It’s been another tough seven days at Robert Walters. Regular readers may remember my blog from last November, back when Robert Walters pulled-pin on their Christchurch operation, leaving 7 or so employees without a job just before Christmas. If my sources, and there are plenty of them, are anything to go by, we’re about to see an even bigger cull from the once mighty recruitment powerhouse. This story first pinged my radar at 5.14pm last Friday when a contact texted me to say: “Got your finger on the pulse re: RW? Could be a busy week for you next week!”. This person clearly knows me well enough to know that texts like this get my juices flowing; after all…I have a blog to write. A short chat, and the story goes as follows: At around 3pm on Friday, everyone at Robert Walters NZ received an email essentially dismissing them for the day, and asking them to check their personal emails. Of course, many went to the pub. Emails like this are rarely used to announce who won the meat raffle. Sure enough, the emails that followed named a number of roles which will go through a “process” and will likely lead to redundancies. In terms of scale, I have seen evidence that suggests that at least 11 roles will go, with potentially an equal number set to change. Change good, or change bad, I do not know. My understanding is that it will be Wellington most affected, with a Senior Tech Recruiter, a Manager in legal, someone in risk, two in marketing and communications, and four in business transformation likely to be on their way out. From this list, it would appear that the restructure sits at “grass-roots” level, with fee-earners, not management, bearing the brunt of market forces. More on this later.
In terms of market forces, RW were quick to highlight the economic pressures by way of background to this decision. Given that Walters still cling blindly to their ineffective team commission model, much of the business performance analysis is based on their own Team Contribution Margin (TCM) metric. Without going in to detail on how this is calculated, the figure, in order to break-even, needs to sit at 40%. Currently this sits at the mid-to-low 30s. Contributing to this is the number of contractors almost halving from over 1200 in 2023, to just over 600 kicking around today. One source told me that nine perm consultants failed to make a perm placement in the first six months of 2024! Incredible stuff if true. Also contributing to this is RW’s desire to have lots of well-paid managers and leaders. If you crunch the numbers, it would suggest that every employee of RW New Zealand has to deliver around $25k/month for the business to successfully trade. In this market, that’s way too high and suggests to me way too many non-billers and overheads.
I share the same barber as a Robert Walters recruiter. I’ve never met him (the recruiter that is. I meet my barber every three weeks), but I’m told that he feels I’m overly mean to Robert Walters. I’m actually not. I like almost every recruiter I’ve met from RW. And they offer good training. I do take issue with their shared/team commission, and I’m not convinced that it is currently a well-run business. Hence we don’t currently work with them. Once-upon-a-time, RW employed about 110 people in Wellington alone. By my calculations, by the 26th June, they’ll be down to about 48 in the capital, and will struggle to surpass 60 nationwide. Many firms have shrunk in the last two years, but most have managed it better that RW. Tribe for example, have contracted slightly (but not nearly to the level of Walters), but have done so without redundancies. Proper management, and dare I say “performance management” can right-size a recruitment firm in a tough market. BrightSpark restructured which meant the loss of a couple of candidate managers – this was a strategic decision to align what they offer with market conditions, and also align with the operating models of their sister businesses of Assemble and Co-Legal. There is nothing wrong with making sure you’re fighting fit in challenging times. This is how you run a recruitment firm. Robert Walters don’t do this however. Individual performance has dropped so low that some tough conversations should have happened a long time ago. Instead, RW seem unable to do this. There seems to be no one at leadership level who can drive performance, and drive out non-performers. Instead, they stumble around like a bloated old man, and use these rounds of redundancies as gastric bands.
The sole purpose of a Robert Walters recruiter seems to be to become a non-billing manager. A big part of this is due to their idiotic team commission model. Very few understand how good life can be as a mega-biller. Instead, you say what you have to say to the relevant parties, escape a few redundancies, and hopefully Labour get in and you can get back on the gravy train. You then find yourself in a situation where everyone wants to manage, and no one wants to bill. If this assertion is correct, you cannot blame the Consultants. Responsibility sits with management. I’ve heard rumours that Stuart Nash, the former Labour MP and now RW’s Commercial Director is paid a salary which starts with 4. And he’s certainly not on $40k. I also know from people who work there, that the average Whiteboard reader has forgotten more about recruitment than Mr Nash currently knows. No disrespect, but he is not a recruiter. And yet it is billing consultants who face the axe. If I worked for Robert Walters, I’d find this somewhat galling – even if I am a raving Labour supporter. The last time RW made redundancies, they were up for a SEEK award the following week. I remember thinking (and writing) how embarrassing it would be for everyone if they won “Large Recruitment Agency of the Year”. In a cruel twist of fate and timing once again, some of you may have seen RW’s Wellington leader Bridget Clarke on Grand Designs last Sunday, completing a $3.15m house build – two days after it was announced that some of her team will be without a job in a horrible market. You couldn’t make it up.
Anyway, genuine and sincere sympathies to those affected. You join firms like Robert Walters because they offer relative stability in a volatile industry. Something that the current leadership has failed to deliver.
^SW
