By Greg Wright

Published 11th Oct 2023, 09:19 BST

The firm reported a 10.5 per cent drop in group-wide gross profit over the three months to September 30, down 7.9 per cent on a constant currency basis. The UK was among countries hit hardest amid the more difficult jobs market, with gross profits tumbling 18.9 per cent.

PageGroup said it was seeing the hiring process take longer as candidates are becoming more reluctant to accept new jobs, due in part to the smaller increases in salaries being offered, as well as moves by current employers to retain workers.

The firm said it now expects full-year operating profits to fall to between £125m and £130m, excluding a £5m up-front hit from cost-cutting moves.

Recruitment firm PageGroup has warned over annual earnings as firms rein in pay offers and job seekers increasingly turn down new roles amid economic uncertainty. (Photo by Yui Mok/PA Wire)

It had previously guided in July for operating profits of £137.6m.

The outturn would mark a sharp drop on the £196.1m earnings reported in 2022.

Nicholas Kirk, chief executive of PageGroup, said: “Europe, Middle East and Africa was our best performing region – however, tough market conditions affected our performances in Asia, the UK and the US.

“Salary levels remain elevated, albeit the salary increases offered to candidates reduced compared to the third quarter 2022.

“These lower offers, combined with lower candidate confidence, led to a further increase in the number of offers rejected by candidates, either through employer buybacks or unwillingness to risk the move for the size of incentive on offer.

“The increased time to hire that we saw in the second quarter continued.”

He added: “Looking ahead, due to a slower end to the quarter, there is a heightened degree of uncertainty in the short term.”

PageGroup is slashing its own costs in the face of tougher trading, cutting its fee-earner workforce by another 310 roles, or 4.8 per cent, in the third quarter. It has now trimmed its total workforce by 10.7 per cent year-on-year to 8,140. Cost-cutting actions are set to deliver annual savings of £20m from 2024 onwards, but will lead to a net £5m impact in 2023.

Earlier this week, recruitment firm Robert Walters revealed another double-digit fall in fee income as economic uncertainty continued to weigh on hiring activity. The group posted a 13 per cent constant currency fall in group net fee income for the three months to September 30, down 17 per cent on a reported basis. It reported a 13 per cent decline in fee income across the UK, although this was better than the 21 per cent plunge seen in the previous three months. Robert Walters said it was a “resilient performance” amid global economic uncertainty, with hiring activity remaining stable on the previous quarter.

PageGroup warns over annual earnings amid tougher jobs market