Robert Walters reports another drop in profits as economic uncertainty weighs on recruitment industry
- Administrative specialist’s net fee income fell 13% in the third quarter
- Among regions, the Asia-Pacific region saw the largest drop in fee income.
- Trade in the UK has been severely 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.
Administrative specialist net fee income fell 13 per cent at constant currency levels to £93.4 million for the three months ended September, compared with a 10 per cent fall in the previous quarter.
Trading was affected in all major territories, with the Asia-Pacific region seeing the biggest drop in commission income following particularly weak performances in China, Australia and New Zealand.
Letting go: Like other top recruiters, Robert Walters has been cutting his staff this year, from 4,356 at the end of last December to 4,200 in September.
In the UK, gross profits fell by £2.2 million to £15.4 million as the technology and financial services sectors imposed further redundancies and hiring freezes in response to high inflation and interest rates.
Like other prominent recruiters, Robert Walters has been cutting its workforce this year, from 4,356 at the end of last December to 4,200 in September, amid the slowing job market.
This is despite the global labor market remaining tight, especially in the UK, where vacancies totaled 989,000 between June and August 2023, well above pre-pandemic levels, according to the Office for National Statistics.
Staff shortages provided a huge financial boon to the British recruitment industry during 2021 and 2022 after pandemic restrictions began to be eased.
The shortfall sparked greater competition for talent among employers around the world, who began offering more generous salaries and benefits.
Workers are leaving their jobs at higher rates to look for those jobs, a phenomenon economists have described as the “Great Quit.”
As a result, many recruiters achieved record results, including Robert Walters, which reported revenues of £1.1bn and pre-tax profits of £55.6m last year.
A hiring frenzy also broke out, having cut staff during the height of the lockdown period, when countless businesses were desperate to save costs.
Although the economic backdrop subsequently weakened, Toby Fowlston, its chief executive, said third-quarter performance was “resilient” and hiring levels remained “largely stable.”
He added: ‘The strategic core of the group 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 quickly capture opportunities when there is an uptick in market confidence and our expectations for the full year remain unchanged.”
Fowlston replaced the company’s eponymous founder as chief executive in April, having previously led its Asia-Pacific division and global recruitment brands Robert Walters and Walters People.
His predecessor started the business in 1985, guiding it through several recessions to expand it to become one of Britain’s best-known recruiters, with staff based in 31 countries.
Robert Walters shares They were down 0.3 per cent at £3.56 on Tuesday morning and have fallen 30 per cent so far this year.
