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A tale of two markets: ‘Muted’ UK recruitment offset by thriving Europe, says Robert Walters

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Recruitment firms are often seen as a bellweather for the health of the UK's labour market.
Recruitment firms are often seen as a bellweather for the health of the UK's labour market.

Robert Walters said its group profit remained flat in the first quarter of 2023 compared to last year, as a European recruitment drive offset falls elsewhere. 

Group profit was flat compared to last year on a constant currency basis, although it rose four per cent to £102.4m from £98.4m on a reported level.

The recruiter said the lack of growth was a result of uncertain global macroeconomic conditions which continued to impact recruitment activity levels.

In the UK fee income slipped nine per cent as activity remained “muted” across London and the regions. 

It singled out technology recruitment, which was impacted by the “drip-feed” of lay-offs across the industry. Financial services however, performed “relatively well despite recent banking sector troubles”.

In the Asia Pacific, Robert Walters’ largest market, fee income slipped three per cent as profit from mainland China slumped on continued covid disruption. 

However, the recruitment firm reported a 10 per cent rise in income from Europe including a record year in Belgium. 

It said seven out of nine markets were delivering income growth year-on-year.  France, the Netherlands and Spain, the region’s largest businesses, increased net fee income on a constant currency basis by eight per cent, eleven per cent and six per cent respectively.

Fee income around the rest of the world also rose eight per cent, helping to keep group income steady overall. 

Back in January Robert Walters warned that a possible recession in the UK would likely lead to a hiring freeze which sent its shares tumbling. In the year to date its shares have fallen over 15 per cent. 

Chief executive Robert Walters said: “The market uncertainty we experienced in the latter stages of last year has tipped over into the first quarter of 2023. Our businesses in Europe, the Middle East and South America held up relatively well whilst Asia Pacific and the UK experienced single digit dips in net fee income albeit against tough and record prior year comparatives.

“A return of confidence to the Chinese economy, a stabilisation of the technology sector and a continued decline in inflation should have a positive effect on the global outlook,” he continued.