Recruitment firm Robert Walters has warned that Britain’s employment market is being hit by “political turmoil” and Brexit uncertainty.
The group reported an 8% fall in UK gross profits for its second quarter to June 30 as it said British candidate and corporate confidence is being affected.
Overall group gross profit growth also slowed in the three months, to 7% from 11% in the first quarter.
But the group’s international business, which now accounts for more than three-quarters of all net fee income, has helped offset the UK woes and sees the group remain on track for the full year.
Founder and chief executive Robert Walters said: “The UK has been impacted by Brexit-related uncertainty; however, the group’s diverse geographic footprint and blend of revenue streams ensures we are well positioned for the future.”
Speaking to PA, finance boss Alan Bannatyne said candidates are “thinking twice” about switching jobs, while firms are holding off from making significant investment.
He said: “We’ve got a lot of people sitting on their hands.
“Our business depends on churn – it’s good that we’ve got good strong employment figures – but what makes our business work is people changing jobs.”
He said the UK recruitment market conditions are unlikely to recover until Brexit is resolved and a new prime minister is in place.
He also warned that recruitment in Britain’s burgeoning fintech sector is being hampered as firms put projects on hold ahead of changes to so-called IR35 rules – the Government’s anti-avoidance tax legislation.
“We’re seeing some of our UK world-class fintech projects being put on hold due to the legislation,” he said.
Robert Walters’ first-half update, which comes ahead of interim results on July 25, showed that Europe and Asia Pacific remained the star performing regions with gross profit growth of 13% and 9% respectively.
The group continued to expand overseas with an office opened in Mexico City and a fourth office opened in the Netherlands, in Utrecht.