British recruiter Robert Walters warned that caution about changing jobs and prolonging employment means its earnings this year will be “significantly lower” than expected.
“Declining levels of candidate confidence and lengthening time to hire were noted in the second half of 2022 and, contrary to previous Board expectations, have not yet shown sustained improvement,” the company said on Wednesday.
Net fee income for the first two months of the second quarter fell 9 percent year-on-year, even as wage growth and the number of jobs coming into the market across Europe, Asia and the United States remained “strong,” the report said. “When market confidence recovers, there will likely be a return to meaningful growth.”
Shares in London-listed Robert Walters – which specializes in “white collar” jobs in legal, technical and accounting – fell 14 per cent early on Wednesday and are down about 25 per cent so far this year. The number of recruiters PageGroup and Hays also decreased by 6 and 5 percent, respectively.
PageGroup said in April that “difficult market” conditions in Asia, the US and the UK were partly responsible for a 2.4% year-on-year decline in first-quarter total profit. Like Robert Walters, she cited “challenging conditions” near the end of last year that carry over into 2023, citing low levels of “both candidate and client confidence.”
Labor markets in the US, Europe and the UK have so far proven unexpectedly resilient in the face of rising inflation and rising interest rates, with unemployment levels in every region near record lows.
Employment in the United Kingdom has returned to above its pre-pandemic level, with 33.1 million people employed, according to data published on Tuesday, while job growth in the United States was nearly twice as strong as expected in May.
Title numbers, however, mask changing work patterns. Although unemployment in the eurozone fell to a record low in April from a peak in August 2020 during the pandemic, average hours worked fell by 1.6 percent over the same period, according to the European Central Bank.
Many white collar professionals continue to work from home most days of the week. Robert Walters said workers in London are finding it particularly difficult to be tempted to return to the office.