2884 Sand Hill Road
As the pioneer and leader in temporary and permanent professional staffing for nearly 50 years, we have remained committed to providing service beyond the expectations of our clients and job candidates, and to becoming a strategic staffing partner to our customers.
Robert Half International Inc. (RHI) is a leading provider of temporary, full-time, and contract employees, and is the oldest and largest specialist placing accounting, finance, and information technology professionals. RHI operates five divisions. Accountemps places accountants and other financial professionals in temporary positions; Robert Half provides permanent personnel in the fields of accounting, banking, and finance; RHI Consulting supplies contract information technology professionals; OfficeTeam specializes in high-end temporary administrative personnel; and The Affiliates supplies paralegal and support personnel for temporary positions in the legal field. At the end of 1996, the company had more than 190 offices in 38 states, Canada, the United Kingdom, Belgium, France, and the Netherlands. RHI also has independently owned and operated franchises in Kansas City, New Orleans, and Israel. Revenues for 1996 totaled $898.6 million.
Robert Half was a pioneer in the employment services industry, founding Robert Half Inc. in 1948 as an employment agency for accountants. He eventually created Accountemps to supply accountants and other financial professionals to firms needing those skills on a temporary basis, while continuing to place permanent employees through his Robert Half offices. Following the success of his business in California, Half began franchising the concept around the country. The temporary personnel industry grew slowly during the 1960s and 1970s, then began to expand rapidly during the 1980s. By 1985, there were 150 independent Robert Half and Accountemps franchises.
1985-90: New Management
The second half of the decade saw major changes in the company. In 1985 Harold M. "Max" Messmer, Jr. assumed the presidency of Robert Half Inc. In July 1986, Boothe Financial Corporation acquired all the outstanding stock of the company and Messmer almost immediately began a program to buy all the franchises in the Robert Half system. In 1987, after being divested by Boothe, Robert Half International Inc. went public, and Messmer became chief executive officer as well as president. The following year, he added chairman of the board to his duties.
During 1989, the company began opening new offices, and Gibbons, Breen, Van Amerongen, L.P., a merchant banking concern, bought 3.1 million shares of the company, approximately 27 percent of the outstanding common shares. As the decade ended, RHI had revenues of $234.5 million, a 29 percent increase from 1988.
The temporary staffing industry experienced double-digit expansion during the 1980s, and many people believed temporary employment firms would survive any national recession. As a result of rapid consolidation, the number of larger, national firms increased, and competition for contracts was intense. This led to a price war which began in the general clerical segment of the industry but soon spread to the specialized areas such as accounting.
1990-93: Recession and Recovery
In 1990, RHI's concentration on the niche of accounting and financial temporary placements helped avoid much of the price war, and the company could afford to acquire Wayne S. Mello & Associates, a financial recruiting firm in Florida. Robert Half, the permanent placement operations, reached a peak in its revenues of $450 million. However the employment recession which began that year did have an effect on the company, with revenues growing by only 9 percent, a big drop from 1989.
In a normal year, the Robert Half permanent placement activity accounted for 15 to 20 percent of the company's total revenues. This meant that RHI was more dependent on permanent placements than most temporary staffing firms, and as the demand for permanent employees fell as a result of corporate downsizing and restructuring, RHI's business began to weaken.
Management's reaction to the situation was a "go slow" strategy. They reduced overhead, cut and focused the advertising budget, and improved cash management. The poor economy also made it easier for the company to acquire Robert Half and Accountemps franchises, which were suffering, and to buy a Seattle-based temporary employment firm, which placed accounting and data-processing employees.
Management also decided the time was right to test a move away from their traditional financial placements. Late in 1991 they started a new division, OfficeTeam, placing temporary high-end, office administrative personnel. This start-up business was in response to requests from longtime clients for help when they needed temporary employees with administrative, word processing, and office management skills. To keep overhead low, RHI placed an OfficeTeam salesperson in a few Accountemps offices. That year the new division brought in $2 million in revenues. That was a bright spot in a year in which revenues dropped by 16 percent and earnings per share by more than 50 percent.
In 1992, its second year, OfficeTeam revenues increased to $12 million, and accounted for nearly 5 percent of the company's total bookings. The permanent placement business, however, brought in only $22 million, less than half the amount it generated in 1990. The company responded by merging most Robert Half offices with Accountemps facilities or combining satellite offices into a single hub office to serve an area.
Company revenues began to turn up towards the end of 1992 as employers felt confident enough to add temporary employees to their workforces. Having expanded into administrative placements through Office Team, the company decided to explore making placements in the legal field, and acquired The Affiliates, a firm in Southern California that placed temporary and permanent paralegal, legal administrative, and other legal support personnel.
During 1993, RHI expanded to the East Coast with the purchase of Key Financial, a Washington, D.C., firm that placed accountants, and opened offices in France, Belgium, and the United Kingdom. The company also completed placing an OfficeTeam salesperson in each of its 135 domestic offices. The temporary administrative placement service had turned into a very successful undertaking as it brought in nearly $41 million that year, more than 13 percent of total revenue. RHI found it had little competition in this area from the national giants such as Kelly or Manpower since most OfficeTemp placements were with longstanding clients who needed only a few workers at a time. Company revenues for the year reached $306.2 million.
Total employment in the U.S. began to grow in the last half of 1993 and RHI's permanent placement business finally started to improve as a result. As the economy strengthened and corporate downsizing and restructuring slowed, the temporary staffing industry found itself thriving. Employers wanted the flexibility to respond quickly to changing market conditions and to avoid overstaffing. Where traditionally employers hired temporary workers primarily to fill in during busy periods, now there was a growing demand for professionals with skills not usually associated with temporary work--home health care, prison management, and scientists and technicians.
1994-96: New Directions
RHI responded to the demand for additional specialized placements by creating RHI Consulting, a new division providing systems analysts, computer engineers, and other information technology specialists to clients on a contract basis. Specialized staffing in the IT area became very popular among temporary employee firms during the mid-90s. Not only was the demand there, but the assignments were for longer durations than many other types of placements and, perhaps most importantly, the margins were higher.
As RHI was branching into other areas, it continued to pull together its core business. By March 1994, the company had acquired all but four of the original 150 Robert Half and Accountemps franchises. According to a Kidder Peabody analyst's report that month, "Management believed that centralized ownership would help reduce costs, aid the funding and implementation of advanced data processing systems, and bring more sophisticated marketing, accounting and legal practices to former stand-alone operations." By the end of 1996, only two franchise offices remained in the United States.
The temporary help industry continued its explosive growth. According to the National Association of Temporary Staffing Services (NATSS), in 1995, 2.16 million people worked as temporary employees each day, up from 185,000 in 1970. They represented 1.78 percent of total employment, holding one out of every 56 jobs, compared to one out of every 100 jobs in 1990 and one out of every 384 jobs in 1970.
Furthermore, NATSS estimated that nearly a quarter (24.2 percent) of the total temporary personnel payroll was made up of specialized professionals, including accountants and information technology specialists. The industry itself generated $39.2 billion in 1995, almost twice as much as it had five years before, when receipts were $20.5 billion.
For RHI, 1995 was an outstanding year. Revenues increased by 41 percent to $628.5 million, all through internal growth. OfficeTeam had revenues of $147 million, and the two-year old RHI Consulting brought in $39 million through its 38 locations. The company was ranked 18th among all NYSE companies based on total return to investors for the 1993-95 period.
The industry credited its growth to several factors, benefiting both employers and employees. The primary advantage to both parties was greater flexibility. Employers were able to manage their work flow and workforce more effectively--using temporary help to complete special projects, fill short-term vacancies, and avoid overstaffing. For the employees themselves, taking temporary assignments afforded, according to Edward Lenz, "flexibility, independence, supplemental income, skills training, 'safety-net' protection while between permanent jobs, and the opportunity to find permanent work." RHI also offered its temporary employees a competitive benefit package.
In addition to its employment activities, RHI was a recognized research authority. Its annual national and regional salary guides were used by the U.S. Department of Labor in the preparation of the Occupational Outlook Handbook, and the company's accounting and information technology Hiring Indexes provided important hiring projections. A variety of surveys kept executives, managers, and temporary employees informed about issues as diverse as why companies hire temporary help to the length of the average executive's workday.
Both Max Messmer and the company's founder, Robert Half, published books and articles on hiring and job search practices. Half's books included The Right Way to Get Hired in Today's Job Market, Making It Big in Data Processing, How to Get a Better Job in This Crazy World, and Finding, Hiring and Keeping the Best Employees. In 1995, Messmer wrote Job Hunting for Dummies, part of the ... For Dummies series published by IDG Books. He also wrote 50 Ways to Get Hired and Staffing Europe.
The company's reputation also was enhanced by endorsements from leading professional associations, including the American Payroll Association, National Association of Credit Management, the American Institute of Professional Bookkeepers, and Professional Secretaries International. It also had worldwide marketing alliances with major accounting and word processing software publishers and major CPA review course companies.
Business continued to be good for the company through 1996, as it had a two-for-one stock split and reported record revenues of nearly $900 million and income of over $61 million.
1997 and Beyond
The temporary staffing industry was a growing segment of the economy. But with some 7,000 firms supplying their clients with temporary help, big national or international companies had the edge. As CEO Messmer explained in a 1996 Barron's article, "Smaller outfits don't have the clout to attract professionals&mdashcountants, medical workers, technicians, programmers--who can deliver the highest margins for the temp company, because the smaller firms don't offer jobs across the country."
In just over 10 years, Robert Half International had grown from a small franchiser to a leading international company in this market. It had created successful specialized niches that connect with its longtime core business of accounting and financial placements, and had paid for its expansion through internal growth. The demand for accountants and auditors remained high, as the Bureau of Labor Statistics projected a 32 percent increase in those jobs over the next decade. The number of computer and information technology jobs was expected to double over the same period, many of which could be expected to be filled by contract staffers. All of these factors made the future look good for RHI.
Principal Subsidiaries: Norman Parsons (France).