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Shortage of London lawyers helps income soar at recruiter Robert Walters

·3-min read
City of London commuters (AFP via Getty Images)
City of London commuters (AFP via Getty Images)

Recruiter Robert Walters today hailed a record December and said profits were ahead of forecasts as a shortage of qualified job candidates around the world sparks a boom for headhunters.

Robert Walters said gross profits were up by 39% on a constant currency basis in the final few months of 2021, hitting £95.1 million. Growth was strongest in Asia, where income jumped 48%, followed by Europe.

Profits were up 7% in the UK but CFO Alan Bannatyne said that was “somewhat under representative” as many City firms had deferred starts dates to January, meaning fees were delayed.

“We are seeing demand,” Bannatyne told the Standard. “One of the audit firms in summer had 600 open vacancies. Six weeks later that was 900 open vacancies.”

Companies are hunting for tech professionals in the capital but the fiercest battle for talent is in the legal sector.

London legal was up by 89.7%,” Bannatyne said. “There is just clearly not enough legal capacity.

“It takes three years to train a lawyer, potentially hiring volumes were reduced during Covid and actually maybe we have had some people during the ‘Great Resignation’ who have decided they are going to change career progression.”

The hunt for staff has provoked a well publicised bidding war for junior talent in the legal sector, with most firms now offering newly qualified lawyers starting salaries of over £100,000.

Bannatyne said pay was soaring across the world, with employers now offering between 15% and 20% above current salaries to attract candidates.

“We’re seeing salary inflation in a way that I’ve not seen it in my 20 years at Robert Walters, just in general across the world,” he said. “We are finding it hard to get hold of good people in all disciplines in all territories.

“I’ve got line of sight, first hand somebody who doubled their salary in cyber. Quite a junior role, but they went from £32,000 to £65,000. “

Bannatyne said soaring salaries were “the icing on top of the cake” for recruiters as they typically take a percentage fee.

“It’s a good time to be a recruiter,” he said.

CEO and founder Robert Walters said: “We are seeing candidate shortages across all locations and disciplines, a fierce competition for talent and wage inflation kicking in which together create huge opportunities across the recruitment market.

“Following a strong quarter including a record December, trading is now comfortably ahead of current profit expectations.”

Shares rose 3.3p, or 1.6%, to 823.32p.

Rival Hays jumped 7.3p, or 5%, to 155.5p, helped higher by a broker upgrade from Credit Suisse.

Bannatyne said he expects the good times to continue for recruiters in 2022.

“An awful lot of things in recruitment are driven by candidate confidence and actually I think that confidence has got momentum,” he said.

“If the world now believes we’re over the worst of Covid then that’s positive. And with salary inflation — if friends are talking about, ‘Oh I just got a pay rise of 20%’, that’s likely to increase levels of candidate confidence and people wanting to move jobs.”

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