PageGroup posts record quarterly performance amidst tight labour market

Recruitment firm PageGroup has posted its best-ever quarterly result as it benefited from an employment market defined by salary hikes and labour shortages.

The Surrey-based business reported a gross profit of £280.9million in the three months ending June, a 27.8 per cent jump from the equivalent period last year, on the back of record showings across 25 countries.

This included Germany and the US, two of the company’s five self-described ‘large, high potential’ markets, with growth in the latter territory boosted by strong demand in its Boston, Chicago and Houston offices.

It also ended the quarter with a record performance in June, the second time the headhunter has achieved a monthly gross profit exceeding £100million.

Chief executive Steve Ingham said the impressive outcome was achieved ‘despite the backdrop of macro-economic and geopolitical uncertainty’, and continuing Covid-19 restrictions across some markets.

Lockdown laws particularly affected the firm’s earnings in Mainland China, where the government’s hardline zero-Covid policy has led to tens of millions of residents in major cities being forced to stay at home.

Compounded by stringent social distancing and quarantine rules in Hong Kong, PageGroup’s gross profits in Greater China declined by 11 per cent.

By contrast, the company’s UK earnings climbed by 22.6 per cent to £39.1million, thanks to a record quarter in its Page Personnel division, which has recovered less quickly from the Covid-19 pandemic.

Following solid performances in other major markets like Latin America and South-East Asia, the firm’s gross profits in the first half of 2022 surged by precisely a third year-on-year from £404.2million to £539million.

Competition: Recruitment firms have heavily benefited from labour shortfalls and steeper level of voluntary resignations driving much stronger competition for talent

As a consequence, PageGroup continues to expect operating profits this year will be in line with current consensus forecasts of £205million.

Ingham said: ‘Looking forward, we are clearly aware of the heightened degree of macro-economic and political uncertainty that exists globally, particularly with regards to increasing inflation in the majority of the markets in which we operate.

‘We are monitoring all KPIs in the business regularly, but to date, we have seen no significant changes apart from the usual seasonal movements.’

PageGroup’s trading update mirrors that of fellow British headhunting giant Robert Walters, which last week revealed it had also accomplished its best-ever quarterly result.

London-listed Robert Walters saw strong growth across all forms of recruitment, whether permanent, temporary or contract work, amid booming demand for new talent.

Both companies have been buoyed by labour shortfalls accelerated by the Covid-19 pandemic, alongside a much steeper level of voluntary resignations that, combined, have led businesses to bump up salaries to try and attract employees.

PageGroup’s boss has also attributed the group’s latest results to investment in new technology, including its global operating system Customer Connect, and video interviewing enabling people to be hired more quickly.

PageGroup shares were up 0.8 per cent to 433.4p during late Wednesday morning, although their value has plunged by over 30 per cent in the past six months.