguay.
This Guanare Afforestation project covers 22,000 hectares
of previously degraded farming which is being regenerated
into forest. The project seeks to store around seven million
tonnes of CO2 over its lifetime, with annual carbon absorption
of nearly 130,000 tonnes. The project has been independently
assessed, and supports five UN SDGs, with around 10,000
local people benefiting from the afforestation efforts, in
addition to the biodiversity gains.
Further information on our climate action is detailed in our reporting
in line with the recommendations of the Task Force on Climate-
related Financial Disclosures (TCFD) which is detailed on page 68.
Minimising impacts
Throughout our regions steps are taken to reduce and minimise
environmental impacts with local initiatives and awareness
raising campaigns, to importantly engage our people. We have
a growing number of environmental ambassadors who are part
of a sustainability employee resource group. We will be working
to extend this during FY24.
Our people are being engaged with training, environmental-related
volunteering and specific campaigns such as the one run in
conjunction with Earth Day 2023. For examples of the local initiatives
please refer to pages 60 to 61.
Where possible and in relation to the size of our local business we
encourage a structured approach to environmental management
such as in the UK where we are certified against the environmental
management standard ISO 14001.
Green Economy
Businesses are becoming more environmentally and sustainability
focused, and as a global recruiter we have a significant role to play
in helping clients to find the right talent. We can focus on finding
candidates for organisations that are in the Green Economy, such
as any role at a renewable energy company, and we can help find
candidates with green skills for organisations in other sector,
such as an environmental manager in a financial services firm.
In recent years we have established a Sustainability specialism.
The UK and Australia are most advanced, with over 30 expert
recruiters placing talent into policy and environmental
management roles. We expect this will grow and expand
into further geographies in FY24.
Arguably, the largest Green Economy opportunities for Hays exist
in Construction & Property, and in Engineering. Legislation and
regulation are driving significant building programmes and creating
demand for new skills. This is especially the case in the UK and the
US, where we estimate that over 10% of our fees are already in this
space, and can grow significantly. In Engineering, the transition to
renewable energy and the transformation of the transportation
and automotive industries globally is driving demand for new skills.
Our German business is particularly well positioned here, with
strong client relationships in these sectors.
We understand that all organisations and businesses will need to
make change. Therefore, we also believe in taking an advocacy role.
In doing so, we will seek to share information and insights. At a
country level, we do this through thought leadership pieces including
interviews, social media videos, blog articles and reports. We have
more planned in FY24, using our network and the support of
organisations such as Institute for Environmental Management
and Assessment.
We also have an opportunity to influence in our supply chain
through our Supplier Code of Conduct. Increasingly we are
seeking sustainable sourcing options for the goods we purchase
and working to engage suppliers in our own environmental
ambitions such as with Net Zero.
FTSE4Good Index
FTSE Russell (the trading name of FTSE International Limited
and Frank Russell) confirms that Hays plc has been independently
assessed according to the FTSE4Good criteria and has satisfied
the requirements to become a constituent of the FTSE4Good Index
Series. Created by the global index provider FTSE Russell, the
FTSE4Good Index Series is designed to measure the performance
of companies demonstrating strong ESG practices.
The FTSE4Good indices are used by a wide variety of market
participants to create and assess responsible investment funds
and other products.
67
GovernanceFinancial StatementsShareholder InformationStrategic Report TASK FORCE ON
CLIMATE-RELATED
FINANCIAL
DISCLOSURES
This statement contains the Group’s TCFD
disclosure in accordance with FCA requirements
of Premium Listed UK corporates. The Company
has provided responses across the four TCFD
pillars, and 11 recommended disclosures,
achieving consistency with listing rules, and aims
to advance the maturity of its climate-related
actions and disclosures on an annual basis.
Pillar 1: Governance
Recommendation 1: Oversight
The plc Board is responsible for our overall risk management
strategy, which includes climate-related risks and opportunities,
and responsibility is delegated to the Executive Board. This group
receives bi-annual climate-focused updates and has primary
responsibility for addressing climate-related matters. The CEO,
who sits on the plc Board and runs the Executive Board, has overall
accountability for climate-related matters and risk appetite.
The Audit Committee assists in risk oversight (as described within
Risk Management on page 106 of the 2023 Annual Report and
Accounts). The Committee reviews the effectiveness of the risk
management systems and process, including internal assurance
of key controls to mitigate identified climate-related risks.
The Group Risk Committee is responsible for assisting the Executive
Board in providing strategic leadership, direction, reporting and
oversight of the Group’s risk framework. The remit and responsibility
of the Committee covers the whole of the Group’s business.
Recommendation 2: Assessment and management
The Climate Committee is responsible for identifying, reviewing,
and assessing climate-related matters – including the likelihood
and potential impact of each risk aligned to the risk appetite.
The Committee meets quarterly and comprises the Group
Financial Controller and senior managers. It is also responsible
for coordinating with third-party support to deliver climate-related
scenario analysis and for ensuring integration of climate-related
risks and opportunities into strategic and financial planning.
Internal Audit ensures that processes and controls to mitigate
specific climate-related risks are monitored and any weaknesses
identified and improved. This is supported by the Net Zero Working
Group, comprising global senior managers, and department heads.
Its principal activity is the day-to-day management of projects to
deliver our Net Zero commitment. Projects cover actions to both
mitigate climate risk and capture opportunity. Our ‘Green Labs’
initiative of senior operators identifies recruitment opportunities in
the Green Economy – specifically those which arise from climate
change and a transition to a low-carbon economy, including our
Sustainability specialism, Engineering and Construction & Property.
Top-down risk
management
Ongoing risk
mitigation and
control review
Board of Directors (plc)
Audit Committee
Chief Executive
Executive Board
Group Risk
Committee
Climate
Committee
Net Zero
Working Group
Group ERM
Bottom-up risk
management
Business leadership
identifies, assesses,
monitors and
manages risk
Internal Audit
68
Hays plc Annual Report & Accounts 2023 Pillar 2: Strategy
Recommendation 3: Risks and opportunities
The key climate-related risks and opportunities (R&Os) identified
were those considered to be material to the development, financial
performance and financial position and/or prospects of Hays.
No long-term risks (10+ years) were considered to be material to
our current business strategy and operations. There is significant
uncertainty in assessing the risk impacts in this timeframe, though
management will continue to monitor country or regional economic
disruption brought on by climate events and respond accordingly.
For short-term risks (0-5 years) we focused on energy supply costs,
as this would have the most immediate impact on operations.
Future carbon pricing and investment in renewable energy sources
could lead to higher utility bills, travel costs and rental prices.
Medium-term risks (5-10 years) include those arising from a
transition to a low-carbon economy. Specifically, we looked at risk
of unrealised fees from missed opportunities in new and emerging
markets, loss of potential candidates and clients (who prefer to
work with recruiters focused on the Green Economy and which have
strong sustainability credentials), and reductions in market supply for
sectors and geographies with high levels of transition risk, including
the fossil fuel sector (<1% of Group fees; see scenario comparison).
In the medium term, we also considered physical risks to our key
assets. Specifically, those resulting from an increase in frequency
and intensity of extreme weather events such as cyclones and
floods. We focused on risks to our data centres, as they are a vital
asset with significant impact to business continuity.
In addition to risks, we identified several key business opportunities.
In the short term, we can develop and scale our service offerings
in low-carbon markets, including jobs in construction retrofit and
infrastructure. Also, we can recruit talent to meet job growth in
ESG and sustainability professions. We also identified short-term
opportunities to reduce energy-related operating costs by focusing
on strategies to reduce office energy use and business travel.
In the short and medium term, we identified an opportunity to
attract and retain talent (and to mitigate future carbon pricing) by
committing to SBTi GHG reduction targets and a Net Zero pathway.
We stress-tested the resilience of our R&Os strategy under two
different climate scenarios, including a ‘1.5°C scenario with a
disorderly transition’ and a ‘3+°C scenario and with a failure to
transition’. Our scenario analysis was based on the Network
for Greening the Financial System’s (NGFS) climate framework.
We used the NGFS Climate Scenarios to stress-test key climate-related risks and opportunities. These are developed to show a range of
higher and low risk outcomes, using integrated assessment modelling, given the interrelationships between physical and transition risks.
The major strategic implications for our business can be summarised by reference to the major scenarios described as follows:
Current Policies (3+°C)
Both scenarios
Divergent Net Zero (1.5°C)
HIGHEST PHYSICAL RISKS
LOWEST TRANSITION RISKS
GENERAL RISKS
AND OPPORTUNITIES
HIGHEST TRANSITION RISKS
LOWEST PHYSICAL RISKS
This scenario, Current Policies, assumes
only currently implemented policies are
preserved, leading to the highest physical
risks of all NGFS scenarios. Emissions grow
until 2080, leading to about 3°C of warming
and severe physical impacts from climate
and weather-related events. This includes
irreversible changes like sea level rise.
– The need to plan for extreme weather
events (cyclones and flooding) that
disrupt data centres, impacting business
operations, including fee generation.
– Global or regional economic disruption
arising from the impact on sectors with
supply chains that are heavily
concentrated in locations of high risk.
Risks and opportunities that are
independent of climate scenarios.
This includes those resulting from energy
supply costs, technology innovations
and environmental policies. In addition,
voluntary business-led climate action
(despite weak policies) and ongoing global
warming (despite strong policies) can
result in both transition and physical
climate-related risks.
– Increased extraction and production
costs for non-renewable energy
sources continue to increase, resulting
in exposure to increased utility and
rental costs.
– Increased extraction and production
costs for non-renewable energy sources
results in less job growth in the fossil
fuel sector, resulting in portfolio revenue
exposures in these industries.
– The need to adapt core services to grow
market share in emerging low-carbon
and sustainability markets in response
to non-climate-related drivers such as
technology innovation, environmental
regulations, resource scarcity and
behavioural changes.
– The development and scaling of new
and emerging services to support clients.
– Ability to attract and retain talent.
Divergent Net Zero reaches Net Zero by
2050 but with high transition risks due to
divergent policies introduced across sectors
and a quicker phase out of fossil fuels.
Emissions are in line with a climate goal
giving at least a 50% chance of limiting
global warming to below 1.5°C by the
end of the century.
– Disruption in sectors and geographies
with high levels of transition risk
(e.g. fossil fuels) leading to higher
portfolio revenue exposure and
job losses.
– Increased competition for market
share of new, emerging low-carbon and
sustainability markets with implications
for client numbers and/or increased
costs associated with bidding.
– Increased costs associated with carbon
pricing for GHG inventory, e.g. costs for
purchasing of certified carbon offsets.
69
GovernanceFinancial StatementsShareholder InformationStrategic Report We chose a 1.5°C climate scenario (Divergent Net Zero) to stress-
test our transition R&Os. Indications are that key drivers such as high
carbon pricing and strong policy reaction (towards a low-carbon
economy) will most likely result in strong job growth in low-carbon
and ESG and sustainability professions.
For physical risks we selected a 3+°C climate scenario (Current
Policies). The projected financial impact from increased cyclonic
weather events is low (4.5% average for all locations). In addition,
the impact on Hays’ infrastructure of an increased risk from
inland flooding is low.
R&O scenario summary
Risk (Timeframe)
Energy
supply costs
(0-5 years)
Increase in utility costs and
rental prices as a result of higher
energy prices
Changes in
market supply
(5-10 years)
Portfolio revenue exposure and job
losses to sectors and geographies
with high levels of transition risk
(e.g. fossil fuel sector)
Changes in
market demand
(5-10 years)
Loss of market share of new, emerging
low-carbon and sustainability markets
results in a reduction in client numbers
and/or increased costs associated
with bidding
Changes in
behaviour
(5-10 years)
Loss of market share/earnings
and ability to attract and retain
employees (talent)
Corporate
GHG emissions
(5-10 years)
Carbon fee for GHG inventory, including
costs for additional purchasing of
certified carbon offsets
Extreme
weather events
(5-10 years)
Extreme weather events (cyclones
and flooding) disrupt data centres,
impacting business operations,
including fee generation
Current Policies (3+°C)
Divergent Net Zero (1.5°C)
MINIMAL IMPACT
Carbon pricing remains low and
investment costs in renewable sources
is minimised, resulting in lower rises
in energy costs. Energy costs may still
increase due to non-climate-related
drivers such as increased energy
production costs.
LOW IMPACT
£1.0 million annual profit
Energy prices increase due to
carbon pricing and rapid renewable
energy investment but are mitigated
to some degree by energy and GHG
reduction targets and strategies.
MINIMAL IMPACT
Policy reaction remains low, resulting
in minimal negative impact to jobs
associated with fossil fuels or other
high-carbon industries. Non-climate-
related drivers (resource scarcity,
technology advancements, etc.) may
still drive change in market supply.
LOW IMPACT
<1% of annual net fees
High policy reaction results in a
shift in market supply away from
jobs supporting carbon intensive
industries such as those related to
fossil fuel extraction and production
or other high-carbon industries.
MINIMAL IMPACT
Policy reaction remains low, resulting in
minimal shift in market towards a low-
carbon economy. Non-climate-related
drivers (resource scarcity, technology
advancements, etc.) may still drive
change in market demand.
MEDIUM IMPACT
1% of annual net fees
High policy reaction (carbon pricing
and related regulations) results in
a shift in market demand towards
jobs supporting a transition to a
low-carbon economy.
MINIMAL IMPACT
Policy ambition remains low, resulting
in less influence on customer and
workforce preferences for companies
with greener credentials.
LOW IMPACT
0.5% of annual net fees
Some shift in employee and
customer preferences to companies
with greener credentials.
MINIMAL IMPACT
Policy reaction remains low, resulting
in no carbon pricing or additional
regulations with respect to regulating
GHG emissions. Some cost savings
are still achieved through GHG
reduction measures.
LOW IMPACT
<£2.5 million annual profit
High policy reaction results in
rapid increases in carbon pricing
and related policy regulations on
GHG emissions.
LOW IMPACT
Increased damage (represented
by decrease in national GDP) from
cyclonic events and flooding is
marginal, 4.5% (average for all
locations) for cyclonic events
and 26% for flooding (Germany)
within the 5-10-year timeframe.
MINIMAL IMPACT
Increased damage from cyclonic
events and flooding is minimal,
2.7% (average for all locations)
for cyclonic events and 16%
for flooding (Germany) within
the 5-10-year timeframe.
Key
AGREED IMPACT RANGES
MINIMAL: No significant financial impact
LOW: <1% annual net fees (<£10 million) | <£2.5 million annual profit
MED: 1%-4% annual net fees (£10-20 million) | £2.5-10 million annual profit
HIGH: +4% annual net fees (+£40 million) | >£10 million annual profit
70
Hays plc Annual Report & Accounts 2023 Opportunity (Timeframe)
Current Policies (3+°C)
Divergent Net Zero (1.5°C)
Develop and
scale services
into low-carbon
markets
(0-5 years)
Secure talent to deliver projects
via e.g. new specialisms –
Sustainability, expansion
into new and emerging sectors
e.g. clean-tech
MINIMAL IMPACT
Policy ambition remains low. Growth in
the clean-tech market is slow, resulting
in less growth in low-carbon markets.
However, non-climate-related drivers
may still drive growth in clean-tech.
Commitment to
GHG reduction
targets and Net
Zero pathway
(5-10 years)
1. Improve competitive position
to attract and retain a
motivated workforce
2. Reduced risk of energy and
carbon pricing and future
reporting mandates
MINIMAL IMPACT
Policy reaction remains low, resulting
in no carbon pricing or additional
regulations with respect to regulating
GHG emissions. Some benefit still
from general increase in energy costs
due to non-climate-related drivers
(e.g. supply, demand).
Reduce business
travel
(0-5 years)
Reduce GHG emissions and
operating costs associated
with Hays’ business travel
MINIMAL IMPACT
Minimal policy reaction results in
no carbon tax on jet fuel. Reducing
business travel still results in significant
cost savings.
Reduce energy
use in office
spaces
(0-5 years)
Reduce costs and emissions
associated with office energy
consumption
MINIMAL IMPACT
Minimal policy reaction results in no
carbon pricing or increase in energy
efficiency standards. Reducing office
energy use still results in significant
operational cost savings.
HIGH IMPACT
>4% of annual net fees
High policy reaction and fast clean-
tech growth drive new low-carbon
markets. Significant potential for
expansion in low-carbon markets.
MEDIUM IMPACT
1-2% of annual net fees
High policy reaction leads to high
carbon pricing and related climate
regulations, in addition to fast
growth in the clean-tech sector.
This in turn creates a high demand
for recruiters who are committed
to the transition towards a
low-carbon economy.
LOW IMPACT
<£2.5 million profit
High policy reaction results in
carbon pricing on jet fuel and
higher business travel costs. A 40%
reduction in Hays’ business travel
reduces existing travel costs and
protects Hays from cost increases
due to carbon pricing.
LOW IMPACT
<£2.5 million profit
High policy reaction results in carbon
pricing and stricter energy efficiency
mandates. Reducing office footprint
lowers existing energy costs and
minimises any cost increases due
to policy changes.
71
GovernanceFinancial StatementsShareholder InformationStrategic Report Recommendation 4: Impact of climate-related
risks on our business and strategy
In preparing the Consolidated Financial Statements, the Directors
have considered the impact of climate change on the Group
and have concluded that there is no material impact on financial
reporting judgements and estimates (as discussed in note 3 to the
Financial Statements). This is consistent with the assertion that risks
associated with climate change are not expected to have a material
impact on the longer-term viability of the Group. Also, the Directors
do not consider there to be a material impact on the carrying value
of goodwill, other intangibles or on property, plant and equipment.
Recommendation 5: Resilience of our strategy
In response to the identified transition R&Os, the Group has
launched a Sustainability recruitment practice to support talent
needed for low-carbon and sustainability job growth.
In addition, we committed to SBTs and carbon reduction measures
to reduce our exposure to future carbon pricing and energy cost
increases. As part of our reduction planning we have started
discussions with our landlords and suppliers to assess their
commitment towards a journey to Net Zero emissions.
To help mitigate physical risks to our data centres we are
transitioning to cloud-based hosting. This will increase geographical
diversity of data storage and backup, reducing our reliance on any
one specific data centre location (see R&O response summary).
Pillar 3: Risk management
Recommendation 6: Process for identifying risks
Specific climate R&O (existing and emerging) are identified and
assessed by the Climate Committee in an annual review process.
Recommendation 7: Process for managing risks
The Committee draws on the Group-wide enterprise risk
management framework and other senior operational leaders drawn
from across the business which allows for both a holistic, top-down
and bottom-up view on key R&Os facing Hays.
The materiality of the R&O is based on the likelihood (of the R/O
occurring) and impact (should the R/O occur) on business strategy
and operations. Priority is then given to R&Os with the highest
potential financial impact.
Risks
Response strategy and FY23 actions
Link to risks/
opportunities
Energy supply
costs
Increase in utility costs and
rental prices as a result of
higher energy prices
Hays has committed to SBTs, which include new
measures in FY23 to reduce energy consumption
in office spaces. In addition, data centre
refurbishments and cloud-based strategies have
potential energy cost savings of c.50%.
1. Commitment to GHG
reduction targets and Net
Zero pathway
2. Reduce energy use: offices
Changes in
market supply
Changes in
market demand
Portfolio revenue exposure
and job losses to sectors
and geographies with high
levels of transition risk
(e.g. fossil fuel sector)
Hays is expanding into emerging, low-carbon and
sustainability-related industries to ensure that
these sectors represent a larger percentage of fees.
For example, Germany won outsourcing contracts
with four major renewable electricity suppliers.
Develop and scale services into
low-carbon markets
Loss of market share of
new, emerging low-carbon
and sustainability markets
results in a reduction in
client numbers and/or
increased costs associated
with bidding
Our Sustainability specialism launched in FY22
and delivered over £1.5 million in fees in FY23,
with H2 doubling compared to H1. We support
organisations to secure the talent they need,
including electric transport, renewable energy,
engineering and low-carbon construction/
infrastructure sectors. Hays continues to evaluate
its approach to bidding for contracts, especially
where the ability to demonstrate its green
credentials is key. Hays is carbon neutral and
committed to Net Zero.
1. Develop and scale services
into low-carbon markets
2. Commitment to GHG
reduction targets and Net
Zero pathway
Changes in
behaviour
Loss of market share due
to a decrease in ability to
attract and retain employees
(talent) who prefer to
work for companies with
greener credentials
Being able to attract and retain key talent is
critical. Hays has committed to SBTs to support a
pathway to a Net Zero economy and as part of our
investment to find solutions to these challenges in
line with our Purpose. We have also launched ERGs,
and in FY23 conducted our most comprehensive
GHG data gathering exercise.
1. Develop and scale services
into low-carbon markets
2. Commitment to GHG
reduction targets and
Net Zero pathway
Corporate
GHG emissions
Carbon fee for GHG inventory,
including costs for additional
purchasing of certified
carbon offsets
Hays has committed to SBTs of a 50% reduction
in scope 1 and 2 emissions by 2026 and a 50%
reduction in selected scope 3 emissions by 2030
(based on 2020 baseline). We purchased offset
credits in 2021, and have just over 20,000 tCO2e
left to utilise.
Commitment to GHG
reduction targets and
Net Zero pathway
72
Hays plc Annual Report & Accounts 2023 Recommendation 8: Integrating climate-related risks
Top climate-related R&Os are integrated into regional-level risk
registers, which are then reviewed by senior management and
consolidated annually to inform the risk management process.
Outputs from the R&O assessment are shared with the Audit
Committee on an annual basis. The Executive Board, which is
responsible for managing overall Group risks, then determines
how the specific R&Os identified should be managed.
Recommendation 10: Targets used
to manage risks and opportunities
– 50% reduction in scope 1, 2 and selected scope 3 emissions
by 2026 (based on 2020 baseline), approved by SBTi.
– 40% reduction in Group flights versus pre-pandemic levels
by 2026.
– 100% renewable energy (where we control the electricity
supply and there is an available market solution) in all offices.
This process allows the Group to determine the relative significance
of climate-related R&Os within the overall risk management process.
Hays’ risk governance and management processes are detailed
within Principal Risks (more information on page 74).
Pillar 4: Metrics and targets
Recommendation 9: Metrics to assess risks and opportunities
Our internal metrics and targets help us measure and manage
financial risk associated with potential future carbon-related risks
and opportunities (R&Os). Hays scope 1, 2 and 3 emissions are
summarised on page 66, giving comparative years.
Recommendation 11: Disclosure of GHG emissions
In 2023, we completed our most comprehensive scope 1,2 and 3
emissions, following improvements made to our data collection
systems (see page 65). These now include purchased goods and
services (PG&S), capital goods, and waste, as well as employee
commuting and homeworking. We are committed to work with our
suppliers to drive a 50% reduction. This includes a clear preference
for working with suppliers that are on their own Net Zero journey.
We also track several external metrics which act as key drivers
for climate-related R&Os. These include future possible carbon
pricing mechanisms, changes in policy ambition for climate change
mitigation, growth in sustainability-related jobs, and changes in
the frequency and intensity of regional extreme weather events
such as cyclonic storms and flooding.
Risks
Response strategy and FY23 actions
Extreme
weather events
Develop and scale
services into low-
carbon markets
Extreme weather events
(cyclones and flooding) disrupt
data centres, impacting
business operations,
including fee generation
To help mitigate physical risks to our data centres,
Hays is transitioning to cloud-based hosting. This
will increase geographical diversity of data storage
and backup, reducing our reliance on any specific
data centre location. We have also transitioned to
laptop computers, which use less energy.
Securing talent to deliver
projects via e.g. new
specialisms – Sustainability,
expansion into new
and emerging sectors
e.g. clean-tech
Our Sustainability specialism, launched in FY22,
is designed to support organisations to secure the
talent they need, including but not limited to electric
transport, renewable energy, engineering and low-
carbon construction/infrastructure sectors.
As evidence of this, we won contracts with four
major renewable energy companies in Germany.
Commitment to
GHG reduction
targets and Net
Zero pathway
1. Improve competitive
position to attract and retain
a motivated workforce
2. Reduced risk of energy and
carbon pricing and future
reporting mandates
Hays has committed to SBTs of a 50% reduction
in scope 1 and 2 emissions by 2026 and a 50%
reduction in selected scope 3 emissions by 2030
(2020 baseline). We will publish our 2023 progress
later this year. We also appointed our first full
time Global Head of Sustainability to lead our
development in this area.
Link to risks/
opportunities
Change in behaviour
1. Change in market supply
2. Change in market demand
3. Change in behaviour
1. Energy supply costs
2. Corporate GHG emissions
Reduce business
travel
Reduce GHG emissions and
operating costs associated
with Hays’ business travel
Hays has committed to reducing business travel by
40% by 2026 (2020 baseline), which will contribute
to a reduction in scope 3 emissions.
1. Corporate GHG emissions
2. Change in behaviour
Reduce energy
use in office
spaces
Reducing costs and emissions
associated with office energy
consumption
Hays will reduce energy costs and GHG emissions
from office use through targeted efficiency
programmes including a measure to replace
conventional PCs with more energy-efficient
laptops (with up to 65% energy savings). Energy
cost savings will also be achieved as part of Hays’
target of a £10 million per annum cost saving (2020
baseline), through a reduction in office space.
1. Energy supply costs
2. Corporate GHG emissions
3. Change in behaviour
73
GovernanceFinancial StatementsShareholder InformationStrategic Report PRINCIPAL RISKS
The Board has overall responsibility for the
Group’s internal control systems and for
reviewing their effectiveness.
Managing risks to achieve our strategic priorities
We focus on key risks which could impact the achievement of our
strategic priorities and objectives and, therefore, on the performance
of our business.
Risk governance – identifying,
evaluating and managing risk
The Board has overall responsibility for the Group’s internal control
systems and for reviewing their effectiveness. This has been
designed to assist the Board in making better, more risk-informed,
strategic decisions with a view to creating and protecting
shareholder value. In practice, the Board delegates the task of
implementing its policies on risk and control to management
and needs to assure itself on an ongoing basis that management
is responding appropriately to these risks and controls.
Ownership and responsibility for operating risk management and
controls is vested in management by the Board, and management
needs to provide leadership and direction to ensure the Group’s
overall risk-taking activity is cascaded to and managed appropriately
with employees in order that the business is operated within the
agreed level of risk appetite. To manage the effectiveness of this,
the Board and management need to rely on adequate line functions,
including monitoring and assurance functions, within the Group.
As such the organisation operates the ‘Three Lines of Defence’
model as a way of explaining the relationship between these
functions and demonstrating how responsibilities are allocated:
– the first line of defence: responsibility to own and manage risk
– the second line of defence: responsibility to monitor and
oversee risk
– the third line of defence: functions that provide
independent assurance.
How we monitor our progress – Three Lines of Defence
Board and Audit Committee
Executive Board
First line
of defence:
– Management
Controls
– Policies and
Procedures
– Financial
Reporting Manual
– Internal Control
Policies
Second line
of defence:
– Financial Control
– Security
– Risk
Management
– KPIs
– Compliance
– Group Risk
Committee
Third line
of defence:
– Internal Audit
– External Advisers
– Regulatory
Reviews
Ownership
& Management
Monitor
& Oversight
Independent
Assurance
74
The Group Risk Committee, chaired by the Chief Risk Officer and
having been reset during FY23, has changed to being centred
around a smaller membership group in order to be more agile and
responsive. The GRC continues to assist the Executive Board in
providing strategic leadership, direction, reporting and oversight of
the Group’s risk framework, together with identifying any emerging
risks that may become apparent during the course of the year.
The Group Risk Committee also allows the opportunity to review
and discuss changes in risk profile, either from an internal or external
perspective, including emerging risks. The Board and management
continued to consider emerging risks, to ensure appropriate internal
processes are defined in order to confirm that emerging risks are
reviewed and monitored across the Group.
Risk identification and impact
– enterprise risk management
The Executive Board oversees a Group- wide enterprise risk
management framework, which allows for both a holistic, top-down
and bottom-up view of key risks facing the business, with Hays’ risks
being analysed on a gross (pre-mitigation) and net (post-mitigation)
basis. Risk registers are maintained at a regional, country and
function level, which are reviewed and approved by their respective
Boards or by senior management and consolidated annually. These
risks are reviewed in conjunction with the Group risk register, which
is reviewed at least annually by the Executive Board and submitted
to the Board thereafter, in order to enable it to carry out its risk
oversight responsibilities. This exercise involves a current and
forward look at various risks affecting the business and prioritises
them according to risk impact and likelihood, which enables
the Board to assess both the risks and the effectiveness of the
mitigations in managing those risks. Risks covered include strategic,
operational, financial and reputational risks, as well as compliance
and people-related risks.
Each risk on the risk register is assigned an owner, with current
and future risk mitigation procedures detailed, with the continuing
monitoring of these risks undertaken on an ongoing basis to ensure
that these are being reviewed and maintained appropriately.
The enterprise risk management framework and emerging risk
process is updated and presented to the Audit Committee at least
annually to allow the Board to assess the effectiveness of the risk
management processes and systems.
Risk attributes
When considering risk appetite the Board considers this in terms
of the following attributes:
– experience of the management team globally
– strong balance sheet, including the level of operational gearing
– clear and open communication channels.
Our risk appetite
Responsibility for the level of risk that the Group is willing to accept
is vested in the Hays plc Board and the principal risks have been
mapped through our risk appetite process in order to identify the
tolerance levels and target position per risk and to assess both the
current and future mitigating actions required, should the net risk
be greater than the risk appetite position.
From this exercise the Board is able to determine what an acceptable
level of risk is for the Group, cognisant that Hays has an established
and proactive approach to measuring performance and considers
risk an integral part of the decision-making process.
Due to the nature of the recruitment market, being a cyclical
business and sensitive to macroeconomic conditions, Hays
operates a measured risk appetite position, due to the lack of
forward visibility of fees and, as a consequence, increases
the overall risk environment.
Hays plc Annual Report & Accounts 2023 Emerging risks
Following the requirements of the UK Corporate Governance
Code 2018, the Board again undertook a formal exercise using
horizon scanning, to identify and assess emerging risks to Hays.
The assessment considered potential risks across a number of
areas, being: Strategic/economic, Reputation/regulatory, Technology,
and Environmental.
Stress testing
The Board approves an annual budget and reviews monthly
management reports and quarterly forecasts. The output of the
planning and budgeting processes has been used to perform a
sensitivity analysis of the Group’s cash flow to model the potential
effects should principal risks actually occur either individually or
in unison.
Each identified emerging risk was then plotted by impact and time
horizon onto a risk radar.
Emerging risks and the horizon scanning process continues to be
embedded into the risk programme going forward, to further ensure
that emerging risks are being considered, captured and monitored.
Viability statement
In accordance with the UK Corporate Governance Code 2018, the
Directors have assessed the prospects of the Group over a period
longer than the 12 months from the date of approval of the Financial
Statements. In assessing viability, the Directors have considered
a number of key factors, including our business model, our strategy
and our principal risks and uncertainties (more information on
pages 76 to 79).
The Directors believe that a three-year period ending 30 June 2026
is the most relevant period over which to provide the viability
statement, being supported by the appraisal of the principal risks
and mitigating internal controls. This allows the Directors to assess
and conclude that the Group will be able to operate within its existing
bank covenants and maintain appropriate bank facilities to meet
its funding requirements over a three-year period, being backed by
the £210 million revolving credit facility in place, that reduces in
November 2024 to £170 million and expires in November 2025. The
Directors anticipate no problems in renewing the facility and fully
intend to do so.
This three-year period also reflects our three-year planning cycle,
which covers the same period, and considers the fast-moving nature
of the industry. As such, collectively these factors allow the Directors
a reasonable expectation, predicated on the basis that there are no
unforeseen events outside of the Group’s control that inhibit the
Group’s ability to continue trading, and that using a three-year period
it is possible to form a reasonable expectation as to the Group’s
longer-term viability.
Process to assess the Group’s prospects
As in prior years, the Board undertook a strategic business review in
the current year which took into account the Group’s current financial
position and the potential impact of the principal risks set out on
pages 76 to 79.
In addition, and in making this statement, the Board carried out a
robust assessment of the principal risks facing the Group, including
those that would threaten the Group’s business model, future
performance and liquidity. While the review has considered all the
principal risks identified by the Group, the resilience of the Group to
the occurrence of these risks in severe yet plausible scenarios has
been evaluated.
Financial position
At 30 June 2023, the Group had net cash of £135.6 million compared
to cash of £296.2 million at 30 June 2022. In addition, the Group
currently has an unsecured revolving credit facility of £210 million
that reduces in November 2024 to £170 million, and expires in
November 2025.
At 30 June 2023, £200 million of the facility was undrawn. The Group
had a strong working capital performance, with significant
management focus on cash collection, average trade debtor days
remained consistent in the year at 33 days (2022: 33 days).
The sensitivity analysis modelled scenarios in which the Group
incurred a sustained loss of business arising from a prolonged
global downturn, with a range of recovery scenarios considered.
The Group’s ‘Stress Case’ scenario assumes that the Group
experiences another severe downturn similar in scale to the one
caused by the COVID-19 pandemic in the year ended 30 June 2020,
followed by a period of gradual recovery, as opposed to the
significant recovery the Group experienced through the years
ended 30 June 2021 and 30 June 2022.
The Stress Case scenario assumes a trough level of operating profit
of £57 million in the year ended 30 June 2024 before gradually
recovering to £103 million operating profit in the year to June 2026,
which models the impact of a long-lasting global economic
downturn. In this scenario the Group is forecast to maintain a strong
net cash position in excess of £60 million throughout the forecast
period, with significant headroom against its banking covenants.
Set against these downside trading scenarios, the Board considered
key mitigating factors including the geographic and sectoral diversity
of the Group, its balanced business model across Temporary,
Permanent and Contract recruitment services, and the significant
working capital inflows which arise in periods of severe downturn,
particularly in the Temporary recruitment business, thus protecting
liquidity as was the case during the Global Financial Crisis of
2008/09 and which we again experienced in the year ended
30 June 2020.
The Group’s history of strong cash generation, tight cost control
and flexible workforce management provides further protection,
and in addition the Group has a revolving credit facility of
£210 million that reduces in November 2024 to £170 million,
and expires in November 2025.
Confirmation of longer-term viability
Based on the above assessment, the Directors confirm that they
have a reasonable expectation that the Company will be able to
continue in operation and meet its liabilities as they fall due over
the three-year period to 30 June 2026.
Going Concern
The Group’s business activities, together with the factors likely to
affect its future development, performance and position, are set out
in the Strategic Report. The financial position of the Group, its cash
flows and liquidity position are described in the Finance Director’s
Review, with details of the Group’s treasury activities, long-term
funding arrangements and exposure to financial risk included in
notes 18 to 20 to the Consolidated Financial Statements.
The Group has sufficient financial resources which, together with
internally generated cash flows, will continue to provide sufficient
sources of liquidity to fund its current operations, including its
contractual and commercial commitments and any proposed
dividends. The Group is therefore well-placed to manage its business
risks. After making enquiries, the Directors have formed the
judgement at the time of approving the Financial Statements, that
there is a reasonable expectation that the Group has adequate
resources to continue in operational existence throughout the Going
Concern period, being at least 12 months from the date of approval
of the Consolidated Financial Statements. For this reason, they
continue to adopt the Going Concern basis of accounting in
preparing the Consolidated Financial Statements.
75
GovernanceFinancial StatementsShareholder InformationStrategic Report Risk
description
Risk trend
and type
Risk
mitigation
Hays has continued to diversify its operations to include a balance of both
Temporary and Permanent recruitment services to Private and Public
sector clients and operates across 33 countries and 21 sector specialisms.
Progress is being made to further diversify the business to reduce the
Group’s reliance on Germany, the UK&I and ANZ, which currently represent
64% of the Group’s net fees.
Hays’ cost base is highly variable and carefully managed to align with
business activity and can be flexed and scaled accordingly to react to
the individual markets. Temporary recruitment tends to be more resilient
in times of economic uncertainty or downturn.
Review of standard Terms of Business pricing for Perm and Temp
business across the Group, and at either annual review or renewal,
a review of contracted pricing/margins for Enterprise business continues
to be undertaken.
Focus on cost management initiatives and efficiency projects in order
to increase automation and reduce costs. Hays is highly cash-generative,
requiring low levels of asset investment cash collection is a priority, and
the Group has made appropriate investment in its credit control and
working capital management processes over the years, resulting in
maintaining the elimination of Group net debt and a continued year-end
net cash positive position for the eighth consecutive year.
Relevant strategic priority
Macroeconomic/cyclical
business exposure/inflation
Financial
Following a strong economic recovery after
the COVID-19 pandemic, the global economic
outlook has deteriorated over the last 12-18
months with significant concerns on the impact
of high levels of inflation and interest rates.
This has led to increased concerns about a
global recession in the next few years, which
have been exacerbated by the continuing
invasion of Ukraine by Russia. As a result the
levels of business confidence could be negatively
impacted, as businesses consider Permanent
and Temporary hiring decisions. Candidate
confidence may also reduce, and their
propensity to change jobs may also be reduced.
After c.20 years of low levels of inflation, the
material increase in inflation over the last 12-18
months, together with the expectation that it will
remain at higher than normal levels in FY24 and
FY25, could lead to significant cost pressures on
our business. While we expect to at least offset
this by increases in our Perm fees and Temp
margins and have been successful in achieving
such increases in both FY22 and FY23, we
will need to continue with this strategy in
FY24/FY25 to ensure that we protect our
overall profitability.
In addition, the conflict between Ukraine and
Russia and the resulting impact on energy
supplies in Europe, the current geopolitical
environment, with tensions between the west
and Russia and the US and Greater China,
together with supply chain issues impacting
energy and food prices, could all individually
and collectively further damage business
confidence and the wider global economy.
Grow – Materially increase core recruitment fees,
particularly in Technology recruitment and with
Enterprise clients
Diversify – Substantially grow new revenue streams
and partnership-based areas such as HR services
and Project Services globally
Partner – Nurture lifelong client and candidate
partnerships and build the deepest and most
engaged Talent Networks worldwide
Enable – Our strategy is underpinned by our
continuous investment in People, Culture,
Technology and Sustainability
Enhance – Drive productivity to deliver significant
profits and cash flows, funding reinvestment and
enabling substantial returns to shareholders
Risk trends
The ongoing review of the Group’s principal risks includes how these risks evolve.
Changes in the trend/direction of our principal risks are noted against each risk.
76
Hays plc Annual Report & Accounts 2023 Risk
description
Risk trend
and type
Risk
mitigation
Operational
Financial
Strategic
People
Financial
Business model
The Group faces growing competition,
especially in mature markets where recruitment
methodologies and systems are more evolved
and competitive, from the increasing use of
digital technologies for recruitment services
and an increasing trend towards insourced,
outsourced and offshore recruitment models.
In addition, generalist recruiters are entering
specialist markets, resulting in associated
margin pressures, which together may
materially impact the business should Hays
not continue to take appropriate actions and
respond effectively.
Social media and internet-enabled digital
dynamics and recruitment value chain
disintermediation, together with the rate of
development in the use of Al and machine
learning, have continued to increase the risk to
the business model over the course of recent
years. Whilst there has been reduced investment
in this area, there has been additional focus on
legislative changes, such as statement of works
and a greater move to automation.
Talent
The Group is reliant on its ability to attract, train,
develop, engage and retain sufficient high-
quality talent in line with our long -term strategic
growth plans and protect the business it has
today and fulfil our growth plans of tomorrow.
Over the past 24 months we have seen a war
for talent and have seen our business directors,
managers and fee earners under unprecedented
headhunting attacks from inhouse recruiters
and competitors.
Following the COVID-19 pandemic, whereby
headcount investment stalled, there was
increased competition for talent in the market.
Hays’ strategy continues to grow and nurture
talent internally into senior roles wherever
possible, supported by external appointments
of experienced professionals where appropriate.
Hays monitors industry trends and opportunities, including social media,
AI and insourcing, and continues to invest in our online presence to provide
a high-quality customer experience.
Our key relationships (such as with LinkedIn and Xing) increase our
exposure to online professional networking and recruitment portals and
enhance our value proposition to both clients and candidates and improve
consultant productivity.
Our expert and specialist consultants are trained in utilising and taking
advantage of social media and other digital technologies to enhance their
day-to-day activities in providing the best quality candidates to our clients.
We continue to leverage our broad geographical and sectoral footprint to
win and maintain a significant number of multispecialism contracts with
large corporate organisations, which will strengthen our relationships
with these clients and increase our share of their recruitment spend.
Significant investment made in recent years has enhanced Hays’ data
science capabilities and has significantly improved our approach to find
and engage with candidates.
Relevant strategic priority
Hays provides a defined and sustainable career development path for new
hires, starting with a structured induction programme and ongoing training
as they advance their careers, supported by formalised performance and
career tracking.
Development Centres focus on the progress of high-potential individuals,
providing further development opportunities and helping to identify
any talent gaps and training needs. Hays continues to roll out the
International Leadership & Management Programme, which focuses
on senior leadership and development and is aligned with the Group’s
business strategy.
‘Our Hays Story’ has a clearly articulated Purpose and Values, with a
demonstrable commitment to DE&I green credentials, employee wellbeing,
flexibility and corporate social responsibility, and has set clear global and
regional DE&I objectives and action plans.
Overall, our remuneration packages are competitive, including an employee
benefit programme, together with a long-term incentive scheme that is
offered to broadly 350 senior managers, which encourages a performance-
led culture and aids retention.
Succession plans identify future potential leaders of the business and
produce individual development plans in which to harness and cultivate
talent, aligned to the Hays Leadership and Management DNA framework.
The Group’s standard employment contracts include notice periods and
non-solicitation provisions in the event of an employee leaving.
Relevant strategic priority
77
GovernanceFinancial StatementsShareholder InformationStrategic Report Risk
description
Risk trend
and type
Risk
mitigation
Regulatory/compliance
The Group operates in 33 countries, with each
operating its own legislative, regulative,
compliance and tax rules, especially for
temporary workers, with any non-compliance
increasing the Group’s exposure to potential
legal, financial and reputational risk.
Legal
Financial
Reputational
Operational
Financial
Reputational
Reliance on technology/
cyber security
Our dependence on technology in our day-to-day
business, which includes delivery of system and
infrastructure change programmes, means that
systems failure due to technical issues or
malicious cyber-attack may have a significant
impact on our operations and ability to deliver
our services if it continued for a number of days
and, as such, could negatively impact our
financial performance and reputation.
Over the course of the year the threat of a
cyber-attack continues to increase (in both
sophistication and volume) and globally we have
seen an increase in phishing attacks, social
engineering and malicious code being reportedly
added into software products, which could prove
to be an entry point for an attack. In addition, as
the reliance on third parties increases, notably
as the business utilises cloud services and
support providers, our exposure in this area
also increases.
Compliance and monitoring processes are tailored to specific specialisms,
ensuring additional focus is given to higher-risk specialisms such as
Education and Healthcare in the UK, Construction & Property in Australia and
specialised corporate contracts for Enterprise clients.
Employees receive training in respect of the operating standards applicable
to their role, with additional support provided by compliance functions,
regional legal teams and, where necessary, external advisers.
All staff receive regular training to ensure that legal and compliance updates
are understood and applied. In territories where legislation sets out additional
compliance requirements, specialists are also employed.
Dedicated compliance auditors conduct sample checks to ensure that the
appropriate candidate vetting checks and due diligence obligations are
carried out in line with legal and contractual requirements.
The Group holds all standard business insurance cover, including employers’
liability, public liability and professional indemnity insurance.
Relevant strategic priority
The Group’s technology strategy is continually reviewed to ensure that the
systems across the Group support its strategic direction.
Ongoing asset life-cycle management programmes mitigate risks of
hardware and software obsolescence.
Technology systems are housed in various data centres across the Group
and have capacity to cope with a data centre’s loss through the
establishment of disaster recovery sites. These are physically based in
separate locations to the ongoing operations and intrinsically linked to the
business continuity plans. Robust due diligence on IT partners and products
is undertaken.
Across the regions we have established dedicated security teams in order to
ensure that the systems are robustly protected from unauthorised access,
both externally and internally, ensuring monitoring systems and anti virus
software are in place and up-to-date, with regular testing of these
environments by external providers.
In addition, we use external advisers to perform regular external and internal
penetration tests, on both a physical and logical basis, on key sites, systems
and operations, implementing required improvements resulting from such
tests as part of a continuous improvement process.
Relevant strategic priority
Grow – Materially increase core recruitment fees,
particularly in Technology recruitment and with
Enterprise clients
Diversify – Substantially grow new revenue streams
and partnership-based areas such as HR services
and Project Services globally
Partner – Nurture lifelong client and candidate
partnerships and build the deepest and most
engaged Talent Networks worldwide
Enable – Our strategy is underpinned by our
continuous investment in People, Culture,
Technology and Sustainability
Enhance – Drive productivity to deliver significant
profits and cash flows, funding reinvestment and
enabling substantial returns to shareholders
Risk trends
The ongoing review of the Group’s principal risks includes how these risks evolve.
Changes in the trend/direction of our principal risks are noted against each risk.
78
Hays plc Annual Report & Accounts 2023 Risk
description
Risk trend
and type
Risk
mitigation
Legal
Financial
Reputational
Data protection/privacy
The business works with confidential and
personal data in all 33 countries on a daily basis
under a variety of laws and regulations and
technologies, including within the supply chain.
Failure to process, store and transmit this data
on a compliant basis could result in a material
data breach and could expose the Group to
potential legal, financial and reputational risks in
the form of penalties and loss of business.
Since the introduction of the General Data
Protection Regulation (GDPR), other non -EU
countries have continued to introduce similar
legislation, which has increased the risk in
this area.
Contracts
The Group enters into contractual arrangements
with clients, some of which can be complex and
with onerous terms and/or impacted by local
regulatory requirements, especially in relation to
Temp/Contracting markets, which can increase
the Group’s risk exposure especially in more
litigious environments.
Operational
Financial
Reputational
Operational
Financial
Strategic
Pandemic
Whilst the global levels of deaths and infections
from the COVID-19 pandemic have significantly
reduced following the successful roll-out of
vaccination programmes in most developed
countries, there remains a residual risk that new
and more harmful variants could occur. A
significantly transmissible variant could reduce
economic confidence and activity, especially if
businesses are subject to government policies in
terms of lockdowns, quarantine and social
distancing restrictions in order to control the
transmission of the virus, which has an impact
on both the local and global economy.
Robust policies and procedures for processing, storing and transmitting
confidential and personal data are in place across the Group, both on a
physical and logical basis.
Comprehensive data protection and information security policies and
procedures are in place across the Group and, where data protection and
privacy legislation allow, protective email monitoring programmes are
undertaken to address potential areas of concern, to best protect our
confidential information and candidates’ personal data.
With the increased threat of cyber-attacks globally, further attention has been
focused in this area and security vulnerability is assessed as part of the
ongoing IT strategy across the Group.
External advisers are engaged to perform regular external and internal
penetration tests, on both a physical and logical basis on key sites, systems
and operations, and implementing required improvements resulting from
such tests as part of a continuous improvement process.
Annual training programmes are also reviewed and updated to ensure the
programmes reflect new regulations, where relevant.
Relevant strategic priority
During contract negotiations management seeks to minimise risk and ensure
that the nature of risks and their potential impact is understood.
Our global legal team has the depth of knowledge and experience to enable
them to advise management on the level of risk presented in increasingly
onerous contracts, with clear guidelines in operation.
The Group Finance Director reviews all commercial contracts with onerous
non-standard terms in accordance with the Group’s risk appetite. In addition,
the Group’s Insurance Manager reviews onerous contracts and, where
necessary, engages with insurance providers to ensure, where possible,
that risks are suitably covered and that policies will respond appropriately.
Operational reviews are performed by regional compliance teams on a
risk basis across key contracts to confirm compliance and adherence to
agreed terms and agree improvements to the way in which services are
delivered to clients.
Assurance work is undertaken in key markets by Internal Audit to ensure
contractual obligations are appropriately managed.
Relevant strategic priority
Following the new reality that the pandemic has brought about, our priority
continues to be to look after the safety and wellbeing of our people and to
support our business as it adjusted to new working practices.
During this time the Executive Board closely monitors and reviews events,
with Board oversight, to determine and assess the response strategies,
coupled with being supported by experienced operational and finance
teams, allowing early trends to be identified and adjustments to be
implemented as we continue to identify and focus investment on key
growth markets, sectors and specialisms in light of new and continually
changing market conditions.
Hays has established and tested IT Disaster Recovery capability, together
with documented Business Continuity Planning processes in place to
mitigate the risk of lockdown and the inability to access offices within the
network, with working from home capacity and processes having been built
and implemented across the Group.
Hays has robust credit control procedures and a continuous monitoring of
the aged debt position at both a Group and local level with robust cash and
cost controls in place to protect both cash flow and profitability.
Relevant strategic priority
79
GovernanceFinancial StatementsShareholder InformationStrategic Report NON-FINANCIAL
AND SUSTAINABILITY
INFORMATION STATEMENT
Compliance Statement
Hays Plc has complied with the requirements of sections 414CA and
414CB of the Companies Act 2006 (as amended by The Companies
(Strategic Report) (Climate-related Financial Disclosure) Regulations
2022) with the table disclosed below and other disclosures
throughout the Strategic Report. The climate-related financial
disclosures of the Company are contained within the Task Force on
Climate-related Financial Disclosures (TCFD) section, on pages 68
to 73 of this Annual Report. The table provided below is to help our
stakeholders understand our position on key non-financial matters.
Reporting
requirements
Policies or standards with
which we govern our approach(1)
Due diligence, outcomes
and additional information
Environmental
matters
Group Environmental and
Sustainability Policy
Our approach to corporate responsibility and sustainability
Climate change
related disclosures
Task Force on Climate-related
Financial Disclosures
Our Net Zero journey
Scenarios summary
Business response
Employees
Our Purpose and Values
Retention of key talent
Health and Safety policy
Creating a supportive workplace environment
Internal HR policies
Diversity, Equity & Inclusion at Hays
Directors’ Remuneration Policy
Remuneration Report
Employee survey results
Human rights
Modern Slavery Statement
Supplier Code of Conduct
Human rights
Our suppliers
Our clients
Social matters
‘Helping for your tomorrow’,
our volunteering initiative
Contributing to society and local communities
Anti-bribery and
anti-corruption
Code of Conduct
Our clients and candidates
Anti-bribery and corruption
Anti-bribery and Corruption Policy
Whistleblowing
Group Tax Strategy
Our approach to tax
Additional information
Description of business model
Non-financial key performance indicators
Description and management of principal risks and impact of business activity
(1) Certain policies, standards and guidelines are published on haysplc.com.
Page
54
65
68
26
60
23
26
110
64
64
64
58
61
64
64
64
4
9
74
By order of the Board
Doug Evans
Company Secretary
23 August 2023
80
Hays plc Annual Report & Accounts 2023 Strategic Report
Governance
Financial Statements
Shareholder Information
GOVERNANCE
How the Hays
Board sets strategic
direction and provides
oversight and control
82 Chair’s statement
84 Board of Directors
88 Governance Framework
90 How the Board works
94 Key activities
96 Stakeholder engagement
98
Workforce engagement
100 Board Evaluation
102 Nomination Committee Report
106 Audit Committee Report
110 Remuneration Report
81
Hays plc Annual Report & Accounts 2023
CHAIR OF
THE BOARD'S
INTRODUCTION
TO GOVERNANCE
We were delighted to welcome Zarin Patel to the Board in January
this year. Zarin has extensive experience in managing transformation
within complex digital-centric businesses and wide-ranging financial
and commercial expertise.
Our annual Board effectiveness evaluation concluded that the
Board continues to operate effectively and you can read more
about the process and outcomes on page 100.
Corporate Governance
The Board recognises the role it has in ensuring Hays operates in
a manner that is consistent with highest standards of Corporate
Governance – aligned to one of our values to ‘Do the right thing’.
We have continued to strengthen Board governance this year, which
has included reviewing and updating internal governance processes
such as our Matters Reserved for the Board. The Board is committed
to enhancing governance controls and welcomes the proposed
changes to the Corporate Governance Code to strengthen reporting
on risk management and internal controls – you can read about
Hays' preparations for this on page 109.
Stakeholder engagement
Alongside strong operational performance this year, we are pleased
to deliver value to all our stakeholders in a sustainable way. The
Board has remained focused on ensuring that Hays is a company
that benefits society by building lifelong partnerships that empower
people and organisations to success. You can read on pages 96 to 99
the various ways we have ensured we consider the views of our
stakeholders in our Board decision-making process.
The Board values the insight it gains from stakeholder engagement
and I have been delighted to have been able to meet with a range
of stakeholders this year, including shareholders at our AGM,
institutional investors and employees on site visits.
Looking ahead
The Board is confident that, despite the challenging macroeconomic
conditions, Hays is well positioned under the new leadership of Dirk
Hahn to emerge even stronger, underpinned by a diverse business
and a committed team.
I would like to take this opportunity to extend my thanks to all
the members of the Board and to our incredible workforce for
their continued dedication to Hays this year. To our shareholders,
clients and candidates, I thank you for your continued support.
I am incredibly proud of all that has been achieved this year and
look forward to building on this in FY24.
Andrew Martin
Chair
23 August 2023
Andrew Martin
Chair
Hays plc
Dear Shareholder
I am pleased to introduce the Corporate Governance section of
this year’s Annual Report. The report sets out our governance
framework, how we make decisions and engage with our
stakeholders and how we have complied with the UK Corporate
Governance Code 2018.
The Board in 2023
Succession planning and the evolution of the composition of the
Board has been the primary focus of the Board this year. We are
committed to maintaining a strong Board from a diverse range
of backgrounds and are pleased to report we have exceeded the
targets the Board set for itself in its Board Diversity Policy for
gender and ethnic minority representation on the Board this year.
On 23 February 2023 we announced that following discussions with
Alistair Cox, it was an appropriate time to commence a process to
identify his successor. On behalf of the Board, I would like to express
our thanks for the great leadership he has shown in his 16 years
in role. The Board, led by the Nomination Committee, spent a
considerable amount of time identifying Alistair's successor to
ensure a rigorous and transparent process. The Board is delighted
to be able to announce that Dirk Hahn will succeed Alistair as Chief
Executive Officer on 1 September 2023. Dirk is a long-standing
member of the Hays Executive Board and is currently MD of Hays
Germany and CEMEA (Continental Europe, Middle East and Africa),
where he oversees around 5,500 employees. The Board has
confidence that Dirk’s knowledge and experience makes him the
ideal person to lead the Company in its next stage of growth.
82
GOVERNANCE AT A GLANCE
Reviewed and
updated Matters
Reserved for
the Board
Reviewed
and adopted
New Share
Dealing Code
Exceeded Parker
Review diversity
target
Highlights
44% female
representation on
the Board
1 new NED
joined on
1 January 2023
New Group Finance
Director appointed
Code compliance
Hays plc is subject to the UK Corporate Governance Code 2018
(the Code) issued by the Financial Reporting Council (available
at frc.org uk). As a listed company, Hays is required to report on
how it has applied the principles of the Code and this is set out
in the following pages. During the year ended 30 June 2023,
Hays complied with all of the provisions of the Code, except for
the fact that Provision 38 was met part way through the year by
the alignment of the Executive Directors' pension with the wider
workforce. More information is on page 128.
The table below shows where shareholders can find further
information on how the Company has applied the principles
of the Code.
Board leadership and Company Purpose
A – An effective Board
B – Purpose, values and culture
C – Governance framework and Board resources
D – Stakeholder engagement
E – Workforce policies and practices
Division of responsibilities
F – Board roles
G – Division of responsibilities
H – Non-Executive Directors
I – Key activities of the Board in 2023
Page
84 to 87
1, 20 to 27
88
96 to 99
98 to 99
Page
89
89
89, 91
93 to 95
Composition, succession and evaluation
J – Appointments to the Board
Page
103
K – Board skills, experience and knowledge
84 to 87, 92
L – Annual Board Evaluation
Audit, risk and internal controls
100
Page
M – Financial Reporting, External Auditor and Internal Audit
107 to 109
N – Review of 2023 Annual Report and Accounts
O – Risk Management
Remuneration
108
74 to 79
Page
P – Linking remuneration with purpose and strategy
114 to 115
Q – Remuneration Policy
R – Performance outcomes in 2023
116 to 126
130
83
Strategic ReportFinancial StatementsShareholder InformationGovernance Hays plc Annual Report & Accounts 2023
OUR BOARD
OF DIRECTORS
Chair of the Board
Executive Directors
Alistair Cox
Chief Executive
James Hilton
Group Finance Director
Appointed
1 September 2007
Appointed
1 October 2022
Skills and experience
With over 15 years’ service with the Group,
Alistair has a deep understanding of the
recruitment market and a sharp focus
on strategy execution and operations.
Past roles
Alistair’s early career was in various field
engineering, management and research
science roles with British Aerospace and
then Schlumberger. Alistair worked for
McKinsey & Company before joining Blue
Circle Industries, where he was the Group
Strategy Director and then the Regional
Director for Asia. Prior to joining Hays,
Alistair was Chief Executive of Xansa plc.
Alistair has previously served as a non-
executive director of 3i Group plc and
Just Eat plc. Alistair is a Chartered Engineer
with an MBA from Stanford University.
External appointments
Non-Executive Director of Relx plc.
Skills and experience
James has extensive experience in finance,
audit and risk management and, having
worked at Hays for more than 15 years,
understands the Group’s operations at
all levels.
Past roles
James is an Economics graduate from
Cambridge University, and qualified as a
Chartered Accountant with KPMG. James
joined Hays in 2008 from the Investment
Banking division of Dresdner Kleinwort,
where he specialised in Corporate Broking
and M&A Advisory. Prior to his appointment
to the Hays Board, James held a number of
senior finance roles at Hays including Head
of Investor Relations, UK Financial Controller,
European Finance Director and Group
Financial Controller.
Andrew Martin
Chair
N
Appointed
12 July 2017
Skills and experience
Andrew has extensive experience in
business, finance and corporate governance
having held a number of non-executive
and senior executive positions across
several sectors.
Past roles
Until 2015, Andrew was Chief Operating
Officer for Compass Group plc, having
previously been their Group Finance Director
from 2004 to 2012. Before joining Compass
Group, Andrew was Group Finance Director
at First Choice Holidays plc (now TUI Group
plc) and prior to that held a number of Senior
Finance roles at Granada Group plc. Andrew
was, until August 2020, a Non-Executive
Director of easyJet plc, and until May 2023,
a Non-Executive Director of the John Lewis
Partnership Board. Early in his career,
Andrew trained as a Chartered Accountant
at KPMG before moving to Arthur Andersen
where he became a partner.
External appointments
Non-Executive Chairman of Intertek
Group plc.
84
Independent Non-Executive Directors
Committee key
A Audit Committee
R Remuneration Committee
N Nomination Committee
W Designated NED for Workforce Engagement
Committee Chair
Joe Hurd
Independent Non-Executive Director
Cheryl Millington
Independent Non-Executive Director
A
N
R
Appointed
1 December 2021
A
N
R
Appointed
17 June 2019
Skills and experience
A strategic technology leader, Cheryl also
brings extensive general management,
data and people experience to the Board.
Past roles
Cheryl was Chief Digital Officer of Travis
Perkins plc from 2016 to 2018, Executive
Director, IT, for Waitrose from 2012 to 2016
and Chief Information and Data Officer
for Asda Stores Ltd from 2009 to 2012.
Prior to those positions Cheryl held senior
management roles at HBOS plc, Innogy plc
and National Power plc, and began her
career as a management consultant with
Price Waterhouse. Cheryl has previously
served as a Non-Executive Director
of National Savings and Investments,
Intu Properties plc and Equiniti Group plc.
External appointments
Non-Executive Director of Atom Bank plc
and AXA Insurance UK plc.
Skills and experience
Joe has significant global experience in
consumer-facing technology businesses.
He also brings expertise as an independent
public board director, advising on strategic
growth, ESG, workforce engagement,
innovation, governance, compensation,
board recruitment and diversity.
Past roles
Joe began his career in corporate and
securities law with Linklaters, before
establishing himself as an entrepreneur
with successful start-ups Friendster and
VideoEgg. Previously he served as a Non-
Executive Director of GoCo Group plc (now
Future plc) and as an Independent Director
of SilverBox Engaged Merger Corp I. From
2009 until 2012, Joe served in the Obama
Administration as a political appointee at
the Department of Commerce, serving
on the White House Business Council.
External appointments
Chief Executive Officer and Managing
Partner of Katama Group LLC. A Non-
Executive Director of Trustpilot Group plc
since June 2021. A nominated member of
Lloyd's Council.
85
Strategic ReportFinancial StatementsShareholder InformationGovernance Hays plc Annual Report & Accounts 2023
OUR BOARD
OF DIRECTORS CONTINUED
Non-Executive Directors
Susan Murray
Independent Non-Executive Director
Zarin Patel
Independent Non-Executive Director
MT Rainey
Independent Non-Executive Director
A
N
R
Appointed
12 July 2017
A
N
R
A
N
R W
Appointed
1 January 2023
Appointed
14 December 2015
Skills and experience
Susan brings extensive experience in
international consumer goods and services
businesses. She has specialist knowledge
and experience in strategy, marketing,
remuneration and general management.
Past roles
Susan is a former Chairman of Farrow & Ball
and a former Non-Executive Director of
Mitchells & Butlers plc, Compass Group plc,
Pernod Ricard S.A., Imperial Tobacco plc,
Enterprise Inns plc, Aberdeen Asset
Management plc, SSL International plc,
2 Sisters Food Group and Wm Morrison
Supermarkets plc. She is also a former
Chief Executive of Littlewoods Stores
Limited and former Worldwide President
and Chief Executive of The Pierre Smirnoff
Company, part of Diageo plc.
External appointments
Non-Executive Director and Chair of
Remuneration Committee at Grafton Group
plc. Senior Independent Director of William
Grant & Sons Limited.
86
Skills and experience
Zarin brings expertise in managing
transformation within complex digital-
centric businesses. She also has wide-
ranging experience across finance,
investment and customer in both
executive and non-executive roles.
Past roles
Zarin spent 15 years at each of KPMG and
the BBC, where she was Chief Financial
Officer for 9 years. From 2014 to 2016 she
was the Chief Operating Officer of The Grass
Roots Group plc. Previously, Zarin was a
Non-Executive Director of Post Office
Limited and an independent member of the
Audit and Risk Committee of John Lewis
Partnership plc. Zarin is a member of
the Institute of Chartered Accountants
in England and Wales and has recent
and relevant financial experience.
External appointments
Non-Executive Director and Chair of the
Audit and Risk Committee of Anglian Water
Services Limited. Senior Independent
Director and Chair of the Audit and Risk
Committee of Pets at Home Group plc.
A Non-Executive Director at HM Treasury
and Chair of the Audit and Risk Committee.
A trustee of National Trust and Chair of its
Audit Committee.
Skills and experience
An experienced media and advertising
professional, MT Rainey has worked
extensively in the UK and US. She brings
a wealth of corporate, commercial and
enterprise experience to the Board
as well as a passion for diversity,
sustainability and corporate ethics.
Past roles
MT founded the advertising agency Rainey
Kelly Campbell Roalfe, which she grew to
a top 20 agency before it was sold to Y&R,
a subsidiary of WPP plc, and where MT
was CEO then Chair until 2005. In addition
she was Chair of the leading digital strategy
agency Th_nk Ltd from 2008-2015. Previous
non-executive directorships held by MT
include WH Smith plc, STV Group plc and
Pinewood Group plc. MT has a Masters
degree from Glasgow University.
External appointments
Non-Executive Director of Clear Channel
Outdoor Holdings Inc., Chair of Lighthouse
Centre for the Arts, Chair of Charlotte Street
Partners.
Board tenure
55.56%
33.33%
11.11%
0-3 years
3-6 years
6+ years
Gender diversity
44%
56%
Male
Female
Peter Williams
Senior Independent Director
Doug Evans
Company Secretary & General Counsel
A
N
R
Appointed
24 February 2015
Skills and experience
Peter has extensive experience of the media
sector and expertise in financial, audit and
risk management.
Past roles
Peter was Group Finance Director of Daily
Mail & General Trust plc, a role he performed
for 19 years until 2011. From 2011 to 2018
Peter was a Non-Executive Director of
Perform Group. Peter has recent and
relevant financial experience and has a
Law degree from Cambridge University
and is a member of the Institute of Chartered
Accountants in England and Wales.
External appointments
A member of the Industrial Advisory Board
of GVQ Investment Management.
Appointed
4 February 2013
Board composition
22.2%
11.1%
66.7%
Non-Executive
Chairman
Executive
Skills and experience
A law graduate from Rhodes University who
began his career with Webber Wentzel in
South Africa, specialising in corporate and
commercial law before moving in-house.
Doug has previously held the posts of
Company Secretary & Corporate Legal
Director at Exel plc and Group General
Counsel at Royal Mail Limited. Prior to
joining Hays, Doug was an Executive
Director, Company Secretary & General
Counsel at Mitchells & Butlers plc.
Directors who served throughout the year
Paul Venables
Group Finance Director
Paul Venables stepped down from his position as Group Finance Director on
30 September 2022 after 16 years with the Group.
87
Strategic ReportFinancial StatementsShareholder InformationGovernance
Hays plc Annual Report & Accounts 2023
OUR GOVERNANCE
FRAMEWORK
The Hays Board is committed to ensuring there
is a strong and effective system of corporate
governance in place to support the execution
of the Company's strategy.
The Board
The role of the Board is to promote the long-term success of the Company, for the benefit of all Hays’ stakeholders.
It sets the Group’s strategy, provides support and constructive challenge to senior management within a framework
of effective controls.
Board Committees
The Board delegates certain matters to Committees which report to the Board at every meeting.
The Committees' Terms of Reference are reviewed and approved annually by the Board.
Nomination Committee
Assists the Board by keeping the
Board composition under review
and makes recommendations to
the Board in relation to
appointments
Audit Committee
Oversees the Group’s financial
reporting and reviews the
integrity of the Group’s Financial
Statements, the adequacy
and effectiveness of the Group’s
system of internal control
and risk management and
maintains the relationship
with the External Auditor
Remuneration
Committee
Determines the Directors’
Remuneration Policy. Approves
performance-linked pay
and share incentive plans.
The Committee also reviews
workforce policies and practices
Executive Level Committees
Chief Executive Officer
and Executive Board
Responsible for the development
and implementation of
Group strategy and day-to-day
running of the business sits
with the CEO, supported by
the Executive Board
Group Risk Committee
An executive committee
responsible for strategic
leadership, direction and
oversight of risk
Disclosure Committee
An executive committee
responsible for overseeing
the Group’s compliance with
its disclosure obligations
88
DIVISION OF
RESPONSIBILITIES
Whilst our Directors take collective responsibility
for the activities of the Board, some of our roles
are described in greater detail below.
Non-Executive Directors
Non-Executive Chair
Senior Independent Non-Executive Director
Independent Non-Executive Directors
– Leadership and effective operation
– Acting as a sounding board for the Chair
– Provide strong, independent and
of the Board
– Chairing the Board and the Nomination
Committee and setting Board agendas
– Encouraging constructive challenge and
facilitating effective communication
between Board members
– Ensuring effective two-way communication
with shareholders and stakeholders
– Ensuring that all Directors receive clear and
accurate information on a timely basis
– Ensuring the views of all stakeholders are
understood and considered appropriately
in Board discussion and decision-making
– Ensuring the effectiveness of the Board and
enabling the annual review of effectiveness
– Responsible for the composition and
evolution of the Board, together with
the Nomination Committee and SID
Executive Directors
Chief Executive Officer
– Serving as an alternative contact and
intermediary for other Directors and
shareholders
– Leading the Chair’s annual performance
appraisal and ultimate succession
external perspectives to Board discussions
and enhance robust and constructive
debate and optimal decision-making
– Bring independent judgement and oversight
on issues of strategy, performance and,
through the Board's committees, on
matters such as remuneration, risk
management systems, financial controls,
financial reporting and the appointment
of new Directors
– Scrutinise the executive management in
meeting agreed objectives and monitoring
the reporting of performance
Group Finance Director
– Day-to-day management of the Group’s business
– Manages the Group’s financial affairs
– Formulating strategic business objectives for Board approval
and implementing approved strategic objectives and policies
– Supports the CEO in the implementation and achievement
of the Group’s strategic objectives
– Managing and optimising the operational and financial performance
– Oversees Hays' relationships with the investment community
of the business in conjunction with the Group Finance Director
– Fostering a good working relationship with the Chair
– Chairing the Executive Board and developing senior talent within the
business for succession planning
– Represents Hays externally to all stakeholders, including the
government and regulators, customers, Pension Trustees for the
Company’s defined benefit pension schemes, lenders, suppliers
and the communities we serve
Company Secretary
Company Secretary and General Counsel
– Secretary to the Board, its Committees and the Executive Board
– Support to the Chair in ensuring that the Directors receive accurate,
– All Directors have access to the advice of the General Counsel
timely and clear information
and Company Secretary
– Responsible for advising the Board on all governance matters
and ensuring that Board procedures are followed
– Advises and keeps the Board updated on any changes to the Listing
and Transparency Rules requirements and best practice corporate
governance developments
89
Strategic ReportFinancial StatementsShareholder InformationGovernance Hays plc Annual Report & Accounts 2023
HOW THE
BOARD WORKS
The Board promotes the long-term sustainable
success of the Company for the benefit of
all stakeholders, whilst generating value for
shareholders and wider society. The Board
is responsible for approval and delivery of the
business strategy and ensuring it is aligned
with the Company’s Purpose and Values.
The requirements of the Board are set out in the Hays plc Articles
of Association and the Board has a formal schedule of matters
reserved for its decision and approval. Both these documents
are available on the Hays plc website. To meet its stated objectives,
it focuses on the following key areas:
Strategy and Performance
Risk Management and Internal Control
The Board is responsible to all stakeholders for assessing
the appropriateness of the strategy against the Company’s
Purpose and Values. It provides leadership of the Group and
direction for management, ensuring that the necessary
resources are in place for the Company to meet its objectives
and its delivery of a sustainable and profitable business,
ensuring it continues to operate within the appropriate
risk-reward culture.
The Board evaluates and monitors current performance
against agreed financial and non-financial targets. It has
a forward-looking agenda that considers economic, social,
environmental and regulatory issues and any other relevant
external matters that may influence the Company’s
achievement of its objectives.
More information on pages 3 to 53
The Board assesses the Company’s principal and emerging
risks, and sets the Company’s risk appetite for each of the
principal risks.
The Board delegates the task of monitoring its policy on
risk and control the Audit Committee. The Executive Board
oversees an enterprise risk management system which
allows for a holistic, top-down, and bottom-up view of key
risks facing the business.
More information on pages 74 to 79 and 106 to 109
People and Culture
Stakeholders
In its discussions and decision-making, the Board considers
and balances the interests of all stakeholders. The Board
reports to shareholders in the form of the Annual Report
and Accounts, Half-year financial reports and quarterly
trading updates.
More information on pages 16 to 19 and 96 to 99
The Board assesses and monitors culture, ensuring that
policy, practices and behaviours in the business are
aligned with the Company’s Purpose, Values and Strategy.
The Board receives and considers detailed analysis of
employee engagement surveys, covering company culture
including wellbeing, learning and development, diversity
and inclusion, noting performance, progress made and
future next steps. The Board reviews the whistleblowing
procedures in place.
The Board is responsible for succession planning for
Directors and other senior executives of the Company
and continually looks at the skills, experience and diversity
required at the Board level to ensure it can discharge
its duties and properly reflect stakeholder interests.
More information on pages 20 to 27
90
Our Directors
The majority of the Board are Independent Non-Executive Directors.
There is clear division of responsibilities between the Executive and
Non-Executive Directors. More information on page 89.
Having received advice from the Nomination Committee, the Board
is satisfied that each Director standing for election or re-election is
qualified for election/re-election by virtue of their skills, experience
and commitment to the Board.
Independence of Directors and time commitment
During the year, the Board considered the independence of each
of the Non-Executive Directors, and concluded that there are
no business or other circumstances that are likely to affect the
independence of any Non-Executive Director and that all Non-
Executive Directors continue to demonstrate independence.
In accordance with the 2018 Code, all Directors are subject to annual
re-election by shareholders. Each of the Non-Executive Directors
seeking appointment or reappointment at this year’s AGM are
considered to be independent in judgement and character.
Non-Executive Director appointments are initially for a period of
three years and may be renewed for two further terms of three years
subject to recommendation from the Nomination Committee, taking
into account both individual contribution, length of service of the
Board overall and its future needs.
Details of the Executive Directors’ service contracts and the
Chairman’s and the Non-Executive Directors’ letters of appointment
are set out in the Directors’ Remuneration Report on page 122.
These documents are available for inspection at the registered office
of the Company during normal business hours and at the AGM.
Board and Committee attendance
The Board met a total of seven times during the year. In addition, the Board attended an annual Strategy Review meeting with the Executive
Board. Board and Committee attendance for meetings during the year is shown below.
Audit
Committee
Nomination
Committee
Remuneration
Committee
Alistair Cox
James Hilton(1)
Paul Venables(2)
Andrew Martin
Joe Hurd
Cheryl Millington
Susan Murray
Zarin Patel(3)
MT Rainey
Peter Williams(4)
Board
7 of 7
5 of 5
2 of 2
7 of 7
7 of 7
7 of 7
7 of 7
3 of 3
7 of 7
6 of 7
–
–
–
–
4 of 4
4 of 4
4 of 4
2 of 2
4 of 4
4 of 4
–
–
8 of 8
8 of 8
8 of 8
8 of 8
4 of 4
8 of 8
8 of 8
Joined the Board on 1 October 2022. Attendance shown is of those meetings which took place during tenure.
(1)
(2) Stepped down from the Board on 30 September 2022. Attendance shown is of those meetings which took place during tenure.
(3) Joined the Board on 1 January 2023. Attendance shown is of those meetings which took place during tenure.
(4)
Did not attend one Board meeting due to a prior commitment.
–
–
–
–
5 of 5
5 of 5
5 of 5
2 of 2
5 of 5
5 of 5
91
Strategic ReportFinancial StatementsShareholder InformationGovernance Hays plc Annual Report & Accounts 2023
HOW THE
BOARD WORKS
CONTINUED
Conflicts of interest
Directors have a duty to avoid a situation where they have, or could
have, a direct or indirect interest that conflicts, or may conflict with
the interests of the Company. Any conflicts or potential conflicts
identified are considered and, as appropriate, authorised by the
Board in accordance with the Company’s Articles of Association.
A register of authorised conflicts is also reviewed periodically.
Only Directors without an interest in the matter being considered
will be involved in any decision involving a potential conflict and each
Director must act in a way they consider, in good faith, will promote
the success of the Group.
While the Company does not have a similar policy for Non-Executive
Directors, their key external commitments are reviewed each year to
ensure that additional commitments do not adversely impact their
time commitment to Hays and that they remain complaint with
shareholder advisory groups’ guidance on ‘overboarding’. Before
committing to an additional appointment, Directors confirm the
existence of any potential or actual conflicts; and provide the
necessary assurance that the appointment will not adversely
impact their ability to continue to fulfil their role at Hays. Directors
are required to obtain formal approval from the Board ahead
of undertaking any new external appointments.
The Board has established a policy permitting its Executive Directors
to hold only one external non-executive directorship, subject to any
possible conflict of interest. This ensures that Executive Directors
retain sufficient time for and focus on the Company’s business,
whilst allowing them to gain external Board exposure as part of their
leadership development. Executive Directors are permitted to retain
any fees paid for such services.
Board composition
As at the date of this report, the Board comprised six Independent
Non-Executive Directors, the Chair and two Executive Directors.
The aim is to ensure the balance of the Board reflects the needs of
the Company, is diverse and able to consider matters from a broad
range of perspectives. Each Board member brings a wide range of
skills and experience from different business backgrounds. The skills
matrix below details some of the skills and experience considered to
be particularly important to the execution of our strategy. The skills
matrix is reviewed at least annually.
Directors’ key skills and experience
x
o
C
r
i
a
t
s
i
l
A
n
o
t
l
i
H
s
e
m
a
J
n
i
t
r
a
M
w
e
r
d
n
A
d
r
u
H
e
o
J
l
e
t
a
P
n
i
r
a
Z
n
o
t
g
n
i
l
l
i
M
l
y
r
e
h
C
y
a
r
r
u
M
n
a
s
u
S
i
y
e
n
a
R
T
M
s
m
a
i
l
l
i
W
r
e
t
e
P
Strategy and M&A
Finance
Audit and Risk
Market transformation
Technology and innovation
AI
International experience
ESG
Strategic People development
and organisational culture
Recruitment industry, sales
Customer
92
Board decision-making
The Board met during the year for seven scheduled Board meetings
and one Strategy day. The Chair, in conjunction with CEO and
Company Secretary, plans an annual programme of business
prior to the start of the year, taking into account outputs from the
annual Board Evaluation. A typical Board meeting will comprise
the following elements: CEO and Group Finance Director reports;
trading performance reports; risk reports; reports from the Chairs
of our Board Committees; deep dive reports into areas of strategic
importance and legal and governance updates.
The Company Secretary ensures that the Directors receive clear,
timely information on all relevant matters. Board papers are
circulated electronically via a secure Board portal in advance of
meetings. The portal is also used to distribute reference documents
such as Company policies and other useful resources like articles
and discussion papers.
Time is set aside at the end of every Board meeting for the Chair
to discuss matters with the Independent Non-Executive Directors
without Executives present.
Board information for decision-making
A forward calendar of matters for discussion at each meeting
is pre-determined.
Consists of certain standing items for each meeting,
including operational, functional and financial reviews,
and Committee updates.
Unplanned items such as commercial or property-related
decisions are considered as and when required.
Agenda for each meeting planned by the Chair,
in conjunction with the Chief Executive and
Company Secretary.
Management shares information in advance
of any decision-making and any S.172 factors
are highlighted for Board discussion by the
Company Secretary.
Board discussion
Based on the information provided, the Board holds a robust
discussion, challenging the matters at hand, as necessary.
The Board considers the impact of its decisions on all its
stakeholders, ensuring those who are impacted are treated fairly.
See pages 16 to 19 for how the Company continues to create
value for stakeholders. Also, a summary of the Board’s key
activities and the topics covered and debated during the year
is set out on pages 94 to 95.
All Board Directors have access to the Company
Secretary who advises them on Board and
governance matters.
Any Director can take independent professional
advice at the Company’s expense in the furtherance
of their duties, where considered necessary.
Board decision
The Company Secretary records all decisions.
Board decisions are cascaded for implementation and the
Board is kept updated on the progress at future meetings.
The Board or management engages with
stakeholders who are impacted because
of Board decisions.
Any material Board decisions are disclosed
via the Annual Report. Examples of the process
in action are provided on page 96.
93
Strategic ReportFinancial StatementsShareholder InformationGovernance Hays plc Annual Report & Accounts 2023
KEY ACTIVITIES
OF THE BOARD
The following table sets out the key areas of
focus considered by the Board during the year.
Stakeholders
Clients
Employees
Principal Risks
Macroeconomic/cyclical
business exposure/inflation
Shareholders
Communities
COVID-19 pandemic
Regulatory/compliance
Reliance on technology
/cyber security
Suppliers
Host countries
& governments
Candidates
Business model
Data protection/privacy
Talent
Contracts
Strategic Priorities
Grow
Diversify
Partner
Enhance
Enable
Strategy and Operations
Stakeholders
Principal Risks
Strategic Priorities
– Attended a Group strategy session with members of the Executive Board and other senior executives, to consider key strategic priorities
and challenges faced across the business
– Approved the Group strategy and reviewed associated performance
– Deep-dive sessions on regional businesses, receiving presentations from senior management on business performance, the state of the
market, strategy, succession planning and opportunities
– Received updates on Strategic Growth Initiatives
– Reviewed strategy plans and received reports on the trading performance and operations for the Group’s regions
– Reviewed and monitored progress of the CEO succession plan
– Approved starting business operations in Saudi Arabia
– Approved acquisition of Vercida Consulting
– Received reports on technology and innovation and related industry developments
People & Culture
Stakeholders
Principal Risks
Strategic Priorities
– Received feedback from Designated workforce engagement Non-Executive Director on matters pertaining to workforce engagement
– Considered and approved invitations under the Company’s all-employee share plans
– Considered and reviewed the leadership and development strategy
– Reviewed the Group’s succession plans and assessed risks and options
– Discussed progress on the Group’s Global DE&I strategy
94
Finance
Stakeholders
Principal Risks
Strategic Priorities
– Received and considered regular reports on the Group’s financial performance
– Approved financial announcements for publication
– Approved the annual budget
– Considered dividend policy in respect of FY23
– Considered and approved share buyback programme
– Met with the Company’s financial adviser and corporate brokers
– Received regular updates on pension schemes
Internal Controls and Risk Management
Stakeholders
Principal Risks
Strategic Priorities
– Performed the annual review of the effectiveness of internal control, risk identification and mitigation
– Reviewed regular reports on legal and compliance matters from the Company Secretary, including the Company’s whistleblowing
arrangements
– Received updates on cybercrime
– Received updates on proposed changes to parts of legacy Enterprise Risk Management Systems
ESG
Stakeholders
Principal Risks
Strategic Priorities
– Received updates on our Net Zero journey
– Received updates on 'Helping for your tomorrow'
– Received updates on customer experience
– Received regular updates on views and feedback from investors
– Considered the Company’s investor relations strategy
– Review and approval of Modern Slavery Statement
– TCFD Disclosures
Governance
Stakeholders
Principal Risks
Strategic Priorities
– On the recommendation of the Nomination Committee, the Board oversaw the arrangements for Board succession planning and approved
the appointments of Zarin Patel and James Hilton
– Reviewed regular reports on legal and compliance matters from the Company Secretary, including from the Company’s whistleblowing
arrangements
– Approval of updated Board Diversity Policy
– Approval of new Share Dealing Code
– Conducted internal Board and Committee evaluation and set action plan for FY24
– Reviewed and updated the Matters Reserved for the Board
– Reviewed the terms of reference of the Board Committees
– Reviewed the Directors’ Conflicts of Interest procedures
– Reviewed the Company’s compliance with the Code (2018)
95
Strategic ReportFinancial StatementsShareholder InformationGovernance Hays plc Annual Report & Accounts 2023
BOARD AND STAKEHOLDER
ENGAGEMENT
The Board is focused on driving long-term,
sustainable performance for the benefit of
our key stakeholders.
Section 172 statement
In accordance with section 172 of the Companies Act 2006 and
the UK Corporate Governance Code 2018, the Board considers the
potential impact on the Company’s key stakeholders and takes their
views and interests into account when making decisions. Some of
the key decisions taken by the Board during the year and how it took
the needs of our different stakeholders, as well as the long-term
consequences of any decision, into account are set out below.
A description of the Company’s key stakeholders, what matters
to them and how the Group engages with them is set out in
pages 16 to 19 of the Strategic Report. More detail of the activities
undertaken by the Board can be found on pages 94 to 95.
Acquisition of Vercida
Key Stakeholders:
Employees, Clients, Shareholders, Communities
On 18 May 2023, the Board announced the acquisition of Vercida
Consulting, a DE&I business that provides organisations with
advice and training to improve their ability to attract, retain and
progress talent from diverse backgrounds.
Interests of clients
DE&I was identified as an area in which our clients needed the
support of a partner. The acquisition of Vercida will increase
our ability to consult on DE&I services and support our clients
to attract and retain talent from diverse backgrounds for the
benefit of wider society.
Long-term consequences of decision
When considering this acquisition, the Board received detailed
updates from management about the strategic rationale,
anticipated commercial synergies, due diligence findings, valuation
and returns analysis, stakeholder considerations, structuring
considerations and post-acquisition plans. Throughout the
decision-making process, the Board considered how the
acquisition could strengthen the Company’s strategy and
how the expertise acquired would benefit Hays stakeholders,
all while ensuring that the acquisition was financially viable.
Interests of employees
The Board were mindful that the acquisition could cause
uncertainty amongst the Vercida workforce and, as far as
permissible, they were kept updated throughout. Following
completion, Vercida employees were invited to the Hays London
office and there has been a comprehensive plan to integrate them
into the team as quickly as possible. More information on page 39.
96
Share buyback programme
Key Stakeholders:
Shareholders
In FY23 the Board executed a £75 million share buyback
programme.
Long-term consequences of decision
Our strategy for long-term sustainable growth is underpinned
by the effective management and utilisation of cash. The share
buyback programme balances the opportunity to return excess
capital to shareholders with the existing and planned investment
back into the business and the need to ensure we meet our short
and long-term profit targets.
Acting fairly between members
The ability of the business to manage its cash position in
an effective way is clearly in the interests of all stakeholders.
The Board considered that the share buyback would benefit
shareholders specifically through the opportunity for increased
future dividends per share on the remaining shares and will
also result in an increase in earnings per share.
Leadership changes
Key Stakeholders:
Employees, Shareholders
During the past year, Hays appointed a new Group Finance Director
and announced the decision to begin a process to identify a new
Chief Executive Officer.
Interests of employees
The Board recognises that Board and senior leadership changes
bring uncertainty for employees in ways of working, culture and
strategic direction. The Board appreciates the impact leadership
changes have on employees, particularly the amount of change
within a short timeframe and ensured that the impact on
employees and culture was considered in the initial decision on
those appointments, but most importantly that the Board monitors
the resulting impact going forward as new leadership embeds
into the business. At times of leadership change, workforce
engagement and the monitoring of culture are more important
than ever and will continue to be a focus for the Board in the
year ahead.
Interests of shareholders
Changes at Board level also bring uncertainty for shareholders.
The Chairman held regular meetings with the top shareholders
to explain that the rationale for the changes were well founded,
and based on the long-term growth and success of the business.
The investors' feedback was regularly communicated to the Board
and was considered by the Nomination Committee in their search
process for a new Chief Executive Officer. You can read more about
this search process and succession planning on page 105.
During the year, the Chair of the Remuneration Committee engaged
with the Company’s top institutional shareholders about the renewal
of the Directors’ Remuneration Policy. Having carefully considered
feedback, the Remuneration Committee’s final decision is not to
make any significant changes to the Policy at this time. Shareholders
are being asked to approve a Policy which includes only minor
amendments and reflects the Policy approved in 2020. The Policy
previously received a favourable vote of 91.47%. More information
is on pages 116 to 126.
Annual General Meeting
The Company’s AGM is an opportunity for the Board to engage
with our retail shareholders and we were pleased to be able to do
so in person at the 2022 AGM. The CEO presented an update on
performance and outlook and then shareholders were invited to
ask questions during the meeting, some of which were followed
up by one-to-one informal discussions afterwards.
The Company’s 2023 AGM will be held at 12 noon on 15 November
2023 at the offices of UBS, 5 Broadgate, London EC2M 2QS.
Number of shareholder meetings in 2022
19.48%
14.29%
2.60%
63.63%
Chair
Executive Directors
Non-Executive Directors
Other
Shareholders
The Board maintains strong lines of communication with investors
and the Chair and Executive Directors proactively engaged
with them to understand their views on strategy, the performance
of the Company and other specific matters, such as the CEO
succession this year.
Major shareholders
As at 30 June 2023, the following shareholders held an interest
of 3% or more of the Company’s issued share capital:
Silchester International
Ameriprise Financial, Inc.
Blackrock, Inc.
GLG Partners LP
Evenlode Investment
Vanguard Group
Heronbridge Investment Management
Marathon Asset Management
Janus Henderson Investors
% of total
voting rights
attached to
shares(1)
17.05%
8.84%
7.38%
3.74%
3.62%
3.61%
3.38%
3.30%
3.04%
(1)
Since the financial year-end until the date of this report, there have been
no changes to the major shareholders' interests.
Institutional investors
There is a programme of meetings with major institutional
shareholders and the Director of Investor Relations engages directly
with investors throughout the year. The Board receives regular
reports from the Investor Relations team. Feedback from meetings
held between executive management, or the Investor Relations
team, and institutional shareholders is also reported to the Board.
The Directors discuss any feedback, which influences decisions
to actively meet with shareholders on specific matters.
The Group reports its financial performance to shareholders six
times a year: half-year and full-year announcements and Q1, Q2,
Q3 and Q4 trading updates. Meetings are scheduled with investors
and analysts to discuss the Group’s half-year and full-year results.
During the year, the Executive Directors and senior management
along with the Investor Relations team participated in meetings,
conferences, roadshows and events across the world with the
investor community, including debt providers, principally the
Company’s banks. They held over 64 meetings with 75 institutions.
The Chair also held 11 meetings with top 20 shareholders during the
year including 3 meetings to discuss matters on CEO succession.
Geographical breakdown of investors met
1%
15%
10%
UK
Europe
North America
Other
74%
97
Strategic ReportFinancial StatementsShareholder InformationGovernance Hays plc Annual Report & Accounts 2023
WORKFORCE ENGAGEMENT
The Hays Board believes that the workforce voice needs to be heard
and understood. MT Rainey continued in her role as Designated
Workforce Engagement Director this year. Her role as a direct
conduit between employees and the Board serves to ensure a
deeper, more authentic insight into the workforce and amplifies
the understanding provided by the YourVoice and other employee
surveys. This perspective is then factored into a wide range of Board
discussions in a more strategic way than specific research-based
discussions would typically allow. As the role has developed over
the past few years it has clearly enabled the Board to hear from
and about a greater diversity of viewpoints, which have added an
important perspective to a wide range of strategic discussions at
Board meetings. Listening to the workforce at Board level creates an
obligation to understand and respond, and MT’s activities this year
have continued to provide valuable insights that help shape actions
and impacts.
The three primary areas of activity were:
Employee Focus Groups
One example of MT’s direct engagement with the workforce this year
was the Employee Focus groups held around the October Board
Meetings in Mannheim and Paris. MT Rainey designed and led a
number of groups, supported by Joe Hurd and Cheryl Millington, to
hear directly from employees across a wide range of roles, functions,
and levels about their experience of working at Hays. The groups
operated on a confidential basis, and while discussion was intended
to be informal a detailed discussion guide was created and followed
using a series of guided questions to open-up the topics.
One of the primary issues that was explored was how well
employees knew and understood the Hays Company strategy,
current direction, primary purpose and core values and how those
related to their own jobs and experience of working at Hays. This led
to discussion of the nature and effectiveness of Hays’ employee
communication and the relationship of the centre to the regions
and the local offices. Another issue was how employees felt working
environments had changed post-pandemic and the pros and cons
of the new, more flexible working style. This led to a discussion of
wellbeing and employee care at Hays and Hays efforts around DE&I.
Overall, the impression of the discussions was that colleagues feel
supported by their managers and are proud to work for an industry
leading brand. There was a consensus that Hays’ policies on flexible
working had made a positive impact on wellbeing and the experience
of working at Hays, and the groups expressed enthusiasm and
appreciation for Hays’ increased efforts and focus on DE&I issues.
Some of the conversations suggested a need to improve ease of
operation and communication across geographies and to remove
functional silos; perhaps a need for improvement in 'socialising' the
understanding of corporate strategy in particular in the light of the
new brand strapline which had been recently launched. There was
a consistent feeling that Hays could be a stronger public (candidate)
brand in this tough skills-led market.
In the coming year Focus Group discussion may focus on how well
the Company is managing its employee base through the cost-of-
living crisis and how well it is managing change.
98
As Workforce Engagement Director, MT also attends and
participates in a considerable number of other global and regional
Employee Forums at Hays that encourage people to connect with
each other on a range of issues across geographies, functions and
interests from employee volunteering to parenting. More information
is on pages 58 to 63.
YourVoice survey
YourVoice is one of the principal tools the Board uses to gauge
employee sentiment and engagement. MT was given unique free
and open access to the platform which allowed her to look at
the data and free text responses among sub-populations, cross-
referencing different questions and issues. This insight has been
extremely valuable to her role, lending weight, colour and nuance
to Board discussions and shaping the Board’s view of employee
wellbeing, diversity and inclusion as well as to operational issues
like pay, fairness and progression.
MT spent a considerable amount of time exploring answers to
open ended questions which helped her to get a strong sense of
understanding around issues being expressed. As YourVoice results
are used by senior managers to inform action over the coming year,
it is helpful for MT to have oversight of the themes to ensure that
management are acting on issues raised.
The Global DE&I Council
The Global DE&I Council’s purpose and objective is to drive Hays'
internal and external DE&I policies. Council meetings are about
sharing and amplifying best practice of many of the grass roots
groups around the Company and to ensure that this becomes
standardised and Group policy. MT has been able to attend these
meetings and her feedback has helped the Board to better
understand the issues and challenges to achieving greater diversity
in senior leadership which is more reflective of the diversity across
the employee base overall.
More information is on pages 22 to 25
HOW THE BOARD MONITORS
CULTURE
The Board recognises that our employees are one of our most
important assets and are integral to our business. The Board is
committed to strengthening employee voice and encouraging
employees to reach their full potential.
Set out below are some of the ways in which the Board monitors
the culture, listens to colleagues and acts on what they say.
Site visits
In October 2022, the Board visited Mannheim, Germany and Paris, France to meet local employees and senior management.
The Board received updates from the local senior management who highlighted strategy, opportunities and challenges.
These visits deepened the Board’s understanding of how the Company’s Purpose, Strategy and Values are embedded in
particular sites and countries. The benefits are mutual as it also gives our people a chance to better understand the Board
and provide direct feedback on matters important to them.
In addition, MT Rainey (in her capacity of Designated Workforce Engagement Director), Joe Hurd and Cheryl Millington also
attended two employee focus groups at these locations. You can read more about it on page 98.
YourVoice surveys
One of the principal tools Hays uses to gauge employee sentiment and engagement is the YourVoice survey, covering a wide
range of areas including reward, leadership, culture and development. Once a year all employees are invited to complete the
survey to provide feedback on what works well and what could be improved. The survey results support the Board’s
understanding of colleague sentiment across the Group and provide direct feedback on areas which can be improved.
Town halls and newsletters
Throughout the year, the Chief Executive Officer, Group Finance Director and the executive management team held town hall
meetings, which Hays employees were invited to attend. These discussions took place at significant points in the year, such
as following key financial results announcements. The employees also receive a monthly newsletter from the Chief Executive
Officer, giving a month’s overview of the business, aspirations for the trading period and general news across the Group.
Regular reports on compliance, including anti-bribery and corruption and whistleblowing reports
Key areas of compliance focus are highlighted at Board meetings, which allows the Board to understand potential issues
and target effort in the right places. Annual review of policies gives the Board visibility of the compliance culture at Hays.
Progressing diversity and inclusion
DE&I at Hays remains a key area of commitment for the Board and they continue to receive regular updates on key metrics.
More information on pages 22 to 25
99
Strategic ReportFinancial StatementsShareholder InformationGovernance Hays plc Annual Report & Accounts 2023
BOARD EVALUATION
Board and Committee evaluation and effectiveness
The Board operates a three-year cycle of evaluations. Year one of
the cycle comprises an externally facilitated evaluation. In FY22 the
Board evaluation was conducted by EquityCulture Ltd, which has no
connection with the Company or individual directors. Years two and
three are internally facilitated reviews using a questionnaire format.
In all years the evaluation assesses the effectiveness of the Board
and its Committees. The Senior Independent Director also
undertakes a review of the effectiveness of the Chair of the Board.
FY22 external evaluation
The progress made to address the findings of the FY22 evaluation
are set out in the table below.
Key recommendations
Succession planning at Board level:
– Consideration should be given to the appointment of additional Non-
Executive Directors, with particular focus on the merits of additional
female representation and greater non-UK experience.
– Further consideration should be given to the skills and attributes Hays
will need from future Board appointments.
Progress made in FY23
One of the key activities of the Board during FY23 was Board succession
planning. An independent search firm was appointed to support the search for
an additional Non-Executive Director, which resulted in the recommendation to
appoint Zarin Patel, who was invited to join the Board and its Committees with
effect from 1 January 2023.
A skills matrix has been established on page 92 to support Board succession
planning.
Enhance Board oversight of ESG, including consideration of the
establishment of an ESG Committee.
A number of recommendations around reporting of additional non-financial
KPIs are now reflected in Board reports.
Consider how the Board could work closer with the business to enhance
data-driven decision-making, particularly around diversity-related data and
consideration should be given to appointing a professional leader in the
diversity arena.
The establishment of an ESG Committee remains a consideration for the
Board but a decision was taken to delay this until FY24 due to the prioritisation
succession planning in FY23.
The Board received presentations and dedicated increased meeting time to
discussing diversity and inclusion, with presentations from the newly
appointed Global Head of DE&I. More information on page 23.
Agree
approach
Complete
questionnaires
Evaluate
findings
Board and
Committee
evaluation
process
Agree action
plan and
disclosures
in the ARA
Report findings
to the Board
Share findings
with Committee
Chairs
100
FY23 internal evaluation
This year the Board agreed to carry out a more rigorous internal
evaluation, using Independent Audit’s (a third party with no
connection to the Company or individual Directors) platform to assist
with the provision of a questionnaire and analysis of the results.
The benefit of using a third-party platform was that it enabled the
data to be broken down between Executive Directors, Non-Executive
Directors and executive management so that alignment across the
groups could be assessed. It also enabled the direct input of each
Board member to be kept confidential, as with the prior year’s
external evaluation, allowing for honest and in-depth feedback.
The results of the evaluation process were presented for discussion
at the Board meeting in July 2023. A key theme of the report was
the way in which the Board has been aligned on the strategic
opportunities for the business and has come together to form a
consensus on key decisions. The report highlighted a key strength
has been that discussions in Board and Committee meetings are
open and inclusive with balanced input from all members. Overall,
it was the collective view of the Directors that the Board and its
Committees are effective, operating in a culture that allows
challenge and debate.
Key themes
Board administration, agendas, meetings – to facilitate greater debate
During the year a review of the Chair of the Board's performance
was undertaken by the Senior Independent Director, in consultation
with the other Independent Non-Executive Directors. The review
concluded that the performance of the Chair was effective.
The review of the Executive Director's performance, which helps
to determine their pay outcomes each year, is contained in the
Directors' Remuneration Report on page 130.
A summary of the FY23 evaluation themes and proposed actions
for FY24 are set out in the table below.
FY24 proposed actions
The Chair and Company Secretary will develop the forward agenda planner in
setting the FY24 Board objectives to enable more focus around the strategic
opportunities, challenges and drivers.
The Company Secretary will review the guidance and training provision for
paper preparers and presenters to enable more time and focus at Board
meetings for input and debate.
Non-Executive Director engagement outside of meetings with Executives
and the business
More opportunities will be created for the Non-Executives to engage with
senior leaders in the business, both formally and informally.
Succession planning at Board level
Succession planning at Executive level
Building wider stakeholder understanding
Executives will be encouraged to approach the Non-Executives for assistance
with strategic issues and to draw on their skills and experience.
Company Secretary and CEO to review the programme of Directors’ training to
enhance depth of Board operational and commercial knowledge through
deep-dive sessions outside of Board meetings.
The Nomination Committee will continue to actively review the Board
composition and skills to set up a diverse pipeline of potential Non-Executive
Directors.
The new CEO will be tasked to ensure there are well considered executive
succession and development plans in place.
Chair and Company Secretary continue to identify opportunities for the Board
to receive insights from the Company’s broader stakeholder groups. Ensure
that each paper where a decision is required includes a section specifically
addressing the impact on stakeholders of that decision.
101
Strategic ReportFinancial StatementsShareholder InformationGovernance Hays plc Annual Report & Accounts 2023
Hays plc Annual Report & Accounts 2023
NOMINATION
COMMITTEE REPORT
tenure. We were therefore delighted to announce the appointment of
Zarin Patel, who joined the Board on 1 January 2023 as an additional
Independent Non-Executive Director. She has brought a wealth of
relevant experience to the Board and will succeed Peter as Chair of
the Audit Committee in due course.
During the year the Board with the assistance of the Nomination
Committee has also monitored changes to the wider organisational
structure and approved changes to key leadership roles below Board
level. The Board also continued to monitor succession plans for
executives below Board level, and this included extensive discussion
of the level of diversity in the executive pipeline.
The Committee also considered the Board Diversity Policy and
outlined its commitment to the Parker Review and FTSE Women
Leaders Review targets on ethnic and gender diversity. We are
pleased to report that the Board is exceeding the targets it set
for itself on gender and ethnic diversity, as detailed on page 104.
Our annual Board Evaluation was an internal assessment this year.
In a change from previous internal evaluations, we used Independent
Audit’s platform to assist with the provision of a questionnaire and
analysis of the results. More information on the Board Evaluation
process and outcomes is on pages 100 to 101. I am pleased to
report that the review concluded that the Committee and Board
are operating effectively.
I would like to thank the members of the Committee for their
dedication and support throughout the year.
Andrew Martin
Chair of the Nomination Committee
23 August 2023
Andrew Martin
Chair of the
Nomination Committee
Hays plc
Dear Shareholder
As Chair of the Nomination Committee, I am pleased to present the
Committee’s 2023 report, which details the important work the
Committee has undertaken this year.
During FY23 the Committee continued to review the leadership
of the Company. In February 2023 we announced the decision
to commence a process to appoint a successor to Alistair Cox.
Assisted by Egon Zehnder, the Nomination Committee has
undertaken a formal, rigorous and transparent recruitment
process and we are very pleased to announce the appointment
of Dirk Hahn. More information on this process is on page 105.
We aim for our Board to have a wide range of backgrounds, skills and
experiences. We also value a diversity of outlook, approach and style
in our Board members. In order to ensure that our Board remains
diverse, we analyse the skills and experiences we require against the
skills and experiences on our Board using the matrix on page 92.
During the year the Committee continued to recognise the
importance of diversity on the Board, and we were also looking to
appoint someone with the financial background necessary to take
over from Peter Williams as he approaches the end of his nine-year
102
Role of the Nomination Committee
The role of the Committee is summarised below and detailed in
full in its Terms of Reference, a copy of which is available on the
Company’s website.
The main responsibilities of the Committee are to:
– review the structure, size and composition (including skills,
knowledge, experience, diversity and balance of Executive
and Non-Executive Directors) of the Board and its Committees
and make recommendations to the Board with regard to
any changes
Membership and meetings
– consider succession planning for Directors and other senior
executives
– identify and nominate for the approval of the Board, candidates
to fill Board vacancies
– keep under review the time commitment expected from the
Chair and the Non-Executive Directors.
The Committee is appointed by the Board. It is chaired by the
Chair of the Board and comprises the Non-Executive Directors,
all of whom are independent, save for the Chair who was
independent on appointment. The names and qualifications of
the Committee’s current members are set out in the Directors’
biographies on pages 84 to 87.
The Committee meets as required and did so on eight occasions
during the year, and attendance by members can be seen on
page 91. Other regular attendees at Committee meetings include
the Company Secretary and, on invitation, the Chief Executive and
Group Finance Director.
Main Committee activities during the financial year:
– considered Board and senior management succession plans
– reviewed the Committee’s Terms of Reference
– reviewed the composition of the Board and its Committees
– considered and approved the appointment of an independent
– considered and recommended to the Board the appointment
of a new CEO and a new Non-Executive Director
leadership services and executive search consultancy.
Board and Committee composition
The Committee reviewed the composition of the Board to consider
the balance of skills, experience and diversity of the Directors, both
as required for succession planning and for potential new
appointments.
The Committee identified the need for a Non-Executive Director with
recent and relevant finance experience. Zarin, having the experience
of managing transformation within complex digital-centric
businesses and broad experience across finance, investment,
procurement and audit as well as corporate finance, was appointed
following a rigorous interview process. Spencer Stuart was used in
respect of Zarin Patel’s appointment which occurred in the year
under review. Spencer Stuart is an independent executive search
consultancy and it has no other connection with the Company.
In the year ahead, the Committee will continue to assess the balance
of skills, diversity and experience of the Non-Executive Directors
and their succession plans. The Committee analyses the skills and
experience required against the skills and experiences of our Board
using the matrix on page 92. We will review this matrix regularly to
ensure it is refreshed to meet the changing needs of the Company.
Board diversity
The Board believes that a diverse Board, with Board members
contributing a range of views, insights, perspectives and opinions,
will improve the Board’s decision-making and effectiveness.
The Board is also committed to increasing diversity across
all operations of the Group. The newly appointed Head of DE&I
presented to the Board on a range of initiatives to support the
development of talented individuals, regardless of factors such
as gender, ethnicity or disability. More information is on pages 22
to 25.
During the year, there has been a significant focus on diversity at
Board level. Following the updated guidance and targets issued
by the FTSE Women Leaders Review and the UK Listing Authority,
the Board approved an updated Board Diversity, Equity and
Inclusion Policy (the Policy). The Policy is available on the Company’s
website. The Board outlined its ongoing commitment to the Parker
Review and FTSE Women Leaders Review and is pleased to report
it is exceeding the targets it set itself for gender and ethnic minority
representation on the Board. See the table on page 104 for
more detail.
The FTSE Women Leaders Review also published revised gender
representation targets, specifically the expectation that a woman
holds at least one of the senior Board positions of Chair, CEO, SID
or Group Finance Director. The Committee considers succession
for these key roles on an ongoing basis and this target is at the
forefront of the Committee's mind when considering candidates
for appointment to these roles in the future.
103
Strategic ReportFinancial StatementsShareholder InformationGovernance Hays plc Annual Report & Accounts 2023
NOMINATION
COMMITTEE REPORT
CONTINUED
FCA Board and Executive Diversity Disclosure
In accordance with Listing Rule 9.8.6(9) of the FCA’s Listing Rules,
these tables set out details of the diversity of the individuals on the
Board and Executive Committee at 30 June 2023.
There are 9 Executive Board members (including two Executive
Directors) and 9 Directors of the Board. The Company Secretary is
included in the calculation of executive management.
The data was obtained on a voluntary self-reported basis.
Participants were invited to complete a survey through a secure
electronic portal, wherein they were asked to confirm their sex and
gender identity, and ethnic background. The descriptive categories
of sex, gender and ethnic background set out in the survey, were
taken verbatim from Listing Rule 9.8.6(9), and therefore correspond
precisely with the tables.
The Company’s compliance with the FCA’s new diversity disclosure
requirements is set out below.
Sex and gender identity
Men
Women
Other categories
Not specified/prefer not to say
Ethnic background
Number of
Board members
% of the Board
5
4
0
0
55.56%
44.44%
0
0
Number of senior
positions on the
Board (Chair, CEO,
Group Finance
Director, SID)
4
0
0
0
Number in
Executive
Management
% of Executive
Management
8
1
0
0
88.89%
11.11%
0
0
White British or other White (including minority-white groups)
Mixed/Multiple ethnic groups
Asian/Asian British
Black/African/Caribbean/Black British
Other ethnic group, including Arab
Number of
Board members
% of the Board
7
0
1
1
0
77.78%
0
11.11%
11.11%
0
Number of senior
positions on the
Board (Chair, CEO,
Group Finance
Director, SID)
Number in
Executive
Management
4
0
0
0
0
9
0
0
0
0
% of Executive
Management
100%
0
0
0
0
Succession planning
A key task of the Committee is to keep under review the Company’s
succession plans for members of the Board and Executive Board. In
order to ensure there are effective succession plans in place, the
Committee has visibility over a wide range of employees who have
been identified as potential succession candidates in the short,
medium and long term. All Board succession discussions take place
in consideration of the Board Diversity Policy.
Succession planning for the Chief Executive Officer has been the
primary focus of the Committee over the past year and you can read
more about this on page 105.
Tenure of Non-Executive Directors
Appointments to the Board are made for initial terms not exceeding
three years and are ordinarily limited to three such terms in office.
Each Director stands for re-election annually.
Director performance
Having reviewed the independence and contribution of Directors, the
Committee confirms that the performance of each of the Directors
standing for election or re-election at the 2023 AGM continues to be
effective and demonstrates commitment to their roles, including
independence of judgement, commitment of time for Board and
Committee meetings and any other duties.
104
Board induction and development
On appointment, each Director takes part in a tailored and
comprehensive induction programme which is designed to give
him or her a deep understanding of the Group’s business,
governance and stakeholders.
On appointment as Group Finance Director, as James Hilton
already had a comprehensive understanding of the Group, his
induction focused on briefings from external counsel on Directors'
duties and corporate governance.
Zarin Patel was given a Board induction pack containing Company
and Board information to assist with building an understanding
of the nature of the Group, its business, markets and people, and
to provide an understanding of the Group’s main relationships.
The pack included information to help facilitate a thorough
understanding of the role of a Director and the framework within
which the Board operates. In addition, Zarin had meetings with key
colleagues across the business to better understand the areas of
the business.
The Chair, in conjunction with the Company Secretary, ensures
that Directors are provided with updates on changes in the legal
and regulatory environment in which the Group operates. These are
incorporated into the annual agenda of the Board’s activities along
with wider business and industry updates; the Chair also keeps
under review the individual training needs of Board members.
The Group’s principal external advisers provide updates to the Board,
at least annually, on the latest developments in their respective fields,
and relevant update sessions are included in the Board’s strategy
meetings. The Company Secretary presents corporate governance
reports to the Board as appropriate, together with any relevant
technical directives issued by the Group’s Auditor. In this way, each
Director keeps their skills and knowledge current so they remain
competent in fulfilling their role both on the Board and on any
Committee of which they are a member.
The Board portal is used as a repository of reference materials and
papers on a range of relevant topics. The Company Secretary
arranges for external speakers to provide training on specific topics
as appropriate.
Board Evaluation
During FY23, in accordance with Code Provision 21, the
effectiveness of the Board and its Committees was assessed
through a Board Evaluation process, conducted internally. The
detailed process and outcomes are set out on pages 100 to 101.
CEO succession process
On 23 February 2023, it was announced that Alistair Cox
would be stepping down as Chief Executive Officer, after
16 years of service in the role. The Nomination
Committee led the search on behalf of the Board to
identify and recruit a new Chief Executive Officer.
A small working group was formed at the outset
consisting of the Chairman, Susan Murray, Cheryl
Millington and Zarin Patel. The working group was
responsible for the day-to-day oversight of the
recruitment process to ensure progress was being
made against the agreed plan. The Committee, with
the assistance of Egon Zehnder, who are independent
of the Company and all the Directors, led the search for
a new Chief Executive Officer. With reference to the
Board Diversity Policy, the Committee agreed a role
profile setting out the preferred attributes, relevant
skills, experience and expertise necessary for the next
CEO. Egon Zehnder conducted an internal and external
market scanning exercise to produce a diverse longlist
of candidates.
The Chair and other members of the Committee
considered the candidates and produced a list of
shortlisted internal and external candidates. This was
followed by an extensive interview process, which
included interviews with the Chair and members of the
working group and finally presentations to the whole
Board. Following interviews, the Nomination Committee
met to discuss feedback and a final meeting was held on
22 August 2023 to agree a recommendation to the Board.
Following approval by the Board, on 24 August 2023
it was announced that Dirk Hahn would be appointed
as the Company’s new Chief Executive Officer from
1 September 2023. More information about Dirk Hahn,
his experience and previous roles can be found on
page 82 and Alistair will work closely on a thorough
handover process ahead of Dirk's formal appointment.
105
Strategic ReportFinancial StatementsShareholder InformationGovernance Hays plc Annual Report & Accounts 2023
AUDIT COMMITTEE
REPORT
Preparing for planned financial governance changes
A significant area of focus during FY23 was on governance
development, namely the government’s consultation Department
for Business, Energy, and Industrial Strategy (BEIS) consultation on
audit and corporate governance reform. The consultation proposed
a number of reforms and new processes designed to improve
communications and engagement between Boards, their Audit
Committees and shareholders. The Committee welcomes these
reforms and more detail on the Company’s plans and preparations is
set out on page 109.
We will continue to ensure that all applicable laws and regulations
are complied with, and we remain confident that the business
continues to operate in a controlled and well-managed way.
The increasing focus of stakeholders on the impact of climate
change and other environmental issues has become evident in the
Committee’s workload. The Committee continued to receive updates
from the management on compliance with the Task Force on
Climate-related Financial Disclosures (TCFD) reporting requirements
and had an overview of the steps taken to fulfil our reporting
obligations.
Committee changes
The Committee was pleased to welcome Zarin Patel in January this
year. She brings a wealth of knowledge and relevant experience from
a variety of financial and risk-related leadership roles.
I would like to thank the members of the Committee, the
management team, Internal Audit, External Audit partners for their
continued commitment, for the open discussions that take place at
our meetings, and for the contribution they all provide in support of
our work.
Peter Williams
Chair of the Audit Committee
23 August 2023
Peter Williams
Chair of the
Audit Committee
Hays plc
Dear Shareholder
I am pleased to present the Audit Committee Report for the year
ended 30 June 2023 on behalf of the Board, prepared in accordance
with the 2018 Code.
The Report provides an oversight of the Committee’s deliberations
and activities over the year. During the year, the Committee’s core
duties remained unchanged and the usual cadence of activities
relating to risk, assurance and internal controls remained in place.
We have reviewed the Committee’s Terms of Reference and minor
amendments were made to ensure they track the Code.
Current macroeconomic climate and risks
While many immediate challenges arising from COVID-19 and Brexit
had dominated prior years, the backdrop of this financial year under
review continued to be characterised by change and uncertainty.
Navigating the risks associated with macroeconomic factors were
key components of discussion in every area of the business,
including the Russian invasion of Ukraine, rising interest rates and
inflation. Detail on our risk mitigating activities can be found on
pages 74 to 79.
106
Role of the Audit Committee
The Committee’s Terms of Reference are available on the
Company’s website.
The key responsibilities of the Committee are to:
– monitor the integrity of the Financial Statements of the
Company, including annual and half-year reports, interim
management statements, and other formal announcements
relating to its financial performance, and reviewing and
reporting to the Board on significant financial reporting issues
and judgements
– where requested by the Board, review the content of the Annual
Report and advise the Board whether, taken as a whole, it is fair,
balanced and understandable and provides the information
necessary for shareholders to assess the Company’s
performance, business model and strategy
– recommend to the Board for approval by shareholders, the
appointment, reappointment or removal of the external Auditor
Membership and meetings
The Committee is appointed by the Board from its Independent
Non-Executive Directors. Biographies of the Committee’s current
members are set out on pages 84 to 87.
The Chair of the Committee, Peter Williams, is a Chartered
Accountant and has recent and relevant financial experience.
All Committee members are financially literate.
The Committee discharges its responsibilities through a series
of scheduled meetings during the year, the agenda of which
is linked to events in the financial calendar of the Company.
The Committee met four times during the financial year and
attendance by members at Committee meetings can be seen
on page 91.
Main Committee activities during the financial year:
– monitor the relationship with the Company’s external Auditor,
including consideration of fees, audit scope and terms of
engagement
– review the effectiveness and objectivity of the external audit
and the Auditor’s independence
– on engagement of the External Auditor, review the policy
for the provision of non-audit services and monitor compliance
– monitor and review the Company’s internal control and risk
management systems
– monitor and review the effectiveness of the Company’s
Internal Audit function
– ensure compliance with laws, regulations, ethical and
other issues.
The Committee commissions reports, either from external
advisers, the Head of Internal Audit or Group management, as
required, to enable it to discharge its duties. The Group Finance
Director attends its meetings, as do the External Auditor and the
Head of Internal Audit, both of whom have the opportunity to meet
privately with the Committee Chair, in the absence of Group
management. The Chair of the Board and the Chief Executive
are also invited to, and regularly attend, Committee meetings.
The Deputy Company Secretary acted as Committee Secretary.
– approved the annual Committee programme
– reviewed the performance and effectiveness of the Internal
– reviewed financial results for publication
Audit function
– considered the external audit plan and reviewed the results
– reviewed the material litigation report
of the audit
– considered and reviewed the steps undertaken for compliance
– approved the internal audit plan and reviewed its findings
with TCFD
– reviewed the non-audit services provided by the
External Auditor
– reviewed the risk management and controls framework and
its effectiveness, together with the Group’s principal risks
– considered all aspects of IT operations and risks
– considered the continuing threat of cyber-related attacks
and the related controls in place across the business
– reviewed the performance and effectiveness of the
External Auditor
– considered all aspects of fraud and ethics matters
– carried out a review of the Committee’s effectiveness and
reviewed progress on matters arising from previous
assessments
– considered the Code requirements concerning fair, balanced
and understandable reporting
– considered the Company’s going concern and long-term
viability
– recommended the Audit Committee Report for approval
by the Board
– held discussions with the External Auditor and the Head
of Internal Audit without management being present.
107
Strategic ReportFinancial StatementsShareholder InformationGovernance Hays plc Annual Report & Accounts 2023
AUDIT COMMITTEE
REPORT CONTINUED
Fair, balanced and understandable
The Committee has reviewed the financial and narrative disclosures
in this year’s Annual Report and has advised the Board that, in its
view, taken as a whole, the Annual Report is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Group’s performance, business model
and strategy.
In making its recommendation to the Board, the Committee’s robust
governance approach included:
– senior individuals within the Company are allocated responsibility
for sections of the ARA (each a 'Section Owner')
– guidance is issued to the primary contributors and section owners
in respect of the requirement for the Annual Report to be FBU.
– senior management, including the Group Finance Director and
General Counsel and Company Secretary, review the ARA on
several occasions to ensure that it promotes consistency
and balance between the narrative in the front half and
accounts sections.
– Section Owners are required to provide written confirmations to
the Group Finance Director and General Counsel and Company
Secretary that each statement of fact contained in the relevant
section has been appropriately verified.
– Deloitte LLP were appointed to assist with the preparation and
review of the Directors’ Remuneration Report.
– the Audit Committee Chair reviews and considers the draft annual
report and accounts in advance of the final sign-off by the Board
in the context of the Code provision. In addition, the Chairs of each
of the Committees review their respective reports and provide
comments.
– final sign-off is provided by the Board, on the recommendation
of the Committee.
Significant issues considered during the year
In reviewing both the half- and full-year Financial Statements, the
following issues of significance were considered by the Committee
and addressed as described. These matters are described in more
detail in notes 1 to 3 to the Consolidated Financial Statements.
Debtor recoverability
The recoverability of trade debtors and the level of provisions for
bad debts are considered to be areas of significant judgement due to
the pervasive nature of these balances to the Financial Statements
and the importance of cash collection in the working capital
management of the business. The Committee considered the level
and ageing of debtors, together with the appropriateness of the
provisioning matrix and the consistency of judgements used to
measure the expected credit losses. Having discussed the level of
provisions both with management and with the External Auditor, the
Committee satisfied itself that the provision levels were appropriate.
108
Provisions
While there are no individually material balances within provisions,
and management does not consider it to be reasonably possible that
any of the provisions will materially change in the next 12 months,
the calculation of each provision requires the use of assumptions
and, in certain cases, advice from third-party experts. The
Committee considered the level of provisions, the assumptions used
in the calculations and, where relevant, the advice received from
third-party experts. Having discussed the value of the provisions
with management and the External Auditor, the Committee are
satisfied that the value of provisions are appropriate.
External Auditor
Both the Committee and the Board keep the External Auditor’s
independence and objectivity under close scrutiny, particularly with
regard to its reporting to shareholders. PwC was appointed External
Auditor of the Group at the 2016 AGM and professional rules require
that the Company’s audit partner be rotated every five years; in FY22
Andrew Paynter was succeeded by Jon Sturges.
As previously reported, following a detailed tender process,
PricewaterhouseCoopers LLP was first appointed as the Company’s
External Auditor in 2016. While the Company has no current
retendering plans, in accordance with The Statutory Audit Services
for Large Companies Market Investigation (Mandatory Use
of Competitive Tender Processes and Audit Committee
Responsibilities) Order 2014 (CMA Order), the Company will be
required to put the external audit contract out to tender by 2026.
Accordingly, the Company confirms that it has complied with
the provisions of the CMA Order for the 2023 financial year.
Auditor independence and non-audit services policy
The Committee believes that the issue of non-audit services to Hays
is closely related to External Auditor independence and objectivity.
The Committee recognises that the independence of the External
Auditor may reasonably be expected to be compromised if they also
act as the Company’s consultants and advisers. Having said that,
the Committee accepts that certain work of a non-audit nature is
best undertaken by the External Auditor. To keep a check on this,
the Committee has adopted a policy to ensure that the provision
of any non-audit services by its External Auditor does not impair
its independence or objectivity.
The key features of the non-audit services policy are as follows:
– the provision of non-audit services provided by the Company’s
External Auditor be limited to a value of 70% of the average audit
fees over a three-year period
– any non-audit project work which could impair the objectivity
or independence of the External Auditor may not be awarded
to the External Auditor
– delegated authority by the Committee for the approval of
non-audit services by the External Auditor is as follows:
Authoriser
Group Financial Controller
Group Finance Director
Audit Committee
Value of services per
non-audit project
Up to £25,000
Up to £100,000
Above £100,000
The three-year average audit fee was £1.9 million. Accordingly,
the maximum value of non-audit services that PwC could have
been engaged by Hays to provide during the financial year 2023 was
£1.3 million. The total fee for non-audit services provided by PwC
during the 2023 financial year was £0.2 million (2022: £0.2 million),
largely reflecting the FY23 half-year review fee of £0.1 million (2022:
£0.1 million). A small number of other assurance services were
provided as permitted under the 2019 FRC Ethical Standard for
which total costs were £102k (2022: £76k). The Company did not
pay any non-audit fees to PwC on a contingent basis. A summary
of the fees paid to the External Auditor is set out in note 6 to the
Consolidated Financial Statements.
Having reviewed Hays’ non-audit services policy this year, including
the Authority level of the Group Finance Director, the Committee is
satisfied that adequate procedures are in place to safeguard the
External Auditor’s objectivity and independence.
Effectiveness and quality of the External Auditor
The annual effectiveness review in respect of financial year 2022
was conducted during the year under the guidance of the Committee
Chair, on behalf of the Committee, and covered amongst other
things a review of the audit partners, audit resource, planning and
execution, Committee support and communications, and PwC’s
independence and objectivity. Overall feedback was positive with an
improved overall rating versus prior year; noting minor improvement
areas were suggested in relation to feedback from specific countries,
which were discussed and implemented, with actions having been
taken into account for the FY23 PwC audit. Based on these reviews,
the Committee was satisfied with the performance of PwC in the
fulfilment of its obligations as External Auditor and of the
effectiveness of the audit process in FY22. Consequently, the
Committee recommended to the Board that PwC be reappointed as
External Auditor at the AGM.
Risk management and internal control
The Board is responsible for the adequacy and effectiveness of the
Group’s internal control system and risk management framework,
which in order to fulfil its responsibilities the Board has delegated
authority to the Committee.
To establish an assessment from both a financial and operational
control perspective, the Committee looks to the work of the Internal
Audit function, specifically to consider whether significant process
and control weaknesses have been identified, then subsequently
improved and monitored and that risks have been identified,
evaluated and managed. The Committee reviews the Group's
internal control systems and receives updates on the findings of
Internal Audit's investigations at every meeting, prior to reporting any
significant matters to the Board.
The Committee considered the Group’s risk assessment process,
which included coverage across the regions, countries and functions
within the Group, reviewing the effectiveness of the risk methodology
employed, the risk mitigation measures implemented and future
risk management and monitoring. The assessment considers each
risk on a gross basis (pre-mitigations), the effectiveness of the
mitigations in place and the resulting net risk (post-mitigations)
to the business. Each net risk is then reviewed against the Group’s
risk appetite position and, where necessary, if the net risk is greater
than the risk appetite additional mitigation plans will be put in place.
Further to the reports received by the Committee, which set out
the Group's processes, systems and assurance processes, the
Committee has concluded that it has complied with its obligations
under the Code 2018 in relation to the assessment of risk together
with the monitoring and review of the effectiveness of internal
controls and risk management. The Committee is pleased to
confirm that it was able to provide the Board with assurance that the
Group's internal control systems and risk management procedures
are effective and operating as required.
The Committee is committed to ensuring the Group's internal control
and governance arrangements reflect best practice and welcomes
the consultation on changes to the Code 2018 in response to the
white paper on 'Restoring trust in audit and corporate governance'.
In preparation for this, the Committee is overseeing a detailed review
of the Group's control framework, policies, procedures and internal
assurance structure, with a view to modernising and strengthening
our internal control structure. An Internal Control and Assurance
Working Group, which includes the Group Finance Director, General
Counsel and Company Secretary, and Head of Internal Audit, has
been established to oversee the review of the new disclosure
requirements in relation to the Group's control framework, Audit and
Assurance Policy, Resilience Statement, Dividend Policy and Fraud
Risk Assessment. The Committee recognises the Group's internal
control environment and enterprise risk management framework
will continue to evolve and this will remain a focus of the Committee
in FY24.
Internal Audit
The Committee oversees and monitors the work of the Internal Audit
function, which reviews key controls and processes throughout
the Group on a rolling basis, including resources, scope and
effectiveness of the function. The Internal Audit function consists
of the Head of Internal Audit and a team of Internal Auditors,
supported by KPMG as the co-source provider, specifically
supporting IT audits and language support across the Group.
The Group Head of Internal Audit has direct access to the
Committee and meets regularly with both the Committee and its
Chair, without the presence of management, to consider the work
of Internal Audit. The Committee approved the programme of work
for the Internal Audit function in respect of the 2023 financial year,
which continues to focus on addressing both financial and overall
risk management objectives across the Group.
During the year, 32 Internal Audit reviews were undertaken, with the
findings reported to both the Executive Board and the Committee,
with recommendations tracked and progress reported back to the
Committee.
No material weaknesses were identified as a result of risk
management and internal control reviews undertaken by Internal
Audit during the reporting period.
Anti-bribery and corruption
Hays has a zero-tolerance approach to bribery and corruption.
The Group Anti-Bribery and Corruption Policy (with specific
reference to the UK Bribery Act 2010) is issued to all employees.
Overall responsibility for, and oversight of, the Policy lies with
the Board. Training is provided to all employees annually in local
languages and ongoing support is provided when and where
necessary. In addition, risk assessments are carried out on an
ad hoc basis, for example when new countries are under
consideration (whether they are considered to be low or high risk)
or prior to entry into new public sector markets. The Committee
reviewed the effectiveness of the Policy during the year and
concluded that it was sufficient for managing the anti-bribery and
corruption risks faced by the Group.
Audit Committee effectiveness
The Committee’s effectiveness in discharging its duties during
the year was assessed as part of the Board internal evaluation in
accordance with the Code. The performance of the Committee
and its work during the year were considered to be effective when
measured against its terms of reference and general audit
committee best practice.
109
Strategic ReportFinancial StatementsShareholder InformationGovernance Hays plc Annual Report & Accounts 2023
REMUNERATION REPORT
– CHAIR’S ANNUAL STATEMENT
AND SUMMARY
Susan Murray
Chair of the
Remuneration Committee
Hays plc
Dear Shareholder
FY23 was the third and last year under the operation of the
Remuneration Policy (the Policy) as approved by shareholders
at the 2020 AGM with a favourable vote of 91.47%. Last year’s
Remuneration Report received a favourable advisory vote of 97.90%
at the 2022 AGM.
Backdrop to FY23 targets and FY23 business review
Although Hays faces many structural growth opportunities, our
markets are highly cyclical. Hays has built a diversified portfolio
designed to try and best mitigate these challenges. However, the
inherent cyclicality means that the incentive arrangements and
target ranges often need to adapt in response to an evolving
external environment.
The backdrop to the setting of FY23 targets was the strong financial
performance in FY22, in the post-pandemic recovery period, in
which the Group delivered record fees and material profit growth.
In addition, having invested significantly in FY22 across a number
of our Strategic Growth Initiatives, the focus in FY23 was to deliver
towards the objectives set out at our April 2022 Investor Day.
The Committee carefully considered the targets it should apply
to the annual bonus and Performance Share Plan (PSP) award for
FY23. As in FY22, the Committee decided to widen the range around
profit targets for the FY23 annual bonus to reflect the greater than
normal level of uncertainty on FY23 earnings and to ensure that any
maximum bonus target would require a level of profit achievement
well above external consensus forecasts from the time when the
targets were originally set.
We delivered a solid trading performance in FY23, against a
macroeconomic and market backdrop that deteriorated significantly
through the year and which especially impacted our Perm business
in the majority of markets in which we operate. Despite this
backdrop, we achieved a record net fee performance and our early
actions taken to manage consultant capacity and cost base ensured
we delivered an improved operating profit and conversion rate
performance in the second half of our financial year versus the first.
This ultimately delivered an operating profit result of £197.0 million
in line with external market expectations. We maintained a strong
balance sheet through the year and our cash performance was
excellent with 101% conversion of operating profit to operating cash
flow, with Group DSOs maintained at record low levels. All of these
factors led to our decision to increase our core dividend by 5% and
distribute £35.6 million surplus cash to our shareholders.
110
Hays plc Annual Report & Accounts 2023 FY23 Annual Bonus
The FY23 Annual Bonus was based on EPS, Cash Conversion
and individual strategic objectives.
As noted above, a wider than normal range was put around the
on-target EPS levels to ensure that there was additional stretch
to achieve the maximum target, which was appropriate given
the increased level of macroeconomic uncertainty.
The FY23 targets for EPS were set following the delivery of strong
growth in FY22, and an expectation for continued strong profit
growth in FY23. The Group’s trading environment proved more
difficult than expected in FY23, most notably in our Perm recruitment
business which became more challenging across the majority of
our markets. Ultimately the Group’s profit performance was below
the stretching ambitions set at the start of the year and therefore the
EPS element of the bonus paid out at 26.93% of maximum. The early
action taken to manage consultant capacity and manage costs
were key factors in the Group’s improved profit performance in our
second half and the delivery of an EPS result that met the target
range entry threshold.
As noted in the previous section, the Group’s cash performance was
excellent in the year. The Group’s DSOs, its key measure of debtor
ageing and recoverability, was maintained at 33 days in line with
FY22, and well below the pre-pandemic level of 39 days. This drove
a Group Cash Conversion of 101%, which delivered a maximum
pay-out result against this element of the FY23 Annual Bonus.
Further detail regarding the Annual Bonus targets have been
retrospectively disclosed on pages 129 to 130.
The 2020 (FY21) Performance
Share Plan (PSP) vesting
Although the award level under the Policy allowed for a 200% of
salary grant, it was determined that, due to the economic conditions
at the time, the award would be reduced to 150% of salary.
Following the assessment of performance, the 2020 (FY21) PSP
vested at 80% reflecting the three-year Performance Period that
ended on 30 June 2023.
As a result of the COVID-19 pandemic, there was considerable
market uncertainty at the time that the conditions were set, and this
made long-term target setting particularly challenging for this award.
Although actual trading conditions over the performance period
have arguably been more favourable than forecast in later 2020,
the geopolitical and macroeconomic backdrop has arguably
become more complex. In practice there has been very significant
outperformance of the EPS targets that were originally set. However,
the EPS performance achieved also far exceeds any reasonable
forecast from the time when the targets were originally set.
The Group’s cash conversion performance over the last three
years has been excellent, with the cumulative three-year
performance of 102% awarding a full award for this segment.
This has been delivered despite the significant working capital
investment as the Group pursued growth opportunities.
The Committee undertook a careful review of the PSP outturn.
Taking into account the swift response to the pandemic, the
continued investment in strategic growth initiatives, the sharp
recovery in profitability over the period, the delivery of record net fee
performance in the current year and dividends to shareholders over
the period, the Committee is satisfied that the overall PSP outcome
fairly reflects, and is aligned with, the performance achieved.
Shares that vest under the 2020 PSP will now be held for a further
two years before release in 2025, extending alignment with the
shareholder experience. During this Holding Period they will be
subject to Clawback conditions.
Full details of the Executive Directors’ remuneration for FY23
can be found in the Single Figure on page 127 and the full Annual
Report on Remuneration on pages 127 to 145.
Remuneration Policy renewal
At the AGM in November 2023, the Committee will be seeking
shareholder approval for our Remuneration Policy (the ‘Policy’),
under the normal three-year renewal cycle.
The Committee has conducted a review of the Policy for senior
executives with a view to ensuring it continues to support our
strategy, the continuing cyclical nature of our business, as well
as evolving market and best practice.
The current Policy comprises a FTSE conventional bonus plus
performance-based LTIP. The Committee is not proposing any
substantial changes to this approach in 2023. Our current Policy,
approved in 2020 with a strong favourable vote of 91.47%,
has aligned the Executive Directors’ pension with that of the wider
workforce (their pension contribution is currently 4% of base salary)
and includes post-employment shareholding requirements, as well
as malus and clawback provisions.
Our current Remuneration Policy continues to support the
Company’s strategic programme. Under the incentive structure,
outcomes are based on the key measures of success. There is a
short-term focus on profit via the annual bonus and a long-term
focus on cash generation through the Performance Share Plan
(‘PSP’). With reference to our business and investment strategy,
cash generation will take on an even greater importance to fund
our expansion to ensure the business outperforms the market,
and so that the business maintains an attractive and
appropriate returns policy. It is expected that appropriate ESG
targets will be included in personal and strategic objectives.
As a result of the Committee’s review, we have not proposed
any changes to the Policy.
The Committee engaged with major shareholders on the Policy
renewal and has welcomed the feedback it has received which was
predominantly supportive, as it was in 2020. The Committee wishes
to thank those shareholders and proxy agencies that responded
and appreciates the feedback and engagement.
While the Committee is not proposing any material changes at this
time, it has noted the current consultation regarding changes to
the UK Corporate Governance Code. We are also mindful that the
external trading environment continues to evolve. In this context, the
Committee will continue to monitor the effectiveness of the current
approach to pay following the 2023 AGM. To the extent that more
material changes to our approach to pay are considered, we would
suitably engage with shareholders about our proposals and seek
approval for a new Policy where necessary.
Remuneration for FY24
FY24 Salary review
The Committee has been very cognisant of the rising Cost of Living
issues affecting the wider workforce. Across the business it was
determined that there would be no pay increase for the Executive
Committee and some senior employees. Instead, the pay review
budget was distributed to eligible employees whose salaries were
below this level. A flat increase was given to eligible employees,
resulting in a higher actual percentage being given to those who
were lower paid. In line with this approach, no pay increases were
given to the Executive Directors for FY24. There was also no
adjustment to the Chair’s fee or any of the fees in relation to
Non-Executive Directors for FY24.
111
Strategic ReportGovernanceFinancial StatementsShareholder Information Other Committee activities in FY23
The Committee also published the results for the Gender Pay Gap
in April 2023 and has continued to monitor actions being taken
within the Company to close the gap.
The Board is delighted to welcome Dirk Hahn, previously Managing
Director of Hays Germany and CEMEA, as our new Chief Executive
from 1 September 2023. Remuneration terms for the new CEO
will be in accordance with the Policy, including pension contribution
level. Departure terms for Alistair Cox will also align to his contractual
notice terms and the Policy for departing executives.
Clear reporting and transparency
We aim to make the Directors’ Remuneration Report clear, concise
and easy to follow and in this year’s report we have included a more
concise At A Glance page. Our proposed 2023 Remuneration Policy
can be found on pages 116 to 126.
We trust that this report demonstrates how we balance
performance, reward and underlying associated behaviours and
that we place great importance on our duty not only to shareholders
but to our wider workforce and other stakeholders, and that we are
aware of the greater societal issues and market sentiment. We are
especially vigilant as the market, economic and political situations
and their impact continue to be felt in the varying economies.
Susan Murray
Chair of the Remuneration Committee
23 August 2023
See the Committee’s Terms of Reference online at haysplc.com
Pension
In line with the Policy approved at the November 2020 AGM, the
pension contribution for the CEO remained at 20% of salary, (reduced
from 30% at the start of FY21) until 31 December 2022 when it
reduced to that of the majority of employees in the UK (currently
4% of salary). The pension contribution for Paul Venables remained
at 20% (reduced from 30% at the start of FY21) until his departure
on 30 September 2022. In line with the Policy for new Executive
Directors, James Hilton’s pension is 4% of salary from 1 October 2022.
Annual Bonus for FY24
Annual Bonus potential is 150% of salary. Annual Bonus targets will
be retrospectively disclosed in the FY24 report.
2023 (FY24) PSP grant
The 2023 PSP grant will be made under the Policy to be approved
at the November 2023 AGM. The intention is to grant 200% of salary
to the Executive Directors.
The current combination of Cash Conversion, EPS and relative TSR
metrics will be maintained for this award. The Committee is currently
in the process of finalising the detailed targets for the financial
metrics. Once finalised, we intend to disclose these on our website
in advance of the 2023 AGM. Any shares that vest under the 2023
(FY24) grant would be subject to a further two-year Holding
Period. The PSP is subject to both Malus and Clawback conditions.
Departure terms for GFD – Paul Venables
As stated in last year’s report, the Committee had agreed the
terms for the departure of Paul Venables who left the Company
on 30 September 2022. The terms fully comply with the
Remuneration Policy and are summarised in section 2.6. As
disclosed last year, Good Leaver status was awarded in recognition
of his significant contribution over his 16 years with the business.
All outstanding performance-based awards will be pro-rated for
time and will only vest based on performance at the end of the
relevant Performance Period.
Incoming GFD – James Hilton
The Committee also approved the remuneration for James Hilton,
who joined the Board on 1 October 2022. His remuneration is in line
with the Remuneration Policy for new Executive Directors and was
outlined in last year’s report. His salary is lower than the previous
GFD and will be kept under review as he builds experience in the role.
His pension aligns with that of the majority of the UK workforce in
line with the Policy.
112
Hays plc Annual Report & Accounts 2023 Membership and meetings
Five formal meetings were held during FY23 – one in each of July,
August, September 2022 then one in each of January and May 2023.
Attendance is shown on page 91. In addition, members participated
in other discussions as required.
This report is structured as follows:
What it includes
Section
Letter from the Remuneration
Committee Chair Page 110
Remuneration At A Glance Page 114
Remuneration Policy Page 116
Annual Report on Remuneration Page 127 This report is divided into sections:
1. Single Figure of Remuneration – page 127
2. Long-term value creation – page 133
3. Remuneration in the broader context – page 138
4. Statement of implementation of the Remuneration Policy in the following financial
year – page 142
5. Governance – page 144
Our full current 2020 Remuneration Policy as applicable to FY23 can be found on our
website at haysplc.com
Our full current Remuneration Policy
113
Strategic ReportGovernanceFinancial StatementsShareholder Information REMUNERATION
AT A GLANCE
Business context: How did we perform?
Incentive arrangements:
Supporting our key strategic priorities
– Record net fees of £1,294.6 million, representing 6% LFL net fee
growth and includes 21 individual country records.
Incentive arrangements continue to have a short-term focus
on profit and a long-term focus on cash generation.
– Operating profit of £197.0 million delivered EPS of 8.59 pence
per share. Whilst operating profit decreased 9% versus prior
year, early management action was taken to align capacity
to underlying market demand and reduce costs.
– Excellent cash performance, with year-end net cash of
£135.6 million and cash conversion of 101%, driven by
DSOs being maintained at historic low levels of 33 days.
– Supported by a strong balance sheet, the core dividend of
3.00 pence per share represents growth of 5% on prior year,
with a proposed special dividend of 2.24 pence per share
returning £35.6 million of surplus cash to shareholders.
s
u
n
o
B
P
S
P
– Financial metrics (80%) place emphasis on profit and
maintain focus on cash returns and business efficiency.
– Personal objectives (20%) provide building blocks to
longer-term strategic goals.
– The cash element (50%) focuses on the long-term business
efficiency and return to shareholders through dividend
payments.
– The EPS element (30%) is a key performance measure
aligned with shareholder interests.
– The TSR element (20%) directly measures shareholder
returns relative to industry peers.
Remuneration for FY23: What did Executive Directors earn during the year?
Single figure £’000s
2,485
PSP
Bonus
Fixed Pay
James Hilton
was appointed
to the Board on
1 October 2022
590
Bonus
Fixed Pay
Alistair Cox
James Hilton
In recognition of the exceptional
economic backdrop and the impact of
COVID-19, the CEO’s 2020 PSP award
was granted at 150% of salary, which was
below the shareholder approved policy
limit of 200% of salary. Stretching targets
were set in the context of performance
expectations at the time of grant.
Further detail is set out on page 131.
s
u
n
o
b
3
2
Y
F
P
S
P
0
2
0
2
EPS (60%)
27%
Cash Conversion (20%)
100%
Personal – CEO (20%)
Personal – GFD (20%)
80%
85%
% of maximum
0%
25%
50%
75%
100%
Cash Conversion (50%)
EPS (30%)
TSR (20%) 0%
100%
100%
% of maximum
0%
25%
50%
75%
100%
CEO
52.14% of maximum
GFD
53.14% of maximum
Paul Venables
(previous GFD)
was not eligible for
a FY23 bonus
CEO 80% of max
James Hilton did not
participate in this
scheme. Awards to Paul
Venables vested subject
to time pro-rating and
performance.
Alignment with shareholders
The current CEO has a significant
shareholding in the Company. The GFD was
appointed in October 2022 and therefore is
expected to build his shareholding over the
course of his tenure.
CEO 305%
Beneficially owned
GFD 15%
Beneficially owned
114
In-employment shareholding requirements
200% of salary
Alistair Cox
200%
305%
James Hilton
15%
0%
100%
200%
300%
400%
Post-employment shareholding requirement: 100% of guideline for Year 1, 50% of guideline for Year 2
Hays plc Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
Shareholder Information
Overview of Remuneration Policy: How will Executive Directors be paid in FY24?
Rollover of the Directors’ Remuneration Policy
We will be submitting a new Directors’ Remuneration Policy for shareholder approval at the forthcoming AGM. No major changes are being
proposed to the overall structure of the remuneration framework.
Fixed pay
Base salary,
pension and
benefits
Bonus
Short-term
variable
remuneration
PSP
Long-term
variable
remuneration
– No salary increases for FY24.
– Salaries for FY24 will be: CEO (Alistair Cox) – £822k; GFD (James Hilton) – £420k.
– Benefits package remains unchanged – includes health insurance and car-related benefits.
– Pension contribution of 4% in line with the wider workforce.
50% Cash
50% deferred into shares for three years
– To align reward to key annual objectives relating to the Group’s financial and operational strength.
– Maximum opportunity unchanged from 2020 Policy at 150% of salary for all Executive Directors.
– Performance measures for FY24 will be EPS (60%), Cash Conversion (20%), Personal/strategic (20%).
3-year performance period
2-year holding period
– To incentivise the delivery of sustained long-term performance and align with share price and dividend growth over
the long term.
– Maximum opportunity unchanged from 2020 Policy at 200% of salary for all Executive Directors.
– Performance measures for the 2023 (FY24) PSP will be Cash Conversion (50%), EPS (30%), TSR (20%).
Shareholding
guidelines
– To ensure that Executive Directors’ interests are aligned with those of shareholders over the longer-term.
– No change to in-employment and post-employment shareholding requirements from 2020 Policy.
Performance measures for FY24: How does our reward framework align with our strategy?
Our strategic priorities
Grow – Materially increase core
recruitment fees, particularly Technology
Diversify – Grow new revenue
streams & partnership-based areas
Enable – Investment in People, Culture, Technology, Sustainability
Enhance – Drive productivity to deliver
significant profits and cash flows
Partner – Nurture lifelong client
and candidate partnerships
Measure
Focus
Strategic priority
FY24 bonus – short-term agility
60%
20%
20%
EPS
Short-term focus on profit
Grow, Enhance
Cash Conversion
Cash returns and business efficiency
Enhance
Personal/Strategic
Aligned to long-term business goals
Diversify, Partner, Enable
2023 PSP – long-term sustainability and focus
50%
30%
20%
Cash Conversion
Long-term business efficiency
Enhance, Diversify, Partner, Enable
EPS
Relative TSR
Strategic direction of the business
Grow, Enhance, Diversify, Partner, Enable
Directly measures shareholder returns
Grow
115
BACKGROUND TO OUR REMUNERATION
POLICY (THE POLICY) RENEWAL
The Remuneration Policy
Introduction
The Committee has conducted a review of the Policy for senior
executives with a view to ensuring it continues to support our
strategy, the continuing cyclical nature of our business, as well
as evolving market and best practice.
The current Policy comprises a FTSE conventional bonus plus
performance-based long-term incentive. The Committee is not
proposing any substantial changes to this approach in 2023. Our
current Policy, approved in 2020 with a strong favourable vote of
91.47%, has aligned the Executive Directors’ (‘ED’s) pension with
that of the wider workforce (their pension contribution is currently
4% of base salary) and includes post-employment shareholding
requirements, as well as malus and clawback provisions.
Although Hays faces many structural growth opportunities, our
markets are highly cyclical. Hays has built a diversified portfolio
designed to try and best mitigate this by:
– Balancing the business between permanent and
temporary/contractor candidate placements;
– Having a wide range of business specialisms covering 21
professional and technical sectors; and
– Having a global geographic footprint in 33 countries.
Nevertheless, the Group is subject to the volatility and vagaries
of the economic markets which can create sudden changes within
the recruitment market and industry. In this environment, where it
is extremely difficult to give an accurate, robust, long-term prediction
of the economy, the Committee believes it is important that the
executives’ reward is consistent with the need to be agile in
managing the business.
Under the current incentive structure, outcomes are based on the
key measures of success. There is a short-term focus on profit via
the annual bonus and a long-term focus on cash generation through
the Performance Share Plan (‘PSP’). With reference to our business
and investment strategy, cash generation will take on an even
greater importance to fund our expansion to ensure the business
outperforms the market, and so that the business maintains an
attractive and appropriate returns policy.
Subject to shareholder approval, the Directors’ Remuneration
Policy (the Policy) as set out below will become formally effective
at the Annual General Meeting on 15 November 2023. While the
Policy is expected to apply for the period of three years from the
date of approval, the Committee will continue to monitor our
approach to pay following the 2023 AGM. The Committee would
consult with shareholders about any future changes to the Policy
that might be required and seek shareholder approval for a new
Policy as necessary.
There are no major changes proposed to the Policy approved at the
2020 AGM. However, as part of the renewal process the opportunity
has been taken to simplify, clarify and refine detailed terms to reflect
market and best practice. The Committee held workshops during
2022 and 2023 to review the evolving business environment, the
Group’s strategic priorities as outlined to shareholders on the
Investor Day in April 2022, market practice and investor guidance.
Although the management team were asked to provide views on
proposals, safeguards were put in place to ensure conflicts of
116
interests were suitably mitigated. External perspective was provided
by our independent advisers. Further detail on how the Committee
assessed the Policy against the principles of clarity, simplicity, risk
management, predictability, proportionality and alignment to culture
is set out on page 126.
Engagement with shareholders
and shareholder feedback
The Committee takes the views of shareholders seriously and these
views are taken into account in shaping and reviewing remuneration
policy and practice. Shareholder views are considered when
evaluating and setting remuneration strategy and the Committee
commits to consulting with key shareholders prior to any significant
changes to its Remuneration Policy.
We value open and transparent dialogue with our shareholders and,
during the consultation process, we have engaged with major
investors and the main shareholder advisory bodies regarding both
the operation of the 2020 Policy and the renewal in 2023. We were
very pleased that many shareholders and advisory bodies responded
to us and we very much appreciate the interaction we had, either
through direct dialogue or email conversations. During the
engagement most respondents were comfortable with maintaining
the current structure.
Policy summary
The Committee determines the Policy for the Chairman, Executive
Directors and other senior executives for current and future years
and this is reviewed on an annual basis. The Policy is designed to
support the strategic objectives of the Company and to allow the
business to attract, retain and motivate the quality of individuals
needed to shape and execute the strategy and deliver shareholder
value.
The Policy is designed around the following key principles:
– Ensure a strong link between reward and individual and Company
performance to align the interests of senior executives with those
of shareholders;
– Provide a balanced package with a focus on variable pay;
– Take into account the associated risks of each aspect of
remuneration;
– Encourage a material, personal stake in the business and
a long-term focus on sustained growth through long-term
shareholding;
– Maintain a competitive package against businesses of a
comparable size in the FTSE and comparable peer group
businesses in the recruitment sector with reference to the breadth
of the role and experience the role holder brings to the Company;
– Encourage the right culture, behaviours and values and “doing the
right thing”; and
– Operate a consistent performance, reward and recognition
philosophy throughout the business.
The Committee considers that a successful Policy needs to be
sufficiently flexible to take account of future changes in the
Company’s business environment and in remuneration practice.
Hays plc Annual Report & Accounts 2023 Remuneration structure (policy table)
Elements of Executive Director remuneration package
Element
Base salary
Objective and
Link to the Strategy
Base salary recognises individual contribution, changes in responsibilities and competitive market rates.
Provides a base level of remuneration to support recruitment and retention of Directors with the necessary
experience and expertise to deliver the Group’s strategy.
Key element of core fixed remuneration.
Operation
Base salary is normally set annually on 1 July.
When determining the base salary of the Executive Directors the Committee takes into consideration:
– The levels of base salary for similar positions with comparable status, responsibility and skills in organisations
of broadly similar size and complexity;
– The comparator groups currently include the FTSE 250, sector peers and UK companies of a similar size and
complexity. The Committee keeps the comparator groups under review and may add or remove companies
from the group as it considers appropriate.
– The performance of the individual Executive Director;
– The individual Executive Director’s experience and responsibilities; and
– Pay and conditions throughout the Company. The Committee has access to pay and conditions of other
employees within the Group when determining remuneration for the Executive Directors and also considers
the relationship between general changes to pay and conditions within the Group as a whole.
Maximum Potential
Value
Whilst there is no prescribed maximum level of salary, increases will normally be set with reference to the market
and the average base pay increase for other employees in the UK.
Higher levels of increases may be made where there is a significant change to the individual’s responsibilities
or where there is significant difference to the market, for example in the case of individuals who are recruited,
or promoted to the Board who may, on occasion, have their salaries set below the targeted policy level until they
become established in their role. In such cases subsequent increases in salary may be higher than the average
until the target positioning is achieved.
Details of current salary levels are set out in the Annual Remuneration Report.
Performance
Conditions
and Assessment
N/A
117
Strategic ReportGovernanceFinancial StatementsShareholder Information Elements of Executive Director remuneration package continued
Element
Annual Bonus
Objective and
Link to the Strategy
To align reward to key annual objectives relating to the Group’s financial performance and operational strength.
The three-year deferral into shares aligns the interests of Executive Directors with those of shareholders and also
assists with their retention.
Operation
Normally, 50% of bonus earned will be paid in cash and 50% deferred into shares for three years under the Deferred
Annual Bonus plan (the ‘DAB’).
Malus and Clawback provisions may be applied in case of:
– Material misstatement resulting in an adjustment to the audited accounts;
– Incorrect assessment of any performance conditions or award calculations due to an error or misleading
information;
– Fraud;
– Gross misconduct;
– Severe reputational damage; and
– Corporate failure.
Maximum Potential
Value
Performance
Conditions
and Assessment
Malus provisions allow the Committee to reduce or eliminate share awards granted under the DAB.
Discretion may also be exercised in cases where the Committee believes that the bonus outcome is not a fair and
accurate reflection of business or individual performance, or is inconsistent with the original intentions of the plan.
The Committee has discretion to reduce the number of shares vesting if the underlying financial performance
of the Company is not satisfactory over the three-year deferral period.
Dividends or equivalents may be provided on deferred shares.
Maximum of 150% of base salary.
There is scaled pay-out for performance between threshold and maximum which may vary depending on the
nature of the target set. Normally the pay-out for on-target performance would be 50% of maximum.
Zero payment for below threshold performance.
Performance is assessed over the year based on a combination of financial (usually profit and cash) and
personal/strategic objectives.
The Company operates in a rapidly changing sector and therefore the Committee may change the balance of the
measures, or use different measures for subsequent financial years, as appropriate. The majority of the award will
normally be assessed against financial measures.
Performance targets for the Annual Bonus are not pre-disclosed on an annual basis as they are considered to be
commercially sensitive. However, we expect to disclose actual targets, performance achieved and awards made
at the end of the performance periods so shareholders can fully assess the basis for any pay-outs under the
Annual Bonus.
The Company will disclose the nature of the targets and their weightings at the end of each year in the relevant
Annual Report on Remuneration. The performance conditions, targets, weightings and their level of satisfaction
for the year being reported on, are contained in the Annual Report on Remuneration on pages 129 and 130.
The Committee retains discretion to change the performance measures and targets and their respective weightings
part way through a performance year if there is a significant and material event which causes the Committee to
believe the original measures, weightings and targets are no longer appropriate.
118
BACKGROUND TO OUR REMUNERATION POLICY (THE POLICY) RENEWAL CONTINUEDHays plc Annual Report & Accounts 2023 Element
Performance Share Plan (‘PSP’) award
Objective and
Link to the Strategy
To incentivise the delivery of sustained long-term performance and align with share price and dividend growth
over the long term.
Operation
In accordance with plan rules, PSP awards are granted annually and vesting is dependent on the achievement
of performance conditions.
Awards are subject to a two-year Holding Period.
Malus provisions may be applied during the Performance Period and Clawback provisions may be applied during
the Holding Period in case of:
– Material misstatement resulting in an adjustment to the audited accounts;
– Incorrect assessment of any performance conditions or award calculations due to an error or misleading
information;
– Fraud;
– Gross misconduct;
– Severe reputational damage; and
– Corporate failure.
Maximum Potential
Value
Performance
Conditions
and Assessment
Reviewed annually to ensure that grant levels, performance criteria and other features remain appropriate to the
Company’s current circumstances, and to ensure that there are no features of the plan that could inadvertently
motivate irresponsible behaviour.
Dividends or equivalents may be provided on released shares.
Discretion may be exercised in cases where the Committee believes that the vesting outcome is not a fair and
accurate reflection of business or individual performance, or is inconsistent with the original intentions of the plan.
Maximum awards will be 200% of base salary for Executive Directors.
Maximum and threshold vesting levels for performance conditions are 100% and 25% respectively.
Performance period of three financial years.
For the 2023 (FY24) award, the performance conditions are based on:
– cumulative Earnings Per Share – 30%;
– Cash Conversion – 50%; and
– Total Shareholder Return relative to a comparator group – 20%.
The Company operates in a rapidly changing sector and therefore the Committee may change the balance of the
measures, or use different measures for subsequent awards, as appropriate.
The Committee will seek to suitably engage with shareholders regarding any material changes to the performance
conditions.
Details of the performance conditions for grants made in the year will normally be set out in the Annual Report on
Remuneration.
Element
Pension allowance
Objective and
Link to the Strategy
To provide a competitive retirement benefit.
Operation
Company pension contribution or salary supplement in lieu of pension contributions.
Maximum Potential
Value
Pension is currently set at the level of the majority of the UK workforce.
As outlined in the recruitment section, new Directors will also receive the same percentage of salary as the majority
of relevant employees at that time or reflect employee practices in the jurisdiction in which an Executive Director is
based.
The pension contribution for UK based Executive Directors is currently 4% of salary but may change in the future.
Performance
Conditions and
Assessment
N/A
119
Strategic ReportGovernanceFinancial StatementsShareholder Information Elements of Executive Director remuneration package continued
Element
Other benefits
Objective and
Link to the Strategy
Operation
To provide competitive employment benefits.
Benefits will generally include:
– Car benefit or equivalent;
– Private medical insurance; and
– Life Assurance.
The level and types of benefits provided is reviewed every year to ensure it remains market competitive.
Other role-appropriate benefits may be provided if considered reasonable and appropriate (e.g. in relation
to relocation).
Maximum Potential
Value
The cost of benefits may vary from year to year. There is no maximum benefit value but the Committee aims
to ensure that the total value of benefits remains appropriate.
Performance
Conditions and
Assessment
N/A
Element
Shareholding policy
Objective and
Link to the Strategy
Operation
To ensure that Executive Directors’ interests are aligned with those of shareholders over a longer time horizon.
The Committee expects the Executive Directors to build and maintain a material shareholding in the Company
of at least two-times base salary over the course of their tenure.
Only shares which are beneficially owned by the executives or subject to a Holding Period count towards this
requirement.
The Committee has discretion to increase the shareholding requirement.
Maximum Potential
Value
Performance
Conditions and
Assessment
N/A
N/A
Element
Post-employment Shareholding Guideline
Objective and
Link to the Strategy
To ensure Executive Directors’ actions and interests continue to be aligned with shareholders over a long time
horizon, and after they step down from the Board.
Operation
Shares to the equivalent of 200% of base salary for the first year and 100% of base salary for the second year
or actual relevant holding if lower.
This guidance applies to shares granted to the Executive Directors under the PSP and DAB in relation to the 2020
Policy and beyond.
Maximum Potential
Value
Performance
Conditions and
Assessment
N/A
N/A
120
BACKGROUND TO OUR REMUNERATION POLICY (THE POLICY) RENEWAL CONTINUEDHays plc Annual Report & Accounts 2023 Element
All-employee Schemes
Objective and
Link to the Strategy
Operation
Maximum Potential
Value
Performance
Conditions and
Assessment
To encourage wide employee share ownership and thereby align employees’ interests with shareholders.
The Company operates Sharesave Schemes in which the Executive Directors are eligible to participate
(which in the UK is HMRC approved and is open to all eligible staff in the UK).
The Company retains the discretion to introduce additional all-employee plans, and to make Directors eligible
for these as appropriate.
UK scheme in line with HMRC limits as amended from time to time.
Overseas schemes broadly in line with UK values, or subject to limits based on local legislation.
There are no performance conditions, in line with HMRC requirements, other than the inherent share price growth
required to receive a benefit.
Element
Non-Executive Director fees
Objective and
Link to the Strategy
Competitive fees for Chairman and Non-Executive Directors with the necessary skills and experience to advise
and assist with establishing and monitoring the Group’s strategic objectives.
Operation
The remuneration of the Non-Executive Directors is determined annually.
Maximum Potential
Value
The responsibility of the role and international nature of the Group are fully considered when setting the fee levels,
along with external benchmarking market data on the chairing of, and participation in, Board committees.
The comparator groups used are normally consistent with those used for the Executive Directors.
The Non-Executive Directors’ fees are non-pensionable and Non-Executive Directors are not eligible to participate
in any incentive plans.
The fees will be within the Articles of Association limits.
Additional fees are paid for additional responsibilities or time commitment such as chairing a committee and the
Senior Independent Director role.
Role appropriate benefits may be provided in certain circumstances. The Chair and non-executive directors will be
reimbursed by the Company for all reasonable expenses incurred in performing their duties. This may include costs
associated with travel where required and any tax liabilities payable.
Performance
Conditions and
Assessment
N/A
Notes to the policy table:
The Committee believes that incentive metrics should be simple and aligned with the delivery of the annual business plan and with long-term sustainable
growth. In prior years, the three main measures used have been EPS, Cash Conversion and Relative TSR, with a clear focus on annual profit growth in the
Annual Bonus Plan and main emphasis on long-term cash generation in the PSP.
(1) EPS is a key performance measure aligned with shareholder interests.
(2) Cash focus promotes sustained free cash flow and is a key indicator of ongoing operational cash efficiency.
(3)
The Annual Bonus includes an element of Personal Objectives linked to the delivery of key projects designed to enhance the Group’s operational strength
and competitiveness in line with future strategy. Appropriate ESG targets may be included.
Relative TSR is a measure favoured by a number of shareholders and provides for reward for outperformance of a number of sector comparators.
The peer group has been chosen to reflect most closely the mix of the Company’s business.
(4)
The Committee may adjust or amend any share based awards only in accordance with the relevant plan rules. In particular, awards under any of the
Company’s share plans referred to in this report may:
(a)
Be granted as conditional share awards or nil-cost options or in such other form that the Committee determines has the same economic effect;
(b) Have any performance condition applicable to them amended by the Committee if the Committee determines that it has ceased to be a fair measure
(c)
of performance provided that the amended condition is not, in the Committee’s reasonable opinion, materially less difficult to satisfy;
Incorporate the right to receive an amount (in cash or additional shares) equal to the value of dividends which would have been paid on the shares under
an award that vests until the award is satisfied. This amount may be calculated assuming that the dividends have been reinvested in the Company’s
shares on a cumulative basis;
(d) Be settled in cash at the Committee’s discretion; and
(e)
(f)
Be adjusted in the event of any variation of the Company’s share capital or any demerger, capital distribution or other event that may materially impact
the Company’s share price.
Malus and Clawback : Severe reputational damage is where a participant is found to have contributed to circumstances which give rise to a sufficiently
negative impact on the reputation of the Company (or would have if such circumstances had been made public), and for the avoidance of doubt,
circumstances need not relate to a financial year in which the relevant individual was a participant in the Plan.
Corporate failure is defined as when the Company enters an involuntary administration or insolvency process or the Grantor or an administrator
(as applicable) determines that there has been a ‘corporate failure’ in respect of the Company (which for these purposes shall include a significant
reduction or cessation of the Company’s ability to continue normal operations).
121
Strategic ReportGovernanceFinancial StatementsShareholder Information
Service contracts
The Committee’s policy for setting notice periods is that a maximum 12-month period will apply for Executive Directors. The Committee may,
in exceptional circumstances arising on recruitment, allow a longer period, which would in any event reduce to 12 months following the first
year of employment.
In the event of early termination of a Director’s service contract, the Company would be required to pay compensation reflecting the salary,
pension allowance and benefits to which the Director would have become entitled under the contract during the notice period. Alternatively,
the Company may, at its discretion, pay a predetermined sum in lieu of notice. In the event of early termination, the Committee will give
careful consideration to what compensation should be paid, taking into account the circumstances and the responsibility of the individual
to mitigate loss.
The contract of Alistair Cox was agreed prior to 27 June 2012 and includes, in his sum in lieu of notice, an amount equal to his on-target
bonus pro-rated for time. All future contracts will contain a ‘PILON’ clause based purely on salary, pension allowance and benefits with
payments staged over the notice period and an obligation to mitigate loss.
Alistair Cox
Paul Venables
James Hilton
Current contract
start date
September 2007
May 2006
Unexpired term
Indefinite
Retired
30 September 2022
Notice period from
Company
Notice period from
executive
One year
One year
One year
Six months
October 2022
Indefinite
One year
One year
The Non-Executive Directors do not have service contracts with the Company, but are appointed to the Board under letters of appointment
for an initial three-year period. They have agreed to annual retirement and reappointment by shareholders at the Company’s Annual General
Meeting and, with the exception of the Chairman, appointments can be terminated immediately by the Company. Contracts are available for
inspection at the Registered Office.
Non-Executive Director
Andrew Martin
Peter Williams
Susan Murray
MT Rainey
Cheryl Millington
Zarin Patel
Date appointed to the
Board
Date of current letter of
appointment
Notice period
12 July 2017
28 August 2018
Three months
24 February 2015
24 February 2015
12 July 2017
12 July 2017
14 December 2015
14 December 2015
17 June 2019
17 June 2019
1 January 2023
29 September 2022
None
None
None
None
None
Payments to departing directors
The Committee will honour Executive Directors’ contractual entitlements. Service contracts do not contain liquidated damages clauses.
If a contract is to be terminated, the Committee will determine such mitigation as it considers fair and reasonable in each case. There are
no contractual arrangements that would guarantee a pension with limited or no abatement on severance or early retirement. There is no
agreement between the Company and its Directors providing for compensation for loss of office or employment that occurs because of
a takeover bid. The Committee reserves the right to make any other payments in connection with a Director’s cessation of office or
employment where such payments are made in good faith in discharge of an existing legal obligation (or by way of damages for breach of
such an obligation); or by way of settlement or compromise of any claim arising in connection with the termination of an Executive Director’s
office or employment or for any fees or outplacement assistance and/or the Director’s legal and/or professional advice fees in connection
with his cessation of office or employment.
When determining any payment for a departing individual the Committee will always seek to minimise cost to the Company while seeking
to address the circumstances at the time.
122
BACKGROUND TO OUR REMUNERATION POLICY (THE POLICY) RENEWAL CONTINUEDHays plc Annual Report & Accounts 2023 The table below shows the approach the Committee will apply in respect of base salary, benefits and pension in respect of departing
directors.
Component
Approach
Application of Remuneration Committee Discretion
Base salary, benefits and pension
N/A
In the event of termination by the
Company, there will be no compensation
for departure due to misconduct.
In other circumstances, Executive
Directors may be entitled to receive
payment in lieu of notice. Payment in lieu
of notice will be equivalent to the salary
payments, benefit value and pension
contributions that they would have
received if still employed by the
Company for a maximum of 12 months.
Other contractual obligations
There are no other contractual
provisions other than those set out
above agreed prior to 27 June 2012.
N/A
The rules of the Performance Share Plan (‘PSP’) and the Deferred Annual Bonus (‘DAB’) set out the treatment of specific categories of
leavers as set out in the table below. In other cases where an executive leaves employment during the DAB period or during the PSP
Performance Period, the Committee will consider the specific details of each case before determining whether to award Good Leaver status
or allow awards to lapse. The Committee will provide a full explanation to shareholders when it is determined that an Executive Director is a
Good Leaver. The Committee is unequivocally against rewards for failure.
Category
Cash Annual Bonus
DAB (Deferred Bonus Shares)
PSP
Good Leaver/Injury/Ill-health/
Disability
Death, or sale of employing
entity out of the Group
Bonus paid at normal time,
subject to performance with
pro-rating for time. The
Committee will determine
whether share deferral
applies in the year of
departure.
Bonus paid immediately
based on estimated
performance with pro-rating
for time.
Awards vest in full at normal
vesting date.
Awards vest in full on
cessation of employment.
Change of control
Bonus payment subject to
pro-rating for time and
performance.
Immediate vesting of awards
in full in accordance with
plan rules.
To the extent that
performance conditions are
met, awards are pro-rated
for service during the
Performance Period and
normally released at the
end of the Holding Period.
To the extent that
performance conditions are
met, awards are pro-rated
for service during the
performance period but
released early.
In accordance with the plan
rules, where no replacement
award, there will be early
vesting of awards pro-rated
for service during the
performance period and
performance.
Notes:
(1)
(2)
(3)
(4)
It should be noted that shares vesting under the DAB rules are shares related to previously earned bonus and therefore the performance conditions for the
relevant Annual Bonus had to be met before the shares were awarded.
Under the DAB rules the Committee has the discretion to allow the award to vest early in ‘exceptional circumstances’ following cessation of employment
as a Good Leaver. It is anticipated that this would only apply in the case of death in service.
The Committee has discretion under the rules of the PSP to bring forward the date of vesting for a Good Leaver to the date of the cessation of employment
subject to the award being pro-rated for time during the Performance Period and to the extent that performance is met. It is not the current intention of the
Committee to use this discretion.
Any shares in the two-year PSP Holding Period remain in place and would be released at the normal time (other than in the case of Gross Misconduct) and
would be subject to any Clawback provisions prior to release. Clawback provisions would continue to apply after release until the end of the normal
Holding Period time frame.
(5) In the event that the Committee determines Good Leaver status to be applicable, it may impose certain conditions for an executive receiving shares under
DAB or PSP on cessation of employment.
Executives would be treated in accordance with the scheme rules in respect of the HMRC approved Hays Sharesave.
(6)
The Chairman and Non-Executive Directors do not have service contracts but instead have letters of appointment. On termination, they are
only entitled to accrued fees to the date of termination.
123
Strategic ReportGovernanceFinancial StatementsShareholder Information Setting payments for new appointments
The Company’s principle is that the remuneration of any new recruit will be assessed in line with the same principles for the Executive
Directors, as set out in the Remuneration Policy table above. The Committee’s approach to recruitment remuneration is to pay no more than
is necessary to attract candidates of the appropriate calibre and experience needed for the role from the international market in which the
Company competes.
The table below summarises the Company’s key policies with respect to recruitment remuneration for Executive Directors:
Component
Policy
Base salary and benefits
Pension
The salary level will be set taking into account a number of factors including market practice, the
individual’s experience and responsibilities and other pay structures within the Company and will
be consistent with the salary policy for Executive Directors.
The Executive Director shall be eligible to receive benefits in line with the Company’s benefits
policy as set out in the Remuneration Policy table.
A pension allowance equivalent to that of the majority of UK employees at the time (or
employees in another relevant jurisdiction based on the nature of the role). Currently this is 4%
of base salary in the UK. The Company may choose to give part or all as a cash allowance rather
than pay into a Group pension fund. Normal payroll deductions (for example income tax and
National Insurance/social security) will be deducted from the gross cash allowance.
Annual Bonus (and Deferred Bonus)
An executive director will be eligible to participate in the Annual Bonus arrangements as set out
in the Remuneration Policy table.
Performance Share Plan (PSP)
Share buy-outs/
replacement awards
For the first year only, the Committee retains the discretion to set performance conditions
in the context of the business priorities on joining and the time frame available to year-end.
Awards may be granted up to the maximum opportunity allowable in the Remuneration Policy
table at the Committee’s discretion.
An Executive Director will be eligible to participate in the PSP as set out in the Remuneration
Policy table. Awards may be granted up to the maximum opportunity allowable under plan rules
at the Committee’s discretion.
The Committee’s policy is not to provide buy-outs as a matter of course.
However, should the Committee determine that the individual circumstances of recruitment
justified the provision of a buy-out, the value of any remuneration terms that will be forfeited on
joining the Company will be calculated taking into account the following:
– The timeline of any award;
– The performance conditions attached to the vesting of these incentives and the likelihood of
them being satisfied; and
– Any other terms and conditions having a material effect on their value (lapsed value).
The Committee may then grant up to the equivalent value as the lapsed value, where possible,
under the Company’s incentive plans. To the extent that it was not possible or practical to provide
the buy-out within the terms of the Company’s existing incentive plans, a bespoke arrangement
would be used.
Relocation policies
In instances where the new Executive Director is expected to relocate, the Company may provide
one-off/ongoing payment(s) as part of the relocation benefits compensation.
The level of relocation package will be assessed on a case by case basis but will take into
consideration any differences in the cost of living/housing/schooling.
Where an existing employee is promoted to the Board, the policy set out above would apply from the date of promotion but there would be no
retrospective application of the policy in relation to subsisting incentive awards or remuneration arrangements. Accordingly, prevailing
elements of the remuneration package for an existing employee would be honoured and form part of the ongoing remuneration of the person
concerned. These would be disclosed to shareholders in the Annual Report on Remuneration for the relevant financial year.
The annual fees payable to newly appointed Non-Executive Directors will be in line with the fees payable to existing Non-Executive Directors.
124
BACKGROUND TO OUR REMUNERATION POLICY (THE POLICY) RENEWAL CONTINUEDHays plc Annual Report & Accounts 2023 Remuneration scenario graph for executive directors
The graphs below illustrate the remuneration that would be paid to each of the Executive Directors, based on salaries at the start of financial
year 2024 under four different performance scenarios: (i) Minimum; (ii) Mid (on-target); (iii) Maximum; and (iv) Maximum + share price
growth. The elements of remuneration have been categorised into three components: (i) Fixed; (ii) Annual Bonus; and (iii) PSP.
Value of package
£’000s
Value of package
£’000s
5,000
4,000
3,000
2,000
1,000
£2,338k
35%
26%
38%
£899k
100%
£4,599k
18%
36%
27%
20%
£3,777k
44%
33%
24%
5,000
4,000
3,000
2,000
1,000
£1,186k
35%
27%
38%
£451k
100%
£1,921k
44%
33%
23%
£2,341k
18%
36%
27%
19%
0
Minimum
Mid (on-target)
Maximum Maximum + share price
0
Minimum
Mid (on-target)
Maximum Maximum + share price
CEO – Alistair Cox
growth (50%)
Group Finance Director – James Hilton
growth (50%)
Fixed
Annual Bonus
PSP
Change in share price
Fixed
Annual Bonus
PSP
Change in share price
Each element of remuneration is defined in the table below:
Description
Total amount of salary and pension in respect of the FY24 financial year and annualised benefits as disclosed under the FY23 Single
Figure.
Bonus of up to 150% of salary.
PSP of up to 200% of salary.
As PSP awards are granted as shares, the value of the award can vary significantly, depending on the extent to which the performance
criteria are achieved and the movement of the share price over the relevant Performance Period and Holding Period. The above chart
shows the effect on the maximum value if the share price increased by 50%. This would make a difference of £822k for Alistair Cox and
£420k for James Hilton. Conversely, if the share price dropped by 50%, their maximum remuneration would reduce by these amounts.
Assumptions used in determining the level of pay-out under given scenarios are as follows:
– Minimum performance scenario assumes fixed pay only and no variable payments under the Annual Bonus and PSP;
– Mid (on-target) performance scenario assumes payment of Annual Bonus and PSP at 50% of the maximum;
– Maximum performance scenario assumes outstanding level of performance, resulting in 200% base salary pay-out in respect of the PSP
and 150% base salary pay-out in respect of the Annual Bonus.
Statement of conditions elsewhere in the Group
Each year, prior to reviewing the remuneration of the Executive Directors and the members of the Executive Board, the Committee considers
a report prepared by the Group Head of Reward detailing remuneration practice across the Group. The report provides a regional overview of
how employee pay compares to the market, any material changes during the year and includes detailed analysis of basic pay and variable
pay changes within the UK where all of the Executive Directors and most of the Executive Board are based. While the Company does not
directly consult with employees as part of the process of reviewing executive pay and formulating the remuneration policy set out in this
report, the Company does receive an update and feedback from the broader employee population on an annual basis using an engagement
survey which includes a number of questions relating to remuneration.
125
Strategic ReportGovernanceFinancial StatementsShareholder Information Our Policy aligns with Provision 40 of the UK Corporate Governance Code 2018
Clarity
Simplicity
Alignment to culture
In formulating the Policy, we actively
engaged with all our shareholders who held
1% of our shares or above. This represented
approximately 70% of total shareholdings.
In addition, we sought views and shared
proposals with the major voting agencies.
Our Global Principles of Remuneration that
explain how executive remuneration aligns
to that of the wider workforce is available on
our intranet for all employees.
We aim to clearly and transparently
disclose our remuneration structure
within the Remuneration Policy and
Remuneration Report and clearly explain
how it aligns to our strategic goals.
Our incentive plans are based on our key
performance metrics which in turn fully
align to our strategy.
Our Global Principles of Remuneration
demonstrate how our remuneration links
to our Purpose and Values and are
available to all employees.
We operate a high-performance model,
with a high proportion of remuneration
based on variable pay.
The key metrics used within the Annual
Bonus and Performance Share Plan align
to our strategy.
Predictability
Proportionality
Risk
The scenario graphs demonstrate the range
of potential outcomes under the Policy.
They show how differing performance
impacts the level of reward, including the
effect of a change in the Company’s
share price.
As stated above, a high proportion of
remuneration is based on variable
incentives. Our PSP has a five-year
life-span with a two-year Holding Period
following a three-year Performance
Period.
Our Executive Directors are required to
hold shares equivalent to 200% of salary
while in office and have a post-
employment shareholding requirement in
order that they continue to align with
shareholders.
The Committee retains discretion to
adjust the outcome of the formulaic
results if they feel these do not
adequately reflect the underlying
performance of the Company.
Malus and Clawback apply to both the
Annual Bonus and PSP.
Discretion
The Committee has discretion in several areas of policy as set out in this Report. The Committee may also exercise operational and
administrative discretions under relevant plan rules. In addition, the Committee has the discretion to amend the Policy with regard to minor or
administrative matters (for example, regulatory, exchange control, tax or to reflect changes in legislation) where it would be, in the opinion of
the Committee, disproportionate to seek or await shareholder approval.
Prior commitments
The Committee reserves the right to make any remuneration payments and/or payments for loss of office (including the exercise of any
discretions available to it in connection with such payments) notwithstanding that they are not in line with the Policy where the terms of the
payment were (i) agreed before 12 November 2014 (when the Company’s first shareholder-approved Directors’ Remuneration Policy came
into effect); (ii) before the Policy came into effect, provided that the terms of the payment were consistent with the shareholder-approved
Directors’ Remuneration Policy in force at the time they were agreed; and (iii) at a time when the individual to whom the payment is made
was not a Director of the Company and, in the opinion of the Committee, the payment was not in consideration for the individual becoming
a Director of the Company. For these purposes, ‘payments’ include the Committee satisfying awards of variable remuneration and, in relation
to an award over shares, the terms of the payment are agreed at the time the award is granted.
Differences in policy from the wider employee population
The Group aims to provide a remuneration package for all employees that is market competitive and consistent. Employees receive base
salary and benefits and may receive bonus, pension and share awards with levels varying depending on the individual’s location, seniority
and responsibilities. Salary increases for Executive Directors are generally in line with those for UK-based employees.
126
BACKGROUND TO OUR REMUNERATION POLICY (THE POLICY) RENEWAL CONTINUEDHays plc Annual Report & Accounts 2023 Strategic Report
Governance
Financial Statements
Shareholder Information
ANNUAL REPORT
ON REMUNERATION
Section 1 – Total reward for FY23
In this section:
1.1
FY23 Single Figure for
Executive Directors
1.1.1 Salary
1.1.2 Benefits
1.1.3 Pension
1.1.4 Other benefits
1.1.5 Annual Bonus
1.1.6 PSP
1.2
FY23 fees for Non-
Executive Directors
(‘NED’s)
Section 1 – Total Reward for FY23
1.1 FY23 Single Figure for Executive Directors
The Single Figure of Remuneration and the subsequent details of the figures reflect the facts that:
– Paul Venables retired from the business on 30 September 2022. His remuneration therefore is from 1 July 2022 to 30 September 2022;
and
– James Hilton was appointed as Group Finance Director (GFD) from 1 October 2022. His remuneration therefore is from 1 October 2022
to 30 June 2023.
Single Figure of Remuneration (audited)
The following table shows the total Single Figure of Remuneration for each Executive Director in respect of qualifying services for FY23.
Comparative figures for FY22 have also been provided. Details of NED fees are set out in Section 1.2 on page 132.
£000s
Executive Director
FY23
Alistair Cox
Chief Executive
Paul Venables
Group Finance Director
up to 30 September 2022
James Hilton
Group Finance Director
from 1 October 2022
FY22
Alistair Cox
Paul Venables
Salary
Note 1
Benefits
Note 2
Pension
Note 3
Other
Note 4
Total
Fixed
Pay
Annual
Bonus
Note 5
PSP
Note 6
and (a)
Total
Variable
Pay(b)
Total
Remuneration
822
141
44
11
315
11
99
28
13
783
565
41
40
157
113
0
0
0
0
0
965
643
877
1,520
2,485
180
0
474
474
654
339
251
0
251
590
981
718
1,040
759
527
380
1,567
1,139
2,548
1,857
(a)
The value of the 2020 (FY21) PSP (vesting in November 2023) is based on a share price of £1.0991 which was calculated using an average for the final
quarter of the financial year in accordance with the Regulations as the vesting will occur after the date of this Report. The share price on award was £1.345
being the closing price on the day preceding the grant date. The value will be restated in the FY24 report when vesting share price is known. The award
vested at 80% of the maximum. More information is shown on page 131.
The PSP figures for the award that was granted in 2019 (FY20) and vested in 2022 now reflect the actual vesting price on 12 September 2022 of £1.2330.
No shares were released but moved into their Holding Period.
(b) For the CEO, FY22 benefits have been restated from £34k to £41k to provide consistency with FY23 reporting and provision of car benefit.
Paul Venables PSP has been pro-rated in line with service during the Performance Period.
Components of the Single Figure and how the calculations are worked out
The following tables and commentary explain how the Single Figure has been derived.
1.1.1 Salary – note 1 (audited)
What has happened
As disclosed in last year’s Report, the salary for Alistair Cox was increased by 5.0% with effect from 1 July 2022 for FY23. The increase was
the same as the wider budget set for relevant UK employees. There was no increase for Paul Venables who retired from the business on
30 September 2022. James Hilton was appointed as GFD on 1 October 2022. His base salary on appointment was £420,000 pa.
Executive Director
Alistair Cox
Paul Venables
James Hilton
Annual Salary for FY23
£822,274
£564,627
£420,000
Increase over FY22
5.0%
0.0%
n/a
Annual Salary for FY22
£783,118
£564,627
n/a
The salary levels for Paul Venables and James Hilton shown in the Single Figure of Remuneration table in 1.1 above are the pro-rated
amounts for their service in FY23.
127
1.1.2 Benefits – note 2 (audited)
What has happened
There were no changes in FY23.
£000s
Executive Director
FY23
Alistair Cox
Paul Venables
James Hilton
FY22
Alistair Cox
Paul Venables
Private Medical
Insurance (PMI)(1)
Life
Assurance(1)
Income
Protection(1)
Car/
Car Allowance(2)
Other
Total
3
1
3
3
2
18
1
1
14
5
15
4
0
16
15
8
5
7
8
18
0
0
0
0
0
44
11
11
41
40
(1)
(2)
PMI, Life Assurance and Income Protection figures represent the annual premiums. James Hilton does not receive Income Protection. Paul Venables’
benefits have been pro-rated in line with service.
Alistair Cox and James Hilton have an electric car and receive a cash allowance to cover the residual value of their benefit. The figures shown are the
benefit-in-kind value of the car plus the annual residual car allowance. Paul Venables did not have a car but had a car allowance which is pro-rated for the
period 1 July 2022 to 30 September 2022.
1.1.3 Pension – note 3 (audited)
What has happened
The Remuneration Committee reviewed the approach on retirement benefits as part of the Policy renewal approved at the November 2020
AGM. As a result, pension reduced from 30% of base salary in FY20 to 20% of base salary for FY21 and FY22. It moved to the level of the
majority of Hays’ UK employees which is 4% on 1 January 2023. James Hilton’s pension was 4% of salary from the date he became Group
Finance Director on 1 October 2022.
£000s
Executive Director
FY23
Alistair Cox
Paul Venables
James Hilton
FY22
Alistair Cox
Paul Venables
1.1.4 Other benefits – note 4 (audited)
£000s
Executive Director
FY23
Alistair Cox
Paul Venables
James Hilton
FY22
Alistair Cox
Paul Venables
Pension
99
28
13
157
113
Other
0
0
0
0
0
Notes:
Paul and James participated in the 2019 Sharesave plan which matured in May 2022. At that time the share price was below the option price. They had six
months until end of October 2022 to exercise. The options lapsed. There was therefore no gain. Other Sharesave plans have not yet reached maturity and
therefore there are no gains.
128
ANNUAL REPORT ON REMUNERATIONCONTINUEDHays plc Annual Report & Accounts 2023 1.1.5 Annual Bonus – note 5 (audited)
What has happened
The figure shown is the total bonus awarded in relation to the performance in the year, including the portion that is deferred.
The maximum opportunity under the Policy is 150% of salary.
For bonus awarded in relation to FY23 performance, 50% of the figure shown is deferred into shares for three years.
There are no further performance conditions but leaver terms apply.
The cash element of the bonus award is subject to Clawback for three years from award. The deferred element is subject to Malus for the
three-year Holding Period.
Paul Venables was not entitled to a bonus for FY23.
The bonus amount shown for James Hilton is pro-rated for the period 1 October 2022 to 30 June 2023.
Calculation of actual results (audited)
Annual Bonus FY23 outcome
Alistair Cox
James Hilton
Threshold
performance
required (0%
of element
vests)
7.66p
63.5%
Maximum
performance
required (100%
of element
vests)
10.89p
101.0%
Actual
performance
8.53p
101.2%
Achievement
% of maximum
26.93%
100.00%
Performance
condition
EPS*
Cash
Conversion
Personal CEO
Personal GFD
Total FY23
Weighting
60%
20%
20%
20%
100%
–
–
100%
100%
80%
85%
These totals are in the FY23
Single Figure
* Both the target and actual performance were based on budget exchange rates.
Therefore actual performance varies from reported performance due to
movements in exchange rates during the year.
Bonus
value
£000s
199
247
197
–
643
321
322
Bonus
value
£000s
76
95
–
80
251
125
126
Achievement
% of maximum
26.93%
100.00%
–
85.00%
53.14%
Of which
cash – 50%
Of which
deferred
– 50%
80.00%
–
52.14%
Of which
cash – 50%
Of which
deferred
– 50%
Use of discretion
The Committee has carefully reviewed the actual results and considered the underlying performance of the Company, as well as the effect of
market and economic circumstances. The Committee has also considered any impact on the Company’s key stakeholders and the input of
the executives in achieving the final outcomes. After careful reflection, the Committee feels that the formulaic outcome of the FY23 bonus is
fair and justified and has exercised no discretion.
129
Strategic ReportGovernanceFinancial StatementsShareholder Information Personal objectives
Personal objectives are weighted at 20% of the Executive Directors’ Annual Bonus potential (a maximum of 30% of base salary).
They comprise specific issues that should be achieved during the financial year to safeguard the business and contribute to, or form,
the essential building blocks of our future long-term strategic priorities. As a result, some details of the executives’ objectives cannot
be fully disclosed due to their commercial sensitivity. However, the key major themes of the objectives and the executives’ broad
achievements are summarised below.
CEO – Alistair Cox
Broad themes
Improve diversity across the regions, especially
within the ‘Top 680’ senior employees.
To focus on succession planning especially at
executive board level and ensure a comprehensive
plan to identify development needs and a clear view
of potential internal successors.
Continue to deliver on the Strategic Growth Initiative
programme including the growth of the Technology
business, ensuring the effective implementation
of the Enterprise Solutions business aimed at
delivering fee growth in the large client segment,
and implementing the appropriate governance
framework, including Board reporting.
Build on more granular financial and non-financial
reporting metrics including strategic initiatives,
diversity data and the environmental impact of the
business.
Total
GFD – James Hilton
Summary of progress
There has been encouraging progress across the
organisation to drive actions that will help gender diversity.
Our female leadership within the Top 680 roles has increased
from 42.4% in FY22 to 44.3% in FY23 and we are on track to
meet our target of 50% by 2030.
Succession planning sessions were held and plans
developed for key roles. In particular, the evaluation of
internal potential CEO successors continued throughout the
year with action plans agreed as appropriate. This ultimately
fed into the actual CEO succession process which started in
February 2023.
Progress has been made in all areas. Record Technology
fees of £333 million have been achieved, up 6% from FY22.
We grew direct and indirect fees in Enterprise clients by 10%
as we partnered with more large organisations and grew our
share of their recruitment spend. This has put us on track
to deliver against FY27 aspirations to build a £400 million
business in Outsourced Solutions.
Monthly management reporting to the Board has been
enhanced to include a greater focus on non-financial
reporting and granular business performance.
Broad themes
Embed a new senior finance team structure and
ensure development plans and succession planning.
Delivery of back-office efficiency projects on budget to
realise cost saving targets. Review of finance and HR
system landscape and target operating model.
Embed TCFD and climate change reporting processes.
Review of internal control and governance procedures
in respect of the BEIS consultation and implement
framework for Group Audit and Assurance Policy.
Ongoing strong Group-wide management of
productivity, headcount and operating cost control.
Continued strong cash and debt management.
Summary of progress
Five senior finance appointments successfully transitioned into
new roles, with succession plans in place across all finance
teams and senior roles.
Back office efficiency project delivery of £4.5 million pa
annualised cost savings. Feasibility assessment completed on
HR and finance systems project.
TCFD and new climate reporting framework established and
embedded, with substantial progress made towards the
financial, operational and compliance control framework
required by BEIS.
Significant focus on consultant productivity and overhead
costs. From October 2022 onwards drove improved
productivity and conversion rate in second half and reduction
in Group cost base. Excellent 101% cash conversion and
maintained record low DSOs at 33 days.
Total
130
Score
4.0 / 5.0
4.0 / 5.0
4.0 / 5.0
4.0 / 5.0
16 / 20 = 80%
Score
4.5 / 5.0
4.0 / 5.0
4.0 / 5.0
4.5 / 5.0
17 / 20 = 85%
ANNUAL REPORT ON REMUNERATIONCONTINUEDHays plc Annual Report & Accounts 2023 1.1.6 PSP – note 6
PSP 2020 (granted in FY21) vesting in 2023 (audited)
The 2020 PSP targets were set at the height of the COVID-19 pandemic, which made long-term target setting particularly challenging.
At the time that the targets were set, there was considerable uncertainty and volatility in the market. There was also limited visibility
regarding long-term prospects, or the pace and trajectory for any economic recovery.
In this context, the Committee set performance targets for the award which were considered to be challenging, taking into account both
internal and external forecasts from the time when targets were set. The Committee opted to maintain the cash conversion and TSR targets
from prior years, however the EPS targets were materially lower than targets set in prior years, reflecting forecasts at the time. In addition,
although the Policy approved in 2020 allowed for a PSP grant of up to 200% of salary, it was agreed that the 2020 grant would be capped
at 150% of salary to reflect the business and economic conditions and impact on key stakeholders arising from the COVID-19 pandemic.
When considering the final vesting outcome, the Committee noted the following:
– Although actual trading conditions over the three-year performance period have arguably been more favourable than forecast in late 2020,
the geopolitical and macroeconomic backdrop has arguably become more complex.
– While there has been very significant outperformance of the EPS range, the outcomes far exceed any reasonable forecast from late 2020.
Even if the maximum hurdle had been set at a much more aggressive level in 2020 (e.g. 2x the actual max set), the vesting outcome for
this element would still have been 100%.
– For the cash conversion element, the outcome is particularly strong given the material working capital outflow which was required as
the market moved from contraction to growth.
– Although the TSR element lapsed based on the methodology for the award, performance was only very marginally below threshold.
Hays delivered TSR performance of 34% versus a median of 35% for peer companies. Hays was actually positioned 5th out of 9
companies, which was the middle of the sector group.
– Strong investment and progress in Strategic Growth Initiatives over the performance period.
– The Group has delivered dividend distributions to shareholders of £419.7 million over the three-year Performance Period of the PSP.
Including shares purchased and cancelled under the Group’s share buyback programme of £93.2 million, the total distribution to
shareholders increased to £512.9 million. This includes a full return of the capital that was raised as part of the rights issue in April 2020.
As the award was capped at 150% of the salary, the actual vesting of 80% is equivalent to 60% of the policy maximum.
Taking into account all of the above, the Committee concluded that the outcome represents a fair reflection of performance over the period.
Awards will be subject to a two-year holding period which will ensure that participants remain aligned with longer-term shareholder
experience. The award is also subject to malus and clawback provisions.
The share price used to calculate the award was £1.345, being the closing price on the day preceding the grant date.
Performance period
Grant date
Vest date
Performance condition
Relative TSR(1)
EPS(2)
Cash Conversion
Total
1 July 2020 to 30 June 2023
20 November 2020
20 November 2023 followed by two-year Holding Period
Threshold
performance
required (25% of
element vests)
Median
of the comparator
group
4.54p
71%
Maximum
performance
required (100% of
element vests)
Upper quartile
of the comparator
group
7.34p
101%
Weighting
20%
30%
50%
100%
Actual performance
Below Median
PSP value achieved as
% of maximum
0%
21.48p
102.15%
100%
100%
80%
(1)
TSR is measured against a bespoke comparator group, with vesting subject to satisfactory financial performance as determined by the Committee.
The comparator group for the FY21 award is: Adecco SA, Kelly Services Inc, Manpower Inc, Page Group, Randstad Holdings nv, Robert Half International
Inc, Robert Walters plc and SThree plc.
(2) The Committee took the following into account when setting the EPS targets:
– EBIT Budget (the setting of which is a robust and transparent process):
– Company EBIT Budget for FY21 and the expectations of EBIT performance for years two and three;
– Threshold and maximum growth expectations for years one, two and three have been set around a fixed range each year.
– In addition, due to the volatility of the composition of Group profitability by Geography across the Group, a fixed tax rate has been applied each
year when converting from EBIT to EPS.
– Strategic direction of the business over the period covered by the PSP award;
– Market conditions and visibility of future trading; and
– Analysts’ forecasts.
131
Strategic ReportGovernanceFinancial StatementsShareholder Information
% of
FY21
salary
awarded
150
Share
Face
price
value at
at
award
award
£000s
£
1,152 1.345
Maximum
number of
shares
excluding
dividends
856,241
Maximum
number of
shares
including
dividend
equivalent
shares
996,875
Number of
shares that
vested
including
dividend
equivalent
shares
797,499
150
830 1.345 452,358
539,547
431,637
Executive
Director
Alistair
Cox
Paul
Venables(3)
Vest date
20 November
2023
20 November
2023
Release date
20 November
2025
20 November
2025
2019
(FY20)
award that
vested in
2022 as
stated in
the FY22
Single
Figure
£000s
509
2019
(FY20)
award
value
restated
using share
price at
vest date
£000s(2)
527
Value (figure
shown in Single
Figure of
Remuneration)
£000s(1)
877
474
367
380
(1)
(2)
(3)
The value of the 2020 (FY21) PSP is based on a share price of £1.0991 which was calculated using an average for the final quarter of the 2023 financial
year in accordance with the Regulations as the vesting will occur after the date of this report.
The value of the 2019 (FY20) PSP disclosed in the 2022 Single Figure was based on a share price of £1.1909 which was calculated using an average
for the final quarter of the 2022 financial year in accordance with the Regulations as the vesting occurred after the date of the Report. The share price
on award was £1.518. The actual share price on the date of vesting was £1.2330. The date of vesting was 12 September 2022. This price has been
used to restate the value of the 2019 (FY20) PSP awards in the Single Figure for 2022 in the table above and the Single Figure table on page 127.
Please note that no shares were released on this date. The shares that vested were placed into their two-year Holding Period.
The number of shares for Paul Venables has been pro-rated in line with his service during the Performance Period.
James Hilton did not participate in this PSP award.
Performance conditions
The Committee believes that the performance conditions for all incentives:
– Are suitably demanding;
– Have regard to business strategy;
– Incorporate an understanding of business risk;
– Consider shareholder expectations; and
– Take into account, to the extent possible, the cyclicality of the recruitment markets in which the Group operates.
To the extent that any performance condition is not met, the relevant part of the award will lapse. There is no re-testing of performance.
1.2 Non-Executive Directors’ FY23 fees (audited)
The table below shows the current fee structure and actual fees paid in FY23.
£000s
Non-Executive Director
Total fee FY23
Taxable expenses FY23
Total FY23
Total fee FY22
Taxable expenses FY22
Total FY22
Andrew
Martin
Chair
240
–
240
229
–
229
Peter
Williams
SID, R, N, A
86
–
86
83
–
83
Susan
Murray
R, N, A
75
–
75
72
–
72
MT
Rainey
R, N, A, WE
75
–
75
72
–
72
Cheryl
Millington
R, N, A
62
–
62
59
–
59
Joe
Hurd(1)
Zarin
Patel(2)
R, N, A
62
2
64
31
2
33
R, N, A
31
–
31
–
–
–
Joe Hurd – The total amount includes expenses incurred in execution of duties which are taxable for reporting purposes.
(1)
(2) Zarin Patel joined the Board on 1 January 2023. Her fee represents the period 1 January 2023 to 30 June 2023.
Key – positions held during FY23
Remuneration Committee member
R
Audit Committee member
A
Nomination Committee member
N
Senior Independent Director
SID
R N A Chair of relevant Committee
WE
Chair of Workforce Engagement
132
ANNUAL REPORT ON REMUNERATIONCONTINUEDHays plc Annual Report & Accounts 2023 Section 2 – Long-term value creation
In this section:
2.1
Outstanding Deferred
Annual Bonus
2.2 Share Options
2.3 Outstanding PSP awards
2.4
Statement of Directors’
shareholdings and
share interests
2.5 TSR chart and table
2.6
Payments to past
Directors/payment for
loss of office during FY23
2.1 Outstanding Deferred Annual Bonus awards (‘DAB’) (audited)
The table below shows the shares held under the DAB and those that were awarded or vested during FY23. The shares that vested related to
deferred Annual Bonus from previous years. Dividend equivalent shares which accrue under the DAB have been included in the table below.
There are no further performance conditions.
Executive Director
Alistair Cox
James Hilton
Paul Venables
Awards
outstanding at
1 July 2022(1)
530,992
n/a
382,845
Dividend
equivalents
accrued to
date
80,126
n/a
57,768
Awards
granted in
FY23
456,680
n/a
332,984
Grant price
(market price
at date
of award)
£1.139
n/a
£1.139
Face value of
award granted
in FY23
(at grant price)
£520,159
n/a
£379,269
Dividend
equivalents
accrued to
date
39,321
n/a
28,671
Awards
vesting in
FY23
213,633
n/a
154,029
Awards
outstanding
as at
30 June 2023
893,486
n/a
648,239
(1) The opening balance shows number of shares at award and not any accrued cumulative dividend equivalents.
Note: As per the Policy, 50% of any bonus award is deferred into shares. The shares granted in FY23 relate to the deferred annual bonus for FY22.
2.2 Share options (audited)
The executive directors participated in the UK Sharesave Scheme (approved by HMRC) on the same terms as other eligible employees.
The following table shows outstanding options over Ordinary shares held by the Executive Directors during the year ended 30 June 2023.
Balance
1 July
2022
6,293
Granted
during
2023 Exercised
–
–
Lapsed/
Cancelled
–
Balance
30 June
2023
6,293
Option
price
£
1.43
Exercise
date
–
Market
price
on date
of
exercise
£
–
Gain
£000s
Date
from which
exercisable
– 1 May 2024
6,666
7,692
2,666
3,776
–
–
–
–
–
–
–
–
6,666
0
1.35
–
7,692
1.17
2,666
0
1.35
–
3,776
1.43
–
–
–
–
–
–
–
–
– 1 May 2022
– 1 May 2025
– 1 May 2022
– 1 May 2024
Executive
Director
Alistair Cox
James Hilton
James Hilton
Paul Venables
Paul Venables
Scheme
date of grant
1 April
2021
28 March
2019(1)
31 March
2022
28 March
2019(1)
1 April
2021
Expiry
date
31 October
2024
31 October
2022
31 October
2025
31 October
2022
31 October
2024
(1)
Neither Paul Venables nor James Hilton exercised their options when they became available in May 2022 as the share price was below the option price.
They had until end October 2022 to exercise. The options subsequently lapsed.
133
Strategic ReportGovernanceFinancial StatementsShareholder Information 2.3 Outstanding PSP awards (audited)
The tables below show the outstanding PSP awards where vesting will be determined according to the achievement of performance
conditions that will be tested in future reporting periods. All awards are subject to Malus and Clawback.
2021 PSP (granted in FY22) vesting in 2024, followed by a two-year Holding Period
The Remuneration Committee was keen to spend appropriate time calibrating and reviewing the targets for the FY22 PSP awards to ensure
that they were sufficiently robust and stretching. The Committee published details of the targets for the FY22 PSP on the Company website,
in advance of the November 2021 AGM.
Performance Period
Grant date
Vest date
Performance condition
Relative TSR(1)
Cumulative EPS(2)
Cash Conversion(3)
Total
1 July 2021 to 30 June 2024
5 October 2021
5 October 2024 followed by a two-year Holding Period
Threshold
performance required
(25% of element vests)
Median of the
comparator group
18.91p
80%
Maximum
performance required
(100% of element vests)
Upper quartile of the
comparator group
25.60p
110%
Weighting
20%
30%
50%
100%
(1)
(2)
(3)
TSR is measured against a bespoke comparator group, with vesting subject to satisfactory financial performance as determined by the Committee. The
comparator group for the FY22 award is: Adecco SA, Kelly Services Inc, Manpower Inc, Page Group, Randstad Holdings nv, Robert Half International Inc,
Robert Walters plc and SThree plc.
The Committee took the following into account when setting the EPS targets:
– EPS Budget (the setting of which is a robust and transparent process);
– The expectations of performance for years two and three;
– The strategic direction of the business over the period covered by the PSP award;
– Market conditions and visibility of future trading, and
– Analysts’ forecasts.
While there remains a degree of uncertainty regarding the long-term market and economic environment, the Committee is satisfied that the target range
is highly challenging, with full vesting requiring very significant growth when compared to results for both FY20 and FY21.
The target range for Cash Conversion has been increased in comparison to that applicable to prior awards (previously 71% to 101%). An award of 45% of
salary is payable for Cash Conversion of 85%, with straight-line vesting for interim levels of performance.
Notes:
There will be a two-year Holding Period post-vesting for any shares that vest as a result of performance conditions being met.
The award is subject to Malus for the three-year Performance Period and Clawback during the two-year Holding Period.
Executive Director
Alistair Cox
Paul Venables(1)
% of
FY22 salary
awarded
200%
200%
Face Value at
award £000s
1,566
1,129
Share Price at
award £
1.533
1.533
Maximum
number of
shares
1,021,680
736,630
Threshold
number of
shares (25%)
255,420
184,157
(1) The award to Paul Venables will be pro-rated in line with his service during the Performance Period.
134
ANNUAL REPORT ON REMUNERATIONCONTINUEDHays plc Annual Report & Accounts 2023
2022 PSP (granted in FY23) vesting in 2025, followed by a two-year Holding Period (audited)
As stated on page 122 of the Directors’ Remuneration report for FY22, the Remuneration Committee wanted to spend appropriate time
calibrating and reviewing the targets for the FY23 PSP to ensure that they were sufficiently robust and stretching taking into account the
economic circumstances at the time. The Committee published details of the targets for the FY23 PSP on the Company website in advance
of the AGM, with a view to allowing sufficient time for investors to see them prior to the November 2022 AGM.
Performance period
Grant Date
Vest date
Performance condition
Relative TSR(1)
Cumulative EPS(2)
Cash Conversion(3)
Total
1 July 2022 to 30 June 2025
21 September 2022
21 September 2025 followed by a two-year Holding Period
Threshold
performance
required
(25% of the element vests)
Median of the
comparator group
25p
80%
Maximum
performance
required
(100% of the element vests)
Upper quartile of the
comparator group
35p
110%
Weighting
20%
30%
50%
100%
(1)
(2)
(3)
Relative TSR – measured against a bespoke comparator group, with vesting subject to satisfactory financial performance as determined by the
Committee. The comparator group for the FY23 award is: Adecco SA, Kelly Services Inc, Manpower Inc, Page Group, Randstad Holdings nv, Robert Half
International Inc, Robert Walters plc and SThree.
EPS – the targets ranges have been set taking into account a range of internal and external reference points. The range has been increased from the FY22
grant. While there remains a degree of uncertainty regarding the long-term market and economic environment, the Committee is satisfied that the target
range is highly challenging, with full vesting requiring very significant growth when compared to results for FY22.
Cash Conversion – the target range for Cash Conversion was increased for the FY22 grant and remains the same for the FY23 grant. An award of 45% of
salary is payable for cash conversion of 85%, with straight-line vesting for interim levels of performance.
Notes:
There will be a two-year Holding Period post-vesting for any shares that vest as a result of performance conditions being met.
The award is subject to Malus for the three-year Performance Period and Clawback during the two-year Holding Period.
Paul Venables was not granted any PSP in FY23 as he retired from the Company on 30 September 2022.
Executive Director
Alistair Cox
James Hilton(1)
(1) The award was granted in relation to his appointment as GFD.
% of FY23
salary
awarded
200%
200%
Face value at
award £000s
1,645
840
Share Price at
award £
1.166
1.166
Maximum
number of
shares
1,410,418
720,411
Threshold
number of
shares (25%)
352,604
180,102
135
Strategic ReportGovernanceFinancial StatementsShareholder Information 2.4 Statement of Directors’ shareholdings and share interests (audited)
What has happened
The number of shares of the Company in which current directors had a beneficial interest and details of long-term incentive interests as at
30 June 2023 are set out in the table below.
Executive Director
Alistair Cox
James Hilton – joined Board on 1 October 2022 and
building up shareholding
Paul Venables – current shareholding
Shareholding
requirement
% of salary
200%
200%
Number of
shares owned
outright/
vested shares
2,456,293
62,143
Share price as
at 30 June
2023
£1.022
£1.022
Base salary
as at
1 July 2022
£822,274
£420,000
Actual share
ownership
as % of
base salary
305%
15%
Guidelines
met
Yes
No
200%
2,115,132
£1.022
£564,627
383%
Yes
Shares used for the above calculation exclude those with performance conditions, i.e. those awarded under the PSP which are still within
their Performance Period, any unexercised options, those shares subject to a period of deferral and any shares held in a private Trust where
the Executive Director is not a Trustee. They include vested shares where the Executive Directors have beneficial ownership, shares
independently acquired in the market and those held by a spouse or civil partner or dependant child under the age of 18 years.
The Executive Directors’ total shareholdings, including shares subject to deferral and including accrued dividend equivalents to 30 June 2023,
but excluding Sharesave options, are shown below. For reference, their Sharesave options are shown in the table under 2.2 on page 133.
Number of
owned
outright/
vested shares
2,456,293
62,143
2,115,132
Value of
owned
outright/
vested
shares(2)
£
£2,510,331
£63,510
£2,161,665
Number
of shares
subject to
deferral/
Holding
Period(1)
1,712,619
255,105
648,239
Value of
shares
subject to
deferral/
Holding
Period(2)
£
£1,750,297
£260,717
£662,500
Number of
total
vested and
unvested
shares
(excludes any
shares with
performance
conditions)
4,168,912
317,248
2,763,371
Value of total
vested and
unvested
shares
(excludes any
shares with
performance
conditions)(2)
£
£4,260,628
£324,227
£2,824,165
Share
ownership
as % of base
salary using
vested and
unvested
shares(3)
518%
77%
500%
PSP share
interests
including
dividends
subject to
performance
conditions
3,647,142
782,441
875,778
Executive Director
Alistair Cox
James Hilton (4)
Paul Venables
(1)
(2)
(3)
Unvested shares will be subject to payroll deductions for tax and social security on vesting. Number includes dividend equivalent shares to date. Shares
currently in their Holding Period relating the 2018 (FY19) PSP are due to be released in September 2023.
Share price as at 30 June 2023 and used in the above table was £1.022.
The table above shows shareholding pre-tax. Shareholdings on an estimated post-tax basis for the current Executive Directors are: Alistair Cox: 418% and
James Hilton 48%
(4) James Hilton’s PSP interests shown in their Holding Period relate to grants made prior to his appointment as GFD.
There have been no changes to the above holdings as at the date of this Report.
The table below shows the NEDs’ shareholdings as at 30 June 2023 – this table has been audited.
Non-Executive Director
Andrew Martin
Peter Williams
Susan Murray
MT Rainey
Cheryl Millington
Joe Hurd
Zarin Patel
There have been no changes to the above holdings for current NEDs as at the date of this Report.
Shares held
at 30 June
2023
190,088
63,806
4,000
48,845
–
7,625
–
Shares held
at 30 June
2022
190,088
63,806
4,000
48,845
–
7,557
n/a
136
ANNUAL REPORT ON REMUNERATIONCONTINUEDHays plc Annual Report & Accounts 2023 2.5 Total Shareholder Return (TSR)
The graph shows the value of £100 invested
in the Company’s shares compared to the
FTSE 350 Index. The graph shows the total
shareholder return generated by both the
movement in share value and the
reinvestment over the same period of
dividend income. The Committee considers
that the FTSE 350 is the appropriate index
because the Company has been a member
of this index throughout the period.
This graph has been calculated in
accordance with the Regulations.
TSR £
300
250
200
150
100
50
0
30 Jun
2013
30 Jun
2014
30 Jun
2015
30 Jun
2016
30 Jun
2017
Hays plc
30 Jun
2018
30 Jun
2019
30 Jun
2020
FTSE 350
30 Jun
2021
Source: Datastream
30 Jun
2022
30 Jun
2023
Chief Executive historical remuneration
The table below sets out the total remuneration delivered to the Chief Executive over the last ten years, valued using the methodology applied
to the total Single Figure of Remuneration.
The 2022 figure has been restated to take into consideration the actual share price on date of PSP vesting.
Chief Executive
Total Single Figure (£000s)
Annual Bonus payment level achieved
(% of maximum opportunity)
PSP vesting level achieved
(% of maximum opportunity)
2014
2,826
98%
2015
3,996
98%
2016
2,796
66%
2017
2,993
93%
2018
3,009
97%
2019
2,666
49%
2020
1,468
0%
2021
2,590
97%
2022
2,548
89%
2023
2,485
52%
50% 100%
86%
60%
55%
70%
50%
50%
50%
80%
2.6 Payments to past Directors/payment for loss of office during FY23 (Audited)
Paul Venables retired from the Company on 30 September 2022. In light of Paul’s significant contribution over his 16 years with the business,
Paul has been considered a ‘Good Leaver’ by the Committee for incentive purposes. Outstanding deferred bonus awards in respect of
bonuses earned for FY21 and FY22 will vest at the end of the normal three-year deferral period. Unvested PSP awards granted in 2020
and 2021 will vest subject to time pro-rating and performance. Fully performance-tested PSP awards granted under the 2017 Policy were
released on departure in line with the 2017 Policy. Fully performance-tested PSP awards granted under the 2020 Policy will be released
following the end of the relevant Holding Period. Malus and Clawback provisions are in place for both the DAB and PSP.
There was no payment in lieu of notice or termination payment payable on departure. Paul did not participate in the bonus plan for FY23,
and he was not granted a PSP award in respect of the year.
Paul will comply with the terms of the post-employment shareholding guidelines as set out in the 2020 Policy.
137
Strategic ReportGovernanceFinancial StatementsShareholder Information Section 3 – Remuneration in the broader context
In this section:
3.1 Remuneration for
employees below Board
3.2 Change in Board
remuneration compared
to other employees
3.3
3.4
3.5
CEO vs Employee
Pay Ratio
External appointments
Relative importance
of spend on pay
3.1 Remuneration for employees below Board
Our remuneration philosophy is cascaded throughout the organisation. Members of the Executive Board are deemed ‘specified individuals’
under the Remuneration Committee’s Terms of Reference and therefore have their remuneration set by the Committee. Our Executive Board
has an Annual Bonus scheme that is measured against Group and Regional financial targets and personal and strategic objectives. Of any
award, 50% is usually deferred into shares for three years and subject to Malus provisions. The cash element is usually subject to Clawback
provisions for three years. Members of the Executive Board also usually participate in the Performance Share Plan (PSP) with the same
performance conditions as the Executive Directors.
Employees below the Executive Board receive salary and benefits which are benchmarked to the local markets and countries in which they
work. These are reviewed annually. There is a strong tie of reward to performance which is recognised through annual bonuses, commission
or other non-financial recognition. Employees who hold key strategic positions or are deemed critical to the business through their
performance are also offered the opportunity to participate in the PSP with performance conditions normally based on Group EPS results
measured over one year. Any shares that crystallise at the end of the Performance Period have a further two-year Holding Period prior to
vesting. During this time there is also a personal performance underpin. In addition, nine countries offer a Sharesave plan to employees.
A Resolution was passed at the 2016 AGM to enable the introduction of a US Stock Purchase Plan for employees in the USA and this was
launched in FY19.
As stated in our Remuneration Policy, each year, prior to reviewing the remuneration of the Executive Directors and the members of the
Executive Board, the Committee considers a report prepared by the Group Head of Reward detailing remuneration practice across the Group.
The report provides a regional overview of how employee pay compares to the market, any material changes during the year and includes
detailed analysis of basic pay and variable pay changes within the UK where all of the Executive Directors and most of the Executive Board
are based.
While the Company does not currently directly consult with employees as part of the process of reviewing executive pay and formulating the
Remuneration Policy, the Company takes account of feedback from the broader employee population on an annual basis using the
engagement survey which includes a number of questions relating to remuneration.
MT Rainey is the Non-Executive Director appointed for workforce engagement and she attends various employee events and projects to
learn first hand about issues or concerns.
138
ANNUAL REPORT ON REMUNERATIONCONTINUEDHays plc Annual Report & Accounts 2023 The table below summarises the above.
Principles
Components
Base salary
Based on skill and experience
and benchmarked to local
market.
Operate a consistent reward
and performance philosophy
throughout the business.
Provide a balanced package with
a strong link between reward
and individual and Group
performance.
Encourage a material, personal
stake in the business to give
a long-term focus on sustained
growth.
Annual Bonus
Employees who hold positions
that influence the business
strategy and direction, or hold
key roles that have a direct
effect on business results,
have annual bonuses based
on a combination of Group,
Regional and/or local business
targets and personal or strategic
objectives.
For members of the Executive
Board, 50% of any bonus earned
is usually deferred into shares
for three years and is subject
to Malus.
Commission
Client-facing employees have
annual bonuses based on
personal objectives and/or
commission directly related to
personal business performance.
Benefits
Benchmarked to local market
and can include pension, life
assurance, health cover and
discounted voluntary benefits.
In the UK the Executive Directors
participate in the same plans as
other UK employees.
Every employee globally is
given at least eight hours of
paid volunteering per year to
allow them to give back to the
communities in which they live
and work.
Timeline
Fixed
Variable
Long-term/Ongoing
Performance Share Plan (PSP)
and Sharesave
Members of the Executive Board
usually participate in the same
PSP Plan as Executive Directors
subject to Remuneration
Committee approval. The PSP is
subject to Malus and Clawback
provisions.
Executive Board members
are encouraged to retain shares.
Below the Executive Board,
broadly 350 key employees each
year participate in a PSP which
has a one-year Performance
Period and two-year Holding
Period. Financial targets are
normally based on Group
EPS results.
Nominations are reviewed and
approved by the Remuneration
Committee.
Employees in nine countries
can participate in a Sharesave
scheme with the option to
purchase shares after three
years. A US Stock Purchase
Plan for employees in the
USA was launched in FY19.
YourVoice Survey
An annual global employee
engagement survey is
conducted across all Hays’
employees in all countries to
ascertain overall engagement.
This includes a number
of questions relating to
remuneration.
139
Strategic ReportGovernanceFinancial StatementsShareholder Information 3.2 Change in Board’s remuneration compared to other employees
The following table sets out the change in the remuneration paid to Board Directors from FY20 to FY23 compared with the average
percentage change for Hays plc employees. Hays plc only employs the CEO and GFD and has contracts for services for the Chairman and
Non-Executive Directors.
The Executive Directors’ remuneration disclosed in the table below has been calculated to take into account base salary, taxable benefits
(excluding allowance in lieu of pension), and Annual Bonus (including any amount deferred).
The reasons for the changes between FY22 and FY23 are due to:
a) General salary and base fees rose by 5% in line with the general workforce pay review.
b) Paul Venables’ FY23 pay and benefits represent the three months he worked within FY23 and therefore show a drop from FY22. Paul was
not eligible for an FY23 bonus.
c) Benefit increase for Alistair Cox is due to the increase in life assurance premium.
d) FY23 annual bonus outturns are lower than FY22.
e) Non-Executive Directors do not receive bonus or benefits.
% change
in salary/
fee
FY23 vs
FY22
5.0%
% change
% change
in taxable
in Annual
benefits
Bonus
FY23 vs
FY23 vs
FY22
FY22
7.3% -38.2%
% change
in salary/
fee
FY22 vs
FY21
2.0%
% change
in taxable
benefits
FY22 vs
FY21
-2.4%
% change
in Annual
Bonus
FY22 vs
FY21
-6.8%
% change
in salary/
fee FY21
vs FY20
2.5%
% change
in taxable
benefits
FY21 vs
FY20
-16%
% change
in Annual
Bonus
FY21 vs
FY20
n/a
% change
in salary/
fee
FY20 vs
FY19
-1.0%
% change
in taxable
benefits
FY20 vs
FY19
0%
% change
in Annual
Bonus
FY20 vs
FY19
-100%
-75.0% -72.5%
-100%
2.0%
2.5%
-5.7%
2.6%
2.6%
n/a
-1.0%
-7.0%
-100%
n/a
5.0%
3.6%
n/a
n/a
n/a
n/a
–
n/a
2.0%
n/a
1.2%
–
n/a
n/a
–
–
n/a
2.3%
n/a
2.5%
–
n/a
n/a
–
–
n/a
7.0%
n/a
18.0%
–
n/a
n/a
–
n/a
n/a
4.2%
n/a
n/a
1.4%
n/a
n/a
2.9%
n/a
n/a
-1.0%
n/a
n/a
4.2%
n/a
n/a
1.4%
n/a
n/a
2.9%
n/a
n/a
13.0%
n/a
n/a
5.0%
n/a
9.4%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
1.7%
-5.2%
n/a
–
n/a
n/a
100%
n/a
–
n/a
n/a
n/a
n/a
–
n/a
1.8%
1.8%
–
–
n/a
n/a
n/a
–
–
n/a
n/a
n/a
–
–
n/a
0%
0%
–
–
n/a
n/a
n/a
–
–
n/a
n/a
n/a
–
–
n/a
Chief Executive
– Alistair Cox
Group Finance Director
– retired –
Paul Venables
Group Finance Director
– James Hilton
Chair
– Andrew Martin
SID and Chair of
Audit Committee
– Peter Williams
Chair of Remuneration
Committee –
Susan Murray
Chair of Workforce
Engagement
– MT Rainey
NED – Cheryl Millington
NED – Torsten Kreindl
NED – Joe Hurd
NED – Zarin Patel(1)
Employees of Hays plc (2)
(1) Zarin Pael joined the Board on 1 January 2023.
(2)
Hays plc only employs the CEO and GFD and has contracts for services for the Chairman and Non-Executive Directors. There are no other employees in
Hays plc.
3.3 CEO vs Employee Pay Ratio
This is the third year that we have been required to disclose the ratio of CEO remuneration to that of our employees at the median, 25th and
75th percentiles. The table below provides further details:
Year
FY23
FY22
FY21
FY20
Method
A
A
A
A
25th percentile pay ratio
83:1
84:1
92:1
53:1
Median pay ratio
56:1
54:1
65:1
36:1
75th percentile pay ratio
33:1
32:1
40:1
22:1
The following table provides salary and total remuneration information in respect of the employees at each quartile.
Year
FY23
140
Element of pay
Salary
Total remuneration
25th percentile
£23,625
£30,085
Median
£26,880
£44,354
75th percentile
£32,235
£75,230
ANNUAL REPORT ON REMUNERATIONCONTINUEDHays plc Annual Report & Accounts 2023 We are committed to providing a total reward package for our employees that is competitive. The structure of remuneration for employees
is shown on pages 138 and 139. We anticipate that the ratio may vary significantly year to year as it will be influenced by the level of variable
pay earned such as commission and Annual Bonus and, in the case of PSP awards, by the level of vesting and share price fluctuation.
This variation in remuneration will apply to both employees and the CEO. A greater proportion of the package is variable at senior levels.
The median pay ratio therefore reflects the pay, reward and progression policies. The difference in ratio between FY23 and FY22 is therefore
felt to be caused most likely by changes in variable pay.
In calculating the ratio, we have used methodology A, the same method used for the CEO Single Figure of Remuneration, as this is felt to be
the most accurate calculation and allows for a like-for-like comparison.
The UK employees included in the calculation are those who have been employed for the full FY23 and part-time employees have been
pro-rated to full-time equivalents to enable a realistic comparison as required under the legislation. We have excluded leavers and joiners
during the year as it is felt these would not allow an accurate reflection of the figures.
3.4 External appointments
The Company considers that certain external appointments can help to broaden the experience and contribution to the Board of the
Executive Directors. Any such appointments are subject to prior agreement by the Company and must not be with competing companies.
Subject to the Company’s agreement, any fees may be retained by the individual.
For the 12 months ended 30 June 2023, the fees earned and retained by the Executive Directors were as follows:
– Alistair Cox: Alistair joined the Board of Rexl in April 2023. His fee for the period to end June 2023 was £22k.
– Paul Venables: Paul joined the Board of Manchester Airport Group as a NED and Audit Chair (designate) on 1 February 2022 and his fee
from 1 July 2022 to 30 September 2022 was £16k.
3.5 Relative importance of spend on pay
The table below sets out the relative importance of the spend on pay in FY23 and FY22 compared with other disbursements. All figures are
taken from the relevant Hays Annual Report.
Profit distributed by way of dividend
Overall spend on pay including Directors
Disbursements
from profit in FY23
£m
83.4
868.8
Disbursements
from profit in FY22
£m
168.5
766.5
% change
-50.5%
13.3%
141
Strategic ReportGovernanceFinancial StatementsShareholder Information Section 4 – Statement of implementation
of Remuneration Policy in the following
financial year
In this section:
4.1 Executive Directors
4.2 Non-Executive Directors
4.3 Voting outcome
Below are the Remuneration Policy decisions for FY24. These are subject of the Policy being approved by shareholders at the November
2023 AGM.
4.1 Executive directors
Summary
Position
CEO
Name
Alistair Cox
Base salary
from 1 July 2023
£822,274 – no change
Maximum bonus potential
as % of salary
150%
GFD
James Hilton
£420,000 – no change
150%
Maximum PSP award
as % of salary
Benefits and
pension
No award Pension is 4% of salary in line
with the pension level of the
majority of UK employees.
200% Pension is 4% of salary in line
with the pension level of the
majority of UK employees.
There were no salary
increases for the
Executive Directors for
FY24
Bonus performance conditions
The weightings of the performance conditions remain as follows for FY24:
Performance condition
Financial
(profit and cash)
Personal
Total
Weighting
80%
20%
100%
It should be noted that the Committee views the disclosure of the actual performance targets as
commercially sensitive. The Committee will aim to provide retrospective disclosure of the performance
targets to allow shareholders to judge the bonus earned in the context of the performance delivered.
In some instances, the detail of certain personal objectives may continue to be commercially sensitive
for an extended period.
Of any award, 50% will be deferred into shares and held for three years from the date of award and will be subject to Malus conditions for the
three-year Holding Period.
Any cash award is subject to Clawback conditions for three years from the date of award.
142
ANNUAL REPORT ON REMUNERATIONCONTINUEDHays plc Annual Report & Accounts 2023 2023 PSP (to be granted in FY24) vesting in 2026, followed by a two-year Holding Period
For the FY24 award, the performance metrics and weightings will remain consistent with the approach taken last year. The Committee is
currently in the process of finalising the detailed targets for the financial metrics. Once finalised, we intend to disclose these on our website in
advance of the 2023 AGM.
Performance period
Vest date
Performance condition
Relative TSR(1)
Cumulative EPS(2)
Cash Conversion
Total
1 July 2023 to 30 June 2026
Three years from grant date followed by a two-year Holding Period
Threshold
performance
required
Median of the
comparator group
*
*
Maximum
performance
required
Upper quartile of the
comparator group
*
*
Weighting
20%
30%
50%
100%
(1)
TSR is measured against a bespoke comparator group, with vesting subject to satisfactory financial performance as determined by the Committee. The
comparator group for the FY24 award is: Adecco SA, Kelly Services Inc, Manpower Inc, Page Group, Randstad Holdings nv, Robert Half International Inc,
Robert Walters plc and SThree plc.
(2) In setting EPS targets, the Committee will take into account the following factors:
– Budget (the setting of which is a robust and transparent process):
– Company budget for FY24 and the expectations for performance;
– Strategic direction of the business over the period covered by the PSP award; and
– Market conditions and visibility of future trading;
– Analysts’ forecasts; and
– Threshold and maximum ongoing growth expectations for years two and three.
Notes:
There will be a two-year Holding Period post-vesting for any shares that vest as a result of performance conditions being met.
The award is subject to Malus for the three-year Performance Period and Clawback during the two-year Holding Period.
4.2 Non-Executive Directors
The Committee reviewed the Group Chair’s fee for FY24 and determined that there should be no increase for FY24. Base fees for the other
NEDs will also remain unchanged. There are no changes to the SID fee or Committee Chair fees. There is no fee for being the Chair of the
Nomination Committee. Fees for FY24 are shown below.
Position
Chair
Base fee
Committee Chair (including fee for NED responsible for workforce engagement)
SID
4.3 Voting outcome for the 2020 Remuneration Policy at the 2020 AGM
and Annual Report on Remuneration FY22 at the 2022 AGM
Votes
Votes for
Votes against
Votes withheld
Votes 2020 Policy
1,330,376,148
124,075,795
2,006,052
%
91.47%
8.53%
–
Votes FY22
Remuneration Report
1,359,585,839
29,178,638
20,681,090
Fee for
FY24
£000s
240
62
13
11
Fee for
FY23
£000s
240
62
13
11
%
97.90%
2.10%
–
143
Strategic ReportGovernanceFinancial StatementsShareholder Information
Section 5 – Governance
In this section:
5.1
Remuneration Committee
members and attendees
5.2 Terms of Reference
5.3 Meetings in FY23
5.4
5.5
Advisers to the
Remuneration Committee
Engagement with
shareholders
5.6 Considering risk
5.7 General governance
5.1 Remuneration Committee members and attendees
The table below shows the members and attendees of the Remuneration Committee during FY23.
Remuneration Committee members
Susan Murray
Peter Williams
MT Rainey
Cheryl Millington
Joe Hurd
Zarin Patel
Position
Member from 12 July 2017
Member from 24 February 2015
Member from 14 December 2015
Member from 17 June 2019
Member from 1 December 2021
Member from 1 January 2023
Comments
Independent
Independent
Independent
Independent
Independent
Independent
Remuneration Committee attendees
Andrew Martin
Position
Group Chairman and attended by invitation
Alistair Cox
James Hilton
Paul Venables
Other executives
Deloitte
Chief Executive
Group Finance Director
Group Finance Director – retired
The Group Head of Reward
The Company Secretary
Committee’s independent advisers during FY23
Comments
Independent upon appointment on 23 July 2018
(member from appointment to Board on 12 July
2017 to date became Chairman).
Attend by invitation but do not participate in any
discussion about their own reward.
Attends by invitation as the executive
responsible for advising on the Remuneration
Policy.
Acts as Secretary to the Committee.
Attended by invitation.
No person is present during any discussion relating to his or her own remuneration.
5.2 Terms of Reference
The Board has delegated to the Committee, under agreed Terms of Reference, responsibility for the Remuneration Policy and for determining
specific packages for the Executive Directors, the Chairman and other senior executives. The Company consults with key shareholders in
respect of the Remuneration Policy and the introduction of new incentive arrangements. The Terms of Reference for the Committee are
available on the Company’s website, haysplc.com, and from the Company Secretary at the registered office.
5.3 Meetings in FY23
The Committee normally meets at least four times per year. During FY23, it formally met five times as well as having ongoing dialogue
via email or telephone discussion. The meetings principally discussed the following key issues and activities:
– A review of the basic pay, bonus, PSP awards, and the personal objectives of the Executive Directors and other senior executives.
In particular the Committee focused on setting incentive targets given the ongoing uncertain market and economic circumstances;
– A review of the Remuneration Policy in preparation for renewal;
– Consideration of the relationship between executive reward and the reward structures in place for other Group employees;
– The ongoing requirements of the revised UK Corporate Governance Code (July 2018);
– A review of the Committee’s Terms of Reference; and
– The review of the Gender Pay Gap reporting.
– The Committee also discussed and agreed the departure terms for the outgoing GFD, Paul Venables, the remuneration package
for the incoming GFD, James Hilton, and the package for the new CEO.
144
ANNUAL REPORT ON REMUNERATIONCONTINUEDHays plc Annual Report & Accounts 2023 5.4 Advisers to the Remuneration Committee
Deloitte was appointed by the Committee as the independent adviser to the Committee with effect from November 2016 following a
competitive tender process. During FY23 Deloitte has advised the Committee on all aspects of the Remuneration Policy for Executive
Directors and members of the Executive Board.
The Committee is satisfied that the advice received was objective and independent. Deloitte is a member of the Remuneration Consultants’
Group and the voluntary code of conduct of that body is designed to ensure objective and independent advice is given to Remuneration
Committees.
Deloitte’s total fee for FY23 in relation to Committee work was £109,450 excluding VAT. While fee estimates are generally required for each
piece of work and set fees have been agreed for certain regular work, fees are generally calculated based on time, with hourly rates in line
with the level of expertise and seniority of the adviser concerned.
5.5 Engagement with shareholders
The Committee seeks to maintain an active and productive dialogue with investors on developments in the remuneration aspects of
corporate governance generally and any changes to the Company’s executive pay arrangements in particular. Following consultation in 2020,
the Committee was pleased to have received strong shareholder support for its 2020 Remuneration Policy proposals, the Resolution for
which received a 91.47% vote in favour at the November 2020 AGM.
The Committee engaged with major shareholders on the Policy renewal and welcomed the feedback it received which was predominantly
supportive, as it was in 2020. The Committee would like to thank those shareholders and proxy agencies who responded and appreciated
the feedback.
5.6 Considering risk
Each year, the Committee considers the executive remuneration structure in the light of its key areas of risk. The Committee takes into
consideration whether the achievement of objectives and any payment from plans have taken into account the overall risk profile of the
Company when it evaluates the executives’ performance.
5.7 General governance
The Directors’ Report on Remuneration has been prepared in accordance with Schedule 8 to The Large and Medium-sized Companies
and Groups (Accounts and Reports) Regulations 2008 (as amended), the revised provisions of the Code and the Listing Rules.
By order of the Board
Susan Murray
Chair of the Remuneration Committee
23 August 2023
145
Strategic ReportGovernanceFinancial StatementsShareholder Information DIRECTORS’ REPORT
Hays is incorporated in the UK and registered as
a public limited company in England and Wales.
Its headquarters are in London and it is listed on
the main market of the London Stock Exchange.
Strategic Report
A description of the Company’s business model and strategy is set
out in the Strategic Report along with the factors likely to affect the
Group’s future development, performance and position. An overview
of the principal risks and uncertainties faced by the Group are also
provided in the Strategic Report. The Company’s Section 172
statement can be on page 96.
The Statement of Compliance with the Code for the reporting period
is contained in the Governance Report.
Information relating to matters addressed by the Audit,
Remuneration and Nomination Committees, which operate within
clearly defined terms of reference, are set out within the Audit,
Remuneration and Nomination Committee Reports. Information
relating to majority shareholders can be found on page 97 under
Board and stakeholder engagement.
In accordance with Section 414CB of the Companies Act 2006,
all of the matters above are incorporated by reference into this
Directors’ Report.
The purpose of this Report is to provide information to the members
of the Company, as a body. The Company, its Directors, employees,
agents or advisers do not accept or assume responsibility to any
other person to whom this document is shown or into whose hands
it may come and any such responsibility or liability is expressly
disclaimed. This Report contains certain forward-looking statements
with respect to the operations, performance and financial condition
of the Group. By their nature, these statements involve uncertainty
since future events and circumstances can cause results and
developments to differ from those anticipated. The forward-looking
statements reflect knowledge and information available at the date
of preparation of this Report. Nothing in this Report should be
construed as a profit forecast.
Related party transactions
Details of the related party transactions undertaken during the
reporting period are contained in note 27 to the Consolidated
Financial Statements.
Post-balance sheet events
There have been no significant events to report since the date
of the balance sheet.
Dividends
An interim dividend of 0.95 pence (2022: 0.95 pence) per Ordinary
share was paid to shareholders on 11 April 2023. The Board
recommends the payment of a final dividend of 2.05 pence
(2022: 1.90 pence) per Ordinary share. In addition, the Board is
also recommending the payment of a special dividend of 2.24 pence
(2022: 7.34 pence) per Ordinary share. These three dividend
payments will represent a total dividend of 5.24 pence (2022: 10.19
pence) per Ordinary share for the financial year ended 30 June 2023.
Subject to the shareholders of the Company approving this
recommendation at the 2023 AGM, the final and special dividends
146
will be paid, in aggregate, on 17 November 2023 to those
shareholders appearing on the register of members as at 6 October
2023. The ex-dividend date is 5 October 2023.
Financial instruments
Details of the financial instruments used by the Group are set out in
notes 18 to 20 to the Consolidated Financial Statements. A general
outline of Hays’ use of financial instruments is set out in the treasury
management section on page 47 of the Finance Director’s Review.
Directors
Biographies of the serving directors of Hays are provided on
pages 84 to 87 of this Report. During the year, James Hilton and
Zarin Patel were appointed as directors on 1 October 2022 and
1 January 2023, respectively. Paul Venables retired from the Board
on 30 September 2022. All the other Directors served on the Board
throughout FY23. Peter Williams is the Senior Independent Director
and MT Rainey is the Designated NED for Workforce Engagement.
General powers of the Directors
The powers of the Directors are contained in the Company’s Articles
of Association (Articles). These powers may be exercised by any
meeting of the Board at which a quorum of three Directors is
present. The power of the Board to manage the business is subject
to any limitations imposed by the Companies Act 2006, the Articles
or any directions given by special resolution of the shareholders
applicable at a relevant time.
The Articles contain an express authority for the appointment of
Executive Directors and provide the Directors with the authority to
delegate or confer upon such Directors any of the powers
exercisable by them upon such terms and conditions and with such
restrictions as they see fit. The Articles contain additional authorities
to delegate powers and discretions to committees and
subcommittees.
Directors’ powers to allot and buy back shares
The Directors have the power to authorise the issue and buyback
of the Company’s shares by the Company, subject to authority
being given to the Directors by the shareholders in general meeting,
applicable legislation and the Articles.
Appointment and replacement of directors
Shareholders may appoint any person who is willing to act as a
Director by ordinary resolution and may remove any Director by
ordinary resolution. The Board may appoint any person to fill any
vacancy or as an additional Director, provided that they are
submitted for election by the shareholders at the AGM following
their appointment. Specific conditions apply to the vacation of
office, including cases where a Director becomes prohibited by
law or regulation from holding office, or is persistently absent
from Directors’ meetings, or if all of the other appointed Directors
request his or her resignation or in the case of mental incapacity
or bankruptcy.
Directors’ indemnities
The Company continues to maintain third-party Directors’ and
officers’ liability insurance for the benefit of its Directors. This
provides insurance cover for any claim brought against Directors
or officers for wrongful acts in connection with their positions.
The Directors have also been granted qualifying third-party
indemnities, as permitted under the Companies Act 2006, which
remain in force. Neither the insurance nor the indemnities extend
to claims arising from fraud or dishonesty and do not provide
cover for civil or criminal fines or penalties provided by law.
Directors’ interests
Details of the interests of Hays’ Directors and their connected
persons in the Ordinary shares of the Company are outlined in
the Remuneration Report.
Hays plc Annual Report & Accounts 2023 Share capital
Hays has one class of Ordinary shares which carry no right to fixed
income or control over the Company. These shares may be held in
certificated or uncertificated form. On 30 June 2023, the Company
had 1,600,433,092 fully paid Ordinary shares in issue, of which
11,294,429 Ordinary shares were held in treasury by the Company.
During the year ended 30 June 2023, Hays purchased 66,240,335
Ordinary shares of 1 pence, representing 4.14% of shares in issue,
for a total consideration of £74,871,470, excluding costs, which
were cancelled.
The rights and obligations attaching to the Company’s Ordinary
shares are contained in the Articles. In brief, the Ordinary shares
allow holders to receive dividends and to exercise one vote on a
poll per Ordinary share for every holder present in person or by
proxy at general meetings of the Company. They also have the
right to a return of capital on the winding-up of the Company.
There are no restrictions on the size of holding or the transfer of
shares, which are both governed by the general provisions of the
Company’s Articles and legislation. Under the Articles, the Directors
have the power to suspend voting rights and the right to receive
dividends in respect of Ordinary shares and to refuse to register a
transfer of Ordinary shares in circumstances where the holder of
those shares fails to comply with a notice issued under Section 793
of the Companies Act 2006. The Directors also have the power to
refuse to register any transfer of certificated shares that does not
satisfy the conditions set out in the Articles.
The Company is not aware of any agreements between shareholders
that might result in the restriction of transfer of voting rights in
relation to the shares held by such shareholders.
Treasury shares
As Hays has only one class of share in issue, it may hold a maximum
of 10% of its issued share capital in treasury. As at 30 June 2023,
0.71% of the Company’s shares were held in treasury. Legislation
restricts the exercise of rights on Ordinary shares held in treasury.
The Company is not allowed to exercise voting rights conferred by
the shares while they are held in treasury. It is prohibited from paying
any dividend or making any distribution of assets on treasury shares.
Once in treasury, shares can only be sold for cash, transferred to
an employee share scheme or cancelled. The shares are held in
treasury and will be utilised to satisfy employee share-based award
obligations. During FY23, Hays transferred 5,063,661 shares out
of treasury to satisfy the award of shares under the Company’s
employee share schemes.
Shares held by the Employee Benefit Trust
The Hays plc Employee Share Trust (the Trust) is an employee
benefit trust which is permitted to hold Ordinary shares in the
Company for employee share schemes purposes. 179 shares were
held by the Trust as at the year-end. Shares held in the Trust may
be transferred to participants of the various Group share schemes.
No voting rights are exercisable in relation to shares unallocated
to individual beneficiaries.
Dilution limits in respect of share schemes
The current Investment Association (IA) guidance on dilution limits
(formerly the responsibility of the Association of British Insurers)
provide that the overall dilution under all share plans operated by
a company should not exceed 10% over a ten-year period in relation
to the Company’s share capital, with a further limitation of 5% in
any ten-year period on executive plans. The Company’s share plans
operate within IA recommended guidelines on dilution limits.
Political donations
The Company made no political donations during the financial year
ended 30 June 2023 and the Board intends to maintain its policy of
not making such payments.
Going Concern
The Group’s business activities, together with the factors likely to
affect its future development, performance and position are set out
in the Strategic Report. The financial position of the Group, its cash
flows and liquidity position are described in the Finance Director’s
Review, with details of the Group’s treasury activities, long-term
funding arrangements and exposure to financial risk included in
notes 18 and 19 to the Consolidated Financial Statements.
The Group has sufficient financial resources which, together with
cash flows, will continue to provide sufficient sources of liquidity to
fund its current operations, including its contractual and commercial
commitments and any proposed dividends. The Group is therefore
well-placed to manage its business risks. After making enquiries,
the Directors have formed the judgement at the time of approving
the Financial Statements, that there is a reasonable expectation that
the Group has adequate resources to continue in operational
existence for the Going Concern period, being at least 12 months
from the date of approval of the Consolidated Financial Statements.
For this reason, they continue to adopt the Going Concern basis of
accounting in preparing the Consolidated Financial Statements.
Disclosure of information to the Auditor
So far as the Directors who held office at the date of approval of this
Report are aware, there is no relevant audit information of which the
External Auditor is unaware and each Director has taken all steps
that he or she ought to have taken as a Director to make himself
or herself aware of any relevant audit information and to establish
that the External Auditor is aware of that information.
This confirmation should be interpreted in accordance with Section
418 of the Companies Act 2006.
2023 Annual Report & Financial Statements
On the recommendation of the Audit Committee and having
considered all matters brought to the attention of the Board during
the financial year, the Board is satisfied that the Annual Report
& Financial Statements, taken as a whole, is fair, balanced and
understandable. The Board believes that the disclosures set
out in the Annual Report provide the information necessary for
shareholders to assess the Company’s performance, business
model and strategy.
Annual General Meeting
The Company’s AGM will be held at 12 noon on 15 November 2023
at the offices of UBS, 5 Broadgate, London EC2M 2QS. The Notice
of Meeting sets out the resolutions to be proposed at the AGM
and gives details of the voting record date and proxy appointment
deadline for that Meeting. The Notice of Meeting is contained
in a separate circular to shareholders which is being mailed or
otherwise provided to shareholders at the same time as this Report.
By order of the Board
Doug Evans
Company Secretary
23 August 2023
147
Strategic ReportGovernanceFinancial StatementsShareholder Information Directors’ confirmations
Each of the Directors, whose names and functions are listed in
the Governance report confirm that, to the best of their knowledge:
– the Group Financial Statements, which have been prepared in
accordance with UK-adopted international accounting standards,
give a true and fair view of the assets, liabilities, financial position
and profit of the Group
– the Company Financial Statements, which have been prepared
in accordance with United Kingdom Accounting Standards, give
a true and fair view of the assets, liabilities and financial position
of the Company
– the Strategic Report includes a fair review of the development
and performance of the business and the position of the Group
and Company, together with a description of the principal risks
and uncertainties that they face
– the Annual Report, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Company’s position, performance,
business model and strategy.
In the case of each Director in office at the date the Directors’
Report is approved:
– so far as the Director is aware, there is no relevant audit
information of which the Group’s and Company’s Auditors
are unaware
– they have taken all the steps that they ought to have taken as
a Director in order to make themselves aware of any relevant
audit information and to establish that the Group’s and Company’s
Auditors are aware of that information.
By order of the Board
Alistair Cox
Chief Executive
James Hilton
Group Finance Director
23 August 2023
DIRECTORS’
RESPONSIBILITIES
The Directors are responsible for preparing the
Annual Report and the Financial Statements in
accordance with applicable law and regulation.
Statement of Directors’ responsibilities
in respect of the Financial Statements
The Directors are responsible for preparing the Annual Report and
the Financial Statements in accordance with applicable law and
regulation.
Company law requires the Directors to prepare Financial Statements
for each financial year. Under that law the Directors have prepared
the Group Financial Statements in accordance with UK-adopted
international accounting standards and the Company Financial
Statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 101 ‘Reduced Disclosure Framework’, and
applicable law).
Under company law, Directors must not approve the Financial
Statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of the
profit or loss of the Group for that period. In preparing the Financial
Statements, the Directors are required to:
– select suitable accounting policies and then apply them
consistently
– state whether applicable UK-adopted international accounting
standards have been followed for the Group Financial Statements
and United Kingdom Accounting Standards, comprising FRS 101
have been followed for the Company Financial Statements,
subject to any material departures disclosed and explained in
the Financial Statements
– make judgements and accounting estimates that are reasonable
and prudent
– prepare the Financial Statements on the Going Concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business.
The Directors are responsible for safeguarding the assets of the
Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s and
Company’s transactions and disclose with reasonable accuracy
at any time the financial position of the Group and Company and
enable them to ensure that the Financial Statements and the
Directors’ Remuneration Report comply with the Companies
Act 2006.
The Directors are responsible for the maintenance and integrity of
the Company’s website. Legislation in the United Kingdom governing
the preparation and dissemination of Financial Statements may
differ from legislation in other jurisdictions.
148
Hays plc Annual Report & Accounts 2023 Strategic Report
Governance
Financial Statements
Shareholder Information
FINANCIAL
STATEMENTS
Independent Auditors’ Report
150
157 Consolidated Group Financial Statements
188 Hays plc Company Financial Statements
149
Financial StatementsGovernanceStrategic ReportShareholder Information INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF HAYS PLC
Report on the audit of the Financial Statements
Opinion
In our opinion:
– Hays plc’s Group Financial Statements and Company Financial
Statements (the “Financial Statements”) give a true and fair view
of the state of the Group’s and of the Company’s affairs as at
30 June 2023 and of the Group’s profit and the Group’s cash flows
for the year then ended;
– the Group Financial Statements have been properly prepared in
accordance with UK-adopted international accounting standards
as applied in accordance with the provisions of the Companies Act
2006;
– the Company Financial Statements have been properly prepared
in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards,
including FRS 101 “Reduced Disclosure Framework”, and
applicable law); and
– the Financial Statements have been prepared in accordance with
the requirements of the Companies Act 2006.
We have audited the Financial Statements, included within the
Annual Report & Financial Statements (the “Annual Report”), which
comprise: the Consolidated and Company Balance Sheets as at
30 June 2023; the Consolidated Income Statement, the Consolidated
Statement of Comprehensive Income, the Consolidated Cash Flow
Statement, and the Consolidated and Company Statements of
Changes in Equity for the year then ended; and the notes to the
Financial Statements, which include a description of the significant
accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities
for the audit of the Financial Statements section of our report. We
believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the
ethical requirements that are relevant to our audit of the Financial
Statements in the UK, which includes the FRC’s Ethical Standard, as
applicable to listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit
services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in Note 6, we have provided no non-audit
services to the Company or its controlled undertakings in the period
under audit.
Audit scope
– 85% of Group net fees and 79% of Group profit before tax subject to full scope audit procedures.
In addition, we performed specified procedures over a further two trading countries that were
not the subject of full scope audit procedures, representing 7% of Group net fees and 3% of
Group profit before tax.
– Australia, UK and Germany were considered to be financially significant due to their relative
contributions to the Group’s net fees and profit before tax.
– As the Group and UK audit team, we maintained regular contact with financially significant component
teams in Germany and Australia. This included visiting Germany during the year end audit process and
maintaining regular dialogue with Australia to help direct and supervise audit procedures performed by
those teams. The audit partner visited Australia in the previous year.
Key audit matters
– Recoverability of trade receivables (Group)
– Valuation of provisions (Group)
– Carrying value of investments (Parent)
Materiality
– Overall Group materiality: £9.5 million (2022: £10.2 million) based on 5% of profit before tax.
– Overall Company materiality: £7.0 million (2022: £8.7 million) based on 1% of total assets, restricted
by the amount of materiality available for allocation.
– Performance materiality: £7.1 million (2022: £7.7 million) (Group) and £5.3 million (2022: £6.5 million)
(Company).
Our audit approach
Overview
Audit scope
Key audit
matters
Materiality
150
Hays plc Annual Report & Accounts 2023 The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the Financial Statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the Financial
Statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon,
were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Valuation of provisions is a new key audit matter this year. Otherwise, the key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Recoverability of trade receivables (Group)
Refer to the Audit Committee Report, Note 2, Note 3 and Note 17
to the Financial Statements for the Directors’ disclosures of the
related accounting policies, judgements and estimates.
At 30 June 2023, total trade receivables balances included in Note
17 were £727.0 million (2022: £663.2 million), net of provisions of
£19.2 million (2022: £17.6 million).
The recoverability of trade receivables and the level of provisions
for expected credit losses are considered to be a key risk due to
the significance of these balances to the Financial Statements
and the judgements required in making appropriate provisions.
In order to test the recoverability of trade receivables,
we performed the following procedures:
i)
ii)
We evaluated the Group’s credit control procedures and
assessed and validated the ageing profile of trade receivables;
We assessed recoverability on a sample basis by reference to
cash received subsequent to year-end, agreement to the terms
of the contract in place and issue of credit notes post year-end,
as necessary;
iii) We considered the appropriateness of estimates regarding the
level of expected credit loss for trade receivables and assessed
whether the associated provisions were calculated in
accordance with the Group’s provisioning policies and/or
whether there was evidence of management bias in provisioning,
obtaining supporting evidence as necessary;
iv) Considering the current global energy crisis, inflationary
conditions and recent levels of insolvencies and its potential
impact on the customer debt book, we challenged management
as to whether the expected credit loss provisions appropriately
reflected the level of risk in the total receivables balance with
consideration given to individual counterparty credit risk and the
general economic conditions in each jurisdiction; and
v)
We also challenged management as to whether the
methodology applied in determining the appropriate expected
credit loss provisions appropriately reflected the level of risk
in the total receivables balance, with consideration given to
individual counterparty credit risk and the general economic
conditions in each jurisdiction.
We did not encounter any material issues through these audit
procedures that indicated that provisioning in respect of trade
receivables was inappropriate.
151
Financial StatementsGovernanceStrategic ReportShareholder Information INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF HAYS PLC
CONTINUED
Key audit matter
How our audit addressed the key audit matter
Valuation of provisions (Group)
Refer to Note 2 and Note 23 of the Financial Statements, and the
Audit Committee Report.
As at 30 June 2023, the Group held provisions of £23.6 million
in respect of legal, tax and other disputes (2022: £19.9 million).
While the provisions included within the legal, tax and other
disputes provision category were each individually immaterial, and
management does not consider it to be reasonably possible that
any of these provisions will materially change in the next 12
months, the work involved in aggregate over the provisions
balance represented a significant area of focus for our audit,
given the different assumptions applied to the valuation of
each provision.
Carrying value of investments (Parent)
Refer to Note 1 and Note 4 of the Company Financial Statements.
The Company holds investments in its subsidiaries of £744 million
(2022: £744 million).
We focused on this area due to the size of the investment
balances. Management has performed an assessment of the
recoverable amount of the investments and compared this to the
carrying value using the same cash flow methodology applied in
the impairment test for goodwill.
The results showed that no impairment was required against
these investments.
In order to test the valuation of a sample of provisions which we
target tested, we performed the following procedures:
i)
ii)
We made inquiries of Group Legal Counsel, management and
Hays’ external legal advisors;
We obtained and read correspondence with external legal
advisors, tax authorities or management’s experts as applicable
to each provision tested;
iii) We examined management’s models used to calculate each
provision, including validating model data and integrity and
assessing the appropriateness of the key assumptions adopted;
iv) Where the valuation of the provisions involved the use of
management’s experts, we assessed the competence and
objectivity of those experts and discussed the matters directly
with those individuals;
v)
For certain tax-related exposures, we were supported by our
internal tax experts, specifically in relation to assumptions used
by management; and
vi) We undertook sensitivity analysis to assess the impact of
changes in underlying key assumptions to these estimates.
Based on the procedures we performed, we were satisfied with
the valuation of these provisions at 30 June 2023.
We obtained management’s assessment of the carrying value
of the investments and we challenged:
i)
The key assumptions for short and long term growth rates
in the forecast cash flows for those businesses underpinning the
investees’ recoverable amounts, comparing them with historical
results;
ii)
The discount rate used in the calculations by assessing the cost
of capital for the Group and comparable organisations;
iii) The recoverability of investment in subsidiaries by comparing
the net asset values of these subsidiaries against the carrying
value of the investment; and
iv) We also considered the market value of the Group compared
to the carrying value of the investments. There were no
indications of impairment identified. We performed sensitivity
analysis on the key assumptions within the cash flow forecasts.
This included sensitising the discount rate applied to the future
cash flows, and the short and longer term growth rates and
operating profit forecast.
Following the conclusion of our procedures above, we are satisfied
that no impairment is required.
152
Hays plc Annual Report & Accounts 2023
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the Financial Statements as a
whole, taking into account the structure of the Group and the Company, the accounting processes and controls, and the industry in which
they operate.
The Group’s 33 trading countries are structured across four reporting segments, Australia & New Zealand (‘ANZ’), Germany, UK & Ireland
(‘UK&I’) and Rest of World (‘ROW’). Of the 33 trading countries, certain companies in the UK, Germany and Australia together represent 63%
of the Group’s net fees and 52% of the Group’s profit before tax excluding intercompany operating income and expenses and calculated on
an absolute basis. Within these three countries we considered certain companies to be financially significant to the Group and were therefore
subject to full scope audit procedures by local component audit teams.
A further 18 other reporting units, including 16 trading countries, were also subject to full scope audits by PwC teams in each of these
countries, representing 22% of Group net fees and 28% of Group’s profit before tax excluding intercompany operating income and expenses
and calculated on an absolute basis. In total, our full scope audit procedures covered 85% of the Group’s net fees and 79% of the Group’s
profit before tax excluding intercompany operating income and expenses and calculated on an absolute basis.
In addition to this, the Group audit team performed specified audit procedures in two other countries, representing 7% of Group net fees and
1% of Group profit before tax excluding intercompany operating income and expenses and calculated on an absolute basis.
Two holding company reporting units were subject to a limited scope audit of tax balances.
Central review procedures were performed by the Group audit team on the remaining 12 countries that were not subject to full scope or
specified audit procedures. These countries represented the remaining 8% of net fees and 20% of Group profit before tax excluding
intercompany operating income and expenses and calculated on an absolute basis. We ensured that we maintained appropriate oversight
of our component teams through visiting our significant component team in Germany as well as France (the latter being a location we visit
on a rotational basis) during the year end audit process. We also maintained regular contact with our team in Australia this year, having
visited the local operations during the last financial year, in addition to the remote communications with all components teams. This included
regular video conferences and remote working paper reviews to direct and supervise the work of these teams, in particular those in Australia
and Germany, to satisfy ourselves as to the appropriateness of the audit work performed.
The Group audit team also joined the audit clearance meetings for each of the 19 countries that were subject to full scope audit procedures.
The impact of climate risk on our audit
As part of the audit, we made enquiries of management to understand and evaluate the Group’s risk assessment process in relation to
climate change. We reviewed management’s paper which sets out its assessment of climate change risk to the Group and the impact on
the Financial Statements, and also considered this assessment in light of the disclosures on TCFD in this second year of its application.
In evaluating the completeness of the risks identified, we reviewed management’s assessment and challenged management on how it
considered the potential financial impacts of the Group’s commitment to halving its GHG emissions by 2026 and becoming a Net Zero
company. Management concluded there are no significant financial reporting risks arising. Based on our evaluation of this assessment,
we concluded this was appropriate. We also read the disclosures in relation to climate change made in the Strategic Report section of the
Annual Report to ascertain whether the disclosures are materially consistent with the Financial Statements and our knowledge from our
audit. Our responsibility over other information is further described in the “Reporting on other information” section of this report.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together
with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on
the individual Financial Statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate
on the Financial Statements as a whole.
Based on our professional judgement, we determined materiality for the Financial Statements as a whole as follows:
Overall materiality
How we
determined it
Rationale for
benchmark applied
Financial statements – Group
£9.5 million (2022: £10.2 million).
5% of profit before tax.
We believe that profit before tax is the primary measure
used by management and the shareholders in
assessing the performance of the Group, and is a
generally accepted auditing benchmark.
Financial statements – Company
£7.0 million (2022: £8.7 million).
1% of total assets, restricted by the amount of materiality
available for allocation.
We believe that total assets is the most appropriate
measure to assess a holding company, and is a generally
accepted auditing benchmark.
153
Financial StatementsGovernanceStrategic ReportShareholder Information
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF HAYS PLC
CONTINUED
For each component in the scope of our Group audit, we allocated
a materiality that is less than our overall Group materiality. The
range of materiality allocated across components was between
£0.6 million and £9.0 million. Certain components were audited to
a local statutory audit materiality that was also less than our overall
Group materiality.
We use performance materiality to reduce to an appropriately
low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically,
we use performance materiality in determining the scope of our
audit and the nature and extent of our testing of account balances,
classes of transactions and disclosures, for example in determining
sample sizes. Our performance materiality was 75% (2022: 75%) of
overall materiality, amounting to £7.1 million (2022: £7.7 million) for
the Group Financial Statements and £5.3 million (2022: £6.5 million)
for the Company Financial Statements.
In determining the performance materiality, we considered a
number of factors – the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls – and
concluded that an amount at the upper end of our normal range
was appropriate.
We agreed with the Audit Committee that we would report to them
misstatements identified during our audit above £500,000 (Group
audit) (2022: £500,000) and £350,000 (Company audit) (2022:
£435,000) as well as misstatements below those amounts that,
in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group’s and the
Company’s ability to continue to adopt the going concern basis
of accounting included:
– Obtaining the Directors’ cash flow forecasts for the going concern
period and validating the underlying cash flow projections by
challenging the basis of the judgements applied and verifying that
it is consistent with our existing knowledge and understanding
of the business;
– Reviewing the sensitivity analysis carried out by the Directors to
assess the impact of the key assumptions underlying the forecast
such as reduction in net fees, increase in working capital and
expected level of operating expenses;
– Assessing the impact of the Directors’ severe but plausible
downside scenarios on the headroom available on liquidity;
– Reviewing the Directors’ identified available mitigating factors
where required and included within the cash flow forecast;
– Testing the mathematical accuracy of the Directors’ cash flow
forecast and validating the opening cash position; and
– Assessing the adequacy of the disclosure provided in note 2
of the Consolidated and Company Financial Statements.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group’s and the Company’s ability to continue as a going concern
for a period of at least twelve months from when the Financial
Statements are authorised for issue.
In auditing the Financial Statements, we have concluded that the
Directors’ use of the going concern basis of accounting in the
preparation of the Financial Statements is appropriate.
However, because not all future events or conditions can be
predicted, this conclusion is not a guarantee as to the Group’s
and the Company’s ability to continue as a going concern.
In relation to the Directors’ reporting on how they have applied the
UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the Directors’ statement in the
Financial Statements about whether the Directors considered
it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections
of this report.
Reporting on other information
The other information comprises all of the information in the Annual
Report other than the Financial Statements and our auditors’ report
thereon. The Directors are responsible for the other information,
which includes reporting based on the Task Force on Climate-related
Financial Disclosures (TCFD) recommendations. Our opinion on the
Financial Statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except to the
extent otherwise explicitly stated in this report, any form of
assurance thereon.
In connection with our audit of the Financial Statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the Financial Statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. If we identify
an apparent material inconsistency or material misstatement, we
are required to perform procedures to conclude whether there is
a material misstatement of the Financial Statements or a material
misstatement of the other information. If, based on the work we have
performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have
nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ Report, we also
considered whether the disclosures required by the UK Companies
Act 2006 have been included.
Based on our work undertaken in the course of the audit, the
Companies Act 2006 requires us also to report certain opinions and
matters as described below.
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course of the
audit, the information given in the Strategic report and Directors’
Report for the year ended 30 June 2023 is consistent with the
Financial Statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the Group and
Company and their environment obtained in the course of the audit,
we did not identify any material misstatements in the Strategic
report and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report
to be audited has been properly prepared in accordance with the
Companies Act 2006.
154
Hays plc Annual Report & Accounts 2023 Corporate governance statement
The Listing Rules require us to review the Directors’ statements
in relation to going concern, longer-term viability and that part
of the corporate governance statement relating to the Company’s
compliance with the provisions of the UK Corporate Governance
Code specified for our review. Our additional responsibilities with
respect to the corporate governance statement as other information
are described in the Reporting on other information section of
this report.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the corporate
governance statement is materially consistent with the Financial
Statements and our knowledge obtained during the audit, and we
have nothing material to add or draw attention to in relation to:
– The Directors’ confirmation that they have carried out a robust
assessment of the emerging and principal risks;
– The disclosures in the Annual Report that describe those principal
risks, what procedures are in place to identify emerging risks and
an explanation of how these are being managed or mitigated;
– The Directors’ statement in the Financial Statements about
whether they considered it appropriate to adopt the going concern
basis of accounting in preparing them, and their identification of
any material uncertainties to the Group’s and Company’s ability to
continue to do so over a period of at least twelve months from the
date of approval of the Financial Statements;
– The Directors’ explanation as to their assessment of the Group’s
and Company’s prospects, the period this assessment covers and
why the period is appropriate; and
– The Directors’ statement as to whether they have a reasonable
expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the period of its
assessment, including any related disclosures drawing attention to
any necessary qualifications or assumptions.
Our review of the Directors’ statement regarding the longer-term
viability of the Group and Company was substantially less in scope
than an audit and only consisted of making inquiries and considering
the Directors’ process supporting their statement; checking that the
statement is in alignment with the relevant provisions of the UK
Corporate Governance Code; and considering whether the statement
is consistent with the Financial Statements and our knowledge and
understanding of the Group and Company and their environment
obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the corporate
governance statement is materially consistent with the Financial
Statements and our knowledge obtained during the audit:
– The Directors’ statement that they consider the Annual Report,
taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess
the Group’s and Company’s position, performance, business
model and strategy;
– The section of the Annual Report that describes the review of
effectiveness of risk management and internal control systems;
and
– The section of the Annual Report describing the work of the Audit
Committee.
We have nothing to report in respect of our responsibility to report
when the Directors’ statement relating to the Company’s compliance
with the Code does not properly disclose a departure from a relevant
provision of the Code specified under the Listing Rules for review
by the auditors.
Responsibilities for the Financial Statements
and the audit
Responsibilities of the Directors for the Financial Statements
As explained more fully in the Statement of Directors’ Responsibilities
in respect of the Financial Statements, the Directors are responsible
for the preparation of the Financial Statements in accordance with
the applicable framework and for being satisfied that they give a true
and fair view. The Directors are also responsible for such internal
control as they determine is necessary to enable the preparation
of Financial Statements that are free from material misstatement,
whether due to fraud or error.
In preparing the Financial Statements, the Directors are responsible
for assessing the Group’s and the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting
unless the Directors either intend to liquidate the Group or the
Company or to cease operations, or have no realistic alternative
but to do so.
Auditors’ responsibilities for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether
the Financial Statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’
report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of these Financial Statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud, is detailed below.
Based on our understanding of the Group and industry, we identified
that the principal risks of non-compliance with laws and regulations
related to the UK Listing Rules, employment legislation and data
protection regulations, and we considered the extent to which
non-compliance might have a material effect on the Financial
Statements. We also considered those laws and regulations that
have a direct impact on the Financial Statements such as the
Companies Act 2006 and tax regulations. We evaluated
management’s incentives and opportunities for fraudulent
manipulation of the Financial Statements (including the risk of
override of controls), and determined that the principal risks were
related to the posting of unusual journals to increase revenue and/or
decrease costs and therefore increase profits and management bias
in determining accounting estimates. The Group engagement team
shared this risk assessment with the component auditors so that
they could include appropriate audit procedures in response to
such risks in their work. Audit procedures performed by the Group
engagement team and/or component auditors included:
– Discussions with senior management, Group legal counsel,
Internal Audit, and the Audit Committee, including consideration
of known or suspected instances of non-compliance with laws
and regulation and fraud;
– Challenging assumptions and judgements made by management
in its significant accounting estimates;
– Reviewing the Financial Statement disclosures and agreeing to
underlying supporting documentation;
– Reviewing Executive management’s incentives and bonus
schemes to understand and review drivers that could lead to
higher fraud risks;
155
Financial StatementsGovernanceStrategic ReportShareholder Information INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF HAYS PLC
CONTINUED
Appointment
Following the recommendation of the Audit Committee, we were
appointed by the Directors on 9 November 2016 to audit the
Financial Statements for the year ended 30 June 2017 and
subsequent financial periods. The period of total uninterrupted
engagement is 7 years, covering the years ended 30 June 2017 to
30 June 2023.
Other matter
In due course, as required by the Financial Conduct Authority
Disclosure Guidance and Transparency Rule 4.1.14R, these Financial
Statements will form part of the ESEF-prepared annual financial
report filed on the National Storage Mechanism of the Financial
Conduct Authority in accordance with the ESEF Regulatory
Technical Standard (‘ESEF RTS’). This auditors’ report provides no
assurance over whether the annual financial report will be prepared
using the single electronic format specified in the ESEF RTS.
Jonathan Sturges
(Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
23 August 2023
– Performing unpredictable procedures; and
– Identifying and testing journal entries, in particular, journal entries
which had unexpected account combinations.
There are inherent limitations in the audit procedures described
above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to
events and transactions reflected in the Financial Statements. Also,
the risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as fraud
may involve deliberate concealment by, for example, forgery or
intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of
certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number
of items for testing, rather than testing complete populations. We will
often seek to target particular items for testing based on their size or
risk characteristics. In other cases, we will use audit sampling to
enable us to draw a conclusion about the population from which the
sample is selected.
A further description of our responsibilities for the audit of
the Financial Statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only
for the Company’s members as a body in accordance with Chapter
3 of Part 16 of the Companies Act 2006 and for no other purpose.
We do not, in giving these opinions, accept or assume responsibility
for any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if,
in our opinion:
– we have not obtained all the information and explanations we
require for our audit; or
– adequate accounting records have not been kept by the Company,
or returns adequate for our audit have not been received from
branches not visited by us; or
– certain disclosures of Directors’ remuneration specified by law are
not made; or
– the Company Financial Statements and the part of the Directors’
Remuneration Report to be audited are not in agreement with the
accounting records and returns.
We have no exceptions to report arising from this responsibility.
156
Hays plc Annual Report & Accounts 2023 CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2023
(In £s million)
Turnover
Net fees(1)
Administrative expenses(2)
Operating profit
Net finance charge
Profit before tax
Tax
Profit after tax
Profit attributable to equity holders of the parent company
Earnings per share (pence)
– Basic
– Diluted
(1) Net fees comprise turnover less remuneration of temporary workers and other recruitment agencies.
(2) Administrative expenses include impairment loss on trade receivables of £3.0 million (2022: £2.4 million).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
(In £s million)
Profit for the year
Items that will not be reclassified subsequently to profit or loss:
Actuarial remeasurement of defined benefit pension schemes
Tax relating to components of other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Currency translation adjustments
Other comprehensive income for the year net of tax
Total comprehensive income for the year
Attributable to equity shareholders of the parent company
Note
4, 5
4, 5
5
4
8
9
2023
7,583.3
1,294.6
(1,097.6)
197.0
(4.9)
192.1
(53.8)
138.3
138.3
2022
6,588.9
1,189.4
(979.3)
210.1
(5.8)
204.3
(50.1)
154.2
154.2
11
11
8.59p
8.52p
9.22p
9.11p
2023
138.3
(95.1)
19.5
(75.6)
(15.6)
(91.2)
47.1
47.1
2022
154.2
39.6
(8.6)
31.0
10.5
41.5
195.7
195.7
157
Financial StatementsGovernanceStrategic ReportShareholder Information CONSOLIDATED BALANCE SHEET
AT 30 JUNE 2023
(In £s million)
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Right-of-use assets
Deferred tax assets
Retirement benefit surplus
Current assets
Trade and other receivables
Corporation tax debtor
Cash and cash equivalents
Derivative financial instruments
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Corporation tax liabilities
Derivative financial instruments
Provisions
Non-current liabilities
Bank loans
Deferred tax liabilities
Lease liabilities
Provisions
Total liabilities
Net assets
Equity
Called up share capital
Share premium
Merger reserve
Capital redemption reserve
Retained earnings
Cumulative translation reserve
Equity reserve
Total equity
Note
2023
2022
12
13
14
15
16
22
17
18
19
21
15
19
23
20
16
15
23
24
25
200.3
53.7
29.7
176.1
21.4
25.7
506.9
1,244.6
6.8
145.6
0.1
1,397.1
1,904.0
(991.3)
(41.3)
(16.2)
–
(10.8)
(1,059.6)
(10.0)
(2.8)
(148.5)
(12.8)
(174.1)
(1,233.7)
670.3
16.0
369.6
43.8
3.4
155.4
58.0
24.1
670.3
202.3
47.1
29.3
171.7
18.5
102.0
570.9
1,205.1
5.2
296.2
–
1,506.5
2,077.4
(1,029.8)
(39.8)
(34.5)
(0.1)
(12.7)
(1,116.9)
–
(10.0)
(145.3)
(9.0)
(164.3)
(1,281.2)
796.2
16.7
369.6
43.8
2.7
268.2
73.6
21.6
796.2
The Consolidated Financial Statements of Hays plc, registered number 2150950, as set out on pages 157 to 196 were approved by the Board
of Directors and authorised for issue on 23 August 2023.
Signed on behalf of the Board of Directors
A R Cox
J Hilton
158
Hays plc Annual Report & Accounts 2023 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
(In £s million)
At 1 July 2022
Currency translation adjustments
Remeasurement of defined
benefit pension schemes
Tax relating to components
of other comprehensive income
Net expense recognised in
other comprehensive income
Profit for the year
Total comprehensive income for the year
Dividends paid
Purchase of own shares
Share-based payments charged
to the income statement(3)
Share-based payments settled
on vesting(3)
At 30 June 2023
Called up
share capital
16.7
–
–
Share
premium
369.6
–
–
Merger
reserve(1)
43.8
–
–
Capital
redemption
reserve
2.7
–
–
Retained
earnings
268.2
–
(95.1)
Cumulative
translation
reserve
73.6
(15.6)
–
Equity
reserve(2) Total equity
796.2
(15.6)
(95.1)
21.6
–
–
–
–
–
–
–
(0.7)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.7
–
–
19.5
–
(75.6)
(15.6)
138.3
62.7
(165.1)
(19.0)
–
–
(15.6)
–
–
–
–
–
–
–
–
–
11.1
19.5
(91.2)
138.3
47.1
(165.1)
(19.0)
11.1
8.6
–
(8.6)
–
16.0
369.6
43.8
3.4
155.4
58.0
24.1
670.3
FOR THE YEAR ENDED 30 JUNE 2022
(In £s million)
At 1 July 2021
Currency translation adjustments
Remeasurement of defined
benefit pension schemes
Tax relating to components
of other comprehensive income
Net income recognised in
other comprehensive income
Profit for the year
Total comprehensive income for the year
Dividends paid
Purchase of own shares
Share-based payments charged
to the income statement(3)
Share-based payments settled
on vesting(3)
At 30 June 2022
Called up
share capital
16.8
–
–
Share
premium
369.6
–
–
Merger
reserve(1)
193.8
–
–
Capital
redemption
reserve
2.7
–
–
Retained
earnings
207.8
–
39.6
Cumulative
translation
reserve
63.1
10.5
–
Equity
reserve(2) Total equity
871.8
10.5
39.6
18.0
–
–
–
–
–
–
–
(0.1)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(150.0)
–
–
–
–
–
–
–
–
–
–
–
(8.6)
–
31.0
10.5
154.2
185.2
(36.4)
(94.7)
–
–
10.5
–
–
–
–
–
–
–
–
–
9.9
(8.6)
41.5
154.2
195.7
(186.4)
(94.8)
9.9
6.3
–
(6.3)
–
16.7
369.6
43.8
2.7
268.2
73.6
21.6
796.2
(1) The Merger reserve was generated under Section 612 of the Companies Act 2006, as a result of the cash box structure used in the equity placing of new
shares issued during the year ended 30 June 2020.
(2) The Equity reserve is generated as a result of IFRS 2 ‘Share-based payments’.
(3) The Share-based payments charged to the Consolidated Income Statement and Share-based payments settled on vesting were previously presented net
as “Share-based payments”. The presentation in the prior year has been updated to enhance the consistency and understandability of the disclosures.
There has been no change in the underlying activity.
159
Financial StatementsGovernanceStrategic ReportShareholder Information CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2023
(In £s million)
Operating profit
Adjustments for:
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Loss on disposal of business assets
Loss on closure of Russian business
Net movements in provisions
Share-based payments
Operating cash flow before movement in working capital
Movement in working capital:
Increase in receivables
Increase in payables(1)
Movement in working capital
Cash generated by operations
Pension scheme deficit funding
Income taxes paid
Net cash inflow from operating activities
Investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Acquisition of subsidiaries
Interest received
Net cash used in investing activities
Financing activities
Interest paid
Lease liability principal repayment
Purchase of own shares(2)
Equity dividends paid
Increase in bank loans and overdrafts
Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate movements
Cash and cash equivalents at end of year
2023
197.0
10.9
46.0
10.0
0.1
–
1.9
12.0
80.9
277.9
(53.2)
24.5
(28.7)
249.2
(17.7)
(65.8)
165.7
(12.3)
(16.8)
(1.0)
2.0
(28.1)
(3.7)
(49.9)
(75.7)
(165.1)
10.0
(284.4)
(146.8)
296.2
(3.8)
145.6
2022(2)
210.1
10.0
44.0
10.1
1.5
4.2
2.1
10.9
82.8
292.9
(259.4)
194.4
(65.0)
227.9
(17.2)
(39.0)
171.7
(12.1)
(12.3)
–
0.8
(23.6)
(1.3)
(45.0)
(38.0)
(186.4)
–
(270.7)
(122.6)
410.6
8.2
296.2
(1) Included within trade and other payables at 30 June 2022 was an amount of £56.8 million in relation to the outstanding liability on the Group’s initial
£75.0 million share buyback programme, as announced on 28 April 2022. The programme was completed during the current year and therefore no
liability has been recognised at 30 June 2023. The resulting movement in trade and other payables is not included within increase in trade payables
in the Consolidated Cash Flow Statement; cash flows under the share buyback programme have been recognised as purchase of own shares.
(2) The comparative for the Consolidated Cash Flow Statement includes a restatement of £38.0m in respect of the Group’s purchases of its own shares.
These were previously presented within Investing activities, and are now correctly shown in Financing activities. There has been no impact on the Group’s
Cash generated by operations, cash inflow from operating activities, or on cash conversion.
160
Hays plc Annual Report & Accounts 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. General information
Hays plc is a Company limited by shares, incorporated and domiciled
in the United Kingdom and registered in England and Wales and
its registered office and principal place of business is 4th Floor,
20 Triton Street, London NW1 3BF.
The Consolidated Financial Statements have been prepared in
accordance with UK-adopted International Accounting Standards.
The Consolidated Financial Statements are presented in sterling,
the functional currency of Hays plc.
New standards and interpretations
The Consolidated Financial Statements have been prepared on
the basis of the accounting policies and methods of computation
applicable for the year ended 30 June 2023. These accounting
policies are consistent with those applied in the preparation of the
Consolidated Financial Statements for the year ended 30 June 2022;
the Group has applied the IAS 12 amendment which provides an
exception from recognising and disclosing information related to
Pillar Two top-up taxes (see note 9). There have been no other new
standards or amendments to existing standards that are mandatory
for the first time in the Group’s accounting period beginning on
1 July 2022 and no new standards have been early adopted.
The Group has not yet adopted certain new standards, amendments
and interpretations to existing standards, which have been published
but which are only effective for the Group accounting periods
beginning on or after 1 July 2023. These new pronouncements
are listed as follows:
– IFRS 17 – ‘Insurance contracts’ (effective 1 January 2023);
– IAS 1 (amendments) – ‘Presentation of Financial Statements’,
on classification of liabilities (effective 1 January 2023);
– IAS 12 (amendments) – ‘Deferred Tax Related to Asset and
Liabilities Arising from a Single Transaction’ (effective 1 January
2023); and
– IAS 12 (amendments) – ‘International Tax Reform – Pillar Two
Model Rules’ (effective 1 January 2023).
The Directors are currently evaluating the impact of the adoption of
the standards, amendments and interpretations but do not expect
them to have a material impact on the Group’s operations or results.
The Group’s principal accounting policies adopted in the presentation
of these Consolidated Financial Statements are set out below and
have been consistently applied to all the periods presented.
2. Significant accounting policies
a. Basis of preparation
The Consolidated Financial Statements have been prepared on
the historical cost basis with the exception of financial instruments,
pension assets and share-based payments. Financial instruments
have been recorded initially on a fair value basis and then at
amortised cost. Pension assets and share-based payments have
been measured at fair value.
b. Going Concern
The Group’s business activities, together with the factors likely to
affect its future development, performance and position are set out
in the Strategic Report. The financial position of the Group, its cash
flows and liquidity position are described in the Finance Director’s
Review, with details of the Group’s treasury activities, long-term
funding arrangements and exposure to financial risk included in
notes 18 to 20 to the Consolidated Financial Statements.
As in prior years, the Board undertook a strategic business review in
the current year which took into account the Group’s current financial
position and the potential impact of the principal risks set out in the
Annual Report.
In addition, and in making this statement, the Board carried out
a robust assessment of the principal risks facing the Group,
including those that would threaten the Group’s business model,
future performance and liquidity. While the review has considered all
the principal risks identified by the Group, the resilience of the Group
to the occurrence of these risks in severe yet plausible scenarios has
been evaluated.
Financial position
At 30 June 2023, the Group had net cash of £135.6 million compared
to cash of £296.2 million at 30 June 2022. In addition, the Group
currently has an unsecured revolving credit facility (RCF) of
£210 million that reduces in November 2024 to £170 million, and
expires in November 2025. As at 30 June 2023, £200 million of the
facility was undrawn. The net cash position is stated after deducting
the currently drawn amount on the RCF. The Group had a strong
working capital performance, with significant management focus
on cash collection, average trade debtor days remained consistent
in the year at 33 days (2022: 33 days).
Stress testing
The Board approves an annual budget and reviews monthly
management reports and quarterly forecasts. The output of the
planning and budgeting processes has been used to perform a
sensitivity analysis of the Group’s cash flow to model the potential
effects should principal risks actually occur either individually or
in unison.
The sensitivity analysis modelled scenarios in which the Group
incurred a sustained loss of business arising from a prolonged
global downturn, with a range of recovery scenarios considered.
The Group’s ‘Stress Case’ scenario assumes that the Group
experiences another severe downturn similar in scale to the one
caused by the COVID-19 pandemic in the year ended 30 June 2020,
followed by a period of gradual recovery, as opposed to the
significant recovery the Group experienced through the years ended
30 June 2021 and 30 June 2022. The Stress Case scenario
assumes a trough level of operating profit of £57 million in the year
ended 30 June 2024 before gradually recovering to £103 million
operating profit in the year to June 2026, which models the impact
of a long-lasting global economic downturn. In this scenario the
Group is forecast to maintain a strong net cash position in excess
of £60 million throughout the Going Concern period, with significant
headroom against its banking covenants.
Set against these downside trading scenarios, the Board considered
key mitigating factors including the geographic and sectoral diversity
of the Group, its balanced business model across Temporary,
Permanent and Contract recruitment services, and the significant
working capital inflows which arise in periods of severe downturn,
particularly in the Temporary recruitment business, thus protecting
liquidity as was the case during the Global Financial Crisis of
2008/09 and which we again experienced in the year ended
30 June 2020.
The Group’s history of strong cash generation, tight cost control and
flexible workforce management provides further protection, and in
addition the Group has a revolving credit facility of £210 million
that reduces in November 2024 to £170 million, and expires in
November 2025.
161
Financial StatementsGovernanceStrategic ReportShareholder Information NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
2. Significant accounting policies continued
b. Going Concern continued
The Group has sufficient financial resources which, together with
internally generated cash flows, will continue to provide sufficient
sources of liquidity to fund its current operations, including its
contractual and commercial commitments and any proposed
dividends. The Group is therefore well-placed to manage its business
risks. After making enquiries, the Directors have formed the
judgement at the time of approving the Consolidated Financial
Statements, that there is a reasonable expectation that the Group
has adequate resources to continue in operational existence
throughout the Going Concern period, being at least 12 months
from the date of approval of the Consolidated Financial Statements.
For this reason, they continue to adopt the going concern basis of
accounting in preparing the Consolidated Financial Statements.
c. Basis of consolidation
Subsidiaries are fully consolidated from the date on which power
to control is transferred to the Group. They are deconsolidated
from the date on which control ceases.
The acquisition method of accounting is used to account for the
acquisition of subsidiaries by the Group whereby the identifiable
assets, liabilities and contingent liabilities are measured at their
fair values at the date of acquisition. The excess of the cost of
acquisition over the fair value of the Group’s share of the identifiable
net assets acquired is recorded as goodwill. The Consolidated
Financial Statements consolidate the accounts of Hays plc and all
of its subsidiaries. The results of subsidiaries acquired or disposed
during the year are included from the effective date of acquisition
or up to the effective date of disposal, as appropriate.
All intra-Group transactions, balances, income and expenses are
eliminated on consolidation.
d. Turnover
Turnover is measured at the fair value of the consideration received
or receivable at the point in time and represents amounts receivable
for services provided in the normal course of business, net of
discounts, VAT and other sales-related taxes.
Turnover arising from the placement of permanent candidates,
including turnover arising from Recruitment Process Outsourcing
(RPO) services, is recognised at the point in time the candidate
commences full-time employment. Where a permanent candidate
starts employment but does not work for the specified contractual
period, an adjustment is made based on experience in respect
of the expected required refund or credit note due to the client.
The revenue recognised from a permanent placement is typically
based on a percentage of the candidate’s remuneration package.
Turnover arising from temporary placements, including turnover
arising from Managed Service Programme (MSP) services, is
recognised starting at the point in time that temporary workers are
provided and continues through the duration of the placement. In
nearly all contract arrangements the Group acts as principal. Where
the Group is acting as a principal, turnover represents the amounts
billed for the services of the temporary workers, including the
remuneration costs of the temporary workers. The commission
included within the revenue recognised arising from temporary
placements is typically based on a percentage of the placement’s
hourly rate.
Where Hays acts as principal in arrangements that invoice on the
costs incurred with other recruitment agencies as part of the MSP
service provided, and in which Hays manages the recruitment supply
chain, turnover represents amounts invoiced on from other
recruitment agencies, including arrangements where no
commission is directly receivable by the Group.
162
In some limited instances where the Group is acting as an agent
in arrangements that invoice on behalf of other recruitment
agencies as part of the MSP service provided, turnover represents
commission receivable relating to the supply of temporary workers
and does not include the remuneration costs of the other agency
temporary workers.
Revenue recognition
Revenue is recognised for permanent placements on the day
a candidate starts work. Revenue is recognised for temporary
placements at the point in time that temporary workers are provided
and continues through the duration of the placement.
The factors considered by management on a contract by contract
basis when concluding the Company is acting as principal
(gross basis) rather than agent (net basis) are as follows:
– The client has a direct relationship with Hays;
– Hays has the primary responsibility for providing the services to
the client, and engages and contracts directly with the temporary
worker and other recruitment companies;
– Hays has latitude in establishing the rates directly or indirectly
with all parties; and
– Hays bears the credit risk on the receivable due from the client.
e. Net fees
Net fees represent turnover less the remuneration costs of
temporary workers for temporary assignments and remuneration
of other recruitment agencies. For the placement of permanent
candidates, net fees are equal to turnover.
f. Foreign currencies
On consolidation, the tangible and intangible assets and liabilities of
subsidiaries denominated in foreign currencies are translated into
sterling at the rates ruling at the balance sheet date. Income and
expense items are translated into sterling at average rates of
exchange for the period. Any exchange differences which have
arisen from an entity’s investment in a foreign subsidiary, including
long-term loans, are recognised as a separate component of equity
and are included in the Group’s cumulative translation reserve.
On disposal of a subsidiary, any amounts transferred to the
translation reserve are included in the calculation of profit and loss
on disposal. All other translation differences are dealt with in the
Consolidated Income Statement.
Goodwill and fair value adjustments arising on the acquisition of a
foreign entity are treated as assets and liabilities of the foreign entity
and translated at the closing rate.
g. Retirement benefit costs
The expense of defined benefit pension schemes and other
post-retirement employee benefits is determined using the
projected-unit credit method and charged to the Consolidated
Income Statement as an expense, based on actuarial assumptions
reflecting market conditions at the beginning of the financial year.
All remeasurement gains and losses are recognised immediately
in reserves and reported in the Consolidated Statement of
Comprehensive Income in the period in which they occur. Past
service costs, curtailments and settlements are recognised
immediately in the Consolidated Income Statement.
The Group chose under IFRS 1 to recognise in retained earnings all
cumulative remeasurement gains and losses as at 1 July 2004, the
date of transition to IFRS. The Group has chosen to recognise all
remeasurement gains and losses arising subsequent to 1 July 2004
in reserves and reported in the Consolidated Statement of
Comprehensive Income.
Hays plc Annual Report & Accounts 2023 The retirement benefit surplus recognised in the Consolidated
Balance Sheet represents the fair value of scheme assets less
the present value of the defined benefit obligation.
The Hays Pension Scheme Definitive Deed and Rules is considered to
provide Hays with an unconditional right to a refund of surplus assets
and therefore the recognition of a net defined benefit scheme asset
is not restricted and agreements to make funding contributions do
not give rise to any additional liabilities in respect of the Scheme.
Payments to defined contribution schemes are charged as an
expense in the Consolidated Income Statement as they fall due.
h. Share-based payments
The fair value of all share-based remuneration that is assessed
upon market-based performance criteria is determined at the date
of grant and recognised as an expense in the Consolidated Income
Statement on a straight-line basis over the vesting period, taking
account of the estimated number of shares that will vest.
The fair value of all share-based remuneration that is assessed upon
non-market-based performance criteria is determined at the date of
the grant and recognised as an expense in the Consolidated Income
Statement over the vesting period, based on the number of shares
that are expected to vest. The number of shares that are expected
to vest is adjusted accordingly, based on the satisfaction of the
performance criteria at each year-end.
The fair values are determined by use of the relevant valuation
models. All share-based remuneration is equity-settled.
i. Borrowing costs
Interest costs are recognised as an expense in the Consolidated
Income Statement in the period in which they are incurred.
Arrangement fees incurred in respect of borrowings are amortised
over the term of the agreement.
j. Taxation
The tax expense is recognised in the Consolidated Income
Statement, the Consolidated Statement of Comprehensive Income
or directly to retained earnings, according to the accounting
treatment of the related transaction giving rise to the tax. The tax
expense comprises both current and deferred tax.
Current tax is the tax payable based on taxable profit for the year.
Taxable profit differs from profit as reported in the Consolidated
Income Statement because it excludes items of income or expense
that are taxable or deductible in other years and it further excludes
items that are never taxable or deductible. Current tax is calculated
using tax rates that have been enacted or substantively enacted by
the balance sheet date.
Deferred tax is provided on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts
in the Consolidated Financial Statements.
Deferred tax liabilities are generally recognised on all temporary
differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which
the temporary differences can be utilised.
Deferred tax is not recognised for temporary differences arising from
the initial recognition of goodwill or initial recognition of other assets
or liabilities in a transaction (other than a business combination) that
affects neither accounting profit nor taxable profit. Deferred tax
liabilities are recognised for taxable temporary differences arising on
investments in subsidiaries and associates except where the Group
is able to control the reversal of the temporary differences and it is
probable that the temporary difference will not reverse in the
foreseeable future.
The carrying amounts of deferred tax assets are reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all
or part of the deferred tax assets to be recovered. Unrecognised
deferred tax assets are also reassessed each balance sheet date
and recognised where it has become probable that future taxable
profits are available against which the asset can be recovered.
Deferred tax is provided using tax rates that have been enacted or
substantively enacted by the balance sheet date.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set-off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same
taxation authority and the Group intends to settle its current tax
assets and liabilities on a net basis.
Uncertain tax positions
The Group operates in many countries and is therefore subject to
tax laws in a number of different tax jurisdictions. The amount of tax
payable or receivable on profits or losses for any period is subject
to the agreement of the tax authority in each respective jurisdiction
and the tax liability or asset position is open to review for several
years after the relevant accounting period ends. In determining
the provisions for income taxes, management is required to make
judgements and estimates based on interpretations of tax statute
and case law, which it does after taking account of professional
advice and prior experience.
Uncertainties in respect of enquiries and additional tax assessments
raised by tax authorities are measured in accordance with IFRIC 23
using the method that in management’s view, best predicts the
resolution of the uncertainty. The amounts ultimately payable or
receivable may differ from the amounts of any provisions recognised
in the Consolidated Financial Statements as a result of the estimates
and assumptions used.
k. Goodwill
Goodwill arising on consolidation represents the excess of purchase
consideration less the fair value of the identifiable tangible and
intangible assets and liabilities acquired.
Goodwill is recognised as an asset and reviewed for impairment
at least annually. For the purpose of impairment testing, assets are
grouped at the lowest level for which there are separately identifiable
cash flows, known as cash-generating units (CGUs). Any impairment
is recognised immediately in the Consolidated Income Statement
and is not subsequently reversed.
On disposal of a business the attributable amount of goodwill is
included in the determination of the profit or loss on disposal.
Goodwill arising on acquisitions before the date of transition to IFRS
(1 July 2004) has been retained at the previous UK GAAP amounts,
subject to being tested for impairment at that date. Goodwill arising
on acquisitions prior to 1 July 1998 was written off direct to reserves
under UK GAAP. This goodwill has not been reinstated and is not
included in determining any subsequent profit or loss on disposal.
l. Intangible assets
Intangible assets acquired as part of a business combination are
stated in the Consolidated Balance Sheet at their fair value as at the
date of acquisition less accumulated amortisation and any provision
for impairment. The Directors review intangible assets for indications
of impairment annually. There are no significant intangible assets
other than computer software.
163
Financial StatementsGovernanceStrategic ReportShareholder Information NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
r. Derivative financial instruments
The Group may use certain derivative financial instruments to reduce
its exposure to foreign exchange movements. The Group held six
foreign exchange contracts at the end of the current year (2022: five
forward contracts) to facilitate cash management within the Group.
The Group does not hold or use derivative financial instruments for
speculative purposes.
The fair values of foreign exchange swaps are measured using
inputs other than quoted prices that are observable for the asset or
liability, either directly or indirectly. It is the Group’s policy not to seek
to designate these derivatives as hedges. All derivative financial
instruments not in a hedge relationship are classified as derivatives
at fair value in the Consolidated Income Statement.
Fair value measurements
The information below sets out how the Group determines fair value
of various financial assets and financial liabilities.
The following provides an analysis of financial instruments that are
measured subsequent to initial recognition at fair value, grouped into
Levels 1 to 3 based on the degree to which the fair value is
observable.
– Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or
liabilities;
– Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are
observable for the asset or liability either directly (i.e. as prices)
or indirectly (i.e. derived from prices); and
– Level 3 fair value measurements are those derived from valuation
techniques that include inputs for the asset or liability that are
not based on observable market data (unobservable inputs).
s. Leases
Set out below are the accounting policies of the Group upon
adoption of IFRS 16, which have been applied from the date of initial
application:
Right-of-use assets
The Group recognises right-of-use assets at the commencement
date of the lease and they are measured at cost, less any
accumulated depreciation and impairment losses, and adjusted
for any remeasurement of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. Unless the
Group is reasonably certain to obtain ownership of the leased asset
at the end of the lease term, the recognised right-of-use assets are
depreciated on a straight-line basis over the shorter of its estimated
useful life and the lease term. Right-of-use assets are subject to
impairment.
2. Significant accounting policies continued
l. Intangible assets continued
Costs associated with maintaining software programmes are
recognised as an expense as incurred. Development costs that are
directly attributable to the design and testing of identifiable and
unique software controlled by the Group are recognised as intangible
assets. Directly attributable costs that are capitalised as part of
the software include employee costs and appropriate overheads.
Capitalised development costs are recorded as intangible assets
and amortised from the point at which the asset is ready for use.
Internally generated intangible assets are stated in the Consolidated
Balance Sheet at the directly attributable cost of creation of the
asset, less accumulated amortisation. Intangible assets are
amortised on a straight-line basis over their estimated useful lives
up to a maximum of 10 years. Software incorporated into major
Enterprise Resource Planning (ERP) implementations that support
the recruitment process and financial reporting process is amortised
over a life of up to seven years. Other software is amortised between
three and five years.
m. Property, plant and equipment
Property, plant and equipment is recorded at cost, net of
depreciation and any provision for impairment. Depreciation is
provided on a straight-line basis over the anticipated useful working
lives of the assets, after they have been brought into use, at the
following rates:
Leasehold improvements – The cost is written off over the
unexpired term of the lease
Plant and machinery
– At rates varying between 5% and 33%
Fixtures and fittings
– At rates varying between 10% and 25%
n. Trade and other receivables
Trade and other receivables are initially measured at the transaction
price and then at amortised cost after appropriate allowances
for estimated irrecoverable amounts have been recognised in the
Consolidated Income Statement. An allowance for impairment
is made to both trade receivables and accrued income based on
historical credit loss experience adjusted for forward-looking factors
specific to the debtors and economic environment, as evidence of
a likely reduction in the recoverability of the cash flows.
o. Cash and cash equivalents
Cash and cash equivalents comprise cash-in-hand and current
balances with banks and similar institutions, which are readily
convertible to known amounts of cash and which are subject
to insignificant risk of changes in value.
p. Trade payables
Trade payables are measured initially at transaction price and
then at amortised cost.
q. Bank borrowings
Interest-bearing bank loans and overdrafts are recorded initially
at fair value and subsequently measured at amortised cost.
Finance charges, including premiums payable on settlement or
redemption and direct-issue costs, are accounted for on an accrual
basis in the Consolidated Income Statement using the effective
interest rate method and are added to the carrying amount of the
instrument to the extent that they are not settled in the period in
which they arise.
164
Hays plc Annual Report & Accounts 2023 Lease liabilities
At the commencement date of the lease, the Group recognises lease
liabilities measured at the present value of lease payments to be
made over the lease term. The lease payments include fixed
payments less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and amounts expected
to be paid under residual value guarantees. The lease payments also
include the exercise price of a purchase option reasonably certain to
be exercised by the Group and payments of penalties for terminating
a lease, if the lease term reflects the Group exercising the option to
terminate. The variable lease payments that do not depend on an
index or a rate are recognised as an expense in the period in which
the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses
the incremental borrowing rate at the lease commencement date
if the interest rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for the
lease payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in the
lease term, a change in the in-substance fixed lease payments
or a change in the assessment to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to
its leases of property, motor vehicles and equipment where leases
have a lease term of 12 months or less from the commencement
date and do not contain a purchase option. It also applies the
lease of low-value assets recognition exemption to leases of office
equipment that are considered of low value. Lease payments on
short-term leases and leases of low-value assets are recognised
as an expense on a straight-line basis over the lease term.
The Group determines the lease term as the non-cancellable term of
the lease, together with any periods covered by an option to extend
the lease if it is reasonably certain to be exercised, or any periods
covered by an option to terminate the lease, if it is reasonably certain
not to be exercised.
t. Provisions
A provision is recognised when the Group has a present legal or
constructive obligation as a result of a past event for which it is
probable that an outflow of resources will be required to settle the
obligation and when the amount can be reliably estimated. If the
effect is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects the current
market assessment of the time value of money and the risks specific
to the liability.
u. Government grants
A government grant is recognised only when there is reasonable
assurance that the Group will comply with any conditions attached
to the grant and that the grant will be received. The grant is
recognised net against the related costs for the period in which
they are intended to compensate.
3. Critical accounting judgements and
key sources of estimation uncertainty
The preparation of the Consolidated Financial Statements requires
judgement, estimations and assumptions to be made that affect the
reported value of assets, liabilities, revenues and expenses.
Judgements, estimates and assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the year
in which the estimate is revised and in any future years affected.
In preparing the Consolidated Financial Statements, the Directors
have considered the impact of Climate Change on the Group and
have concluded that there is no material impact on financial
reporting judgements and estimates (further information is provided
in the Strategic Report on page 68). This is consistent with the
assertion that risks associated with Climate Change are not
expected to have a material impact on the longer term viability of the
Group. Furthermore, there is not considered to be a material impact
on the carrying value of goodwill, other intangibles or on property,
plant and equipment.
Whilst the Directors have concluded that there is no material impact
of Climate Change on the financial reporting judgements and
estimates, they are mindful of the changing nature of the risks of
Climate Change. The Directors will therefore continue to monitor
these risks and their potential impact on the judgements and
estimates used in the Consolidated Financial Statements.
In applying the Group’s accounting policies, the Directors have
identified that the following areas are the critical accounting
judgements and key sources of estimation uncertainty:
Critical accounting judgements
Management does not consider there to be any critical accounting
judgements in either the current or prior years.
Estimation uncertainty
Goodwill impairment
Goodwill is tested for impairment at least annually. In performing
these tests assumptions are made in respect of future growth
rates and the discount rate to be applied to the future cash flows
of cash-generating units (CGUs). These assumptions are set out
in note 12 to the Consolidated Financial Statements.
Management has determined that there is no impairment required
to any of the CGUs in the year ended 30 June 2023.
Pension accounting
Under IAS 19 ‘Employee Benefits’, the Group has recognised a
pension surplus of £25.7 million (2022: £102.0 million). A number of
assumptions have been made in determining the pension position
and these are described in note 22 to the Consolidated Financial
Statements.
Provisions in respect of recoverability of trade receivables
As described in note 17 to the Consolidated Financial Statements,
provisions for impairment of trade receivables and accrued income
have been made. In reviewing the appropriateness of these
provisions, consideration has been given to the ageing of the debt
and the potential likelihood of default, taking into account current
and future economic conditions.
165
Financial StatementsGovernanceStrategic ReportShareholder Information NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
4. Segmental information
IFRS 8 ‘Operating Segments’
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly
reviewed by the chief operating decision-maker to allocate resources to the segment and to assess their performance.
As a result, the Group segments the business into four regions, Germany, United Kingdom & Ireland, Australia & New Zealand and Rest
of World. There is no material difference between the segmentation of the Group’s turnover by geographic origin and destination.
The Group’s operations comprise one class of business, that of qualified, professional and skilled recruitment.
Turnover, net fees and operating profit
The Group’s Executive Board, which is regarded as the chief operating decision-maker, uses net fees by segment as its measure of revenue
in internal reports, rather than turnover. This is because net fees exclude the remuneration of temporary workers, and payments to other
recruitment agencies where the Group acts as principal, which are not considered relevant in allocating resources to segments. The Group’s
Executive Board considers net fees for the purpose of making decisions about allocating resources. The Group does not report items below
operating profit by segment in its internal management reporting. The full detail of these items can be seen in the Group Consolidated
Income Statement on page 157. The reconciliation of turnover to net fees can be found in note 5 to the Consolidated Financial Statements.
(In £s million)
Turnover
Germany
United Kingdom & Ireland
Australia & New Zealand
Rest of World
Group
(In £s million)
Net fees
Germany
United Kingdom & Ireland
Australia & New Zealand
Rest of World
Group
(In £s million)
Operating profit
Germany
United Kingdom & Ireland
Australia & New Zealand
Rest of World
Group
Note
2023
2022
1,956.3
1,714.6
1,583.3
2,329.1
7,583.3
1,621.9
1,657.2
1,638.8
1,671.0
6,588.9
5
Note
2023
2022
382.0
266.1
188.4
458.1
1,294.6
313.9
263.3
195.7
416.5
1,189.4
5
2023
2022
100.2
28.7
32.1
36.0
197.0
75.6
43.4
51.6
39.5
210.1
Net trade receivables
For the purpose of monitoring performance and allocating resources from a balance sheet perspective, the Group’s Executive Board
monitors trade receivables net of provisions for impairment only on a segmental basis. These are monitored on a constant currency basis
for comparability through the year. These are shown below and reconciled to the totals as shown in note 17 to the Consolidated Financial
Statements.
(In £s million)
Germany
United Kingdom & Ireland
Australia & New Zealand
Rest of World
Group
As reported
internally
234.3
174.2
109.4
221.1
739.0
Exchange
adjustments
(0.3)
(0.1)
(8.3)
(3.3)
(12.0)
2023
234.0
174.1
101.1
217.8
727.0
As reported
internally
204.3
149.8
75.5
214.3
643.9
Exchange
adjustments
0.6
0.1
4.9
13.7
19.3
2022
204.9
149.9
80.4
228.0
663.2
Major customers
In the current year and prior year there was no customer that exceeded 10% of the Group’s turnover.
166
Hays plc Annual Report & Accounts 2023 5. Operating profit
The following costs are deducted from turnover to determine net fees:
(In £s million)
Turnover
Remuneration of temporary workers
Remuneration of other recruitment agencies
Net fees
2023
7,583.3
(5,212.9)
(1,075.8)
1,294.6
2022
6,588.9
(4,784.1)
(615.4)
1,189.4
The increase in remuneration of other agencies during the year is primarily due to first full-year of large Temp outsourcing contract in our
RoW division, where we manage a complex supply chain which includes a significant volume of third-party agency supply. Over time we
expect to increase our direct-fill proportion of these contingent workers. Excluding this contract, other agency supply increased by
c.£33 million.
Operating profit is stated after charging the following items to net fees of £1,294.6 million (2022: £1,189.4 million):
(In £s million)
Staff costs (note 7)
Amortisation of intangible assets (note 13)
Depreciation of property, plant and equipment (note 14)
Depreciation of right-of-use assets (note 15)
Loss on closure of Russian business
Short-term leases and leases of low-value assets
Impairment loss on trade receivables (note 17)
Auditor’s remuneration (note 6):
– for statutory audit services
– for other services
Other external charges
Administrative expenses
2023
868.8
10.0
10.9
46.0
–
3.8
3.0
2.1
0.2
152.8
1,097.6
2022
766.5
10.1
10.0
44.0
4.2
3.1
2.4
1.8
0.2
137.0
979.3
In the year ended 30 June 2022, due to the conflict in Ukraine, the Group announced that it had taken the decision to close its offices in
Moscow and St Petersburg, cease trading with immediate effect and exit Russia. Russia generated £7.8 million of net fees and £1.2 million
of operating profit in the year ended 30 June 2022. The total one-off cost of closing the Russian business was £4.2 million and, due to the
amount being immaterial to the Group, was incurred as an expense within operating profit and not reported as a discontinued operation.
6. Auditor’s remuneration
(In £s million)
Fees payable to the Company’s Auditors for the audit of the Company’s annual Financial Statements
Fees payable to the Company’s Auditors and their associates for other services to the Group:
The audit of the Company’s subsidiaries pursuant to legislation
Total audit fees
Audit-related assurance services
Total non-audit fees
2023
0.6
1.5
2.1
0.2
0.2
2022
0.5
1.3
1.8
0.2
0.2
167
Financial StatementsGovernanceStrategic ReportShareholder Information 7. Staff costs
The aggregate staff remuneration (including Executive Directors) was as follows:
(In £s million)
Wages and salaries
Social security costs
Other pension costs
Share-based payments
Staff costs
Average number of persons employed during the year (including Executive Directors) was as follows:
(Number)
Germany
United Kingdom & Ireland
Australia & New Zealand
Rest of World
Group
Closing number of persons employed at the end of the year (including Executive Directors) was as follows:
(Number)
Germany
United Kingdom & Ireland
Australia & New Zealand
Rest of World
Group
8. Net finance charge
(In £s million)
Interest received on bank deposits
Interest payable on bank loans and overdrafts
Interest on lease liabilities (note 15)
Pension Protection Fund levy
Net interest credit/(expense) on defined benefit pension schemes (note 22)
Net finance charge
9. Tax
The tax expense for the year is comprised of the following:
(In £s million)
Current tax
Current tax expense in respect of the current year
Adjustments recognised in the current year in relation to the current tax of prior years
Deferred tax
Deferred tax (charge)/credit in respect of the current year
Adjustments to deferred tax in relation to prior years
Total income tax expense recognised in the current year
2023
737.6
95.9
23.3
12.0
868.8
2023
2,994
3,767
1,634
4,961
13,356
2023
3,023
3,656
1,581
4,789
13,049
2023
2.0
(3.7)
(4.2)
(0.1)
1.1
(4.9)
2022
654.1
81.5
20.0
10.9
766.5
2022
2,568
3,430
1,563
4,552
12,113
2022
2,885
3,764
1,672
4,913
13,234
2022
0.8
(1.2)
(3.9)
(0.1)
(1.4)
(5.8)
2023
2022
(57.2)
6.8
(50.4)
(5.4)
2.0
(3.4)
(53.8)
(54.8)
4.0
(50.8)
0.2
0.5
0.7
(50.1)
168
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUEDHays plc Annual Report & Accounts 2023 Current tax expense for the year is comprised of the following:
(In £s million)
United Kingdom
Overseas
Group
The income tax expense for the year can be reconciled to the accounting profit as follows:
(In £s million)
Profit before tax
Income tax expense calculated at 20.5% (2022: 19.0%)
Net effect of items that are non-deductible in determining taxable profit
Effect of unused tax losses not recognised for deferred tax assets
Effect of tax losses not recognised for deferred tax utilised in the year
Effect of tax losses now recognised for deferred tax
Effect of other timing differences not recognised for deferred tax assets
Effect of other timing differences previously unrecognised for deferred tax assets
Effect of different tax rates of subsidiaries operating in other jurisdictions
Effect of share-based payment charges and share options
Income tax recognised in the current year
Adjustments recognised in the current year in relation to the current tax of prior years
Adjustments to deferred tax in relation to prior years
Income tax expense recognised in the Consolidated Income Statement
Effective tax rate for the year
2023
(5.7)
(51.5)
(57.2)
2023
192.1
(39.4)
(3.7)
(6.6)
0.3
1.2
(1.6)
0.8
(13.3)
(0.3)
(62.6)
6.8
2.0
(53.8)
28.0%
2022
(3.8)
(51.0)
(54.8)
2022
204.3
(38.8)
(5.6)
(1.1)
0.8
3.1
2.4
0.9
(15.7)
(0.6)
(54.6)
4.0
0.5
(50.1)
24.5%
The tax rate used for the reconciliation above for the year ended 30 June 2023 is the corporation tax rate of 20.5% (2022: 19.0%), being a
blend of the tax rate of 19% up to 31 March 2023 and 25% from 1 April 2023, payable by corporate entities in the United Kingdom on taxable
profits under tax law in that jurisdiction. The Group operates in jurisdictions which have tax rates higher than the UK statutory tax rate, the
most significant being Germany and Australia with statutory rates of 31.5% and 30% respectively, the impact of which is shown in the above
reconciliation under effect of different tax rates of subsidiaries operating in other jurisdictions.
In the Spring Budget 2021, the UK government announced an increase in the UK corporation tax rate from 19% to 25% with effect from 1 April
2023. This was substantially enacted in May 2021. Furthermore, on 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the
UK, introducing a global minimum effective tax rate of 15%. The legislation implements a domestic top-up tax and a multinational top-up tax,
effective for accounting periods starting on or after 31 December 2023. The Group has applied the exception under the IAS 12 amendment
to recognising and disclosing information about deferred tax assets and liabilities related to top-up income taxes.
Income tax recognised in other comprehensive income
(In £s million)
Current tax
Contributions in respect of defined benefit pension scheme
Tax on foreign exchange movements
Effect of tax losses previously recognised, utilised in the year
Deferred tax
Actuarial loss/(gain) in respect of defined benefit pension scheme
Contributions in respect of defined benefit pension scheme
Effect of tax losses previously recognised, utilised in the year
Effect of tax losses recognised for deferred tax
Total income tax credit/(charge) recognised in other comprehensive income
2023
2022
3.9
1.1
–
23.7
(4.7)
–
(4.5)
19.5
–
(1.8)
1.8
(9.9)
–
(1.8)
3.1
(8.6)
169
Financial StatementsGovernanceStrategic ReportShareholder Information 10. Dividends
The following dividends were paid by the Group and have been recognised as distributions to equity shareholders in the year:
Prior year final dividend
Prior year special dividend
Current year interim dividend
Total
2023
(pence per
share)
1.90
7.34
0.95
10.19
2023
(£s million)
30.8
119.1
15.2
165.1
The following dividends have been proposed by the Group in respect of the accounting year presented:
Interim dividend (paid)
Final dividend (proposed)
Special dividend (proposed)
Total
2023
(pence per
share)
0.95
2.05
2.24
5.24
2023
(£s million)
15.2
32.6
35.6
83.4
2022
(pence per
share)
1.22
8.93
0.95
11.10
2022
(pence per
share)
0.95
1.90
7.34
10.19
2022
(£s million)
20.5
150.0
15.9
186.4
2022
(£s million)
15.9
31.4
121.2
168.5
The final dividend for 2023 of 2.05 pence per share (£32.6 million) along with a special dividend of 2.24 pence per share (£35.6 million) will be
proposed at the Annual General Meeting on 15 November 2023. Neither the final dividend nor the special dividend have been included as a
liability. If approved, the final and special dividends will be paid on 17 November 2023 to shareholders on the register at the close of business
on 6 October 2023.
11. Earnings per share
For the year ended 30 June 2023
Basic earnings per share
Dilution effect of share options
Diluted earnings per share
For the year ended 30 June 2022
Basic earnings per share
Dilution effect of share options
Diluted earnings per share
Weighted
average
number of
shares
(million)
1,610.0
13.9
1,623.9
Weighted
average
number of
shares
(million)
1,671.7
20.7
1,692.4
Earnings
(£s million)
138.3
–
138.3
Earnings
(£s million)
154.2
–
154.2
Per share
amount
(pence)
8.59
(0.07)
8.52
Per share
amount
(pence)
9.22
(0.11)
9.11
The weighted average number of shares in issue for the current and prior years exclude shares held in treasury.
170
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUEDHays plc Annual Report & Accounts 2023 12. Goodwill
(In £s million)
At 1 July
Exchange adjustments
Additions during the year
At 30 June
2023
202.3
(3.0)
1.0
200.3
2022
199.9
2.4
–
202.3
Goodwill arising on business combinations is reviewed and tested on an annual basis or more frequently if there is an indication that goodwill
might be impaired. Goodwill has been tested for impairment by comparing the carrying amount of each cash-generating unit (CGU),
including goodwill, with the recoverable amount. The recoverable amounts of the CGUs are determined from value-in-use calculations.
The additions during the year of £1.0 million relate to the acquisition of Vercida Consulting, a DE&I advisory business based in the UK, with
further amounts payable based on achieving our ambitious growth plans. These amounts will be charged to the Consolidated Income
Statement and are not expected to be material.
The key assumptions for the value-in-use calculations are as follows:
Assumption
How determined
Operating profit
The operating profit is based on the latest one-year forecasts for the CGUs approved by the Group’s Executive Board,
and medium-term forecasts over a two to five year period which are compiled using expectations of fee growth,
consultant productivity and operating costs, from past experience. The Group prepares cash flow forecasts derived
from the most recent one-year financial forecasts approved by the Group’s Executive Board, and extrapolates cash
flows in perpetuity based on the long-term growth rates and expected cash conversion rates.
Cash flow projections used to measure value-in-use do not include any cash inflows or outflows expected from any
future restructurings or asset enhancements.
Discount rates
The pre-tax rates used to discount the forecast cash flows range between 12.2% and 14.2% (2022: 12.7% and 16.0%)
reflecting current market assessments of the time value of money and the country risks specific to the relevant CGUs.
The discount rate applied to the cash flows of each of the Group’s operations is based on the weighted average cost
of capital (WACC), taking into account adjustments to the risk-free rate for 20-year bonds issued by the government
in the respective market. Where government bond rates contain a material component of credit risk, high-quality
local corporate bond rates may be used.
These rates are adjusted for a risk premium to reflect the increased risk of investing in equities and, where appropriate,
the systematic risk of the specific Group operating company. In making this adjustment, inputs required are the
equity market risk premium (that is the increased return required over and above a risk-free rate by an investor who
is investing in the market as a whole) and the risk adjustment beta, applied to reflect the risk of the specific Group
operating company relative to the market as a whole.
Growth rates
The medium-term growth rates are based on management’s current forecasts for a period of two to five years.
These are consistent with a minimum average estimated growth rate for Group of 12.0% (2022: 9.0%). The growth
estimates reflect a combination of both past experience and the macroeconomic environment, including GDP
expectations driving fee growth.
The long-term growth rates are based on management forecasts, which are consistent with external sources of an
average estimated growth rate of 2.0% (2022: 2.0%), reflecting a combination of GDP expectations and long-term
wage inflation driving fee growth.
GDP growth is a key driver of our business, and is therefore a key consideration in developing long-term forecasts.
Wage inflation is also an important driver of net fees, as net fees are derived directly from the salary level of
candidates placed into employment. Based on past experience a combination of these two factors is considered
to be an appropriate basis for assessing long-term growth rates.
171
Financial StatementsGovernanceStrategic ReportShareholder Information 12. Goodwill continued
Goodwill is allocated to CGUs for the purpose of impairment testing. The allocation is made to those CGUs or groups of CGUs that are
expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at the lowest level
at which goodwill is monitored for internal management purposes, being the operating segments. The carrying amount of goodwill has been
allocated as follows:
(In £s million)
Germany
United Kingdom & Ireland
Rest of World
Group
2023
49.8
94.1
56.4
200.3
2022
49.9
93.1
59.3
202.3
Information about the performance of the individual CGUs is provided in the Divisional Operating Reviews, within the Strategic Report on
pages 48 to 52.
Impairment reviews were performed at the year-end by comparing the carrying value of goodwill with the recoverable amounts of the CGUs
to which goodwill has been allocated. In the current year, management has determined that there has been no requirement to impair to any
of the CGUs and in respect of these a sensitivity analysis has been performed in assessing recoverable amounts of goodwill. This has been
based on changes in key assumptions considered to be reasonably possible by management. This included a change in the pre-tax discount
rate of up to 3% and changes in the medium and long-term growth rates of between 0% and 2% in absolute terms. The sensitivity analysis
shows that no impairment would arise in isolation under each scenario for any of the CGUs. The average headroom across all the CGUs
was 465% and the lowest level of headroom on an individual CGU was 40%.
The USA business, which is part of the Rest of World segment, had a challenging year with an industry wide slowdown in Permanent
recruitment market, particularly in the Technology sector. As a result, the headroom has decreased from the prior year to £12.3 million on
goodwill of £22.2 million. A key assumption in determining the value-in-use calculation is an average annual fee growth of 7% for the period
of two to five years, this is in line with Group’s overall strategy to build a strong presence in the USA, and maximise the long-term growth
opportunities available in the market. The sensitivity analysis shows that a reduction in average fee growth rate assumption from 7% to 4%
will eliminate headroom to nil. The pre-tax rate used to discount the forecast cash flow is 13.6%, a 1% increase to this rate will reduce
headroom by c.£3 million.
13. Other intangible assets
(In £s million)
Cost
At 1 July
Exchange adjustments
Additions
Disposals
At 30 June
Accumulated amortisation
At 1 July
Exchange adjustments
Charge for the year
Disposals
At 30 June
Net book value
At 30 June
At 1 July
2023
2022
179.2
(1.5)
16.8
(0.5)
194.0
132.1
(1.3)
10.0
(0.5)
140.3
164.9
2.7
12.3
(0.7)
179.2
120.1
2.0
10.1
(0.1)
132.1
53.7
47.1
47.1
44.8
All other intangible assets relate mainly to computer software, and of the additions in the current year, £7.3 million relate to internally
generated assets (2022: £5.4 million).
The estimated average useful life of the computer software related intangible assets is seven years (2022: seven years). Software
incorporated into major Enterprise Resource Planning (ERP) implementations is amortised on a straight-line basis over a life of up to seven
years. Other software is amortised on a straight-line basis between three and five years.
Capital commitments were £1.7 million (2022: £nil).
172
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUEDHays plc Annual Report & Accounts 2023 14. Property, plant and equipment
(In £s million)
Cost
At 1 July 2022
Exchange adjustments
Additions
Disposals
At 30 June 2023
Accumulated depreciation
At 1 July 2022
Exchange adjustments
Charge for the year
Disposals
At 30 June 2023
Net book value
At 30 June 2023
At 1 July 2022
(In £s million)
Cost
At 1 July 2021
Exchange adjustments
Additions
Disposals
At 30 June 2022
Accumulated depreciation
At 1 July 2021
Exchange adjustments
Charge for the year
Disposals
At 30 June 2022
Net book value
At 30 June 2022
At 1 July 2021
Leasehold
improvements
Plant and
machinery
Fixtures and
fittings
28.1
(1.5)
2.9
(1.5)
28.0
20.7
(1.0)
2.3
(1.5)
20.5
7.5
7.4
54.8
(1.2)
5.4
(1.7)
57.3
39.7
(0.9)
6.7
(1.7)
43.8
13.5
15.1
31.4
(0.3)
4.0
(1.1)
34.0
24.6
(0.2)
1.9
(1.0)
25.3
8.7
6.8
Leasehold
improvements
Plant and
machinery
Fixtures and
fittings
26.8
1.2
1.5
(1.4)
28.1
18.9
0.8
2.3
(1.3)
20.7
7.4
7.9
51.4
0.9
9.2
(6.7)
54.8
39.2
0.7
5.8
(6.0)
39.7
15.1
12.2
30.4
0.5
1.4
(0.9)
31.4
23.1
0.4
1.9
(0.8)
24.6
6.8
7.3
Total
114.3
(3.0)
12.3
(4.3)
119.3
85.0
(2.1)
10.9
(4.2)
89.6
29.7
29.3
Total
108.6
2.6
12.1
(9.0)
114.3
81.2
1.9
10.0
(8.1)
85.0
29.3
27.4
173
Financial StatementsGovernanceStrategic ReportShareholder Information Right-of-use assets
Motor
vehicles
9.2
–
8.5
(0.1)
(6.1)
–
–
11.5
Other
assets
0.1
–
0.1
–
(0.1)
–
–
0.1
Right-of-use assets
Motor
vehicles
8.3
0.2
6.6
(0.2)
(5.7)
–
–
9.2
Other
assets
0.2
–
–
–
(0.1)
–
–
0.1
Property
162.4
(2.2)
53.6
(9.5)
(39.8)
–
–
164.5
Property
181.8
2.5
32.0
(15.7)
(38.2)
–
–
162.4
Total
lease
assets
171.7
(2.2)
62.2
(9.6)
(46.0)
–
–
176.1
Total
lease
assets
190.3
2.7
38.6
(15.9)
(44.0)
–
–
171.7
2023
(41.3)
(36.5)
(26.9)
(19.6)
(15.4)
(50.1)
(189.8)
2023
(41.3)
(148.5)
(189.8)
Lease
liabilities
(185.1)
2.2
(62.2)
9.6
–
49.9
(4.2)
(189.8)
Lease
liabilities
(201.1)
(2.4)
(38.6)
15.9
–
45.0
(3.9)
(185.1)
2022
(39.8)
(37.1)
(29.9)
(20.7)
(14.4)
(43.2)
(185.1)
2022
(39.8)
(145.3)
(185.1)
15. Lease accounting
(In £s million)
At 1 July 2022
Exchange adjustments
Lease additions
Lease disposals
Depreciation of right-of-use assets
Lease liability principal repayments
Interest on lease liabilities
At 30 June 2023
(In £s million)
At 1 July 2021
Exchange adjustments
Lease additions
Lease disposals
Depreciation of right-of-use assets
Lease liability principal repayments
Interest on lease liabilities
At 30 June 2022
Maturity analysis
(In £s million)
Less than one year
One to two years
Two to three years
Three to four years
Four to five years
More than five years
Total lease liabilities
(In £s million)
Current
Non-current
Total lease liabilities
174
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUEDHays plc Annual Report & Accounts 2023 16. Deferred tax
Deferred tax assets and liabilities in relation to:
(In £s million)
Accelerated tax depreciation
Retirement benefit surplus
Share-based payments
Provisions
Tax losses
Other short-term timing differences
Net deferred tax
(In £s million)
Accelerated tax depreciation
Retirement benefit surplus
Share-based payments
Provisions
Tax losses
Other short-term timing differences
Net deferred tax
(Charge)/
credit to
Consolidated
Income
Statement
(1.0)
–
0.6
(0.9)
(3.1)
1.0
(3.4)
(Charge)/
credit to
Consolidated
Income
Statement
(0.3)
(4.0)
0.1
–
3.4
1.5
0.7
(Charge)/
credit to
other
comprehensive
income
–
19.0
–
–
(4.5)
–
14.5
(Charge)/
credit to
other
comprehensive
income
–
(9.9)
–
–
1.3
–
(8.6)
1 July
2022
(3.8)
(25.5)
1.7
8.5
17.2
10.4
8.5
1 July
2021
(3.4)
(11.6)
1.6
8.4
12.2
8.5
15.7
Exchange
adjustments
–
–
–
(0.2)
(0.2)
(0.6)
(1.0)
Exchange
adjustments
(0.1)
–
–
0.1
0.3
0.4
0.7
30 June
2023
(4.8)
(6.5)
2.3
7.4
9.4
10.8
18.6
30 June
2022
(3.8)
(25.5)
1.7
8.5
17.2
10.4
8.5
Deferred tax assets and liabilities are offset where the Group has a legal enforceable right to do so. The analysis of the deferred tax balances
(after offset) for financial reporting purposes are as follows:
(In £s million)
Deferred tax assets
Deferred tax liabilities
Net deferred tax
2023
21.4
(2.8)
18.6
2022
18.5
(10.0)
8.5
The deferred tax asset of £21.4 million (2022: £18.5 million) as at 30 June 2023 primarily arises from our Australian and UK businesses and
the deferred tax liability of £2.8 million (2022: £10.0 million) as at 30 June 2023 mainly arises from our German business.
The increase in the overall deferred tax balance is primarily explained by the reduction in the deferred tax liability driven by a reduction in the
retirement benefit surplus, partially offset by the derecognition of deferred tax asset in relation to previously unrecognised tax losses. This is
on the basis that the asset can be recovered against the deferred tax liability relating to the retirement benefit surplus when the latter unwinds
in the future.
Deferred tax assets can, inter alia, be recognised where the potential asset can offset the future unwind of a deferred tax liability. Therefore,
when considering the recognition of certain deferred tax assets, management must consider the level of the deferred tax liability recognised
in relation to the retirement benefit surplus and the manner in which that deferred tax liability will unwind.
Management considers a buy-out of the defined benefit pension scheme to be the most probable manner of recovery of the retirement
benefit surplus, based on the progress of the Group’s stated long-term objective of achieving a buy-out of the scheme within the next six
years. On this basis, the retirement benefit surplus would unwind as a one-off event, rather than over time, and hence the associated deferred
tax liability would unwind simultaneously at that point in time.
As such, the extent to which a deferred tax asset can be recognised against this deferred tax liability is capped to the amount of that potential
asset that can be utilised in the one period in which the pension related deferred tax liability unwinds.
If management were to judge that the retirement benefit surplus would unwind over a number of years, rather than as a one-off event, the
deferred tax asset recognised at 30 June 2023 would be £2.4 million higher.
The basis for measurement will be assessed at each reporting period based on the latest position in relation to the defined benefit pension
scheme as a change in the basis of recovery would result in a different measurement basis and impact the quantum of the deferred tax
balance recognised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the periods in which they reverse – being the
rates enacted or substantively enacted for those relevant periods applicable for each jurisdiction. Following the legislated increase in the
main UK corporation tax rate from 19% to 25% which has effect from 1 April 2023, the UK deferred tax balances were remeasured as at
30 June 2021 and continues to be measured at the tax rates that would apply in the period they are expected to reverse.
175
Financial StatementsGovernanceStrategic ReportShareholder Information 16. Deferred tax continued
Unrecognised deductible temporary differences, unused tax losses and unused tax credits
Deductible temporary differences, unused tax losses and unused tax credits for which no deferred tax assets have been recognised are
attributable to the following:
(In £s million)
Tax losses (revenue in nature)
Tax losses (capital in nature)
Total tax losses
(In £s million)
Unrecognised deductible temporary differences
Gross
2023
138.1
22.1
160.2
Gross
2023
49.6
Tax
2023
34.6
5.5
40.1
Tax
2023
11.9
Gross
2022
97.8
22.1
119.9
Gross
2022
41.9
Tax
2022
26.5
5.5
32.0
Tax
2022
10.2
In tax losses (revenue in nature) £0.7 million is due to expire in five years. The remaining tax losses have no fixed expiry date. The capital
losses can also be carried forward indefinitely but can only be offset against capital gains.
Unrecognised taxable temporary differences associated with investments and interests
Taxable temporary differences in relation to investments in subsidiaries, for which deferred tax liabilities have not been recognised are
attributable to the following:
(In £s million)
Foreign subsidiaries
Tax thereon
17. Trade and other receivables
(In £s million)
Net trade receivables
Net accrued income
Prepayments and other receivables
Trade and other receivables
2023
34.9
2.2
2022
28.3
1.8
2023
727.0
476.8
40.8
1,244.6
2022
663.2
495.9
46.0
1,205.1
Due to their short-term nature, the Directors consider that the carrying amount of trade receivables approximates to their fair value. The
average credit period taken is 33 days (2022: 33 days).
Accrued income primarily arises where temporary workers have provided their services but the amount incurred and margin earned thereon
has yet to be invoiced on to the client due to timing.
The Group’s exposure to foreign currency translation is primarily in respect of the euro and the Australian dollar. The sensitivity of a 1 cent
change in the year-end closing exchange rates in respect of the euro and Australian dollar would result in a £2.8 million and £0.5 million
movement in trade receivables respectively.
Credit risk
The Group’s credit risk is primarily attributable to its trade receivables and the risk of customer default, although the Group is also subject
to credit risk on its accrued income. The amounts presented in the Consolidated Balance Sheet for both trade receivables and accrued
income are net of allowances for doubtful receivables. An impairment analysis is performed centrally using a provision matrix to measure
the expected credit losses, in which the allowance for impairment increases as balances age. Expected credit losses are measured using
historical losses for the past five years, adjusted for forward-looking factors impacting the economic environment, such as the GDP growth
outlook (based on the IMF’s World Economic Outlook data), and commercial factors deemed to have a significant impact on expected credit
loss rates. The provision matrix used to measure the expected credit losses is:
As at 30 June 2023
(In £s million)
Not yet due
Up to one month past due
One to three months past due
Greater than three months past due
Trade receivables
Accrued income
176
Gross
633.2
81.9
20.1
11.0
746.2
478.5
Expected
Credit Loss
0.3%
5.7%
17.4%
84.6%
2.6%
0.4%
Provision
(1.7)
(4.7)
(3.5)
(9.3)
(19.2)
(1.7)
Net
631.5
77.2
16.6
1.7
727.0
476.8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUEDHays plc Annual Report & Accounts 2023 As at 30 June 2022
(In £s million)
Not yet due
Up to one month past due
One to three months past due
Greater than three months past due
Trade receivables
Accrued income
Gross
570.0
78.5
22.2
10.1
680.8
499.0
Expected
Credit Loss
0.4%
2.8%
19.4%
90.1%
2.6%
0.6%
Provision
(2.0)
(2.2)
(4.3)
(9.1)
(17.6)
(3.1)
Net
568.0
76.3
17.9
1.0
663.2
495.9
The Group reduces risk through its credit control process and by contractual arrangements with other recruitment agencies in situations
where the Group invoices on their behalf. The Group’s exposure is spread over a large number of customers.
The movement on the provision for impairment of trade receivables is as follows:
(In £s million)
At 1 July
Exchange movement
Charge for the year
Uncollectable amounts written off
At 30 June
2023
17.6
(0.2)
3.0
(1.2)
19.2
2022
16.6
0.2
2.4
(1.6)
17.6
Sensitivity
The key sensitivity for credit risk is the movement in recoverability of trade receivables, measured by Days Sales Outstanding (‘DSO’).
Sensitivity analysis is performed for both an increase and decrease of one DSO, based on actual DSO of 33 days at 30 June 2023
(30 June 2022: 33 days). The sensitivity analysis show that an increase of one DSO will result in an additional £1.1 million impairment
allowance, whereas a decrease of one DSO will result in a £1.1 million decrease in impairment allowance. The impact of forward-looking
factors on the required provision is immaterial at 30 June 2023, including the impact on the required provision on accrued income.
The results of the sensitivity analysis of DSO is shown below:
One additional DSO
(In £s million)
Not yet due
Up to one month past due
One to three months past due
Greater than three months past due
Trade receivables
One fewer DSO
(In £s million)
Not yet due
Up to one month past due
One to three months past due
Greater than three months past due
Trade receivables
Adjusted
Gross
670.6
87.2
21.2
11.6
790.6
Adjusted
Gross
600.0
78.0
19.0
10.4
707.4
Expected
Credit Loss
0.3%
5.7%
17.4%
84.6%
2.6%
Expected
Credit Loss
0.3%
5.7%
17.4%
84.6%
2.6%
Required
Provision
(1.8)
(5.0)
(3.7)
(9.8)
(20.3)
Required
Provision
(1.6)
(4.5)
(3.3)
(8.8)
(18.2)
The risk disclosures contained on pages 74 to 79 within the Strategic Report form part of these Consolidated Financial Statements.
177
Financial StatementsGovernanceStrategic ReportShareholder Information 18. Cash and cash equivalents
(In £s million)
Cash and cash equivalents
2023
145.6
2022
296.2
The effective interest rate on short-term deposits was 3.4% (2022: 0.1%). The average maturity of short-term deposits was 7 days
(2022: 19 days).
Capital management
The Group’s business model remains highly cash generative. The Board’s free cash flow priorities are to fund the Group’s investment
and development, maintain a strong balance sheet, deliver a sustainable and appropriate core dividend and to return surplus capital to
shareholders via special dividends and share buybacks.
The Group’s target core full-year dividend cover range remains 2.0 to 3.0x earnings. The Group’s policy for returning surplus cash to
shareholders is based on returning capital above the Group’s cash buffer at each financial year-end (30 June) of £100 million, subject
to the economic outlook.
The capital structure of the Group consists of net cash/(debt), which is represented by cash and cash equivalents, bank loans and overdrafts
(note 20) and equity attributable to equity holders of the parent, comprising issued share capital, reserves and retained earnings.
The Group is not restricted to any externally imposed capital requirements.
Risk management
A description of the Group’s treasury policy and controls is included in the Finance Director’s Review on page 47.
Cash management and foreign exchange risk
The Group’s cash management policy is to minimise interest payments by closely managing Group cash balances and external borrowings.
Euro-denominated cash positions are managed centrally using a cash concentration arrangement which provides visibility over participating
country bank balances on a daily basis. Any Group surplus balance is used to repay any maturing loans under the Group’s revolving credit
facility or invested in money market funds. As the Group holds a sterling-denominated debt facility and generates significant foreign currency
cash flows, the Board considers it appropriate in certain cases to use derivative financial instruments as part of its day-to-day cash
management to reduce the Group’s exposure to foreign exchange risk.
The Group’s operating profit exposure to foreign currency translation is primarily in respect of the euro and the Australian dollar.
The sensitivity of a 1 cent change in the average exchange rates for the year in respect of the euro and Australian dollar would result
in a £1.2 million and £0.2 million change in operating profit respectively.
The Group does not use derivatives to hedge balance sheet and income statement translation exposure.
Interest rate risk
The Group is exposed to interest rate risk on floating rate bank loans and overdrafts. It is the Group’s policy to limit its exposure to fluctuating
interest rates by selectively hedging interest rate risk using derivative financial instruments, however there were no interest rate swaps held
by the Group during the current or prior year. Cash and cash equivalents carry interest at floating rates based on local money market rates.
Counterparty credit risk
Counterparty credit risk arises primarily from the investment of surplus funds. Risks are closely monitored using credit ratings assigned to
financial institutions by international credit rating agencies. The Group restricts transactions to banks and money market funds that have an
acceptable credit profile and limits its exposure to each institution accordingly.
178
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUEDHays plc Annual Report & Accounts 2023 19. Derivative financial instruments
(In £s million)
Net derivative asset/(liability)
2023
0.1
2022
(0.1)
As set out in note 18 to the Consolidated Financial Statements and in the treasury management section of the Finance Director’s Review on
page 47, in certain cases the Group uses derivative financial instruments to manage its foreign exchange exposures as part of its day-to-day
cash management.
As at 30 June 2023, the Group had entered into six forward exchange contract arrangements with a counterparty bank (2022: five forward
contracts). The fair market value of the contracts as at 30 June 2023 gave rise to a gain resulting in the presentation of a net derivative asset
of £0.1 million (2022: liability £0.1 million) in the Consolidated Balance Sheet.
In the current year, some of the derivative assets and liabilities met the offsetting criteria of IAS 32 paragraph 42. Consequently, the qualifying
gross derivative assets were set off against the qualifying gross derivative liabilities.
The Group does not use derivatives for speculative purposes and all transactions are undertaken to manage the risks arising from underlying
business activities. These instruments are classified as Level 2 in the IFRS 7 fair value hierarchy.
Categories of financial assets and liabilities held by the Group are as follows:
(In £s million)
Financial assets
Net trade receivables
Net accrued income
Cash and cash equivalents
Derivative financial instruments
Total financial assets
(In £s million)
Financial liabilities
Trade payables
Other payables
Other financial liabilities
Accruals
Derivative financial instruments
Bank loans and overdrafts
Total financial liabilities
20. Bank loans and overdrafts
(In £s million)
Bank loans
2023
2022
727.0
476.8
145.6
0.1
1,349.5
663.2
495.9
296.2
–
1,455.3
2023
2022
278.6
87.6
–
537.7
–
10.0
913.9
279.5
84.2
56.8
518.9
0.1
–
939.5
2023
10.0
2022
–
Risk management
A description of the Group’s treasury policy and controls is included in the Finance Director’s Review on page 47.
Committed facilities
On 19 October 2020, the Group extended the maturity of its £210 million unsecured revolving credit facility by one year to November 2025
at the lower value of £170 million in its final year due to reduced lender commitments received. The financial covenants within the facility
remain unchanged and require the Group’s interest cover ratio to be at least 4:1 and its leverage ratio (net debt to EBITDA) to be no greater
than 2.5:1. The interest rate of the facility is based on a ratchet mechanism with a margin payable over SONIA in the range of 0.70% to 1.50%.
At 30 June 2023, £200 million of the committed facility was undrawn (2022: £210 million undrawn).
Interest rates
The weighted average interest rates paid were as follows:
Bank borrowings
2023
4.6%
2022
1.7%
For every 25 basis points fall or rise in the average SONIA rate in the year, there would be a reduction or increase in profit before tax by
approximately £0.1 million.
179
Financial StatementsGovernanceStrategic ReportShareholder Information 21. Trade and other payables
(In £s million)
Trade payables
Other tax and social security
Other payables
Other financial liabilities
Accruals
Trade and other payables
2023
278.6
87.4
87.6
–
537.7
991.3
2022
279.5
90.4
84.2
56.8
518.9
1,029.8
The Directors consider that the carrying amount of trade payables approximates to their fair value. The average credit period taken for trade
purchases is 31 days (2022: 28 days).
In the year ended 30 June 2022, the Group commenced a £75.0 million share buyback programme, to be completed over a 12-month period.
By 30 June 2022 the Group had purchased and cancelled £18.2 million (15.4 million shares) under this programme. Due to the nature of the
cancellation terms in the agreement being not substantive, the outstanding balance under the programme of £56.8 million was recognised
as other financial liabilities as at 30 June 2022. This was fully settled in the current financial year.
Accruals primarily relate to the remuneration costs for temporary workers and other agencies that have provided their services but
remuneration has yet to be made due to timing.
22. Retirement benefit surplus
The Group operates a number of retirement benefit schemes in the UK and in other countries. The Group’s principal schemes are within the
UK where the Group operates one defined contribution scheme and two defined benefit schemes. The majority of overseas arrangements
are either defined contribution or government-sponsored schemes and these arrangements are not material in the context of the Group
results. The total cost charged to the Consolidated Income Statement in relation to these overseas arrangements was £17.5 million
(2022: £15.1 million).
UK Defined Contribution Scheme
The Group’s principal defined contribution benefit scheme is the Hays Group Personal Pension Plan which is operated for all qualifying
employees and is funded via an employee salary sacrifice arrangement, and for qualifying employees additional employer contributions.
Employer contributions are in the range of 3% to 12% of pensionable salary depending on the level of employee contribution and seniority.
The total cost charged to the Consolidated Income Statement of £5.8 million (2022: £4.9 million) represents employer’s contributions
payable to the money purchase arrangements. There were no contributions outstanding at the end of the current or prior year. The assets
of the money purchase arrangements are held separately from those of the Group.
UK Defined Benefit Schemes
The Group’s principal defined benefit schemes are the Hays Pension Scheme and the Hays Supplementary Scheme both in the UK.
The Hays Pension Scheme is a funded final salary defined benefit scheme providing pensions and death benefits to members. The Hays
Supplementary Scheme is an unfunded unapproved retirement benefit scheme for employees who were subject to HMRC’s earnings cap on
pensionable salary. The Schemes were closed to future accrual from 30 June 2012 with pensions calculated up until the point of closure. The
Schemes are governed by a Trustee Board, which is independent of the Group and are subject to full actuarial valuation on a triennial basis.
The last formal actuarial valuation of the Hays Pension Scheme was performed at 30 June 2021 and quantified the deficit at £23.9 million.
A revised deficit funding schedule, in line with the Group’s strategy to achieve an eventual buy-out of the Scheme, was agreed with effect
from 1 July 2021 which maintained the annual contribution at its previous level, subject to a 3% per annum fixed uplift over a period of five
and a half years. During the year ended 30 June 2023, the Group made a contribution of £17.2 million to the Hays Pension Scheme (2022:
£16.7 million) in accordance with the agreed deficit funding schedule. The cash contributions made during the year mainly related to deficit
funding payments.
In respect of IFRIC 14, The Hays Pension Scheme Definitive Deed and Rules is considered to provide Hays with an unconditional right to
a refund of surplus assets and therefore the recognition of a net defined benefit scheme asset is not restricted and agreements to make
funding contributions do not give rise to any additional liabilities in respect of the Scheme.
The defined benefit schemes expose the Group to actuarial risks, such as longevity risk, inflation risk, interest rate risk and market
(investment) risk. The Group is not exposed to any unusual, entity-specific or scheme-specific risks.
180
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUEDHays plc Annual Report & Accounts 2023 The net amount included in the Consolidated Balance Sheet arising from the Group’s obligations in respect of its defined benefit pension
schemes is as follows:
(In £s million)
Present value of defined benefit obligations
Less fair value of defined benefit scheme assets:
Bonds and gilts
Absolute return funds
LDI funds
Real estate
Buy-in policy and other insurance policies
Cash
Total fair value of defined benefit scheme assets
Net asset arising from defined benefit obligations
(In £s million)
Asset category
Bonds and gilts
LDI funds
Buy-in policy and other insurance policies
Cash
Total scheme assets
2023
(475.8)
2022
(573.5)
166.7
–
162.6
–
159.7
12.5
501.5
25.7
218.4
31.2
139.7
65.9
191.6
28.7
675.5
102.0
Quoted
Unquoted
2023
–
281.7
–
12.1
293.8
166.7
(119.1)
159.7
0.4
207.7
166.7
162.6
159.7
12.5
501.5
The Trustee Board is responsible for determining the Hays Pension Scheme’s investment strategy, after taking advice from the Schemes’
investment advisor Mercer Limited. The investment objective for the Trustee of the Scheme is to maintain a portfolio of suitable assets of
appropriate liquidity which will generate investment returns to meet, together with future contributions, the benefits of the defined benefit
scheme as they fall due. The current strategy is to hold investments that share characteristics with the long-term liabilities of the Scheme.
The majority of assets are invested in a Liability Driven Investments (LDI) portfolio and corporate bonds and gilts. The Scheme also holds
a bulk purchasing annuity policy (buy-in) contract with Canada Life Limited in respect of ensuring all future payments to existing pensioners
of the Hays defined benefit Scheme as at 31 December 2017. The Scheme assets do not include any directly held shares issued by the
Company or property occupied by the Company.
The fair value of financial instruments has been determined using the fair value hierarchy. Where such quoted prices are unavailable,
the price of a recent transaction for an identical asset, adjusted if necessary, is used. Where quoted prices are not available and recent
transactions of an identical asset on their own are either unavailable or not a good estimate of fair value, valuation techniques are
employed using both observable market data and non-observable data.
In relation to the LDI funds the valuations have been determined as follows:
– Repurchase agreements (where the Scheme has sold assets with the agreement to repurchase at a fixed date and price) are included in
the Consolidated Financial Statements at the fair value of the repurchase price as a liability. The assets sold are reported at their fair value
reflecting that the Scheme retains the risks and rewards of ownership of those assets;
– The fair value of the forward currency contracts is based on market forward exchange rates at the year-end and determined as the gain
or loss that would arise if the outstanding contract was matched at the year-end with an equal and opposite contract; and
– Swaps represent current value of future cash flows arising from the swap determined using discounted cash flow models and market
data at the reporting date.
181
Financial StatementsGovernanceStrategic ReportShareholder Information
22. Retirement benefit surplus continued
The analysis of the LDI funds included within the pension scheme assets is as follows:
(In £s million)
LDI funds summary valuation
Government bonds
Government index-linked
Interest rate swaps
Fixed incomes futures
Liquidity
Gross funds
Repurchase agreements
RPI swaps
Futures
Gross liabilities
Total LDI funds
Quoted
Unquoted
2023
(35.0)
301.7
–
42.0
15.0
323.7
–
–
(42.0)
(42.0)
–
–
(26.6)
–
–
(26.6)
(94.5)
2.0
–
(92.5)
(35.0)
301.7
(26.6)
42.0
15.0
297.1
(94.5)
2.0
(42.0)
(134.5)
281.7
(119.1)
162.6
The LDI portfolio is managed by Insight (a Bank of New York Mellon company) under an active mandate and uses government bonds and
derivative instruments (such as interest rate swaps, inflation swaps and gilt repurchase transactions) to hedge the impact of interest rate and
inflation movements in relation to the long-term liabilities.
Under the Schemes’ LDI strategy, if interest rates fall, the value of LDI investments will rise to help match the increase in actuarial liabilities
arising from the fall in discount rate. Similarly if interest rates rise, the LDI investments will fall in value, as will the liabilities because of the
increase in the discount rate. The extent to which the liability interest rate and inflation risk is not fully matched by the LDI funds, represents
the residual interest rate and inflation risk the Scheme remains exposed to.
In addition to the above risk, the LDI portfolio forms part of a diversified investment portfolio for the Scheme, with this diversification seeking
to reduce investment risk.
The Scheme is subject to direct credit risk because it invests in segregated mandates with the LDI portfolio. Credit risk arising on bonds held
directly within the LDI portfolio is mitigated by investing mostly in government bonds where the credit risk is minimal.
Credit risk arising on the derivatives held in the LDI mandate depends on whether the derivative is exchange traded or over the counter (OTC).
OTC derivative contracts are not guaranteed by any regulated exchange and therefore the Scheme is subject to risk of failure of the
counterparty. The credit risk for OTC swaps held in the LDI portfolio is reduced by collateral arrangements.
The change in the present value of defined benefit obligations is as follows:
(In £s million)
Opening defined benefit obligation at 1 July
Administration costs
Interest on defined benefit scheme liabilities
Net remeasurement losses – change in experience assumptions
Net remeasurement gains – change in demographic assumptions
Net remeasurement gains – change in financial assumptions
Benefits and expenses paid
Closing defined benefit obligation at 30 June
2023
(573.5)
(3.2)
(21.9)
(26.5)
16.8
106.6
25.9
(475.8)
2022
(855.8)
(2.5)
(16.3)
(12.3)
17.6
256.8
39.0
(573.5)
182
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUEDHays plc Annual Report & Accounts 2023 The analysis of the defined benefit obligations is as follows:
(In £s million)
Plans that are wholly or partly funded
Plans that are wholly unfunded
Total
2023
(470.2)
(5.6)
(475.8)
2022
(565.9)
(7.6)
(573.5)
The defined benefit schemes’ liability comprises 55% (2022: 57%) in respect of deferred benefit scheme participants and 45% (2022: 43%) in
respect of retirees.
The weighted average duration of the UK defined benefit scheme liabilities at the end of the reporting year is 15 years (2022: 17 years).
The change in the fair value of defined benefit scheme assets is as follows:
(In £s million)
Fair value of plan assets at 1 July
Interest income on defined benefit scheme assets
Return on scheme assets
Employer contributions (towards funded and unfunded schemes)
Benefits and expenses paid
Fair value of plan assets at 30 June
2023
675.5
26.2
(192.0)
17.7
(25.9)
501.5
2022
902.4
17.4
(222.5)
17.2
(39.0)
675.5
During the year the Company made deficit funding contributions of £17.2 million (2022: £16.7 million) into the funded Hays Pension Scheme,
and made pension payments amounting to £0.5 million (2022: £0.5 million) in respect of the unfunded Hays Supplementary Scheme.
The amount of deficit funding contributions expected to be paid into the funded Hays Pension Scheme in the year to 30 June 2024 is
£17.7 million. Following the closure of the schemes in 2012 future service contributions are no longer payable.
The net interest credit/(expense) recognised in the Consolidated Income Statement comprised:
(In £s million)
Net interest income
Administration costs
Net interest credit/(expense) recognised in the Consolidated Income Statement
2023
4.3
(3.2)
1.1
2022
1.1
(2.5)
(1.4)
The net interest income and administration costs in the current year and prior year were recognised within finance costs.
The amounts recognised in the Consolidated Statement of Comprehensive Income are as follows:
(In £s million)
Return on plan assets (excluding amounts included in net interest expense)
Actuarial remeasurement:
Net remeasurement losses – change in experience assumptions
Net remeasurement gains – change in demographic assumptions
Net remeasurement gains – change in financial assumptions
Remeasurement of the net defined benefit surplus
2023
(192.0)
2022
(222.5)
(26.5)
16.8
106.6
(95.1)
(12.3)
17.6
256.8
39.6
A roll-forward of the actuarial valuation of the Hays Pension Scheme to 30 June 2023 and the valuation of the Hays Supplementary Pension
Scheme has been performed by an independent actuary, who is an employee of ISIO Group Limited.
The key assumptions used at 30 June are as follows:
Discount rate
RPI inflation
CPI inflation
Rate of increase of pensions in payment
Rate of increase of pensions in deferment
2023
5.20%
3.25%
2.55%
2.90%
2.55%
2022
3.90%
3.15%
2.45%
3.05%
2.45%
183
Financial StatementsGovernanceStrategic ReportShareholder Information 22. Retirement benefit surplus continued
The discount rate has been constructed to reference the AA corporate bond curve (which fits a curve to iBoxx sterling AA corporate data).
The corporate bond yield curve has been used to discount the Scheme cash flows using the rates available at each future duration and this
had been converted into a single flat rate assumption to give equivalent liabilities to the Scheme’s cash flows. The duration of the Scheme’s
liabilities using this approach is 15 years.
The RPI inflation assumption has been set as gilt market implied RPI appropriate to the duration of the liabilities (15 years) less a
0.2% per annum inflation risk premium. The CPI inflation assumption has been determined as 0.7% per annum below the RPI assumption
(2022: 0.7%).
The life expectancy assumptions have been updated and calculated using bespoke 2021 Club Vita base tables along with CMI 2022
projections (smoothing factor of 7 and assuming improvements have peaked) and a long-term improvement rate of 1.25% per annum.
On this basis a 65-year-old current pensioner has a life expectancy of 21.8 years for males (2022: 22.3 years) and 23.4 years for females
(2022: 23.8 years). Also on the same basis, the life expectancy from age 65 years of a current 45-year-old deferred member is 22.6 years
for males (2022: 23.2 years) and 25.4 years for females (2022: 25.8 years).
A sensitivity analysis on the principal assumptions used to measure the Scheme’s liabilities at the year-end is:
Discount rate
Inflation and pension increases (allowing for caps and collars)
Assumed life expectancy at age 65
Change in
assumption
+/- 0.5%
+/- 0.5%
+/- 1 year
Impact on
Scheme’s liabilities
-£31m/+£34m
+£18m/-£16m
+£14m/-£14m
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation; it is unlikely that
the change in assumptions would occur in isolation to one another as some of the assumptions may be correlated.
In presenting the above sensitivity analysis the present value of the defined benefit obligation has been calculated using the projected unit
credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability
recognised in the Consolidated Balance Sheet.
23. Provisions
(In £s million)
At 1 July 2022
Charged to income statement
Credited to income statement
Utilised
At 30 June 2023
(In £s million)
Current
Non-current
Total provisions
Restructuring
1.8
–
(0.6)
(1.2)
–
Legal, tax and
other matters
19.9
7.6
(3.9)
–
23.6
2023
10.8
12.8
23.6
Total
21.7
7.6
(4.5)
(1.2)
23.6
2022
12.7
9.0
21.7
As a global specialist in recruitment and workforce solutions and in common with other similar organisations, in the ordinary course of our
business the Group is exposed to the risk of legal, tax and other disputes. Where costs are likely to arise in defending and concluding such
disputes, and these costs can be measured reliably, they are provided for in the Consolidated Financial Statements. These items affect
various Group subsidiaries in different geographic regions and the amounts provided for are based on management’s assessment of the
specific circumstances in each case. The timing of settlement depends on the circumstances in each case and is uncertain.
There are no individually material balances within Legal, tax and other matters, and management does not consider it reasonably possible
that any of these balances will materially change in the next 12 months.
184
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCONTINUEDHays plc Annual Report & Accounts 2023 24. Called up share capital
Called up, allotted and fully paid Ordinary shares of 1 pence each
At 1 July 2022
Cancelled in the year
At 30 June 2023
Share capital
number
(thousand)
1,666,673
(66,240)
1,600,433
Share capital
(£s million)
16.7
(0.7)
16.0
In accordance with the Companies Act 2006, the Company no longer has an authorised share capital. The Company is allowed to hold 10%
of issued share capital in treasury.
As at 30 June 2023, the Group has completed the initial £93.2 million share buyback programme, purchasing and cancelling 66.2 million
shares under this programme in the year ended 30 June 2023 (2022: 15.4 million).
As at 30 June 2023, the Company held 11.3 million (2022: 16.4 million) Hays plc shares in treasury. The shares held in treasury are used to
satisfy the exercises in relation to equity-settled share-based payment awards.
25. Merger reserve
(In £s million)
At 1 July 2022
At 30 June 2023
Total
43.8
43.8
In accordance with Section 612 of the Companies Act 2006, the Merger reserve was generated as a result of the cash box structure used in
the equity placing of new shares issued during the year ended 30 June 2020.
26. Share-based payments
During the year, £12.0 million (2022: £10.9 million) was charged to the Consolidated Income Statement in relation to equity-settled share-
based payments.
Share options
At 30 June 2023 the following options had been granted and remained outstanding in respect of the Company’s Ordinary shares of 1 pence
each under the Company’s share option schemes:
Hays UK Sharesave Scheme
Hays International Sharesave Scheme
Total Sharesave options outstanding
Number of
shares
–
493,774
1,696,188
1,728,324
3,918,286
–
517,466
681,809
548,143
1,747,418
5,665,704
Subscription
price
(pence/share)
Date
normally
exercisable
–
143
117
108
–
143
117
108
2023
2024
2025
2026
2023
2024
2025
2026
Nominal
value of
shares
(£)
–
4,938
16,962
17,283
39,183
–
5,175
6,818
5,481
17,474
56,657
The Hays International Sharesave Scheme is available to employees in Germany, the Republic of Ireland, Australia, New Zealand, Canada,
Hong Kong SAR, Singapore and the United Arab Emirates.
185
Financial StatementsGovernanceStrategic ReportShareholder Information NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
26. Share-based payments continued
Details of the share options outstanding during the year are as follows:
Sharesave
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
2023
Number of
share
options
(thousand)
2023
Weighted
average
exercise
price
(pence)
2022
Number of
share
options
(thousand)
2022
Weighted
average
exercise
price
(pence)
6,125
2,328
(2,104)
–
(684)
5,665
–
127
108
126
–
136
118
135
4,679
3,622
(1,716)
(3)
(457)
6,125
1,124
145
117
144
159
171
127
135
There were no options exercised during the year (2022: weighted average share price for all options exercised of 171 pence).
The options outstanding as at 30 June 2023 had a weighted average remaining contractual life of 2 years.
Performance Share Plan (PSP) and Deferred Annual Bonus (DAB)
The PSP is designed to link reward to the key long-term value drivers of the business and to align the interests of the Executive Directors and
approximately 360 of the global senior management population with the long-term interests of shareholders. PSP awards are discretionary
and vesting is dependent upon the achievement of performance conditions measured over either a three-year period with a two-year holding
period or a one-year period with a two-year holding period. The fair value of both the PSP and DAB awards are calculated using the share
price as at the date the shares are granted.
Only the Executive Directors and other members of the Executive Board participate in the DAB which promotes a stronger link between short-
term and long-term performance through the deferral of annual bonuses into shares for a three-year period.
Further details of the schemes for the Executive Directors can be found in the Remuneration Report on pages 110 to 145.
Details of the share awards outstanding during the year are as follows:
Performance Share Plan
Outstanding at the beginning of the year
Granted during the year
Exercised during the year
Lapsed during the year
Outstanding at the end of the year
2023
Number of
share
options
(thousand)
24,024
10,245
(3,442)
(3,369)
27,458
2023
Weighted
average
fair value
at grant
(pence)
2022
Number of
share
options
(thousand)
2022
Weighted
average
fair value
at grant
(pence)
137
117
169
144
127
19,404
8,285
(2,210)
(1,455)
24,024
145
147
206
191
137
The weighted average share price on the date of exercise was 115 pence (2022: 167 pence).
The options outstanding as at 30 June 2023 had a weighted average remaining contractual life of 2 years.
Deferred Annual Bonus
Outstanding at the beginning of the year
Granted during the year
Exercised during the year
Outstanding at the end of the year
2023
Number of
share
options
(thousand)
2023
Weighted
average
fair value
at grant
(pence)
2022
Number of
share
options
(thousand)
2022
Weighted
average
fair value
at grant
(pence)
2,028
1,765
(753)
3,040
157
114
147
135
1,703
1,274
(949)
2,028
180
164
206
157
The weighted average share price on the date of exercise was 117 pence (2022: 167 pence).
The options outstanding as at 30 June 2023 had a weighted average remaining contractual life of 1.8 years.
186
Hays plc Annual Report & Accounts 2023 27. Related parties
Remuneration of key management personnel
The remuneration of the Executive Board and Non-Executive Directors, who are key management personnel of the Group, is set out below in
aggregate for each of the categories specified in IAS 24 ‘Related Party Disclosures’ and represents the total compensation costs incurred by
the Group in respect of remuneration, not the benefit to the individuals. Further information about the remuneration of Executive and
Non-Executive Directors is provided in the Directors’ Remuneration Report on pages 110 to 145.
(In £s million)
Short-term employee benefits
Share-based payments
Remuneration of key management personnel
2023
8.9
5.1
14.0
2022
11.4
5.0
16.4
28. Disaggregation of net fees
IFRS 15 requires entities to disaggregate revenue recognised from contracts with customers into relevant categories that depict how the
nature, amount and cash flows are affected by economic factors. As a result, we consider the following information relating to net fees to be
relevant:
For the year ended 30 June 2023
Temporary placements
Permanent placements
Total
Private sector
Public sector
Total
Technology
Accountancy & Finance
Engineering
Construction & Property
Office Support
Other
Total
For the year ended 30 June 2022
Temporary placements
Permanent placements
Total
Private sector
Public sector
Total
Technology
Accountancy & Finance
Engineering
Construction & Property
Office Support
Other
Total
United
Kingdom &
Ireland
56%
44%
100%
70%
30%
100%
Australia &
New Zealand
61%
39%
100%
65%
35%
100%
Rest of World
34%
66%
100%
98%
2%
100%
18%
19%
2%
16%
10%
35%
100%
16%
11%
0%
21%
11%
41%
100%
27%
11%
6%
9%
5%
42%
100%
United
Kingdom &
Ireland
55%
45%
100%
72%
28%
100%
Australia &
New Zealand
62%
38%
100%
66%
34%
100%
Rest of World
32%
68%
100%
99%
1%
100%
17%
19%
1%
16%
11%
36%
100%
15%
10%
0%
19%
11%
45%
100%
26%
12%
6%
9%
5%
42%
100%
Germany
83%
17%
100%
86%
14%
100%
35%
17%
26%
4%
0%
18%
100%
Germany
83%
17%
100%
87%
13%
100%
38%
16%
25%
4%
0%
17%
100%
Group
57%
43%
100%
84%
16%
100%
26%
15%
10%
10%
5%
34%
100%
Group
55%
45%
100%
85%
15%
100%
26%
14%
9%
11%
6%
34%
100%
29. Subsequent events
The final dividend for 2023 of 2.05 pence per share (£32.6 million) along with a special dividend of 2.24 pence per share (£35.6 million) will be
proposed at the Annual General Meeting on 15 November 2023. Neither the final dividend nor the special dividend have been included as a
liability. If approved, the final and special dividends will be paid on 17 November 2023 to shareholders on the register at the close of business
on 6 October 2023.
187
Financial StatementsGovernanceStrategic ReportShareholder Information HAYS PLC COMPANY BALANCE SHEET
AT 30 JUNE 2023
(In £s million)
Non-current assets
Other Intangible assets
Property, plant and equipment
Investment in subsidiaries
Trade and other receivables
Deferred tax assets
Retirement benefit surplus
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Provisons
Net current liabilities
Total assets less current liabilities
Non-current liabilities
Deferred tax liabilities
Provisions
Total liabilities
Net assets
Equity
Called up share capital
Share premium
Merger reserve
Capital redemption reserve
Retained earnings
Equity reserve
Total equity
Note
Company
2023
Company
2022
4
5
6
9
7
8
10
6
10
11
12
3.0
0.8
743.9
67.9
1.3
25.7
842.6
19.6
0.3
19.9
862.5
(118.2)
(1.9)
(120.1)
(100.2)
742.4
(2.6)
(5.4)
(8.0)
(128.1)
734.4
16.0
369.6
43.8
3.4
277.5
24.1
734.4
1.9
0.7
743.9
138.4
2.3
102.0
989.2
13.6
4.0
17.6
1,006.8
(99.6)
(2.2)
(101.8)
(84.2)
905.0
(12.1)
(9.0)
(21.1)
(122.9)
883.9
16.7
369.6
43.8
2.7
429.5
21.6
883.9
The profit for the financial year in the Hays plc Company Financial Statements is £100.3 million (2022: profit of £157.3 million).
The Financial Statements of Hays plc, registered number 2150950, set out on pages 188 to 196 were approved by the Board of Directors and
authorised for issue on 23 August 2023.
Signed on behalf of the Board of Directors
A R Cox
J Hilton
188
Hays plc Annual Report & Accounts 2023 HAYS PLC COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
(In £s million)
At 1 July 2022
Remeasurement of defined
benefit pension schemes
Tax relating to components
of other comprehensive income
Net expense recognised in
other comprehensive income
Profit for the year
Total comprehensive income for the year
Dividends paid
Share-based payments charged
to the income statement(3)
Share-based payments settled
on vesting(3)
Purchase of own shares
At 30 June 2023
Called up
share capital
16.7
–
Share
premium
369.6
–
Merger
reserve(1)
43.8
–
Capital
redemption
reserve
2.7
–
Retained
earnings
429.5
(95.1)
Equity
reserve(2)
21.6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(0.7)
16.0
–
369.6
–
43.8
0.7
3.4
18.3
(76.8)
100.3
23.5
(165.1)
–
8.6
(19.0)
277.5
–
–
–
–
–
11.1
(8.6)
–
24.1
FOR THE YEAR ENDED 30 JUNE 2022
(In £s million)
At 1 July 2021
Remeasurement of defined
benefit pension schemes
Tax relating to components
of other comprehensive income
Net income recognised in
other comprehensive income
Profit for the year
Total comprehensive income for the year
Dividends paid
Share-based payments charged
to the income statement(3)
Share-based payments settled
on vesting(3)
Purchase of own shares
At 30 June 2022
Called up
share capital
16.8
–
Share
premium
369.6
–
Merger
reserve(1)
193.8
–
Capital
redemption
reserve
2.7
–
Retained
earnings
364.2
39.6
Equity
reserve(2)
17.9
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(0.1)
16.7
–
369.6
–
–
–
–
(150.0)
–
–
–
43.8
–
–
–
–
–
–
–
–
2.7
(6.8)
32.8
157.3
190.1
(36.4)
–
6.3
(94.7)
429.5
–
–
–
–
–
10.0
(6.3)
–
21.6
Total
equity
883.9
(95.1)
18.3
(76.8)
100.3
23.5
(165.1)
11.1
–
(19.0)
734.4
Total
equity
965.0
39.6
(6.8)
32.8
157.3
190.1
(186.4)
10.0
–
(94.8)
883.9
(1) The Merger reserve was generated under Section 612 of the Companies Act 2006, as a result of the cash box structure used in the equity placing of new
shares issued during the year ended 30 June 2020.
(2) The Equity reserve is generated as a result of IFRS 2 ‘Share-based payments’.
(3) The Share-based payments charged to the Company Income Statement and Share-based payments settled on vesting were previously presented net as
“Share-based payments”. The presentation in the prior year has been updated to enhance the consistency and understandability of the disclosures. There
has been no change in the underlying activity.
189
Financial StatementsGovernanceStrategic ReportShareholder Information NOTES TO THE HAYS PLC COMPANY FINANCIAL STATEMENTS
1. Accounting policies
Basis of accounting
The Company Financial Statements have been prepared under the historical cost convention, in accordance with Financial Reporting
Standard 101 (FRS 101) ‘Reduced Disclosure Framework’ as issued by the Financial Reporting Council.
As permitted by Section 408 of the Companies Act 2006, the Company’s Income Statement has not been presented. The Company, as
permitted by FRS 101, has taken advantage of the disclosure exemptions available under that standard in relation to share-based payments,
financial instruments, certain disclosures regarding the Company’s capital, capital management, presentation of comparative information in
respect of certain assets, presentation of a cash flow statement, certain related party transactions and the effect of future accounting
standards not yet adopted. Where required, equivalent disclosures are provided in the Consolidated Financial Statements of Hays plc.
New and amended accounting standards effective during the year
There have been no new or amended accounting standards or interpretations adopted during the year that have had a significant impact
on the Company Financial Statements.
The significant accounting policies and significant judgements and key estimates relevant to the Company are the same as those set out
in note 2 and note 3 to the Consolidated Financial Statements with the addition of the following accounting policies set out below.
Investment in subsidiary undertakings
Investments in subsidiary undertakings are held at cost less any provision for impairment. The subsidiary undertakings which the Company
held at 30 June 2023 are described in note 4 to the Company Financial Statements.
Financial guarantee arrangements
Where the Company enters into financial guarantee arrangements to guarantee the indebtedness of other companies within its Group, the
Company considers these to be insurance arrangements and accounts for them as such. In this respect, the Company treats the guarantee
contract as a contingent liability until such time as it becomes probable that the Company will be required to make a payment under the
guarantee.
Intercompany and other receivables
Intercompany and other receivables are initially measured at fair value. Subsequent to initial recognition these assets are measured at
amortised cost less any provision for impairment losses. The Company measures impairment losses using the expected credit loss model
in accordance with IFRS 9.
2. Employee information
There are no staff employed by the Company (2022: none), therefore no remuneration has been disclosed. Details of Directors’ emoluments
and interests are included in the Remuneration Report on pages 110 to 145 of the Annual Report.
3. Profit for the year
Hays plc has not presented its own Income Statement and related notes as permitted by Section 408 of the Companies Act 2006.
The profit for the financial year in the Hays plc Company Financial Statements is £100.3 million (2022: profit of £157.3 million).
4. Investment in subsidiaries
(In £s million)
Cost
At 1 July
Provision for impairment
Charge during the year
Total
At 30 June
Investments in subsidiaries are stated at cost less any impairment in recoverable value.
The subsidiary undertakings of the Company are listed in note 13 to the Company Financial Statements.
2023
2022
743.9
743.9
–
–
743.9
743.9
190
Hays plc Annual Report & Accounts 2023 5. Trade and other receivables: non-current assets
(In £s million)
Prepayments
Amounts owed by subsidiary undertakings
Trade and other receivables: amounts falling due after more than one year
2023
1.6
66.3
67.9
2022
1.3
137.1
138.4
The Company charges interest on amounts owed by subsidiary undertakings at a rate of three-month SONIA plus 1%. The amounts owed by
subsidiary undertakings are unsecured.
6. Deferred tax
(In £s million)
Deferred tax assets
Deferred tax liabilities
Net deferred tax
2023
1.3
(2.6)
(1.3)
2022
2.3
(12.1)
(9.8)
The reduction in the overall deferred tax balance is primarily explained by the decrease in the deferred tax liability driven by a decrease in the
retirement benefit surplus, partially offset by the derecognition of deferred tax asset in relation to tax losses, together with a reduction in the
deferred tax asset following a provision release.
7. Trade and other receivables: current assets
(In £s million)
Corporation tax debtor
Amounts owed by subsidiary undertakings
Prepayments
Trade and other receivables: amounts falling due within one year
2023
1.2
13.5
4.9
19.6
2022
–
9.5
4.1
13.6
The amounts owed by subsidiary undertakings relate to a corporation tax debtor which is expected to be settled via group relief from UK
subsidiary undertakings.
8. Trade and other payables
(In £s million)
Accruals
Other financial liabilities
Amounts owed to subsidiary undertakings
Trade and other payables
2023
24.2
–
94.0
118.2
2022
32.2
56.8
10.6
99.6
In the year ended 30 June 2022, the Group commenced a £75.0m share buyback programme, to be completed over a 12-month period.
By 30 June 2022 the Group had purchased and cancelled £18.2 million (15.4 million shares) under this programme. Due to the nature of the
cancellation terms in the agreement being not substantive, the outstanding balance under the programme of £56.8 million was recognised
as other finanicial liabilities as at 30 June 2022. This was fully settled in the current financial year.
Amounts owed to subsidiary undertakings are repayable on demand. The Company is charged interest on amounts owed to subsidiary
undertakings at a rate of three-month SONIA less 1%.
9. Retirement benefit surplus
(In £s million)
Net asset arising from defined benefit obligations
2023
25.7
2022
102.0
The details of these UK schemes, for which Hays plc is the sponsoring employer, are set out in note 22 to the Consolidated Financial
Statements.
191
Financial StatementsGovernanceStrategic ReportShareholder Information NOTES TO THE HAYS PLC COMPANY FINANCIAL STATEMENTS
CONTINUED
10. Provisions
(In £s million)
At 1 July 2022
Credited to the income statement
Utilised during the year
At 30 June 2023
(In £s million)
Current
Non-current
Total provisions
Total
11.2
(3.8)
(0.1)
7.3
2022
2.2
9.0
11.2
2023
1.9
5.4
7.3
Provisions comprise of potential exposures arising as a result of business operations. The timing of settlement depends on the
circumstances in each case and is uncertain.
11. Called up share capital
Called up, allotted and fully paid Ordinary shares of 1 pence each
At 1 July 2022
Cancelled in the year
At 30 June 2023
Share capital
number
(thousand)
1,666,673
(66,240)
1,600,433
Share
capital
(£s million)
16.7
(0.7)
16.0
In accordance with the Companies Act 2006, the Company no longer has an authorised share capital. The Company is allowed to hold 10%
of issued share capital in treasury.
As at 30 June 2023, the Group has completed the initial £93.2 million share buyback programme, purchasing and cancelling 66.2 million
shares under this programme in the year ended 30 June 2023 (2022: 15.4 million).
As at 30 June 2023, the Company held 11.3 million (2022: 16.4 million) Hays plc shares in treasury. The shares held in treasury are used to
satisfy the exercises in relation to equity-settled share-based payment awards.
12. Merger reserve
(In £s million)
At 1 July 2022
At 30 June 2023
Total
43.8
43.8
In accordance with Section 612 of the Companies Act 2006, the Merger reserve was generated as a result of the cash box structure used in
equity placing of new shares issued during the year ended 30 June 2020.
192
Hays plc Annual Report & Accounts 2023 13. Subsidiaries
Emposo Pty Limited
Hays Specialist Recruitment (Australia) Pty Limited
Hays Österreich GmbH
Hays Professional Solutions Österreich GmbH
Hays NV
Hays Services NV
Hays Alocação Profissional Ltda
Hays Recruitment and Selection Ltda
Hays Trabalho Temporário Ltda
Hays Specialist Recruitment (Canada) Inc.
Hays Especialistas En Reclutamiento Limitada
Hays Specialist Recruitment (Shanghai) Co. Limited* (90% owned)
Hays Colombia SAS
Hays Czech Republic s.r.o
Hays Information Technology s.r.o
Registered Address and Country of Incorporation
Level 13, The Chifley Tower, 2 Chifley Square, Sydney, NSW 2000,
Australia
Level 13, The Chifley Tower, 2 Chifley Square, Sydney, NSW 2000,
Australia
Europaplatz 3/5, 1150 Wien, Austria
Europaplatz 3/5, 1150 Wien, Austria
Brugsesteenweg 255, 8500 Kortrijk, Belgium
Brugsesteenweg 255, 8500 Kortrijk, Belgium
Avenida das Nações Unidas, nº 14.401 Torre Jequitibá, 17º andar, São
Paulo, Brazil – CEP 04794-000
Avenida das Nações Unidas, nº 14.401 Torre Jequitibá, 17º andar, São
Paulo, Brazil – CEP 04794-000
Avenida das Nações Unidas, nº 14.401 Torre Jequitibá, 17º andar, São
Paulo, Brazil – CEP 04794-000
1500 Don Mills Road, Suite 402, North York, Ontario, M3B 3K4,
Canada
Cerro El Plomo 5630, Of. 1701, Las Condes, P.O. 7560742, Santiago,
Chile
Unit 0304, 19/F Shui On Plaza, 333 Huaihai Road, Lot No.7 Luwan
District, Shanghai 200020, CN, 0, China
AK 45 No. 108-27 Torre 2 Oficina 1105, Bogotá, Colombia
Olivova 4/2096, 110 00 Praha 1, Czech Republic
Olivova 4/2096, 110 00 Praha 1, Czech Republic
Hays Specialist Recruitment (Denmark) A/S
Kongens Nytorv 8, 1050 København K, Denmark
H101 Limited
4th Floor, 20 Triton Street, London, NW1 3BF, UK
Hays Commercial Services Limited (In Liquidation)
55 Baker Street, London, W1U 7EU, UK
Emposo Limited
Hays Group Holdings Limited †
Hays Healthcare Limited
Hays Holdings Ltd †
Hays International Holdings Limited †
Hays Life Sciences Limited
Hays Nominees Limited
Hays Overseas Holdings Limited †
Hays Pension Trustee Limited †
Hays Recruitment Services Limited
Hays Social Care Limited
4th Floor, 20 Triton Street, London, NW1 3BF, UK
4th Floor, 20 Triton Street, London, NW1 3BF, UK
4th Floor, 20 Triton Street, London, NW1 3BF, UK
4th Floor, 20 Triton Street, London, NW1 3BF, UK
4th Floor, 20 Triton Street, London, NW1 3BF, UK
4th Floor, 20 Triton Street, London, NW1 3BF, UK
4th Floor, 20 Triton Street, London, NW1 3BF, UK
4th Floor, 20 Triton Street, London, NW1 3BF, UK
4th Floor, 20 Triton Street, London, NW1 3BF, UK
4th Floor, 20 Triton Street, London, NW1 3BF, UK
4th Floor, 20 Triton Street, London, NW1 3BF, UK
Hays Specialist Recruitment (Holdings) Limited †
4th Floor, 20 Triton Street, London, NW1 3BF, UK
Hays Specialist Recruitment Limited
4th Floor, 20 Triton Street, London, NW1 3BF, UK
Hays Stakeholder Life Assurance Trustee Limited †
4th Floor, 20 Triton Street, London, NW1 3BF, UK
James Harvard Limited
4th Floor, 20 Triton Street, London, NW1 3BF, UK
193
Financial StatementsGovernanceStrategic ReportShareholder Information NOTES TO THE HAYS PLC COMPANY FINANCIAL STATEMENTS
CONTINUED
13. Subsidiaries continued
Krooter Limited
Oval (1620) Limited
Paperstream Limited
Registered Address and Country of Incorporation
4th Floor, 20 Triton Street, London, NW1 3BF, UK
4th Floor, 20 Triton Street, London, NW1 3BF, UK
4th Floor, 20 Triton Street, London, NW1 3BF, UK
Vercida Consulting.com Limited * (65% owned)
4th Floor, 20 Triton Street, London, NW1 3BF, UK
Recruitment Solutions Group Limited (IOM)
First Names House, Victoria Road, Douglas, IM2 4DF, Isle of Man
Emposo SASU
Hays Consulting SASU
Hays Corporate SASU
Hays Executive SASU
Hays France SASU
Hays Life Sciences Consulting SASU
Hays Media SASU
Hays Pharma SASU
Hays Portage
Hays SASU
Hays Services SASU
Hays Talent Solutions SASU
Emposo GmbH
Hays AG
Hays Beteiligungs GmbH & Co. KG
Hays Holding GmbH
Hays Professional Solutions GmbH
Hays Talent Solutions GmbH
Hays Verwaltungs GmbH
Hays Vorrat 01 GmbH
Hays Hong Kong Limited
Hays Specialist Recruitment Hong Kong Limited
Hays Hungary Kft.
Hays Professional Services Kft
Hays Business Solutions Private Limited (Gurgaon)
Hays Specialist Recruitment Private Limited
Emposo (Ireland) Limited
Hays Business Services Ireland Limited
Hays Specialist Recruitment (Ireland) Limited
Hays Professional Services S.r.l
194
149 boulevard Haussmann, 75008 Paris, France
147 boulevard Haussmann, 75008 Paris, France
147 boulevard Haussmann, 75008 Paris, France
147 boulevard Haussmann, 75008 Paris, France
147 boulevard Haussmann, 75008 Paris, France
147 boulevard Haussmann, 75008 Paris, France
147 boulevard Haussmann, 75008 Paris, France
147 boulevard Haussmann, 75008 Paris, France
149 boulevard Haussmann, 75008 Paris, France
147 boulevard Haussmann, 75008 Paris, France
147 boulevard Haussmann, 75008 Paris, France
149 boulevard Haussmann, 75008 Paris, France
Willy-Brandt-Platz 1-3, 68161 Mannheim, Germany
Willy-Brandt-Platz 1-3, 68161 Mannheim, Germany
Willy-Brandt-Platz 1-3, 68161 Mannheim, Germany
Willy-Brandt-Platz 1-3, 68161 Mannheim, Germany
Völklinger Straße 4, 40219 Düsseldorf, Germany
Völklinger Straße 4, 40219 Düsseldorf, Germany
Willy-Brandt-Platz 1-3, 68161 Mannheim, Germany
Willy-Brandt-Platz 1-3, 68161 Mannheim, Germany
Unit 6604-06, 66/F, International Commerce Centre, 1 Austin Road
West, Kowloon, Hong Kong
Unit 6604-06, 66/F, International Commerce Centre, 1 Austin Road
West, Kowloon, Hong Kong
1054 Budapest, Szabadság tér 7, Bank Center, Hungary
1054 Budapest, Szabadság tér 7, Bank Center, Hungary
Buildings 9B, 11th Floor, DLF Cyber City, Gurgaon, Haryana-HR,
122002, India
Office No. 2102, Space Inspire Hub, Adani Western Height, J.P. Road,
Four Bungalows, Andheri West, Mumbai, Maharashtra, 400053, India
26/27a Grafton St. Dublin 2, Ireland
26/27a Grafton St, Dublin 2, Ireland
26/27a Grafton St, Dublin 2, Ireland
Corso Italia 13, CAP 20122, Milano, Italy
Hays plc Annual Report & Accounts 2023 Hays Solutions S.r.l
Hays S.r.l
Hays Resource Management Japan K.K.
Hays Specialist Recruitment Japan K.K.
Hays Finance (Jersey) Limited
Hays S.a.r.l
Hays Travail Temporaire Luxembourg
Agensi Pekerjaan Hays (Malaysia) Sdn. Bhd.* (49% owned)
Hays Solutions Sdn. Bhd.
Hays Specialist Recruitment Holdings Sdn. Bhd.
Hays Flex. S.A. de C.V.
Hays Servicios S.A. de C.V.
Hays, S.A. de C.V.
Hays Maroc
Hays B.V.
Hays Holdings B.V.
Hays Services B.V.
Hays Temp B.V.
Registered Address and Country of Incorporation
Corso Italia 13, CAP 20122, Milano, Italy
Corso Italia 13, CAP 20122, Milano, Italy
Izumi Garden Tower 28F 1-6-1 Roppongi, Minato-ku,
Tokyo 106-6028, Japan
Izumi Garden Tower 28F 1-6-1 Roppongi, Minato-ku,
Tokyo 106-6028, Japan
44 Esplande, St Helier, Jersey JE4 9WG
65 Avenue de la Gare – L 1611, Luxembourg
65 Avenue de la Gare – L 1611, Luxembourg
B4-3A-6, Solaris Dutamas, No 1, Jalan Dutamas 1,
50480 Kuala Lumpur, Malaysia
B4-3A-6, Solaris Dutamas, No 1, Jalan Dutamas 1,
50480 Kuala Lumpur, Malaysia
B4-3A-6, Solaris Dutamas, No 1, Jalan Dutamas 1,
50480 Kuala Lumpur, Malaysia
Avenida Paseo de las Palmas No. 405, 1003, Colonia Lomas de
Chapultepec VII Seccion, C.P. 11000, México,CD.MX.
Avenida Paseo de las Palmas No. 405, 1003, Colonia Lomas de
Chapultepec VII Seccion, C.P. 11000, México,CD.MX.
Avenida Paseo de las Palmas No. 405, 1003, Colonia Lomas de
Chapultepec VII Seccion, C.P. 11000, México,CD.MX.
Casablanca 20180, Anfa Place, Tour Ouest, Niveau 1,
Boulevard de la corniche – Ain Diab (Maroc), Morocco
Ellen Pankhurststraat 1G, NL-5032 MD, Tilburg, Netherlands
Ellen Pankhurststraat 1G, NL-5032 MD, Tilburg, Netherlands
Ellen Pankhurststraat 1G, NL-5032 MD, Tilburg, Netherlands
Ellen Pankhurststraat 1G, NL-5032 MD, Tilburg, Netherlands
Hays Specialist Recruitment (NZ) Limited
Level 12, Pwc Tower, 188 Quay Street, Auckland, 1010 , New Zealand
Hays Document Management (Private) Limited (in liquidation)
6th Floor, AWT Plaza, I.I Chundrigar Road, Karachi, Pakistan
Hays Outsourcing Sp. z.o.o.
Hays Poland Sp. z.o.o.
ul. Marszałkowska 126/134, 00-008 Warszawa, Poland
ul. Marszałkowska 126/134, 00-008 Warszawa, Poland
Hays Poland Centre of Excellence sp. z.o.o.
ul. Marszałkowska 126/134, 00-008 Warszawa, Poland
Hays Business Services Portugal
Avenida da Republica, no 90 – 1º andar, fração 4,
1600-206 – Lisbon, Portugal
HaysP Recrutamento Seleccao e Empresa de Trabalho Temporario
Unipessoal LDA
Avenida da Republica, no 90 – 1º andar, fração 4,
1600-206 – Lisbon, Portugal
Hays Specialist Recruitment Romania SRL
Hays Professional Services SRL
Emposo Romania S.R.L.
Premium Plaza 63-69 Dr. Iacob Felix Street, 7th floor
Bucharest 011033 Romania
Premium Plaza 63-69 Dr. Iacob Felix Street, 7th floor
Bucharest 011033 Romania
Premium Plaza 63-69 Dr. Iacob Felix Street, 7th floor
Bucharest 011033 Romania
Hays Specialist Recruitment P.T.E Limited
80 Raffles Place, #27-20 UOB Plaza 2, Singapore
195
Financial StatementsGovernanceStrategic ReportShareholder Information NOTES TO THE HAYS PLC COMPANY FINANCIAL STATEMENTS
CONTINUED
13. Subsidiaries continued
Hays Solutions Pte Ltd
Registered Address and Country of Incorporation
80 Raffles Place, #27-20 UOB Plaza 2, Singapore
Hays Business Services Unipessoal, LDA
Paseo de la Castellana 81, 28046 Madrid, Spain
Hays Personnel Espana Empresa de Trabajo Temporal SA
Paseo de la Castellana 81, 28046 Madrid, Spain
Hays Personnel Services Espana SA
Hays Talent Solutions Espana SL
Hays AB
Hays (Schweiz) AG
Hays Talent Solutions (Schweiz) GmbH
Hays Holdings (Thailand) Ltd * (49% owned)
Hays Recruitment (Thailand) Ltd * (74% owned)
Hays FZ-LLC
3 Story Software LLC
Hays Holding Corporation
Hays Specialist Recruitment LLC
Hays Talent Solutions LLC
Hays U.S. Corporation
Hays Holdings U.S. Inc.
Paseo de la Castellana 81, 28046 Madrid, Spain
Madrid, C / Zurbano nº 23, 1º Dcha (C.P. 28010)
Bryggargatan 4, 11121 Stockholm, Sweden
Beethovenstrasse 19 8002 Zürich, Switzerland
Beethovenstrasse 19 8002 Zürich, Switzerland
#25-110 T-One Building, 8 Soi Sukhumvit 40,
Klong toey, Phrakanong, Bangkok 10110
No. 8 T-One Building, 22nd Floor, Unit 2202, Soi Sukhumvit 40,
Sukhumvit Road, Phra Khanong Sub-district,
Klong Toei District, Bangkok.
Al Thuraya Tower 1, Office 2003, Dubai Media City Dubai 500340,
United Arab Emirates
c/o C T Corporation System, 67 Burnside Avenue,
East Hartford, CT 06108, USA
c/o National Registered Agents, Inc. 1209 Orange Street,
Wilmington, DE 19801, USA
c/o National Registered Agents, Inc. 1209 Orange Street,
Wilmington, DE 19801, USA
c/o National Registered Agents, Inc. 1209 Orange Street,
Wilmington, DE 19801, USA
c/o NRAI Services, Inc. 1200 South Pine Island Road,
Plantation FL 33324 USA
c/o NRAI Services, Inc. 1200 South Pine Island Road,
Plantation FL 33324 USA
As at 30 June 2023, Hays plc and/or a subsidiary or subsidiaries in aggregate owned 100% of each class of the issued shares of each of
these companies with the exception of companies marked with an asterisk (*) in which case each class of issued shares held was as stated.
Shares in companies marked with a (†) were owned directly by Hays plc. All other companies were owned by a subsidiary or subsidiaries of
Hays plc.
14. Other related party transactions
Hays plc has taken advantage of the exemption granted under paragraph 8(k) of FRS 101 not to disclose transactions with fellow wholly
owned subsidiaries. Transactions entered into and trading balances outstanding that were owed to Hays plc at 30 June 2023 with other
related parties were £4.1 million (2022: £3.8 million).
196
Hays plc Annual Report & Accounts 2023 Strategic Report
Governance
Financial Statements
Shareholder Information
SHAREHOLDER
INFORMATION
198 Shareholder information
199 Financial calendar
199 Hays online
200 Glossary
200 Country and specialism list
197
SHAREHOLDER INFORMATION
Registrar
The Company’s registrar is:
Equiniti Limited
Aspect House, Spencer Road, Lancing,
West Sussex BN99 6DA
www.shareview.co.uk
Telephone: 0371 384 2843(1)
International: +44 (0) 121 415 7047
Textphone: 0371 384 2255
ID fraud and unsolicited mail
Share-related fraud and identity theft affects
shareholders of many companies and we
urge you to be vigilant. If you receive any
unsolicited mail offering advice, you should
inform EQ (Equiniti), the Company’s registrar,
immediately.
As the Company’s share register is, by law,
open to public inspection, shareholders may
receive unsolicited mail from organisations
that use it as a mailing list. To reduce the
amount of unsolicited mail you receive,
contact the Mailing Preference Service,
FREEPOST 29 LON20771, London W1E 0ZT.
Telephone: 0345 0700 705
Website: www.mpsonline.org.uk
ShareGift
ShareGift is a charity share donation
scheme for shareholders and is
administered by the Orr Mackintosh
Foundation. It is especially useful for
those shareholders who wish
to dispose of a small number of shares
whose value makes it uneconomical
to sell on a normal commission basis.
Further information can be obtained
from www.sharegift.org or from EQ.
Website
The Company has a corporate website at
haysplc.com, which holds, amongst other
information, a copy of our latest Annual
Report & Financial Statements and copies
of all announcements made over the last
12 months.
Registered office
4th Floor
20 Triton Street
London
NW1 3BF
Registered in England & Wales no. 2150950
Telephone: +44 (0)203 978 2520
Company Secretary
Doug Evans
Email: cosec@hays.com
Investor Relations contact
David Phillips, Head of Investor Relations
Email: ir@hays.com
198
EQ provides a range of services for shareholders:
Service
Shareholder
service
What it offers
You can access details of your
shareholding and a range
of other shareholder services.
Enquiries
relating to your
shareholding
Dividend payments
You can inform EQ of lost share
certificates, dividend warrants or
tax vouchers, change of address
or if you would like to transfer
shares to another person.
Dividends may be paid directly into
your bank or building society account.
Tax vouchers will continue to be sent
to the shareholder’s registered address.
How to participate
You can register at
www.shareview.co.uk
Please contact EQ.
Complete a dividend
bank mandate instruction
form which can be
downloaded from
www.shareview.co.uk
or by telephoning EQ.
Dividend payment
direct to bank
account for
overseas
shareholders
Dividend
Reinvestment
Plan (DRIP)
Amalgamation
of accounts
Share dealing
service(2)
Individual Savings
Accounts (ISAs)(2)
Equiniti can convert your dividend in
over 83 currencies to over 90 countries
worldwide and send it directly to your
bank account.
For more details
please visit
www.shareview.co.uk
or contact EQ.
The Company has a DRIP to allow
shareholders to reinvest the cash
dividend that they receive in Hays plc
shares on competitive dealing terms.
If you receive more than one copy
of the Annual Report & Financial
Statements, it could be because
you have more than one record
on the register. EQ can amalgamate
your accounts into one record.
EQ offers Shareview Dealing, a service
which allows you to sell your Hays plc
shares or add to your holding if you
are a UK resident. If you wish to deal,
you will need your account/shareholder
reference number which appears
on your share certificate.
Alternatively, if you hold a share
certificate, you can also use any
bank, building society or stockbroker
offering share dealing facilities
to buy or sell shares.(2)
Investors in Hays plc Ordinary shares
may take advantage of a low-cost
individual savings account (ISA) and/or
an investment account where they can
hold their Hays plc shares electronically.
The ISA and investment account are
operated by Equiniti Financial Services
Limited and are subject to standard
dealing commission rates.
Further information is
available from the Share
Dividend helpline on
0371 384 2268 or visit
www.shareview.co.uk
Please contact EQ.
You can deal in your
shares on the internet
or by phone. For more
information about this
service and for details
of the rates, log on to
www.shareview.co.uk/
dealing or telephone
EQ on 0345 603 7037
between 8.00am and
4.30pm, Monday
to Friday.
For further information
or to apply for an ISA
or investment account,
visit EQ’s website at
www.shareview.co.uk/
dealing or telephone
them on 0345 0700 720.
(1)
(2)
Lines open 8.30am to 5.30pm (UK time), Monday to Friday (excluding public holidays in England
and Wales).
The provision of share dealing services is not intended to be an invitation or inducement to engage
in an investment activity. Advice on share dealing should be obtained from a professional
independent financial adviser.
Hays plc Annual Report & Accounts 2023 Strategic Report
Governance
Financial Statements
Shareholder Information
FINANCIAL CALENDAR
2023
12 October
15 November
2024
12 January
22 February
Trading update for the quarter ending 30 September 2023
Annual General Meeting
Trading update for the quarter ending 31 December 2023
Half-year results for the six months ending 31 December 2023
HAYS ONLINE
Our award-winning investor site gives you fast, direct
access to a wide range of Company information.
Visit haysplc.com/investors
Our investor site includes
– Investment case
– Results centre
– Investor video
– Downloadable historical financial data
– Events calendar
– Corporate governance
– Investor Day materials
– Regulatory news
– Share price information
– Shareholder services
– Analysts’ consensus
– Annual Reports archive
Follow us on social
linkedin.com/company/hays
twitter.com/HaysWorldwide
facebook.com/HaysWorldwide
youtube.com/user/HaysTV
199
GLOSSARY
Term
Carbon neutral company
Contractor
Conversion rate
Enterprise client
‘Find & Engage’
Definition
A business which has measured its annual Greenhouse Gas Emissions and purchased certified carbon credits to offset this level of
emissions. Hays became a carbon neutral company in FY21 having calculated and offset all aspects of its scope 1 and 2 and selected
aspects of its Scope 3 Greenhouse Gas Emissions
Freelance worker who is paid to work on a specific project or task. Typically works on a project basis for a fixed period of time, usually
around 6-12 months
Proportion of our net fees which is converted into operating profit
Clients whom we bill a significant amount each year, typically >£100K in fees. Within this, direct outsourcing fees in Enterprise clients
(formerly Hays Talent Solutions) include our MSP and RPO contracts
Our proprietary recruitment model, which combines the best practices and skills of traditional hiring, and then incorporates new
technology and data science to locate candidates at scale
Flex/Flexible worker
Encompasses both Temp and Contractor workers
Free cash flow
HR services
International
Job churn
Leadership Partner
Cash generated by operations less tax paid and net interest paid
Broader suite of people-related capabilities which support clients’ and candidates’ wider needs beyond recruitment. For example,
consultancy, onboarding, upskilling and reskilling
Relating to our non-UK&I business
Confidence among businesses to hire skilled people, aligned to candidate confidence to move jobs
Leadership Partner – the relationship our customers are looking for with us, delivering strategic insights and tailored services, that take us
beyond being a trusted recruitment delivery partner. This includes providing valuable insights, new workforce strategies and expertise on
best practice to support better decision-making by clients and candidates
Like-for-like
Year-on-year organic growth of net fees or profits of Hays’ continuing operations, at constant currency
Managed Service Programmes (MSP)
The transfer of all or part of the management of a client’s Temp staffing hiring activities on an ongoing basis to a recruitment company
Megatrend
Net fees
Perm
Perm gross margin
Profit drop-through
Project Services
Recruitment Process Outsourcing
(RPO) contracts
Reporting period
Specialism
Powerful macro industry theme which we regard as shaping recruitment markets and driving net fee growth
As defined in note 2 (e) to the Consolidated Financial Statements
Candidate placed with a client in a permanent role
Our percentage placement fee, usually based on the Perm candidate’s base salary
The additional like-for-like profit which flows to our bottom line from incremental like-for-like net fees in a particular period. Expressed
as a percentage
The process by which a specific task, or set of tasks, is initiated, planned, controlled and executed for a client, including recruiting and
managing the personnel to complete the project, which meets specific success criteria
The transfer of all or part of a client’s Perm recruitment processes on an ongoing basis to a recruitment company
Our internal Group reporting cycle comprises some countries which report using 12 calendar months, and some which report using
13 four-week periods. The Group’s annual cost base equates to c.12.5x our cost base per period. This is consistent with prior years
21 broad areas, usually grouped by industry, in which we are experts, e.g. Technology, Construction & Property, Accountancy & Finance,
and Life Sciences
Strategic Growth Initiative (SGI)
programme
Our largest ever investment programme, designed to accelerate our structural growth in the most attractive future markets. Headcount
and systems investment is directed at sectors such as Technology, Life Sciences, Engineering, Enterprise clients and the Green Economy
Talent pools
Temp
Turnover
Underlying Temp gross margin
Collective term for active candidate databases
Worker engaged on a short-term basis to fill a skills gap for a pre-agreed period of time
As defined in note 2d to the Consolidated Financial Statements
Temp net fees divided by Temp gross revenue. Relates solely to Temp placements where we generate net fees, and specifically excludes:
transactions where we act as agent for workers supplied by third-party agencies; and arrangements relating to major payrolling services.
Usually expressed as a percentage
33 COUNTRIES
21 SPECIALISMS
Australia
Italy
Canada
Accountancy & Finance
Legal
New Zealand
Luxembourg
Chile
Banking & Capital Markets
Life Sciences
Germany
Netherlands
Colombia
Construction & Property
Office Support
UK
Ireland
Austria
Belgium
Poland
Portugal
Romania
Spain
Czech Republic
Sweden
Mexico
USA
China
India
Japan
Contact Centres
Procurement
Education
Resources & Mining
Energy, Oil & Gas
Retail
Engineering & Manufacturing Sales & Marketing
Executive
Sustainability
Switzerland
Malaysia
Financial Services
Technology
UAE
Brazil
Singapore
Thailand
Health & Social Care
Telecoms
Human Resources
Denmark
France
Hungary
200
Hays plc Annual Report & Accounts 2023 Designed and produced by
www.salterbaxter.com
This report has been printed on Heaven 42 – an FSC® certified paper
containing 100% ECF pulp and manufactured at a mill accredited with
the ISO 14001 and EMAS environmental standards, and Colorplan
– an FSC approved 100% Virgin ECF Fibre and Acid Free paper.
Printed by Pureprint. Pureprint are ISO14001 certified,
CarbonNeutral®, and are FSC® Chain of Custody
certified. The inks used are vegetable oil based.
© Copyright Hays plc 2023
HAYS, the Corporate and Sector H devices,
Hays Working for your tomorrow, and Powering
the World of Work are trademarks of Hays plc.
The Corporate and Sector H devices are original
designs protected by registration in many countries.
All rights are reserved.
haysplc.com