The Impact of Caution and Extended Hiring Times on Recruiters’ Profits
Recruiter Robert Walters has warned that due to caution regarding changing jobs and extended hiring times, its profits will be “significantly lower” than expected. Recent reports indicate that there is reduced candidate confidence levels and lengthening hiring times. Net fee income for the first two months of the second quarter declined 9% YoY. Though wage growth and the number of jobs added to the market in Europe, Asia, and the US remained “solid,” hiring times continued to extend. Recruiters PageGroup and Hays also experienced a decline in shares of 6% and 5%, respectively.
The Volatility of Labor Markets
Despite high inflation and rising interest rates, labor markets in the US, Europe, and the UK have proven unexpectedly resilient. Unemployment levels in each region are nearing historic lows. Employment in the UK has returned to pre-pandemic levels with 33.1 million people employed, while U.S. job growth was almost twice as much as forecast in May. However, the headline numbers mask the changing work patterns. Unemployment in the Euro area fell to a record low in April, though working hours fell by 1.6% over the same period, according to the European Central Bank. Many white-collar workers continue to work from home most of the week. London workers are proving particularly difficult to tempt back to the office.
The Impact of Caution and Extended Hiring Times on Recruiters’ Profits
Recruiter Robert Walters has warned that due to caution regarding changing jobs and extended hiring times, its profits will be “significantly lower” than expected. Recent reports indicate that there is reduced candidate confidence levels and lengthening hiring times. Net fee income for the first two months of the second quarter declined 9% YoY. Though wage growth and the number of jobs added to the market in Europe, Asia, and the US remained “solid,” hiring times continued to extend. Recruiters PageGroup and Hays also experienced a decline in shares of 6% and 5%, respectively.
The Volatility of Labor Markets
Despite high inflation and rising interest rates, labor markets in the US, Europe, and the UK have proven unexpectedly resilient. Unemployment levels in each region are nearing historic lows. Employment in the UK has returned to pre-pandemic levels with 33.1 million people employed, while U.S. job growth was almost twice as much as forecast in May. However, the headline numbers mask the changing work patterns. Unemployment in the Euro area fell to a record low in April, though working hours fell by 1.6% over the same period, according to the European Central Bank. Many white-collar workers continue to work from home most of the week. London workers are proving particularly difficult to tempt back to the office.
Additional Piece:
The hiring process is a lengthy one that involves screening, testing, interviewing, and shortlisting candidates. However, recent trends indicate that the hiring process is taking longer than ever. This is due to the high level of caution among candidates, who are reluctant to change jobs due to the uncertainty caused by the COVID-19 pandemic. This has led to a significant reduction in job confidence levels and prolonged hiring times. The situation is not limited to Robert Walters, as other recruiters like PageGroup and Hays have also experienced a decline in shares of 6% and 5%, respectively.
As market confidence recovers, there will likely be a return to meaningful growth. However, recruiters will need to adapt to the new normal and streamline their hiring processes. With the shift towards remote work, recruiters need to create a hybrid recruiting process that caters to remote candidates. For instance, they can use virtual platforms to conduct interviews, run background checks and testing, and shortlist candidates. The process empowers recruiters to hire candidates regardless of their location and enables organizations to widen their talent pool.
Additionally, organizations can enhance candidate experience by providing them with regular updates on the hiring process. This goes a long way in building trust and reducing anxiety. The current climate has made businesses more attentive to their employees’ needs and has also led to an increased focus on the quality of the workplace environment. A comfortable and encouraging work culture reduces employee stress levels and makes them more productive.
The labor market has shown unexpected resilience despite the high inflation and rising interest rates. However, the ongoing pandemic has made it possible for job patterns to change. Even with record lows in unemployment, the average hours worked in some areas have gone down, highlighting the changing work patterns. With organizations beginning to embrace remote work, the recruitment process needs to adapt to enable the hiring of candidates regardless of their location.
Summary:
Recruiter Robert Walters experienced a decline in profits due to caution regarding changing jobs and extended hiring times. Other recruiters such as PageGroup and Hays also experienced a decline in shares. Despite the unexpected resilience of labor markets in the face of high inflation and rising interest rates, the headline numbers mask the changing work patterns. Many white-collar workers continue to work from home most of the week with London workers proving particularly reluctant to return to the office.
Recruiters need to adapt to the new normal and streamline their hiring processes to cater to remote candidates. Organizations should focus on enhancing candidate experience by providing regular updates on the hiring process to build trust and reduce anxiety. A comfortable and encouraging work culture reduces employee stress levels.
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British recruiter Robert Walters has warned that caution about changing jobs and extended hiring times mean his profit this year will be “significantly lower” than expected.
“Reduced candidate confidence levels and lengthening hiring times were reported in the second half of 2022 and, contrary to the board’s earlier expectations, are not yet showing lasting improvement,” the company said Wednesday.
Net fee income for the first two months of the second quarter declined 9% year over year, even as wage growth and the number of jobs added to the market in Europe, Asia and the US remained “solid,” he has declared. “As market confidence recovers, there will likely be a return to meaningful growth.”
Shares listed in London Robert Walters — who specializes in “white-collar” jobs in legal, technology and accounting — was down 14% early Wednesday and is down nearly 25% this year. Recruiters PageGroup and Hays also fell 6 and 5%, respectively.
PageGroup it said in April that “difficult market conditions” in Asia, the US and the UK were partly responsible for the 2.4% year-on-year decline in first-quarter gross profit. Like Robert Walters, he cited “difficult conditions” late last year that had been reported in 2023, citing low levels of “both candidate and client confidence.”
So far, labor markets in the US, Europe and the UK have proved unexpectedly resilient in the face of high inflation and rising interest rates, with unemployment levels in each region nearing historic lows.
Employment in the UK it returned above its pre-pandemic level, with 33.1 million people employed according to data released Tuesday, while U.S. job growth was nearly twice as much as forecast in May.
However, the headline numbers mask the changing work patterns. Although unemployment in the euro area fell to a record low in April from its peak in August 2020 during the pandemic, average hours worked fell by 1.6% over the same period, according to the European Central Bank.
Many white-collar workers continue to work from home most of the week. London workers are proving particularly difficult to tempt to return to the office, Robert Walters said.
https://www.ft.com/content/33d09f5f-7d3a-49e3-bf7c-2138ab62990f
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