The Perfect Balance: How Hays Crafts Excellence in People Management and Profitability
- Jean Jacques André｜WorkN'Play
- Apr 1
- 5 min read
Introduction: The Power of Dual Excellence
In a business landscape where companies often sacrifice employee wellbeing for financial gain, Hays stands as a remarkable exception. The global talent services corporation has achieved what many consider impossible: excellence in both Human Capital Management and Profitability Management. This rare combination places Hays among the elite in the Talent Services industry, second only to Recruit in overall performance with an impressive rating of 51.83 (categorized as "High"). This article explores how Hays has mastered this delicate balance and what other organizations can learn from their approach.
A Corporate Intelligence Revolution
WorkN'Play's Corporate Intelligence App—developed by Jean Jacques André—has revolutionized how we evaluate corporate performance. Using over 500,000 mathematical calculations, the app comprehensively benchmarks and rates corporations based on management accounting and financial indicators. What makes this model particularly insightful is its focus on momentum rather than static snapshots—the change in indicators carries more weight than current values. This approach reveals Hays' exceptional trajectory in key performance areas.
Human Capital Management: Putting People First
With a remarkable Human Capital Management performance index of 73.33 (categorized as "Very High"), Hays outperforms all competitors in the Talent Services industry. This top-tier rating isn't surprising when examining the metrics. Despite reducing headcount by 8.5% over three years (compared to the industry average increase of 9.6%), Hays has achieved a 37.3% increase in revenue per employee—reaching $744,000 compared to the industry average of $492,000.
Employee Investment as a Strategic Advantage
Hays allocates 14.9% of total expenses to payroll costs, significantly higher than the industry average of 10.3%. More impressively, this investment has increased by 19.5% over three years, compared to just 5.1% across the industry. This deliberate investment in human capital has yielded remarkable returns, with annual revenue growth of 25.5%—more than double the industry average of 10.8%.
Values in Action: The Hays Approach
Hays' exceptional human capital metrics align perfectly with their stated values. Their commitment to "Build partnerships," "Think Beyond," and "Do the right thing" translates into tangible practices. By investing in employee development, fostering collaboration, and creating inclusive workplaces, Hays demonstrates that their values aren't just corporate rhetoric but strategic imperatives that drive performance.
Profitability Excellence: The Financial Impact
Complementing their human capital success, Hays achieves a "Very High" rating of 72.22 in Profitability Management—significantly outperforming most competitors. Their operating profit margin has increased by an astounding 72.5% over three years, while the industry average declined by 14%. Even more impressive, their net profit margin growth of 91.2% stands in stark contrast to the industry's 14.5% decline.
Gross Margins and Operational Efficiency
While Hays' gross profit margin of 17.1% is below the industry average of 27.6%, they've achieved an 8% increase over three years, compared to the industry's 4.4% growth. This upward trajectory demonstrates Hays' commitment to continuous improvement and operational efficiency, suggesting further margin expansion potential in the future.
Production Asset Management: A Key Differentiator
Hays excels in Production Asset Management with a "Very High" rating of 81.48. Their asset efficiency rate of 398.3% dwarfs the industry average of 191.8% and has improved 18.7% over three years. With a productive asset investment ratio of 1.2 (compared to the industry's 0.5), Hays demonstrates strategic asset allocation that drives their exceptional performance.
Marketing and Administrative Discipline
With a "High" rating of 56.67 in Marketing, Selling, General & Administrative Expenses Management, Hays shows remarkable discipline. These expenses account for only 14.8% of total expenses (versus 23.6% industry average) and have increased by just 1.7% over three years (compared to 7.4% industry-wide). This controlled spending contributes significantly to their profit margin expansion.
The Working Capital Efficiency Challenge
Despite many strengths, Hays faces challenges in Working Capital Management, receiving a "Very Low" rating of 29.17. Their working capital ratio of 1.3 is slightly below the industry average of 1.4, and their working capital to revenues ratio has decreased by 40% over three years. This represents an opportunity for improvement in an otherwise stellar performance profile.
Bargaining Power Dynamics
Hays demonstrates mixed results in Bargaining Power with a "Low" rating of 43.33. While their Days Sales Outstanding (DSO) of 60 days beats the industry average of 64 days, it has increased by 5.6% over three years (while the industry improved by -4.4%). Conversely, their Days Payable Outstanding (DPO) of 70 days significantly exceeds the industry average of 41 days and has increased by 12.6%. This indicates strong supplier relationships but potential challenges with customer terms.
Cash Conversion Cycle Mastery
One of Hays' most impressive metrics is their 72.4% improvement in Cash Conversion Cycle over three years—more than four times better than the industry average improvement of 17%. This demonstrates exceptional cash flow management and operational efficiency, providing the liquidity needed for strategic initiatives.
Total Shareholder Return: Room for Improvement
With a "Medium (Lower)" rating of 43.33 in Total Shareholder Return Management, Hays faces investor challenges despite operational excellence. Their share price declined 19.8% over three years, somewhat worse than the industry average decline of 14.6%. However, their Return on Equity (ROE) of 20.6% exceeds the industry average of 15.6% and has improved by an extraordinary 183.5% over three years.
Economic Value Added: The Growth Opportunity
Hays' "High" rating of 65.00 in Economic Value Added Management highlights their value creation potential. While they currently show a negative cumulative Economic Value Added of -$1,043 million, their Return on Total Assets (ROTA) has improved by 123.7% over three years (versus an industry decline of 11.7%). Their high Weighted Average Cost of Capital (WACC) presents a challenge but also an opportunity for optimization.
The Competitive Landscape
Among talent services corporations, Hays sits in an enviable position. With an overall performance rating of 51.83, they rank second only to Recruit (57.99) and slightly ahead of Insperity (50.88). All three significantly outperform industry giants like Robert Half (48.34), Randstad (45.61), ManpowerGroup (39.47), and Adecco Group (33.15).
Building Sustainable Advantage Through Balance
Hays' simultaneous excellence in human capital and profitability management creates a virtuous cycle. Investing in employees drives productivity and innovation, which improves financial performance, which enables further investment in people. This balanced approach yields sustainable competitive advantages that competitors struggle to replicate.
The Customer Experience Connection
Hays' mission statement—"We invest in lifelong partnerships that empower people and businesses to succeed"—aligns perfectly with their performance metrics. By excelling in human capital management, Hays creates engaged employees who deliver superior customer experiences. Their profitability excellence provides the resources to continually enhance these experiences, creating loyal customer relationships.
Conclusion: The Hays Model for Future Success
Hays demonstrates that the supposed trade-off between employee wellbeing and financial performance is a false dichotomy. Their balanced approach proves that investing in people while maintaining financial discipline creates sustainable value for all stakeholders. As the talent services industry evolves, Hays' model of dual excellence offers a blueprint for future success that other corporations would be wise to study and emulate.
