Robert Walters winning the war for talent

Considered a bellwether for the health of the wider economy, recruitment may seem an odd investment choice amid fears of a global economic slowdown. With 69 per cent of net fee income (NFI) derived from permanent recruitment, Robert Walters has a seemingly high degree of exposure to economic downturns. However, in targeting specific labour markets with acute shortages (rather than high volumes) and aided by ever-increasing specialisation within disciplines, the group has some level of defence.

Against a tumultuous background, including an escalating US-China trade war and the looming spectre of Brexit, NFI increased across all regions in 2018. It is a sign of confidence that the group has made a higher than average quarterly investment in headcount in 2019 to drive further NFI growth. Despite an increasingly cautious labour market, UK NFI has remained resilient, rising by 10 per cent during the first quarter of this year. A “two-speed economy” has seen a “generally slow” financial services market in London, according to Robert Walters, in contrast to non-financial services growth in cities, such as Manchester, positioning themselves as technology hubs.

Deriving 72 per cent of group NFI from outside the UK, a diversified international presence in both established and emerging recruitment markets reduces vulnerability to domestic headwinds. With candidate shortages across the region, Europe is the fastest growing division, with like-for-like NFI growth of 24 per cent in 2018. Despite the maturity of its economy, changes in employment law mean Germany is viewed as an emerging recruitment market with long-term growth potential – NFI has increased by over 25 per cent so far this year. A hiring surge in financial services in Frankfurt reflects the group’s positioning to benefit from any business movements relating to Brexit.

Boasting an “unrivalled” regional footprint in its largest market, Asia Pacific, local businesses seeking international expansion are driving demand for bilingual professionals. Demand in the region is likely to be strengthened by national initiatives such as China’s ‘Manufacturing 2025’ and Japan’s ‘Society 5.0’.

The group predominantly pursues an organic growth strategy, having made just four market-entry acquisitions in its 33-year history. With “no shortage of opportunities to enter new markets”, a disciplined approach to expansion focuses on the long-term potential of markets. The group entered two new markets (Chile and the Czech Republic) in 2018 and has opened three further offices in existing markets so far this year.