Robert Walters is being hit by budget cuts as employers delay hiring

Robert Walters has joined rival recruitment firms Hays and PageGroup in reporting weaker quarterly performance in all key areas.

The white-collar recruiter, whose eponymous founder retired last year, saw net fee income fall 12 percent at constant exchange rates to £79.9 million in the three months ended September.

Net fee income fell 19 percent to £12.5 million in Britain, which the company blamed on businesses “typically ceasing operations pending clarity” on future employment laws and tax measures in the upcoming October Budget of the government.

Meanwhile, revenues in the Asia-Pacific market fell 12 percent to £35 million, partly due to challenging trading conditions in Hong Kong and public sector job losses in New Zealand.

Recruitment agencies have suffered a slowdown in trade this year as higher interest rates and economic uncertainty have prevented companies from hiring new staff.

PageGroup reported on Monday that gross profit fell 13.5 percent to £201.4 million in the quarter ending September, while Hays said last week that net fees fell 15 percent in the same period.

Both PageGroup and Robert Walters have warned that client and candidate confidence figures ‘do not yet show signs of material improvement’.

The latter’s chief executive, Toby Fowlston, said the company still expects trading conditions not to improve until 2025 and commission income for the second six months of this year is unlikely to exceed first-half levels.

However, he assured investors that a “programme of actions is underway” and the group still expects to be profitable throughout the year.

Fowlston added: “As we approach the end of 2024, I am confident we will end the year a stronger business than when we started.”

Last week the UK government unveiled the Employment Rights Bill, which includes 28 individual reforms designed to improve worker protections.

Proposed measures include the abolition of zero-hour contracts, the day-one right to parental and bereavement leave, and making flexible working standard for all employees.

Many business groups are concerned that the plans will make it more expensive for companies to hire new staff and could worsen unemployment.

A British Chamber of Commerce survey published earlier this month found that the proportion of companies looking for new staff fell to 56 percent, the lowest level in three years.

Robert Walters Stocks remained at 351p late on Tuesday morning, meaning they are down by around a quarter this year.