Recruiters’ profits plunge as pandemic collapses global hiring market
THE collapsing global jobs market dealt a brutal blow to recruiters Robert Walters and PageGroup as hiring froze up at the height of the Covid-19 pandemic.
A plunge in demand sent profits at the London-listed firms tumbling 33pc and 47pc respectively in the second quarter of 2020, compared to 12 months earlier. Chancellor Rishi Sunak announced a string of measures on Wednesday designed to protect jobs as lockdown ends, including a £2bn wage subsidy for new hires and payments to support trainees and apprentices.
But the stimulus package will not directly boost either Robert Walters or PageGroup, as they specialise in recruiting professionals who are less likely to benefit. PageGroup boss Steve
Ingham said an unemployment surge is inevitable in coming months, but he expects blue collar workers to be hardest hit.
The business plans to open four of its UK offices next week. All but one of its offices in Europe have already reopened and activity is picking up, Mr Ingham added. Most of the company’s Asian offices are open but US sites remain shut. PageGroup’s fee income in the UK fell to £14m in the second quarter, down 61.5pc from the same period last year, while total income worldwide dropped from £225m to £118m.
Profits from permanent hiring fell by more than half. The market for temporary jobs was more resilient but fees still fell by almost a quarter.
Robert Walters slashed its costs by 19pc over the three months, turning to taxpayer-funded furlough schemes and asking staff to cut their working hours. Salaries make up about 75pc of the company’s cost base. The firm’s fee income dropped to £71.1m, from £106.1m in the same period of 2019.
Founder and chief executive Robert Walters said it is too early to predict when the economy might pick up.
Shares in Robert Walters rose 5pc to 415p yesterday, while PageGroup fell 1pc to 375p.