UK recruiter Robert Walters has warned that caution about changing jobs and extended hiring times mean its profit this year will be “significantly lower” than expected.
“Reduced levels of candidate confidence and lengthening time to hire were signalled in the second half of 2022 and, contrary to the board’s prior expectations, are not yet showing sustained improvement”, the company said on Wednesday.
Net fee income for the first two months of the second quarter fell 9 per cent year on year, even as wage growth and the number of jobs coming to market across Europe, Asia and the US remained “solid”, it said. “When market confidence recovers there will likely be a return to meaningful growth.”
Shares in London-listed Robert Walters — which specialises in “white collar” jobs in legal, tech and accounting — fell 14 per cent early on Wednesday and are down almost 25 per cent so far this year. Recruiters PageGroup and Hays also fell 6 and 5 per cent, respectively.
PageGroup had said in April that “tough market” conditions in Asia, the US and the UK were partly to blame for a 2.4 per cent year-on-year decline in first-quarter gross profit. Like Robert Walters, it cited “challenging conditions” towards the end of last year that had carried over into 2023, citing low levels of “both candidate and client confidence”.
Labour markets in the US, Europe and the UK have so far proved unexpectedly resilient in the face of high inflation and rising interest rates, with unemployment levels in each region close to record lows.
UK employment is back above its pre-pandemic level, with 33.1mn people in work according to data published on Tuesday, while US jobs growth was almost twice as strong as forecast in May.
The headline figures mask shifting work patterns, however. Although unemployment in the euro area fell to a record low in April from a peak in August 2020 during the pandemic, average hours worked declined by 1.6 per cent over the same period, according to the European Central Bank.
Many white collar professionals continue to work from home for much of the week. Workers in London are proving particularly hard to tempt back to the office, Robert Walters said.
