Annual Report
& Accounts
2023
CONTENTS | |
STRATEGIC REPORT | |
Highlights | 1 |
Message from our CEO | 2 |
Chair's Introduction | 3 |
Overview | 5 |
Business Model | 7 |
Strategic Review | 13 |
KPIs | 19 |
Q&A with Nicholas Kirk, CEO | 23 |
Culture & Engagement Framework | 25 |
Sustainability and TCFD | 42 |
Risk Management | 58 |
Principal Risks and Uncertainties | 60 |
Non-Financial and Sustainability Information Statement | 68 |
Stakeholder Engagement | 69 |
Review of the Year | 76 |
CORPORATE GOVERNANCE | |
Chair's Introduction to Corporate Governance | 81 |
Our Board of Directors | 83 |
The Executive Board | 88 |
Corporate Governance Report | 90 |
Nomination Committee Report | 97 |
Audit Committee Report | 101 |
Directors' Remuneration Report - Annual Statement | 107 |
Directors' Remuneration Report | 109 |
Directors' Report | 132 |
Directors' Statements of Responsibility | 135 |
FINANCIAL STATEMENTS | |
Independent Auditor's Report | 136 |
Consolidated Income Statement | 143 |
Consolidated Statement of Comprehensive Income | 143 |
Consolidated and Parent Company Balance Sheets | 144 |
Consolidated Statement of Changes in Equity | 145 |
Statement of Changes in Equity - Parent Company | 146 |
Consolidated and Parent Company Cash Flow Statements | 147 |
Notes to the Financial Statements | 148 |
ADDITIONAL INFORMATION | |
Shareholder Information and Advisers | 179 |
STRATEGIC REPORT
FINANCIAL STATEMENTSCORPORATE GOVERNANCE
ADDITIONAL INFORMATION
PageGroup Annual Report and Accounts 2023 | PageGroup Annual Report and Accounts 2023 |
PageGroup is one of the world's leading specialist recruitment consultancies, with a global presence through our 135 offices over 37 countries.
GROSSCONVERSION
HIGHPROFIT LIGHTS RATE***
£1,007.1m11.8%
-6.3%* 2022: £1,076.3m | 2022: 18.2% | ||||
OPERATING | |||||
BASIC EARNINGS | |||||
PROFIT | |||||
PER SHARE | |||||
£118.8m | 24.4p | ||||
-39.4%** 2022: £196.1m | -44.2% 2022: 43.7p |
ORDINARY AND
SPECIAL DIVIDEND
32.24p
2022: 42.38p
*in constant currency at prior year rates
-
Excluding impact of hyperinflation in Argentina
***Operating Profit as a percentage of Gross Profit
37
countries
7,859
headcount
MESSAGE FROM OUR CEO
NICHOLAS
KIRK
With great pleasure, I welcome you to our 2023 Strategic Report, in which I will present our business model and strategic framework.
After that, we will talk about our Strategic Review, which also includes a feature on our new Group Strategy and Vision which we launched in September 2023. After that, I will walk you through our capital allocation strategy and how we view the current state of the market.
We continue to tie the four essential components of the performance criteria in our current executive share plans to performance, as determined by our financial and non-financial KPIs and the risks that accompany it.
135
offices
STRATEGIC REPORT
FINANCIAL STATEMENTSCORPORATE GOVERNANCE
ADDITIONAL INFORMATION
1 PageGroup Annual Report and Accounts 2023 | PageGroup Annual Report and Accounts 2023 2 |
CHAIR'S
INTRODUCTION
Angela Seymour-Jackson Chair
Strategy
In 2022, having delivered on the previous vision with £1bn of gross profit and £200m of operating profit, a key priority for the Board in 2023 was establishing a new Vision and Strategy for the Group.
Nick and his Executive Board led this process with input from all our key Stakeholder groups, including our Customers, our People and our investors.
The new Strategy will take the Group through to 2030 and is based on three key strategic goals. A goal that targets the Group on delivering £400m of operating profit for our Shareholders and our People. A social impact goal of changing 1 million lives that speaks to our People, our Customers and our investors. Finally, a client net promoter score goal of 60 or above, from a starting point of 52 in 2022, which reflects our focus on Customer-centricity that sets us apart from many of our competitors and is key for our clients and our People.
The new Strategy is about leveraging our existing global platform with a focus on targeted growth whilst maximising profit, building on what the Group is famous for.
For more details of the new Strategy, please refer to pages 17 to 18.
Our 2023 Global Employee Engagement Survey again showed positive results, with 90% of our People feeling proud to work at PageGroup.
In 2021, we established the Group's Shadow Executive Board. This was a huge success, bringing different perspectives to our Executive Board on key business topics. During 2023, the Shadow Board made a number of key recommendations during the year, covering our Strategy development, Page values, job architecture and communications.
Sustainability
In 2023, we reaffirmed our commitment to sustainability and social impact by putting our social impact target to change one million lives at the core of our new corporate Strategy. We also aligned our carbon targets to the Science Based Targets initiative (SBTi) and are committed to Net Zero across our full value chain by 2050, with near-term reduction targets across Scope 1, 2 and 3 emissions by 2030.
Scope 1 and 2 emissions decreased by a further 15% in 2023 as we continued to transition offices to renewable energy. Our total value chain GHG emissions (Scope 1,
2 and 3) remained broadly stable. We are committed to achieving our targets and know we must continue to drive activities to reduce emissions over time, particularly in our
STRATEGIC REPORT
GOVERNANCE
2023 Performance
2023 was an important year for the Group, following the Board's appointment of Nicholas Kirk as our new CEO. In conjunction with the Board, Nick has led the development of our new Strategy and set ambitious new goals for the Group. Despite tough trading conditions, the Group has proven resilient and the Board was pleased to recommend a final dividend of 11.24 pence per share.
The tougher macro economic conditions we began to see at the end of 2022 continued into 2023. Despite these conditions, the Group delivered robust results. Overall for the year, gross profit declined 6.3% in constant currencies against 2022 to £1,007.1m. We delivered operating profit of £118.8m, albeit this was after a net restructuring cost of
c. £2m, which is discussed in more detail on page 79.
EMEA was our most resilient region, delivering growth of 0.3%, due mainly to the strength of our business in Germany, particularly within our Technology-focused Interim business.
Elsewhere, trading conditions in Greater China continued to be particularly tough, with the recovery after COVID-19 lockdowns being slower than anticipated. We now have c. 200 fee earners in Mainland China compared to c. 340 in Q2 2022, albeit now a third are manager grade or above with an average tenure of over six years. This will put us in a good place to grow market share when conditions improve.
Conditions in the US were also particularly challenging, with uncertainty around market conditions, especially within Technology, impacting both candidate and client confidence. Latin America delivered strong results, with growth of 8% and we also saw good growth in the Middle East and Africa of 11%.
Trading remained tough in the UK, which was down 16% for the year. We continued to see clients deferring hiring decisions and increased caution from candidates.
Board Composition
On 10 April 2023, we were pleased to welcome Babak Fouladi to the Board. Babak brings extensive technology experience to the Group from his roles at MTN Group plc, Vodafone Group plc and Koninklijke KPN MV.
Patrick De Smedt, our previous Senior Independent Director, did not seek re-election at the Company's AGM in 2023, having been on the Board since 2015. I would like to thank Patrick for his significant contributions to the success of the Group during this time. Ben Stevens was appointed as Senior Independent Director at the Company's AGM
in 2023.
We continue to support the FTSE Women Leaders Review and the requirement to disclose the gender balance of senior management. On the Board as at 31 December 2023, female representation was 50% and on our Executive Board female representation was 30%. At the Director level, female representation was 45% as at 31 December 2023. In 2021, we signed up to the UN Global Compact Network with a target of achieving gender equality in senior management roles by 2030 and have set clear gender targets at all levels of our organisation to enable us to achieve this goal. Full details of the work undertaken by the Board during the year are set out in the Corporate Governance Report.
upstream value chain. In addition, we continue to offset our carbon impact for emissions that we are not yet able to avoid. Our sustainability business, where we place candidates into green and sustainability-related roles, almost doubled in 2023.
This year we also strengthened our social impact programmes with a focus on social inclusion and support for employment for under-represented groups. We are building long-term charity partnerships to help maximise our impact. For example, through our Empowering Talent programme we work with a range of groups to open doors to employment opportunities they are not always afforded. This includes activities such as running workshops to support re- employment of people aged by 50+ in Switzerland.
Further details of our progress on sustainability, greenhouse gas reporting and climate-related financial disclosures (TCFD) are included in the Sustainability section.
Looking ahead
As we enter 2024, a high degree of macro economic and geopolitical uncertainty remains across the majority of our markets. However, against this backdrop, we continue to see high levels of candidate shortages and vacancies, along with strong fee rates and salary levels. We have a flexible
CORPORATE
FINANCIAL STATEMENTS
Dividends
In 2023, despite the tougher macro economic conditions, we continued to deliver Shareholder returns. We paid an interim dividend of £16.2m and a special dividend of £50.0m in October 2023. We have now paid special dividends of over £300m in the last six years. We generated cash from operations of £211.9m in 2023, ending the year with net cash of £90.1m.
Based on this cash position, the levels of distributable reserves and our 2023 results, we are proposing a final dividend of 11.24p. This, combined with the interim dividend of 5.13p paid in October, represents a total ordinary dividend of 16.37p, an increase of 4.5% on 2022. This ordinary dividend of 16.37p is covered 1.5 times by earnings, with a yield of 3.4%. If the special dividend is included, using the year end share price of 487p, this yield increases to 6.6%.
Dividend Per Share (p)
50 | |||||||||
41.71 | 42.38 | Special dividend | |||||||
40 | 28.71 | ||||||||
26.71 | |||||||||
32.74 | |||||||||
30 | 15.87 | ||||||||
15.87 | |||||
20 | 17.03 | ||||
12.73 | 15.67 | 16.87 | |||
15.0 | |||||
10 | |||||
4.3 | 0 | ||||
0 | 4.3 | ||||
2019 | 2020 | 2021 | 2022 | 2023 | |
Purpose, Culture and Vision
At PageGroup, our purpose is to change lives and this is integral to everything we do. We are driven to see the development and success of our candidates, clients and our People. Our values are reflected throughout the organisation, and we believe this culture sets us apart from our competitors.
In accordance with the requirements of the UK Corporate Governance Code, all members of the Board are engaging effectively with employees. This is carried out in several forums, including attendance at employee meetings, virtual events and regular employee surveys.
business model and remain confident in our ability to weather any uncertainty in 2024.
I am hugely proud of the achievements made by the Group in 2023. On behalf of the Board, I would like to thank all of our People for their dedication this year and I look forward to another successful year in 2024.
Strategic Report
Our Strategic Report on pages 2 to 80 has been reviewed and approved by the Board.
Angela Seymour-Jackson
Chair
ADDITIONAL INFORMATION
3 PageGroup Annual Report and Accounts 2023 | PageGroup Annual Report and Accounts 2023 4 |
OVERVIEW
PAGE 7 BUSINESS MODEL
FINANCIAL | STRATEGIC | PEOPLE | OPERATIONAL |
• Highly profitable | • Sustainable organic growth | • Team-based service | • Strong brands |
• Maintain a strong | • Diversification to mitigate | delivery | • Effective use of |
balance sheet | cyclicality by geography, | • Talent and skills | technology |
• Highly cash | brand and discipline | development/retention | |
generative | • Focus on operational | ||
efficiency | |||
PAGE 9 STRATEGY
FINANCIAL | STRATEGIC | PEOPLE | OPERATIONAL |
Long-term investment into core | • To be the leading | • Career development | • Assurance of a |
strategic markets: | specialist recruiter | structure | quality service |
• Core | in each of the | • Training | • Effective recruitment |
markets in which | |||
process | |||
• Technology | we operate | • Global mobility | |
- Page Executive
- Strategic Customer Solutions
PAGE 58 RISKS
FINANCIAL | STRATEGIC | PEOPLE | OPERATIONAL |
• Macro economic | • Shift in business model | • People | • Technology; systems |
exposure | • Delivery of operational | development | transformation and change; |
data security; brand reputation; | |||
• Foreign exchange | efficiencies | • Attraction | |
financial management and | |||
translation risk | and retention | ||
control; fiscal and legal | |||
compliance | |||
PAGE 19 KPIs
FINANCIAL | STRATEGIC | PEOPLE | OPERATIONAL |
• Gross profit growth | • Gross profit per fee earner | • Employee | • Measurement |
• Perm:Temp ratio | • Fee earner headcount | satisfaction survey | performed |
at a granular level | |||
growth | |||
• Cash | |||
• D&I review ratings | |||
• Conversion rate | |||
• Earnings per share | |||
PAGE 107 REMUNERATION
FINANCIAL | STRATEGIC | PEOPLE | OPERATIONAL |
• EPS growth: three year | • Strategic targets | • Leadership | • Cost and financial |
cumulative | • Systems and innovation | and people | management |
development | |||
• PBT performance | • Risk management and | ||
• Comparator gross profit | • Retention/ | internal controls | |
succession | |||
growth | • IT strategic development | ||
PAGE 16 DIVIDEND POLICY
FINANCIAL | STRATEGIC | PEOPLE | OPERATIONAL |
• Maintain a strong | • Return surplus cash | • Ensure dividends are | • First use of cash is to satisfy |
balance sheet | to Shareholders by | paid at sustainable | operational and investment |
• Maintain core ordinary | special dividends and/ | levels such that | needs, as well as to hedge |
or share buybacks | investment in the | liabilities under the Group's | |
dividend | |||
business and its people | share plans | ||
is maintained | |||
STRATEGIC REPORT
FINANCIAL STATEMENTSCORPORATE GOVERNANCE
ADDITIONAL INFORMATION
5 PageGroup Annual Report and Accounts 2023 | PageGroup Annual Report and Accounts 2023 6 |
BUSINESS MODEL OUR MODEL AT WORK
OUR
PEOPLE
An experienced senior management team and high- quality consultants. Expertise in premium candidate sourcing and advocating for clients and candidates.
OUR
CULTURE
Diverse and inclusive culture with ingrained values of how to do business ethically. We have created an environment where developing our People and achieving results for the Customer is paramount.
OUR
RELATIONSHIPS
We work closely with our clients and candidates. Our Customer-centric ethos upholds our reputation, maintains our competitive edge and enables our business to thrive.
OUR
BRAND AND SCALE
Global reach, with deep local knowledge. Specialist industry and market knowledge. High levels of operational efficiency.
TECHNOLOGY
& INNOVATION
Focused on how best to acquire, engage and nurture Customers to build long-term relationships. The use of technology allows us to leverage growth and improve our conversion rate.
FINANCIAL
CAPABILITY
Our business is supported by a strong balance sheet and significant cash flow generation.
OUR PURPOSE
CLIENTS
• Sector expertise
• Appropriate candidate shortlist
• Professional high-quality service
Our Value | CONSULTANTS | |
• | Team-based structure and | |
Proposition Model | ||
compensation | ||
• | Access to jobs across entire Group | |
• | Consistent process | |
CANDIDATES | ||
• | Professional high-quality service | |
• | Market understanding and client profiling | |
• | Career advice |
UNDERPINNED
BY OUR VALUES
EARN | GROW | MAKE A |
TRUST | CONNECTIONS | DIFFERENCE |
LEADS TO...
- Repeat business
- Greater exclusivity
- Future candidates
LEADS TO...
- Rapid career promotion
- Career opportunities
- Reward and recognition
LEADS TO...
- Career-longrelationships
- Peer recommendations
- Future clients
Delivering our strategic objectives
ORGANIC, HIGH-MARGIN, DIVERSIFIED GROWTH:
With a core focus on organic growth, our broad-based capabilities enable us to capitalise on market opportunities around the globe, avoiding over-reliance on one geography or discipline.
SCALABLE &
FLEXIBLE
CAPACITY:
Our brand and scale enable us to build an unrivalled skillset, together with the ability to respond quickly
to changing market conditions.
TALENT AND SKILLS DEVELOPMENT:
The recruitment, retention and development of talent is fundamental to driving our meritocratic growth model.
Our strategic framework is outlined on page 9.
Sustainable growth for the benefit of our Stakeholders
EMPLOYEES
Supportive, inclusive culture where they experience real opportunities for development and a long and rewarding career.
INVESTORS
Look for investment growth and seek confidence their investment is under sound stewardship.
CUSTOMERS
Rely on us to provide world-class specialist recruitment services and solutions to help drive their business and careers forward.
COMMUNITIES &
GOVERNMENT
Need businesses that have a positive impact.
SUPPLIERS
Seek strong and enduring partnerships based on fair terms.
Stakeholder engagement is outlined on page 69.
STRATEGIC REPORT
FINANCIAL STATEMENTSCORPORATE GOVERNANCE
ADDITIONAL INFORMATION
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STRATEGIC FRAMEWORK
PageGroup is focused on delivering against three key objectives to achieve its
Strategic Vision and deliver sustainable financial returns. These are to:
1
LOOK FOR ORGANIC, HIGH-MARGIN AND DIVERSIFIED GROWTH
3
NURTURE AND DEVELOP OUR PEOPLE, DRIVING OUR MERITOCRATIC GROWTH MODEL
STRATEGIC REPORT
Our business model is centred on delivering organic and diverse growth. As recruitment is a cyclical business and impacted by the strength of economies, diversification is an important component of our Strategy, reducing our reliance on any individual market or business and thereby increasing the strength of the Group.
Our Strategy therefore is to expand and diversify the business by industry sectors, professional disciplines, geographies and brands, with the objective of being the leading specialist recruitment consultancy in each of our chosen markets.
With less reliance on any one individual country, brand or discipline, the business is better positioned to face adverse market conditions. Our global presence and strategic investments made in recent years have enabled us to capitalise on opportunities coming out of the pandemic.
In 2007, prior to the global financial crisis, our Non-UK business represented 61% of the Group and it now represents 88%. We have also successfully diversified away from Accounting and Financial Services, with this discipline making up 54% of total Group gross profit in 2007, compared with 33% in 2023. These changes highlight the success of our diversification Strategy.
PageGroup's historical success across major global economies has helped us to identify the markets likely to produce long-term gross profit growth at attractive conversion rates. This enables us to offer a premium service that is valued by our clients and also attracts the highest calibre of candidates.
We recognise that our employees are key to our long-term success. The recruitment, retention and development of talent is a key priority for the Group. We recruit from a diverse set of backgrounds and value our consultants' experiences greatly.
We have clear and defined career pathways for consultants through to senior management and Board level. This helps to ensure that we retain the best talent and develop our People for leadership positions. We have a proven track record of internal promotion and international career moves and the newly evolving hybrid working model will provide greater opportunities in this area.
Our highly experienced management team have the longest tenure in the industry and are passionate in developing the next generation of Page leaders. Many
of our management team have international experience and this has helped with global knowledge sharing and best practice. It additionally allows us to capitalise on opportunities and react to market conditions effectively. Increasingly, we are promoting within regions and many of the leaders have had long-standing careers in those markets, combined with valuable local expertise.
We introduced our continuous listening strategy in 2020 and the insights from these initiatives have allowed us to build understanding and drive change and improvement. We are committed to diversity and inclusion and have made significant progress in this area in recent years. Underpinned by our global diversity and inclusion framework, we have numerous internal communities to ensure our employees have networks to connect, share and learn.
CORPORATE GOVERNANCE
STATEMENTS
2
POSITION THE BUSINESS TO BE SCALABLE EFFICIENTLY AND HIGHLY FLEXIBLE TO REACT TO MARKET CONDITIONS
WHAT WE DO
PageGroup is a worldwide leader in specialised recruitment. We have 46 years of recruitment experience and deliver recruitment services to clients across 37 countries through our network of 135 offices.
FINANCIAL
Our ability to respond quickly to changes in market conditions is critical to managing the business efficiently through economic cycles. Our team-based structure and profit share business model has proven highly scalable on a global basis.
share during downturns and position our businesses for market-leading growth when economic conditions improve.
Our global footprint requires high levels of operational
DISCIPLINE
EXPERTISE
PERM AND | GEOGRAPHIC |
TEMP MIX | REACH |
The small size of our specialist teams enables us to grow gross profit quickly with incremental fee-earner headcount. When market conditions tighten, this headcount is reduced mostly via natural attrition to ensure a lower cost base in a slowdown.
Having invested years in training and developing our highly capable management teams, our objective is to ensure we retain this expertise within the Group. By following this course of action, we typically gain market
efficiency in order to achieve this strategic objective. Our focus on shared service centres has delivered greater economies of scale and efficiencies. It has driven consistency, increased flexibility and improved the quality of the service provided to our operational business. Collectively, our shared service centres allow us to be more agile, reduce our fixed costs and remove constraints on how fast we can react to market conditions.
We've developed PageGroup's reputation as a global recruitment leader through our focus on specialist areas of the market, replicated across our international network. Within our four broad discipline categories, we operate across 14 specialist discipline teams. We then specialise further within these (e.g. Digital Marketing within Marketing)
to ensure we provide expert recruitment services to our clients.
PageGroup is the international market leader for permanent recruitment in the majority of the countries in which we operate. We also have a substantial and growing temporary recruitment business in markets where temporary placements for professionally qualified candidates are culturally accepted.
Our substantial and well- balanced business reaches across all regions, including Latin America and Asia. Our global model allows us to source candidates from domestic and international markets and provide a comprehensive service to both local and multinational clients.
ADDITIONAL INFORMATION
PageGroup Annual Report and Accounts 2023 | PageGroup Annual Report and Accounts 2023 10 | |
9 |
OUR STRATEGY | The Group's Strategy aims to expand and diversify the business organically by |
professional disciplines, brands and geographies, with the objective of being the | |
leading specialist recruitment consultancy in each of our chosen markets. |
A FOCUS ON ORGANIC GROWTH
OUR BRANDS
STRATEGIC REPORT
PageGroup's business model has proved itself both through economic cycles and as the business has expanded into a global enterprise. At its core is a focus on organic growth.
Team profit-led | Global management |
compensation | mobility |
A focus on team-based | We regularly move experienced |
managers and directors into | |
performance rather than the | |
markets where they can add the | |
individual promotes positive | |
most value and guide the business | |
corporate behaviour and | |
through the challenges of a market | |
consistent quality of service for | |
cycle, while allowing us to retain | |
both clients and candidates. | |
and motivate key senior talent. | |
With typical margins above those of Michael Page and Page Personnel, our executive search division of PageGroup provides a range of search, selection and talent management solutions for organisations on a permanent and interim basis. Recognised for our powerful in-house research function, speed and flexibility of response, and assignment completion rates, organisations worldwide use Page Executive to secure their senior talent. The roles on which we focus typically sit at the sub-board and Board levels.
Page Personnel offers specialist recruitment services to clients requiring permanent, temporary or contract employees. Mirroring the geographical and sector coverage of Michael Page, it provides specialist services to organisations requiring talent at professional clerical and support levels.
The original PageGroup brand is normally established as the first business in each new country that we enter. Michael Page is comprised of 25 specialisms, each providing a service to a specialist area of the market, recruiting permanent, temporary, contract and interim opportunities, typically at qualified professional and management level. The businesses we work with range from SMEs to global blue-chip organisations.
Our newest brand, Page Outsourcing, harnesses the power of the other PageGroup brands. Our flexible recruitment outsourcing solution allows our clients to focus on their core business.
The Page Outsourcing offering includes both Recruitment Process Outsourcing (RPO) and Managed Service Provision (MSP), together with a number of Outsourcing Consultancy solutions. Page Outsourcing represents an opportunity
CORPORATE GOVERNANCE
Experienced management pool
Experience through economic cycles and across geographies and disciplines reduces our learning curve, maximises scalability and is crucial for placing resources where they will add the most value.
ORGANIC
GROWTH
Career development structure
PageGroup offers its consultants a well-definedand varied career in recruitment. This includes a clear development structure with significant opportunities for the most talented.
for the Group to accelerate growth across all segments of the market.
FINANCIAL STATEMENTS
Productivity-led expansion
Our operational metrics focus on productivity by team, discipline and geography. This bottom-up approach aligns expansion criteria throughout the Group, focusing and optimising investment on key priorities.
Agile and responsive
Recruitment is a fast-pacedand dynamic business. Our agility gives us the confidence to respond quickly to opportunities and challenges as they appear.
ADDITIONAL INFORMATION
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STRATEGIC REVIEW
OUR COMPETITIVE ADVANTAGE
Our true competitive advantage is the combination of the below four factors and the balance we have achieved in the business over the past 47 years. We generate funds through fees earned for placing candidates in permanent, temporary and contract roles.
SCALE | BRAND |
MARKET DYNAMICS
The professional recruitment sector has always been highly sensitive to fluctuating economic conditions and is influenced strongly by client and candidate confidence. Market liquidity can change rapidly, whether in terms of candidate confidence or availability of jobs.
It can also be localised, by geography or discipline, and differ between temporary and permanent placements in the same market.
In a number of geographic regions, such as Greater China or Latin America, our potential markets are very large, yet relatively immature. This provides not only significant market share opportunities, but also challenges in areas such as business development. New markets can take time to reach maturity, but the advantages of being an early mover and being able to build scale can be considerable.
As well as the influence of the general macro economic environment on business activity, there are a number of market-based drivers that can impact financial performance materially.
These are split into elements which affect market liquidity and those which influence consultant productivity and therefore gross profit. It is the nature of the professional recruitment market that strong market conditions will see drivers align in both elements and this can have a dramatic impact on our overall performance.
STRATEGIC REPORT
GOVERNANCE
Our scale enables PageGroup to commit to markets through economic cycles, which, combined with our strong financial standing, has given clients the confidence to build lasting relationships with us. Temporary staff also derive comfort from our financial strength that their services will be paid for.
The breadth of our client base globally, even in our new markets, gives us the ability to offer diverse expertise across a wide range of complementary specialisms and geographies, enhancing our offering to the market and the candidate pools we can access.
Our scale has led to us having an unrivalled skillset with high levels of experience, which is available to clients of any size and across all sectors in which we operate.
We deliver specialised sector experience operated via four key brands: Page Executive, Michael Page, Page Personnel and Page Outsourcing, supported by supplementary brands throughout our international locations.
The first class reputation of our brands gives high- quality candidates assurance to place key decisions on their future in our hands. Our superior level of expertise and the knowledge of our consultants inspires trust and assurance of service quality, for both clients and candidates, enabling our brands to outperform other recruitment businesses.
MARKET LIQUIDITY
IMPACT
CORPORATE
STATEMENTS
DATA AND
CULTURETECHNOLOGY
CANDIDATE AVAILABILITY | CANDIDATE CONFIDENCE |
Often highly discipline/geography-specific, | A major influence on market liquidity where |
FINANCIAL
PageGroup's culture is unique and sets us apart from the competition. Our global culture delivers a consistent approach, both internally and externally, whilst remaining accepting of each of our market's local characteristics.
A diverse team brings different perspectives and insight to our business, and our promotion of diversity and inclusion ensures we add value to the markets we recruit into on behalf of our clients. We work closely with our clients to source and recruit from a diverse talent pool to provide them with the best candidate.
We have ingrained values of how we do business ethically and make long-term decisions.
Our purpose and values that are the key to our success are set out on page 26.
The digital revolution has transformed the recruitment market. The impact of technology on the behaviours and expectations of both clients and candidates continues to grow at pace. Our innovation approach is focused on how best to acquire, engage and nurture customers to build long-term relationships.
Our internal Business Technology function focuses on designing, implementing and exploiting scalable global systems. By improving our processes and tools, we empower consultants to be more productive. In our operational business we are utilising technologies, such as Customer Connect, to engage with customers throughout their journey.
The use of our global data and insights allows us to leverage growth in the business and improve our conversion rate.
especially at midpoints in the cycle as client | the macro environment is sufficiently stable, |
confidence grows. This is a key driver of most | |
candidates will look to progress their careers, | |
other elements, as the quality of a recruiter is | |
which helps to drive job liquidity. | |
most clearly demonstrated through their ability | |
to source difficult-to-find candidates. |
FINANCIAL IMPACT
Mainly visible through improvement in gross profit, a buoyant market helps to drive consultant productivity.
ADDITIONAL INFORMATION
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GROSS PROFIT AND PRODUCTIVITY
IMPACT
CAPITAL ALLOCATION POLICY
The Group's Strategy is to operate a policy of financing the activities and development of the Group (including our sustainability objectives) from our retained earnings and to maintain a strong balance sheet position. We first use our cash for our operational and investment requirements, as well as hedging our liabilities under the Group's share plans.
REPORT
FEES/RATES
Group average typically moves within a c. 10% range over the cycle (19.5%-22%).
WAGE INFLATION | TIME TO HIRE |
Reflects level of | As candidates become scarcer, |
candidate shortage | companies shorten the decision |
and liquidity within a | making process in order not to |
particular discipline or | lose preferred candidates. This |
geography, plus macro | is particularly noticeable since |
economic conditions. | COVID-19, with video interviewing |
also reducing time to hire. |
Over and above this requirement, we review our liquidity to make returns to Shareholders, primarily by way of ordinary dividends. Our policy is to grow the ordinary dividend over the course of the economic cycle, in line with our long-term growth rate. We believe this will enable us to sustain the ordinary dividend payments during a downturn, as well as increasing it during more prosperous times.
Beyond these two priorities, cash generated will be returned to Shareholders through supplementary returns, using either special dividends or share buybacks.
MARKET CATEGORIES
STRATEGIC
GOVERNANCE
FINANCIAL IMPACT
Notable influence on both gross profit and also conversion rate. Productivity, especially in permanent recruitment, is significantly enhanced as these market drivers align positively.
As a result of the new Group Strategy and Vision, as previously announced in September 2023 at our Capital Markets Event, the way that we strategically categorise our markets has been updated from 2022. For further details on our new Strategy and Vision, please refer to pages 17 to 18.
CORPORATE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
15 PageGroup Annual Report and Accounts 2023 | PageGroup Annual Report and Accounts 2023 16 |
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