Headhunter Robert Walters’s profits surge on the back of high vacancy levels and huge salary rises
- Net fee income at Robert Walters jumped by 39% year-on-year to £95.1m
- The Asia-Pacific region, its largest market, saw a 56% rise in gross profits
- UK law, commercial finance and tech firms are fiercely competing for talent
Professional recruiter Robert Walters has seen profits skyrocket following record trade in December and a worldwide shortage of job applicants, which its finance boss has said has led to the largest wage hikes he has seen in two decades.
Net fee income at the group jumped by 39 per cent year-on-year on a constant currency basis to £95.1million in the fourth quarter, thanks to impressive results across all regions and categories of recruitment activity.
The Asia-Pacific region, its biggest market, provided the bulk of this growth with a 56 per cent rise in gross profits even though strict lockdowns impacted some Asian countries during the period.
Labour power: Many Britons have used the opportunity brought by worker shortages to move to different jobs and starting salaries for graduates have been bumped considerably
Fee income also grew strongly in Europe, soaring by 36 per cent to £27million with Germany, Belgium, Spain and the Netherlands all individually recording growth of 40 per cent or more.
By comparison, its domestic UK market registered an increase of just £1.1million in gross profits despite the firm saying it benefited from fierce competition for jobs in industries such as law, commercial finance and technology.
Founder Robert Walters said the group’s record December performance helped push total net fee income for 2021 up by over a fifth and that the battle amongst businesses to hire new people had led to much larger salaries being offered.
‘We are seeing candidate shortages across all locations and disciplines, a fierce competition for talent, and wage inflation kicking in which together create huge opportunities across the recruitment market,’ he remarked.
Chief financial offer Alan Bannatyne also said today that the salary hikes were the ‘highest I’ve seen it in my 20 years at Robert Walters,’ with some businesses lifting their pay packages by up to 50 per cent.
He told the Evening Standard that one auditor in London had seen their open vacancy levels swell from 600 during the summer to 900 just six weeks later, while the number of legal openings in the British capital had shot up by about 90 per cent.
Skyrocketing wages: Alan Bannatyne, the chief financial officer of Robert Walters, said the salary hikes at businesses were the ‘highest I’ve seen it in my 20 years at Robert Walters’
‘It takes three years to train a lawyer, potentially hiring volumes were reduced during Covid, and actually, maybe we have had some people during the ‘Great Resignation’ who have decided they are going to change career progression,’ he remarked.
Back in July last year, the headhunter noted that it was ‘commonplace’ for some white collar firms to be hiking salaries by 20 to 30 per cent for certain positions amidst an employment market where there was a ‘war for talent.’
The dearth of professional workers was blamed by Robert Walters on the coronavirus pandemic, decreasing immigration levels and labour mobility, and is particularly affecting countries like the United Kingdom.
Job vacancies hit a new record of 1.22 million in the UK over the three months to November 2021, according to the Office for National Statistics, a surge of 434,500 on pre-pandemic volumes.
Virtually all industries have been impacted by worker scarcity in the UK, but the sectors with the highest number of vacancies include manufacturing, human health, and social work and hospitality.
On the upside, many Britons have used the opportunity to move to better paying jobs and starting salaries for graduates in professional sectors have been bumped up to considerable levels, particularly within the legal profession.
Yesterday, law firm Katten Muchin Rosenman announced a £10,000 pay rise for its London associates, meaning junior lawyers could take home an annual wage of £108,000.
This came after Simmons & Simmons boosted their yearly salary for newly-qualified lawyers to £100,000, whilst the equivalent person at Baker McKenzie will now get £105,000 and those at Rose & Gray will earn a massive £147,000.
Shares in Robert Walters were 2.6 per cent higher at 830.8p during the late afternoon on Tuesday and have risen about 80 per cent over the last 12 months.