Recruiters Robert Walters and PageGroup released trading updates over the past few days signaling slowdowns in hiring, profit warnings, and possible recession risks.
Robert Walters
Robert Walters warned of softening recruitment activity across all markets, especially Asia-Pacific where the company saw net fee income (gross profit) dip by 2%, 3%, and 24% in Japan, Australia, and China respectively year-on-year in Q4 2022. Still, APAC income overall squeezed a 3% increase. Net fee income was also up 8% in the UK, 18% in Europe, and 2% in other regions.
In total, Robert Walters recorded an 8% gross profit increase across all regions in Q4 2022 year-on-year in constant currency.
While Robert Walters continued to see softer growth across all regions, it warned of increased uncertainty in macro-economic conditions globally, and issued a profit warning, saying it expected full-year profit to be a record, "albeit slightly below current market expectations."
PageGroup
Likewise, rival PageGroup maintained overall profits, but warned of a slowdown. PageGroup fared worse than Robert Walters in the UK and APAC, recording a -1.9% and -15.8% decrease in gross profits respectively in the two regions in Q4 2022. Again, APAC stood out as having suffered the worst of the global recruitment slowdown.
In total, PageGroup still managed a 3.5% increase in gross profit across all regions in Q4 2022 year-on-year in constant currency.
Mirroring Robert Walters, PageGroup managed to remain profitable in Q4 and FY 2022, but warned of a slowdown in hiring. PageGroup was somewhat more emphatic in its profit warning than Robert Walters:
Nicholas Kirk, CEO of PageGroup, commented: "As the quarter progressed, conditions became increasingly challenging and we saw a reduction in both candidate and client confidence, leading to further delays in decision making, as well as candidates being more reluctant to accept offers."
As a result of aforementioned factors, PageGroup recorded gross profit per fee earner, its gauge of productivity, down 12% compared to Q4 2021 amid a "reduction in both candidate and client confidence".
Given the slowdown in trading in Q4, PageGroup now expects its FY22 operating profit to be c. £195m, down from a previous forecast of £204m.
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