Robert Walters (LON:RWA) outlined a difficult 2025 trading environment in its full-year results presentation, as cautious client and candidate sentiment weighed on hiring activity across many markets. Chief executive Toby Fowlston and CFO David Bower said the group continued to pursue “self-help” cost actions while prioritizing balance sheet strength, and pointed to early signs of recovery in a handful of markets during the second half of the year.
2025 financial results and dividend decision
Bower said net fee income declined 14% year-on-year in constant currency terms, a reduction of GBP 47 million, against a backdrop that included geopolitical tensions and tight monetary policy. The group’s cost actions offset “over half” of the fee income decline, though management said it remained mindful of protecting the core fee-earning platform.
The board decided not to declare a final dividend, having also not declared an interim dividend earlier in the year. Management said the decision was driven by a desire to keep the balance sheet as strong as possible to support near-term execution and strategic objectives.
Cost reductions and headcount actions
Management emphasized ongoing reductions to the cost base in response to weaker markets. Bower said around three-quarters of operating costs related to people, and efficiencies there drove the majority of the group’s GBP 27 million reduction in operating costs. Average group headcount fell 15% year-on-year, contributing to a GBP 21 million reduction in fixed staff costs.
Non-staff costs declined by GBP 4 million as the company tightly controlled discretionary spend. The group ended 2025 with a monthly cost base run rate below GBP 24 million, and Bower said the trend had continued lower into early 2026.
Cash flow and balance sheet focus
Free cash flow was negative GBP 14.6 million in 2025. Combined with payment of the 2024 final dividend in May 2025, this led to net cash “broadly halving” versus the 2024 closing position. While the closing net cash position was below the group’s GBP 50 million capital allocation policy target, Bower said the target had been designed with “the top of the mid-cycle in mind,” and argued the balance sheet remained supportive during what has become a three-year downturn.
Bower also highlighted a structural issue in the group’s financing: the company holds a consistent net debt position in the UK while overseas markets retain positive cash reserves. He said the group’s invoice discount facility is accessible only by UK businesses and has not been more than 50% utilized at year-end, limiting flexibility given the international business mix. Management said it is working to introduce local financing facilities in certain markets and is stepping up internal measures to optimize cash holdings.
Market opportunity and signs of recovery in select regions
Fowlston said the group estimates its aggregate addressable market at over GBP 60 billion in net fee income terms. While permanent specialist recruitment remains the largest opportunity, he said the company has been expanding into outsourcing, consultancy, and talent advisory to operate as a “total talent solutions provider.” The company also estimated an additional market opportunity of at least GBP 10 billion across consultancy and talent advisory, broadly evenly split.
On market conditions, management pointed to “green shoots” in the UK, Spain, and New Zealand, where it said evidence of stabilization and recovery strengthened in the second half of 2025. Fowlston said these markets returned to positive year-on-year net fee growth as the second half progressed, and that growth trends continued through the first two months of 2026. He added that while job vacancies are not a perfect measure, they are “the best proxy for labor demand,” and vacancy data in those three markets also showed stabilization.
However, the company said recovery was not yet evident in its most material Northern European markets, and the board remains cautious given ongoing volatility. Management reiterated prior guidance that 2026 group net fees are expected to be slightly below 2025, and said trading in the first two months of 2026 was in line with the board’s expectations.
Business line updates: outsourcing, consultancy, talent advisory, and recruitment
Fowlston said the group is now organized into four service lines and described progress in each:
- Recruitment outsourcing: Management said the business is on a “much sounder” footing after reducing cost to serve, focusing the product set, and taking a tougher stance on pricing at renewal. The approach led to some contracts not being renewed, contributing to a 15% reported net fee decline in 2025, but the company said retained clients were more resilient, with net fees down 5%. The business exited 2025 with 95% of net fees derived from retained clients. Fowlston also cited an expanded permanent volume hiring partnership with a large enterprise Asian financial institution, moving from regional support in Asia to a global mandate that is expected to treble annual contractual hiring volumes from “hundreds” to “thousands.” For 2026, management said it is planning for outsourcing top line to be “broadly flat” versus 2025, given the annualization of lost clients, while remaining focused on returning outsourcing to profitable growth.
- Talent advisory: Launched two years ago, talent advisory net fees “almost doubled” in 2025, according to management. Fowlston said the company is refining the operating model to improve scalability, with a focus on lead qualification and lead flow management. He said internal referrals—especially from specialist recruitment—remain the most valuable lead source but historically varied in quality, prompting work to improve qualification processes. He highlighted a “Global Collaboration Day” that involved connecting with over 4,000 clients in a single day and securing over 1,500 future client meetings.
- Consultancy: The consultancy offering provides flexible hiring by deploying Robert Walters’ own permanently employed consultants into client organizations, often in technology. The company said 2025 saw a 25% increase in average consultant volumes, lower bench costs, and average assignment tenure more than doubling. Net fees were up 20%, and net fees per consultant rose 12%. Consultancy represented around 2% of group net fees in 2025. Management said clients are seeking flexibility rather than building permanent project teams, and the company sees potential to expand consultancy beyond the UK as global clients request it.
- Specialist recruitment: Specialist recruitment accounted for 83% of group net fees in 2025. Fowlston said “perm placements per perm fee earner per month” began trending positively year-on-year, though placement volumes fell for a third consecutive year. He said the second-half improvement was driven partly by headcount reductions and also by a rationalization of “low-billing senior managers,” adding that managers must “lead by example when it comes to billing.”
Management also discussed portfolio actions across countries. In 2025, the company closed its operations in Brazil and Canada after concluding it could not reach a more competitive position. In the U.S., the firm consolidated around two hubs—East Coast and Texas—to accelerate the path to profitability. In Japan, management said the temporary business was performing very well, but permanent hiring faced challenges amid increased competition and candidate scarcity; actions are focused on improving conversion rates and relationship strength in a market where candidates may have multiple offers.
On technology investment, Bower said the group completed deployment of a new CRM system during 2025, and expects a “significantly lower” capex level going forward as that implementation is completed. Management reiterated that it has been using AI in a secure environment to improve efficiency, including work since 2023 on large language model use cases, scaling in 2024, and freeing up over 10,000 hours of fee earner time through faster job advert creation and other tools.
In Q&A, management said it was not expecting restructuring charges in 2026 to be as significant as 2025’s GBP 4.4 million, citing plans for a broadly stable fee earner headcount base and transformation programs that may carry some restructuring costs, but at a lower level.
About Robert Walters (LON:RWA)
Established in 1985, Robert Walters is a global talent solutions business operating in 31 countries across the globe. We support organisations to build high-performing teams, and help professionals to grow meaningful careers. Our client base ranges from the world’s leading blue-chip corporates through to SMEs and start-ups.
We deliver three core services:
• Specialist recruitment – encompassing permanent and temporary recruitment, executive search and interim management.
• Recruitment outsourcing – enabling organisations to transfer all, or part of, their recruitment needs to us either through recruitment process outsourcing (RPO) or contingent workforce solutions (CWS).
• Talent Advisory – supporting the growth of organisations through market intelligence, talent development, and future of work consultancy.
Our employees are passionate about powering people and organisations to fulfil their unique potential.
