ROBERT WALTERS PLC (THE
"COMPANY")
Annual Financial Report
Copies of the Annual Report &
Accounts of the Company for the year ended 31 December 2023, the
Circular to shareholders of the Company, including Notice of the
Annual General Meeting ("AGM") of the Company, currently scheduled
to be held on Tuesday, 30 April 2024, and the form of proxy for use
at the Annual General Meeting, have been submitted to the National
Storage Mechanism and will shortly be available for inspection
at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
The Annual Report & Accounts 2023
is now available on the Company's website (in pdf and ESEF format)
at:
https://www.robertwaltersgroup.com/investors/financial-reports.html
The AGM Notice and form of proxy are
also available on the Company's website at:
https://www.robertwaltersgroup.com/investors/annual-general-meeting.html
Hard copies of the above documents
will be mailed to those shareholders having elected to receive
paper copies.
In accordance with Disclosure and
Transparency Rule 6.3.5, the information in the attached Appendix
consisting of a Directors' Responsibility Statement, principal
risks and uncertainties and related party transactions has been
extracted unedited from the Annual Report and Accounts for the year
ended 31 December 2023 and should be read in conjunction with the
Company's final results for the year ended 31 December 2023 which
were announced in unedited full text on Thursday, 7 March
2024.
Enquiries:
Tony Hunter, Company Secretary +44
(0) 20 7379 3333
APPENDIX
Directors' Responsibility Statement
pursuant to DTR4
We confirm that to the best of our
knowledge:
− The Group
financial statements have been prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Group and the undertakings included in the consolidation
taken as a whole; and
− The Annual
Report includes a fair review of the development and performance of
the business and the financial position of the Group and the Parent
Company together with a description of the principal risks and
uncertainties that they face.
By order of the Board,
David Bower
Chief Financial Officer
7 March 2024
Principal risks and
uncertainties
The Board considers the full range of
business risks affecting the Group on a regular basis, and takes
action to address such risks. The perceived key risks are as
follows:
(i) Political factors, economic,
environmental and market uncertainty
The level of candidate and client
confidence in the employment market and job availability are
important factors in determining the total number of recruitment
transactions in a given year and are significantly impacted by
political and economic turbulence and uncertainty.
Candidates are less inclined to move
jobs when the number of jobs available is in decline or stagnant,
which could lead to a deterioration in the Group's financial
performance.
Continued global political
turbulence could add pressure to local economies and have a
significant negative impact on the jobs market and result in
reduced hiring volumes.
Climate change (including increased
extreme weather events) could result in geopolitical disruption and
could have an impact on job losses and the job market.
The Group is geographically
diversified, spanning 31 countries which limits the reliance on the
success of any particular market. The Group also continues to
develop its contract business, which provides more resilient
revenue streams in the event of an economic downturn. The Group has
successfully diversified into other sectors to reduce its
concentration risk in the event of a downturn.
The Board's strategy when facing a
slowdown in a market is to balance the cost base, such that the
impact on profit is mitigated, against the expected future benefit
from the retention of key staff. Historically, the Group has
benefited substantially from increased operational gearing as a
result of its policy of deliberately retaining key staff through
economic downturns.
The Resource Solutions business is
prepared to support the relocation of workers, with the opportunity
to leverage off existing infrastructure within the Robert Walters
Group. Live job availability is monitored to ensure action plans
are documented for immediate action in response to any potential
adverse impact on hiring volumes.
The Group has strong but prudent
cost management. Management continuously monitor the ongoing impact
of political and economic factors, and increased market uncertainty
on individual markets, implementing appropriate actions as
required.
The impact of climate-related
environmental issues on the Group and local markets is considered
on an ongoing basis. An ESG Committee meets regularly to assist the
Board in identifying and assessing climate-related risks and
opportunities.
(ii) Talent attraction and
retention
The Group relies heavily on
recruiting and retaining talented individuals with the right and
diverse skill sets to grow the business.
In addition, as the Group expands its
operations in emerging markets, the supply of people with the
required skills in specific geographic regions may be
limited.
Failure to attract and retain key
employees with the required sales, management and leadership skills
may adversely affect the Group's financial results.
The overall culture and leadership
behaviours of an organisation has a direct influence on performance
and retention.
An inability to maintain and continue
to strive for a truly diverse and inclusive culture could have an
adverse impact on talent attraction and retention, strategic
thinking, decision-making and overall employee
engagement.
A global pandemic, eco-anxiety and
unusual stressful working environments could have an impact on
employees' mental health, which could lead to increased staff
turnover and reduced engagement.
Increased importance of ESG,
alignment of personal and employer's purpose and action against
climate change and flexible working, could have an impact on
attraction and retention of staff.
The Group's policy of linking bonuses
to profitability in discrete operating units has a high correlation
to the retention of efficient and effective members of
staff.
The long-term incentive schemes that
are detailed in note 19 to the accounts form a key part of a wider
strategy to improve levels of staff retention, particularly of the
Group's senior employees.
The Group offers international career
opportunities and actively encourages the redeployment of existing
talent to international offices and also to establish new
offices.
Other elements of the strategy to
improve staff retention and maximise career opportunities include
significant investment of time and financial resources in employee
training and development including regular appraisals, aimed at
core consultant competencies and focused on enhancing management
potential.
The Group's culture and the
associated processes help to increase productivity and improve
employee alignment to the business. A comprehensive approach to
succession planning and career development is also in place across
the Group.
Our equity, diversity and inclusion
(ED&I) initiatives are encapsulated as part of wider ESG
targets and associated KPIs. The Board promotes, monitors and
benchmarks ED&I, with initiatives and actions being a focus
across all of the Group's regions.
The Group has a Global Head of
Equity, Diversity & Inclusion to drive our ongoing commitment
to a working environment that promotes inclusion, dignity and
respect for all. A Group-wide ED&I council is in place, the
purpose of which is to create a forum for staff to discuss topical
ED&I issues and to ensure, as a business, we are striving to
create a truly inclusive culture. All-inclusive leadership training
for all managers form part of the Group's training
programme.
The Group does not accept or tolerate
inappropriate behaviour and has clear policies and processes to
that effect.
Our approach to ESG stems from our
purpose and focuses on the six pillars of our ESG Strategy:
Engaging our workforce, Enhancing our ED&I initiatives,
Responding to a sustainable world of work, Reducing our
environmental impact, Being a responsible business and Supporting
our communities. Our ESG strategy is informed by our materiality
assessment and aligns to the United Nations' 17 Sustainable
Development Goals (SDGs). This ensures that our actions are aligned
with the latest thinking and best practice, and that we can respond
to the most critical areas of concern in an effective, agile
way.
There are a significant number of
mental health and wellbeing initiatives in place across the Group
and they are considered as high priority by management.
(iii) Competition and emerging
technologies
Competition risk varies in each of
the Group's main regions depending on the maturity of the client
and candidate market. The emergence of new technology platforms
such as web-based applications and artificial intelligence for
recruitment purposes may also lead to increased competition. The
release of OpenAI's ChatGPT and the increasing use of generative AI
could have an impact on the recruitment process for both clients
and candidates.
The development of strong commercial
relationships with clients has enabled the Group to win and then
maintain its contracts with large global organisations and the
Group also has a significant and diverse income stream across the
SME marketplace.
The Group reviews and monitors
changes in technology and social media trends to ensure that it
evolves appropriately. The Group continues to promote itself as a
relationship recruiter operating in specialised markets, ensuring
its online presence is competitive and provides a high-quality
customer experience.
Through our innovation, marketing,
customer experience (CX) and technology and transformation teams,
we continue to identify, trial and adopt new technology to both
enhance and augment the service our consultants can provide and to
drive efficiencies across our business.
Time is a critical resource, and
we're seeking to harness fast-evolving technological change (e.g.
the deployment of AI to reduce human time given to standardised
tasks) on behalf of our consultants so they can spend even more
time with their clients and candidates. In 2023 we launched our
OpenAI Playground, our own private and secure version of ChatGPT
(enabled in our Microsoft Azure environment). Our consultants are
incorporating AI to enhance job adverts and assist with sales
outreach to name just a few examples.
(iv) Brand, reputation and business
strategy
There is an inherent risk that the
brand and reputation of the Group could be impacted by failure to
maintain high-quality service levels to both candidates and
clients.
The increasing use of social media
increases the Group's exposure to reputational damage.
A failure to demonstrate progress in
reducing our environmental impact and meeting our ESG Strategy
targets could have a negative impact on the Group's
reputation.
Quality control standards are
maintained and reviewed for each stage of the recruitment
cycle.
A 'contact us' email address is
available on the Group's websites to give users and candidates the
ability to provide feedback or concerns. These can then be acted
upon swiftly by the Chief Strategy & Transformation Officer and
local senior management. The Group has a well-defined
whistleblowing process which can be accessed by candidates, clients
and suppliers. To complement this and in line with best practices,
the Group has appointed an independent confidential reporting
service where concerns can be raised anonymously and treated with
complete confidence.
The Group's long-term strategy for
growth is centered around geographic penetration and discipline
diversification. It is a testament to this strategy and underlying
strength of the Group's brand and management team that we have
delivered a resilient performance throughout the difficult market
conditions.
Candidate satisfaction surveys are
carried out on a regular basis, with Directors addressing any
negative feedback directly with the candidate or client.
The Group has committed to the
ongoing tracking and monitoring of our core ESG KPIs, including
climate-relevant metrics and targets. These are disclosed in full
on page 37.
(v) Candidate risk
A negative candidate experience as a
result of poor candidate service, data breach or other candidate
dissatisfaction, could result in candidate complaints, loss of
quality candidate base or loss of referrals.
Clear processes are in place around
candidate engagement and active candidate management. Quality
control standards are maintained and reviewed for each stage of the
recruitment cycle with all new employees receiving appropriate
levels of training applicable to their role.
We have an ongoing global review
dedicated to refining our engagement with candidates and to ensure
that best practice candidate experience protocols are delivered
consistently across the Group.
We monitor consumer trends outside of
the recruitment industry and analyse how consumers' changing
expectations could drive the imperative for change within our
industry.
We continue to develop the ways we
use Microsoft Power BI to deliver business insights and management
information.
(vi)
Non-compliance with contractual
obligations
The Group operates under a number of
complex contractual arrangements. Any non-compliance with
contractual obligations may have an adverse effect on the Group's
financial performance and reputation.
Contractual terms and conditions are
thoroughly reviewed before signing to ensure contract provisions
are fully understood, risks are fairly allocated between parties
and are monitored to ensure contractual obligations are adhered
to.
An escalation process exists such
that contracts with nonstandard terms are reviewed and approved by
the Chief Legal Officer and Chief Financial Officer as
appropriate.
(vii) Non-compliance with laws and
regulations and regulatory environment
The Group operates in a number of
diverse jurisdictions and has to comply with numerous domestic and
international laws and regulations.
Any non-compliance with legislation
or regulatory requirements may result in legal penalties,
non-renewal or revocation of a local business licence or financial
loss which could have a detrimental effect on the Group's financial
performance and reputation. Specifically, the landscape of carbon
reporting, data protection and use of AI is rapidly changing,
increasing the risk of non-compliance with reporting
requirements.
Any change in the regulatory
environment, particularly impacting employment legislation for both
candidates and clients, could have a detrimental effect on how the
Group operates and the Group's financial performance. Any
unanticipated change or implementation of climate policies may
result in increased costs and a possible threat to licences to
operate if the Group is unable to keep up with legal
requirements.
To ensure compliance, our legal
department works with leading external advisers, as required, to
monitor potential changes in employment legislation across the
markets in which we operate.
The Group's legal department,
together with local legal expertise, remains up to date with any
proposed regulatory changes, allowing the Group sufficient time to
assess the impact and implement processes to minimise the exposure
and maximise opportunity.
A log of licences and renewals is
maintained. There is formalisation of regulatory reporting and
escalations with legal oversight of licensing processes, and the
Group makes use of external counsel where necessary.
The Group has set environmental
targets and corporate strategy to reduce carbon emissions and has
made disclosures consistent with the TCFD recommendations and
recommended disclosures. Appropriate disclosures are made where
they are considered to have a material impact on business strategy,
operations or the environment. Although the Group does not operate
in a sector with a significant environmental impact, the Group
recognises its requirements and embraces environmental
stewardship.
(viii) Data breach and cyber
security
A data breach, cyber-attack or loss
of confidential and competitive information could have a material
impact on the Group's financial results and an adverse impact on
the operations and the reputation of the Group.
The Group maintains a comprehensive
IT security policy. Though it is not possible to eliminate all
risk, the policy covers all relevant areas of IT security, and is
reviewed on a regular basis to ensure it continues to robustly
support business developments.
Third-party advisers are used to
perform penetration tests on major systems and
operations.
All candidate and client information
is held securely with restricted access and with data protection
rules in place.
Appropriate guidance and training on
the security and handling of both manual and electronic documents,
including confidential and sensitive data is available to all
staff.
The Group has a dedicated Chief
Technology Architect and Group Information Security Officer with
specific remits to consider and ensure that appropriate and
reasonable controls are put in place, particularly in respect of
cyber related threats and data breach.
The Group has appointed a Data
Protection Officer to oversee the handling of personal data and
compliance with Data Protection laws.
(ix) Reliance on technology
infrastructure
The Group is reliant on its
technological infrastructure for day-to-day operations and for
delivering client and candidate services.
A critical infrastructure or system
disruption could have a material impact on the Group's financial
results and an adverse impact on operations and the reputation of
the Group.
Climate change could result in more
extreme weather events, which could cause damage and disruption to
the Group's technology infrastructure.
The Group continues to review and
improve its business continuity and disaster recovery plans to
mitigate against any critical infrastructure disruptions. The Group
has invested in technology and innovation, enabling effective
ongoing hybrid working.
Third-party advisers are used to
perform penetration tests on major systems and
operations.
A change management team is in place
to ensure that appropriate consideration is given to all change
requirements, including a risk analysis of the requirement, and
appropriate plans are developed to deal with any potential critical
disruptions.
Our disaster recovery processes,
which are regularly reviewed, ensure the Group is able to mitigate
natural disaster risks (e.g. floods, earthquakes), and the Group is
also geographically diversified. In addition, all staff have the
tools and flexibility to work remotely as required.
(x) Financial risk
Foreign currency risk
In the course of its core business,
the Group transacts in a number of functional currencies. Any
unfavourable movement in the foreign exchange rates may have an
adverse effect on translation of overseas operations' local
currency earnings, and subsequently the Group's Pounds Sterling
financial results.
Revenues and costs are in their
functional currencies in the local entities, which minimises the
Group's transactional exposure.
The Group continues to monitor the
sensitivity to foreign currency fluctuations through performing
regular sensitivity analysis and reducing exposure wherever
possible.
Liquidity risk
An adverse cash position, or the
inability to access capital/funding could result in an inability to
pay creditors and to fulfil day-to-day operations and
requirements.
The future success of the Group could
be affected if the Group fails to align its capital planning with
its business strategy.
Cash flow and working capital
forecasts are prepared and reviewed regularly to ensure the Group
remains in a strong balance sheet position and a detailed plan for
any growth opportunities is created before any deal is executed to
ensure that the appropriate finance is in place.
Credit risk
There is an increased uncertainty
over cash flows due to economic pressures, which could increase the
risk that a counterparty will default on its contractual
obligations resulting in financial loss to the Group.
The Group has adopted a policy of
only dealing with counterparties that are deemed creditworthy and
that are considered to have adequate credit ratings.
Credit exposure is controlled by
counterparty limits that are reviewed and approved by
management.
The Group's exposure and the credit
ratings of its counterparties are regularly monitored.
(xi) Transformation, change and management of significant
projects
Investing in technology,
transformation and innovation is vital for the Group to remain an
industry-leading organisation and in achieving its strategic
objectives.
Poor governance and management of our
significant global projects could result in increased costs,
inefficiencies, reduced employee engagement and risk to business
continuity.
A Technology & Transformation
Investment Board, including members of the Operating Board and the
Transformation and Portfolio Director, reviews and approves all
significant technology and transformation investments before they
begin.
A Change Advisory Board is in place,
which ensures that appropriate consideration is given to the
introduction of changes to our live environments.
A monthly steering committee/weekly
core project team meeting is held with representatives from key
areas involved or impacted by the project/program. The steering
committee/project team reviews progress against the current program
objectives, spend and approves any significant changes to both.
Regular program team meetings are conducted to manage the
day-to-day activities of the program. Other governance sessions
include product counsel and program, product, technology and
business working groups.
Business change plans are in place to
actively communicate and engage with employees throughout the
process of transformation and change and include ongoing evaluation
and feedback to ensure the impact of any change is continually
monitored and improved. This includes the use of change champions
in each region, user feedback surveys, quarterly updates, relevant
training and communication channels with key stakeholders. The
outputs from these activities are used to support evidence-based
decision making.
Related party transactions
Transactions between Robert Walters
Plc and its subsidiaries, which are related parties, have been
eliminated on consolidation and are not disclosed in this note. The
remuneration of key management personnel who are deemed to be
Directors as been disclosed in the Report of the Remuneration
Committee on pages 74 to 97.
During the year, there were no
related party transactions included within administrative expenses
(2022: nil)
There were no outstanding balances at
31 December 2023.
All transactions were undertaken on
an arms-length basis.