Headhunter Robert Walters’s profits surge on high vacancy levels

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Headhunter Robert Walters’ profits rise due to high vacancy rates and huge salary increases

  • Net commission income at Robert Walters rose 39% year-on-year to £95.1m
  • The Asia-Pacific region, the largest market, saw a 56% increase in gross profit
  • British law, trade finance and technology firms are fiercely competing for talent

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Professional recruiter Robert Walters has seen profits skyrocket after record trading in December and a global shortage of job applicants, leading to the biggest pay increase he has seen in two decades, according to the finance boss.

The group’s net fee and commission income increased 39 percent year-over-year at constant exchange rates to £95.1 million in the fourth quarter, driven by impressive results across all regions and categories of recruiting activity.

The Asia-Pacific region, the largest market, provided most of this growth with a 56 percent increase in gross profit, although strict lockdowns impacted some Asian countries during the period.

Workforce: many Britons have taken advantage of the opportunity offered by staff shortages to move to other jobs and graduate starting salaries have risen significantly

Workforce: many Britons have taken advantage of the opportunity offered by staff shortages to move to other jobs and graduate starting salaries have risen significantly

Fee income also grew strongly in Europe, up 36 percent to £27 million, with Germany, Belgium, Spain and the Netherlands each posting 40 percent or more growth.

By comparison, the UK’s domestic market registered a rise of just £1.1m in gross profit, despite the company said it benefited from fierce competition for jobs in sectors such as law, commercial finance and technology.

Founder Robert Walters said the group’s record performance in December helped increase total net income for 2021 by more than a fifth and that the battle between companies to hire new people had resulted in much higher salaries being offered. .

“We are seeing candidate shortages in all locations and disciplines, fierce competition for talent and rising wage inflation that combine to create huge opportunities in the recruiting market,” he noted.

Chief Financial Officer Alan Bannatyne also said today that pay increases were the “highest I’ve ever seen in my 20 years at Robert Walters,” with some companies increasing their pay packages by as much as 50 percent.

He told the Evening Standard that an accountant in London had seen their job openings rise from 600 in the summer to 900 just six weeks later, while the number of legal openings in the British capital had risen by about 90 percent.

Rising wages: Alan Bannatyne, Robert Walters' chief financial officer, said corporate pay increases were the 'highest I've ever seen in my 20 years at Robert Walters'

Rising wages: Alan Bannatyne, Robert Walters' chief financial officer, said corporate pay increases were the 'highest I've ever seen in my 20 years at Robert Walters'

Rising wages: Alan Bannatyne, Robert Walters’ chief financial officer, said corporate pay increases were the ‘highest I’ve ever seen in my 20 years at Robert Walters’

“It takes three years to train a lawyer, potential hiring volumes have been reduced during Covid, and we may have had some people during the ‘Great Layoff’ who decided they’re going to change career progression,” he noted. .

In July last year, the headhunter noted that it was “normal” for some white-collar firms to increase salaries by 20 to 30 percent for certain positions amid a labor market where there was a “war for talent.”

The lack of professional workers was attributed by Robert Walters to the coronavirus pandemic, declining immigration levels and labor mobility, and is particularly affecting countries such as the United Kingdom.

According to the Office for National Statistics, the number of job vacancies in the UK reached a new all-time high of 1.22 million in the three months to November 2021, an increase of 434,500 from pre-pandemic volumes.

Virtually all sectors have been affected by the scarcity of workers in the UK, but the sectors with the highest number of vacancies include manufacturing, human health and social work and hospitality.

On the bright side, many Brits have taken the opportunity to move into higher paying jobs and starting salaries for graduates in professional sectors have risen to significant heights, particularly within the legal profession.

Yesterday law firm Katten Muchin Rosenman announced a £10,000 pay increase for its London staff, meaning junior lawyers can take home an annual salary of £108,000.

This came after Simmons & Simmons increased their annual salary for newly trained lawyers to £100,000, while the equivalent at Baker McKenzie will now get £105,000 and those at Rose & Gray will earn a whopping £147,000.

Shares in Robert Walters closed 2 percent higher at £8.42 on Tuesday, meaning their value is up about three-quarters over the past 12 months.

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