Fee income tumbles at Robert Walters

Robert Walters reported a slide in quarterly fee income on Thursday, despite high levels of job vacancies, as the weak macroeconomic backdrop dampened confidence.

The white collar recruiter said group net fee income fell 11% in the three months to 30 June, or by 10% on a constant currency basis, to £99.9m.

Within that, the UK saw fee income tumble 21% to £16m while Asia Pacific recorded an 12% slide to £43.8m. Other international, which includes the Americas, South Africa and the Middle East, was down 25% at £7.8m.

Interim group net fee income fell 5% on a constant currency basis, to £202.3m.

Robert Walters said recruitment confidence in the UK “continued to be impacted by the knock-on macroeconomic effects of a high inflation and high interest rate environment”, while the US has been hit by mass lay-offs in the technology and financial services sectors this year.

During the quarter, Robert Walters reduced its own headcount by 3%, to 4,280.

New chief executive Toby Fowlston, who took over in April, said: “Candidate confidence and time to hire are not yet showing the anticipated signs of sustained improvement.

“Structural recruitment market fundamentals – including job vacancy levels, salary inflation and candidate shortages – are still holding strong, which continues to suggest that when market confident recovers, there will likely be an increase in demand and candidate movement across all areas of recruitment.”

As at 1015 BST, shares in the firm were off 2% at 418p.

Victoria Scholar, head of investment at Interactive Investor, said: “This quarter’s results are a particularly difficult read given the tough comparison versus the second quarter of 2022, which was a record.

“However, it is clear that weak confidence, macroeconomic uncertainty with a sluggish growth backdrop, elevated inflation and rising interest rates are dampening hiring appetite among corporates.

“More and more, businesses are attracted to the temporary hiring market to fill vacancies instead of piling on the additional fixed costs by adding full-time workers.”