Top recruiters flag tough conditions in jobs market as incomes fall
16 April 2024, 09:54
Robert Walters and Hays both reported declining income and said they had axed staff to cut costs.
Recruiters Robert Walters and Hays have flagged that tough conditions have persisted in the jobs market, as both firms reported declining income and said they had axed staff to cut costs.
Robert Walters said its gross profit dropped by 16% to £81 million in the three months to the end of March, compared with the previous year.
In the UK, profits tumbled by a fifth as it cautioned that trading conditions remain challenging.
But it offered a glimmer of hope for the sector with income growing in London for the first time in more than a year.
Robert Walters said that even though some elements of the economic environment had started to improve, such as inflation, the “general environment remains one where client and candidate confidence is at low levels”.
The global recruitment agency said its total workforce had shrunk by 13% compared with the year prior, including a reduction of about 170 staff since the end of 2023.
It said it was keeping a tight control over costs as it stays focused on strengthening the business.
Meanwhile, fellow recruitment agency Hays, which specialises in placing white-collar roles, said its group fees dropped by 14% in the three months to the end of March, on a like-for-like basis compared with the previous year.
In the UK and Ireland, fees dropped by 16% year on year, with the biggest declines in the technology sector where fees tumbled by nearly a third.
Hays told investors it was on track to meet its target of saving about £50 million per year by the summer.
It came as it revealed its total headcount had also decreased by 13% compared with the previous year as the firm said it was focusing on being more efficient.
Hays’ chief executive Dirk Hahn said: “While economic uncertainties remain, we have a strong and clear strategy and will continue to build a more resilient business through greater focus, increased operational rigour and strong cost management.”
The updates come as new official data showed that Britain’s unemployment rate rose to 4.2% in the three months to February, the highest level for nearly six months, as vacancy numbers continued to fall.
Job markets have faltered worldwide over the past year amid a more uncertain economic outlook and businesses facing higher costs.
