Robert Half International Inc.

International Directory of Company Histories, Volume 70 (1999) by Ellen Wernick, Jennifer Gariepy

Robert Half International Inc.

2884 Sand Hill Road Menlo Park, California 94025 U.S.A.

Telephone: (415) 854-9700 Fax: (415) 954-9735 Web site: http://www.rhi.com

Public Company Incorporated: 1948 as Robert Half Inc. Employees: 182,300 Sales: $2 billion (2004) Stock Exchanges: New York Ticker Symbol: RHI NAIC: 541612 Human Resources and Executive Search Consulting Services; 561310 Employment Placement Agencies

Robert Half International Inc. (RHI) is a leading provider of temporary, full-time, and contract employees, and is the oldest and largest specialist company placing accounting, finance, and information technology professionals. RHI operates seven divisions and one subsidiary. Accountemps places accountants and other financial professionals in temporary positions; Robert Half Finance & Accounting provides permanent, full-time personnel in the fields of accounting, banking, and finance; Robert Half Technology supplies contract information technology professionals; OfficeTeam specializes in high-end temporary administrative personnel; Robert Half Legal supplies attorneys, paralegals, and legal support personnel for temporary, project, and full-time positions; Robert Half Management Resources provides accounting, banking, and finance professionals on a project basis; and The Creative Group provides creative, advertising, marketing, and Web design professionals on a freelance basis. The subsidiary Protiviti specializes in independent internal audit and business and technology risk consulting. At the end of 2004, RHI had more than 330 offices in 43 states, the District of Columbia, Belgium, Canada, the Czech Republic, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Singapore, and the United Kingdom. Revenues for 2004 totaled $2 billion.

Origins

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.

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 became chairman of the board.

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's stock, 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.

Recession and Recovery in the Early 1990s

In 1990, RHI's concentration on 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, Robert Half's 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.