A recruiter that is often viewed by analysts as a bellwether for the UK jobs market has posted a 60 per cent drop in profits as a result of firms trimming hiring amid the economic slowdown.
Robert Walters, which specialises in sourcing talent for the City’s biggest banks, brokers and insurers, said today operating profits slumped to £11.2m in the six months to June.
That is down from £27.7m worth of profits clocked in the same period last year. The announcement sent the London-headquartered company’s shares down more than two per cent in the City today.
Profits before tax slumped by a greater degree, to £8.1m from £26.4m, or just under a 70 per cent fall.
“Candidate and client confidence has been muted throughout the first half of 2023 in a continuation of the trend we first experienced during the second half of last year. Whilst recruitment market fundamentals such as vacancy levels, candidate shortages and wage inflation have remained relatively solid, job churn has reduced,” Robert Walters’s management team said in its half year results release.
However, vacancies have been steadily declining for around a year and now down to 1,034m.
Financial services jobs – which Robert Walters specialises in filling – have slipped sharply over the last year.
According to fellow recruiter Morgan McKinley, open roles in the Square Mile dropped to 6,105 in the three months to June, down from 7,497 in the previous quarter and 11,415 in the same period last year.
Surveys have indicated firms are beginning to lay off staff to contain costs ahead of a further expected slump in consumer demand in the coming months.
An increase in candidate supply could boost the recruitment sector as workers seek to find a new gig, but only if businesses feel confident enough to take on new staff.