Re­cruiters’ prof­its plunge as pan­demic col­lapses global hir­ing mar­ket

The Daily Telegraph - Business - - Business - By Michael O’Dwyer

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.

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