Robert Walters reports another drop in profits as economic uncertainty weighs on recruitment industry
- Net fee income at the white collar specialist fell by 13% in the third quarter
- Among regions, the Asia-Pacific region saw the biggest drop in fee income
- Trading in the UK has been badly affected by high inflation and interest rates
Robert Walters has reported another significant drop in gross profits as economic uncertainty continues to weigh on the recruitment industry.
Net fee income at the white collar specialist fell 13 per cent at constant currency levels to £93.4million for the three months ending September, compared to a 10 per cent fall in the prior quarter.
Trading was affected across all major territories, with the Asia-Pacific region seeing the biggest drop in fee income following particularly weak performances across China, Australia and New Zealand.
Letting go: Like other prominent recruiters, Robert Walters has been cutting staff headcount this year, from 4,356 at the end of last December to 4,200 in September
In the UK, gross profits dipped by £2.2million to £15.4million due to the technology and financial services sectors imposing further redundancies and hiring freezes in response to high inflation and interest rates.
Like other prominent recruiters, Robert Walters has been cutting staff headcount this year, from 4,356 at the end of last December to 4,200 in September, amid the slowing employment market.
This is despite the global labour market remaining tight, especially in the UK, where vacancies totalled 989,000 between June and August 2023, far above pre-pandemic levels, according to the Office for National Statistics.
Staff shortages provided a massive financial boon for Britain’s recruitment industry during 2021 and 2022 after pandemic restrictions started being loosened.
The shortfall led to heightened competition for talent among employers across the world, who began offering more generous salaries and benefits.
Workers quit their jobs at higher rates to seek out such jobs, a phenomenon that economists have described as the ‘Great Resignation.’
Consequently, many recruiters achieved record results, including Robert Walters, which reported revenue of £1.1billion and pre-tax profits of £55.6million last year.
It also went on a hiring frenzy, having slashed personnel during the height of the lockdown period when countless businesses were desperate to save costs.
Although the economic backdrop has subsequently weakened, Toby Fowlston, its chief executive, said that the third-quarter performance was ‘resilient’ and that recruitment levels remained ‘largely stable.’
He added: ‘The group’s strategic core remains strong, and we are focused on consultant productivity, cost discipline and long-term investments in our people and global infrastructure.
‘The group is well positioned to swiftly capture opportunities when there is an upturn in market confidence and our expectations for the full year remain unchanged.’
Fowlston replaced the company’s eponymous founder as CEO in April, having previously run its Asia-Pacific division and the Robert Walters and Walters People global recruitment brands.
His predecessor started the business in 1985, steering it through various recessions to expand it into one of Britain’s most well-known recruiters with staff based in 31 countries.
Robert Walters shares were 0.3 per cent down at £3.56 on Tuesday morning and have slumped by 30 per cent so far this year.
