Talent securing ‘close to 100% pay uplifts’ and recruiters boosted amid reopening hiring spree

Recruiters have reported soaring profits and say some new hires are receiving huge wage rises as companies recruit en-masse and compete for talent after a year of freezes and cuts.

In the latest sign the economy is bouncing back, recruiting giants PageGroup and Robert Walters both gave positive quarterly updates to the City on Wednesday.

In the three months to July, Robert Walters, which specialises in jobs spanning legal, finance, engineering and software, saw group net fee income (the equivalent of gross profit) of £89 million, up 31% on the same period in 2020.

Similarly, FTSE 250 recruiter PageGroup reported net fee income for the quarter of £219.7 million - nearly double that seen in the same period in 2020. June fee incomes were up 11% on 2019 levels.

Walters told the Standard businesses are competing to hire the best talent amid skills shortages in some "hotspot" sectors, including tech - particularly in cybersecurity - and legal.

Robert Walters CFO, Alan Bannatyne, said it is "very common now seeing 30% salary uplifts" and that some junior software developers are managing to secure close to 100% pay increases in new roles.

Bannatyne added that some SMEs are hiring "more like [they were in] 2005 or 2006".

"We are seeing signs of a pretty strong recovery in confidence in both candidates and clients," Walters said. "It is reflecting in increased wages, just because of supply and demand, and I would expect that to be a trend as well.

"We are seeing a skills shortage-driven, wage inflation market, and we haven't seen that for a while."

Russ Mould, an investment director at AJ Bell, told ShareCast that recruiters' updates "suggest there is a serious hiring spree going on around the world, perhaps a mixture of reactivating jobs that were lost in the pandemic and companies feeling more confident to invest in the future".

In the year to March, 813,000 jobs were lost in the UK, particularly hitting the shuttered hospitality and leisure sectors.

But UK-wide vacancies surged by 16% in the first quarter, according to ONS figures, and pent-up demand from businesses and professionals waiting until more certain times to make moves has since been unleashed.

Walters said his own firm is "really part of the story" as it is currently "hiring as many good quality people as we can find". He said it is a "hardened, toughened up" version of his firm that is emerging from the pandemic.

Shares in both PageGroup and Robert Walters rose on the updates on Wednesday. Robert Walters saw its shares surge by 10%, before falling back to a gain of around 7%, while PageGroup's rose by around 3%.