Letter to Stockholders

Chairman and Chief Executive Officer Harold M. Messmer, Jr.
Vice Chairman, President and Chief Financial Officer M. Keith Waddell.


Executive Chairman Harold M. Messmer, Jr. (left); President and Chief Executive Officer M. Keith Waddell

To Our Stockholders,

As we write this letter to our shareholders, we are in the midst of a global pandemic crisis. An increasing number of people are affected each day by the coronavirus, whether medically or by unprecedented changes in how we all work and live. Most of what appears on the following pages reflects Robert Half’s performance in 2019. We are sensitive to the fact that the current environment has greater uncertainty, although we are confident we are well-positioned to manage through these challenging times.

Robert Half turned in another solid performance in 2019. We reported record levels of revenues, net income, diluted earnings per share and cash dividends declared. Full-year global revenues for the company were $6.1 billion, up 5 percent from $5.8 billion in 2018. U.S. revenues increased 6 percent, while international revenues were essentially flat. International revenues represent 22 percent of the company total.

Our staffing operations performed well throughout the year, particularly in the United States, where demand benefited from unprecedented labor shortages, especially in our specialty areas. Our non-U.S. staffing operations were challenged by slower economic growth and global trade uncertainties. Notwithstanding these headwinds, we were generally pleased with how our non-U.S. staffing operations performed. While the non-U.S. growth rate moderated in most countries we serve, we still fared better than our industry, largely because of our professional sector and small and midsize client focus.

Protiviti, our internal audit and consulting subsidiary, enjoyed double-digit percentage growth rates in every quarter in 2019. Protiviti continued to expand its consulting solutions and strengthen its client base. Its revenues of $1.1 billion increased 18 percent over the prior year and exceeded $1 billion for the first time in its 18-year history. It now represents 19 percent of total revenues.


Service Revenues

$6.1 Billion

Operating Income

$622 Million

Return on Invested Capital


Companywide operating income grew to a record $622 million, up 6 percent from the previous year. Net income was $454 million, 5 percent higher than in the year-ago period. Diluted net income per share was $3.90, compared to $3.57 in 2018, a 9 percent increase. The net income per share comparison benefited from 4 percent fewer shares outstanding in 2019.

We continue to regard return on invested capital (ROIC) as a key measure of our financial performance. 2019 ROIC of 41 percent compared favorably with our past experience and with levels commonly achieved in corporate America. We believe our superior ROIC is rooted in our ability to generate industry-leading profitability on a judiciously employed capital base, including growth achieved primarily by organic means.


In 2019, our staffing operations benefited from global labor shortages and the resulting high demand for skilled talent, particularly in the United States. The hiring environment for U.S. employers is the most challenging it has been in decades. In September, the U.S. unemployment rate fell to 3.5 percent, a 50-year low, and held close to that level for the remainder of the year. Notably, 2019 was the ninth consecutive year the United States added more than 2 million jobs. The U.S. jobs growth cycle in recent years has been unlike any we have seen before.

Small to midsize businesses (SMBs) dominate Robert Half’s staffing client base; we have a long history of serving these companies. Finding workers is a serious problem for small-business owners when unemployment is as low as it has been. According to a December 2019 report from the National Federation of Independent Business (NFIB), 53 percent of business owners polled said they were hiring or trying to hire, and 50 percent reported few or no qualified applicants for the positions they need to fill.

SMBs are a key driver of the U.S. economy. According to the Q4 2019 Vistage CEO Confidence Index, this sector creates 75 percent of all new jobs, yet our research tells us the majority of these companies have never employed a staffing firm. Our decades-long experience in identifying and serving SMBs by understanding how their needs differ from those of larger companies is difficult to duplicate. SMBs continue to constitute a vast, yet largely underserved, market opportunity.

While the well-documented shortages of global skills boost demand for our services, they also constrain the candidate supply. To increase our own reserve of talent, we have been focused on developing a proprietary matching technology using machine learning. Its artificial intelligence (AI) is informed by decades of candidate placement data exclusive to Robert Half. We believe our matching technology and unique data insights differentiate us in our industry. Our ability to rapidly provide professionals who closely match our clients’ requirements is invaluable in a tight labor market.


Revenues for Protiviti, our global consulting subsidiary, were $1.1 billion in 2019. At year-end, Protiviti had achieved seven straight quarters of year-over-year double-digit percentage growth. Its diverse practices range from internal audit to an array of business, risk and technology consulting solutions.

Protiviti has grown to be an important part of our business. It has significantly expanded its offerings since its launch in 2002, when the great majority of Protiviti revenues came from internal audit and internal controls, to a diversified range of services. In addition to internal audit, including IT audit, Protiviti has developed robust offerings in areas including:

  • Managed solutions (finance/accounting and technology)
  • Artificial intelligence
  • Machine learning
  • Advanced analytics and model development/validation
  • RPA (robotic process automation)
  • Business process and performance improvement
  • IPO (initial public offering) readiness
  • Finance function transformation
  • Technology strategy and applications
  • Cybersecurity and privacy
  • Cloud solutions
  • Risk and regulatory compliance solutions
  • Emerging technologies

As Protiviti continues to service larger, multinational clients and help companies solve increasingly complex business problems, it is often combining a variety of competencies, such as data, analytics, controls and process capabilities, to increase the value provided.


During 2019, we made excellent progress in two important areas — establishing a full spectrum of specialized staffing and consulting solutions and expanding our digital presence. Both are helping us further build out our continuum of service.

Our Full Complement of Solutions

The traditional labor model is evolving. It used to be that the great majority of labor functions were provided exclusively by full-time, permanent employees. Today, full-time staff remain the core workforce, but they comprise a smaller part of the whole. The changes are being driven by companies’ need to access more skills, many of which are new and technical in nature. The broader range of skills comes from a variety of labor sources suited to different-size projects deployed on a scalable basis. The model now includes contingent and gig workers, the human cloud, and more. Robert Half is embracing these changes by combining our offerings of a uniquely flexible talent pool and deep consulting capability through our staffing and Protiviti units, respectively. Flexibility is a critical element in the new paradigm.

We have long had the ability to identify professionals whose skills are tailored to meet an employer’s specific needs. We are expanding this core capability to include entire cross-functional teams and managed services offerings. We now offer companies a full complement of staffing and consulting solutions, from transactional engagements with our temporary staffing divisions at one end of the spectrum to pure consulting solutions through Protiviti at the other end. With our blended solutions, we can offer clients a combination of consultants from Protiviti along with engagement professionals from our staffing divisions. This advantage makes us a formidable competitor to larger consulting firms that lack this access to a virtually limitless talent network. Likewise, no other major staffing firm can deliver the project solutions of Protiviti.

The ability for Protiviti and our staffing businesses to call on each other’s expertise and resources also provides us with internal advantages. Protiviti, for example, routinely draws on Robert Half’s staffing units to augment its conventional consulting teams. Protiviti has access to our entire talent database. We believe this provides an important competitive advantage since it reduces Protiviti’s need to seek outside labor. The distinctive synergy between Protiviti and our staffing units makes us unique in our industry. We believe we have just scratched the surface when it comes to the business potential of this opportunity.

Our Technology

Our investment in technology is growing. It includes enhancements to our website, personalized job and candidate recommendations, a proprietary matching engine, and our own mobile app. We are committed to meeting our customers’ increasing expectations by offering more choices in how and when they work with us. These technical innovations, combined with the expertise of our staffing specialists, provide both employers and job seekers greater flexibility, whether they engage with us online or in person.


We have developed the technology we use internally to help our staffing professionals become even better at finding the right fit between job seeker and employer. Our proprietary AI-based matching technology incorporates performance data from our most successful candidate placements in professional sectors. No one else in our industry has this capability because no one else can draw on the millions of successful candidate placements we’ve made over seven decades in staffing. Using data only we have, we can evaluate how well our candidates align with job openings based on how past candidates have performed. We recently compared Robert Half’s matching technology to that of several of our competitors in a head-to-head test of performance. The matching engine we built outperformed them all. Our staffing and recruiting specialists are already the best in the business, but these tools extend their ability to make rapid yet solid matches.

One of the goals of our technology and digital innovation efforts is to make it faster and easier for customers to hire or be hired. A few years ago, we moved the entire organization onto the Salesforce customer relationship management (CRM) system to put all of our global teams on to one platform. That move has paid off with increased efficiencies in managing our vast databases and improved collaboration among our global workforce.

Our technology enables us to be proactive in candidate recruiting. When we get a job order, we immediately match it to our candidate database. We invite all candidates who are identified to apply in real time, rather than waiting for a more limited number of candidates to self-identify opportunities, then apply. Likewise, we alert clients when a candidate in our database matches their needs.

We launched our candidate mobile app in July 2019. In less than a year’s time, we have received more than 100,000 job applications through this path. The app has shown itself to be an effective way to attract and engage job seekers. The Robert Half mobile app and our own websites have proven to be productive sources of talent, making us far less reliant on third-party sources for candidates.

There are hiring managers who traditionally have not used staffing firms. They prefer to source and hire on their own. We recently created Robert Half Direct, a hiring platform meant to serve this segment. By using this service, which is now available in all U.S. markets, clients have immediate access to a short list of candidates through a direct-hiring platform. Clients control the process and interact directly with job candidates to arrange interviews and make hiring decisions. This gives them access to our proprietary technology and data insights and our extensive candidate database powered by over 10,000 active recruiters. Early results show that Robert Half Direct is reaching a new segment of the market for us.

Our Personal Service

No amount of technology can replace a genuine understanding of a client’s or candidate’s needs. Robert Half has developed a level of personal service that is well-known and highly regarded. We work with companies on all aspects of the hiring process. Anyone who has ever hired for an open position knows the real work begins after you’ve identified people who may be a skills-match for that job. It is time-consuming but critical that candidates’ interpersonal attributes are also assessed to ensure a good fit with the organization’s culture. Further work must then be done in salary negotiation and persuading top picks to choose one employer’s offer over others.

Employers and candidates also need personal contacts to help them address the bigger picture — their staffing and career strategies. Employers increasingly need a workforce with new skills, fueled by rapidly changing technology, and they need advice on how to find these skills cost-effectively. Candidates need counsel on how to acquire the most marketable current and future skills. They will want more than online assistance in these cases.


Robert Half has an enviable history of financial and managerial stability. We have produced decades of mainly organic growth that has extended a profitable presence throughout the United States and select overseas markets. Our asset-lite business model produces generous amounts of cash in both good and bad economic conditions. We operate with an extremely solid balance sheet, which is dominated by current assets, most of which are highly liquid. After allocating cash to operate and grow the business, we return much of the cash produced to stockholders through share buybacks and cash dividends. We have repurchased shares yearly since 1997 for a total of $3.7 billion and 115.5 million shares, all from internally generated cash flow. Our initial cash dividend was made in 2004. Since then, we have paid uninterrupted quarterly cash dividends. Cash dividends have grown at a compound average annual rate of 11.2 percent.


We are optimistic about how Robert Half is positioned right now, but we also recognize the uncertainty surrounding the COVID-19 pandemic, which as of this writing is having a very real impact on global economies. Like all businesses, we are watching carefully to see how the situation evolves and we are responding accordingly. The labor shortages we have been seeing have been building for some time, but the current climate makes it difficult to assess even near-term trends.

Whether markets improve relatively soon or take longer to recover, our experience navigating in uncertain times through the years should guide us well through these uncharted waters. Robert Half has a very strong balance sheet, no debt and decades of proven business experience. At times like this, the drive and tenure of our leadership team become our greatest asset. And as in the past, there may be opportunities presented by major economic shifts. Like perhaps never before, businesses will need the ability to staff up and down flexibly as events unfold. Our digital investments give us the ability to quickly find the right professionals for companies with rapidly changing needs. These firms will also need a talent pipeline when markets recover, and Robert Half will be there for them as they rebuild.


I have been honored to serve as Robert Half’s CEO since the business was acquired from Bob Half in 1986. In December, I made the decision to transition from Chairman and CEO to Executive Chairman. I will, of course, be involved with the growth strategy of the company, and I am extremely pleased to see Keith Waddell, who has been my partner and collaborator from virtually the beginning, succeed me as CEO. Keith provides a sense of continuity, and with his vision and history of innovation, he also is absolutely the right person to lead Robert Half into the future.

— Harold M. Messmer, Jr.

Businesses will have many and varied needs as they face the future. It has long been our vision to complete the full spectrum of specialized staffing and consulting solutions we offer these customers, and this vision has just recently become a reality. It gives us access to new clients beyond our traditional staffing base of SMBs, especially when you consider our blended solutions, where Protiviti works with our staffing business.

Our industry has entered an age of multiple staffing sources to serve an evolving labor market. The new model is both beneficial and more complex for companies and workers. Clients and job seekers need help as they enter unfamiliar territory, and we can provide it.

We would like to thank our board of directors for the strategic counsel they provided during 2019, and you, our stockholders, for your continued support of our business.


Respectfully submitted,

Max Messmer Signature
Harold M. Messmer, Jr.
Executive Chairman

March 18, 2020

Keith Waddell Signature
M. Keith Waddell
President and
Chief Executive Officer
March 18, 2020