The second quarter of 2021 saw greatly improved US business conditions as pandemic restrictions were eased nationwide. The economic resurgence was evident in the earnings of IT staffing firms, both in the form of a sharp increase in demand for IT specialists and healthy gross margin trends. Below, we summarize the latest round of financial results of publicly traded US-based staffing firms active in the IT segment.
ASGN Inc. (NYSE: ASGN) reported revenue of $568.1 million for its commercial assignment segment, up 12.1% year over year and down 1.1% compared to the second quarter of 2019. ASGN’s commercial segment includes its IT staffing business and was previously reported as Apex. ASGN recorded growth in all five of its commercial industry verticals — business and government services, consumer and industrial, financial services, healthcare and TMT — with its consumer and industrial vertical experiencing the greatest growth.
Notably, ASGN sold its Oxford Global Resources business in the second quarter for $525 million. ASGN acquired Oxford in 2007 to strengthen its high-end consulting offerings in niche industries. However, in recent years, ASGN has shifted its focus to higher-margin large-account IT services and consulting solutions. ASGN plans to use proceeds from the sale to fund acquisitions, where it has been quite active. The firm has acquired six companies since last year.
CTG’s (NASDAQ: CTG) IT staffing revenue contracted 8.2% year over year to $50.8 million as it continues to disengage from its staffing business to focus on its higher-margin solutions business. IT solutions contributed 44.9% of its second-quarter revenue, up from 42.1% in Q2 2020 and 35.5% in Q2 2019.
Kforce (NASDAQ: KFRC) disclosed Tech Flex revenue reached $304.6 million in the second quarter, an increase of 20.9% year over year and 17.3% compared to Q2 2019, as momentum in its technology segment remained strong. Tech Flex encompasses Kforce’s IT temporary staffing business. Management noted that new assignment starts in technology reached all-time highs and have been consistent and broad-based.
Mastech Digital (NYSE: MHH) reported second-quarter revenue of $44.7 million for its IT staffing services business, a 9.5% increase year over year and a 6.9% increase compared to Q2 2019. The firm noted that billable consultants increased 8% during the quarter and 18% so far this year, offsetting the decline in 2020. Management also cited a strong increase in new engagements in its IT staffing services segment.
Robert Half’s (NYSE: RHI) technology segment, which includes its IT staffing business, reached $194.2 million in the second quarter, up 19.9% year over year and 2.5% compared to Q2 2019. The company’s staffing business saw broad-based recovery as companies across all industries resumed hiring and dealt with higher levels of attrition.
Among the larger, more diversified global staffing companies, Adecco’s Modis business saw revenues increase 12% year over year but noted talent scarcity and wage inflation has affected its technology solutions. Randstad’s US Professionals business revenues rose 6% year over year and management singled out very strong performance in its Randstad Technologies division. ManpowerGroup also experienced increased revenue within its Experis segment and cited improved demand for its interim services, permanent placement business and managed services as main drivers of growth. Recently, ManpowerGroup announced plans to acquire Ettain, the 12th largest IT staffing firm in the US according to SIA, for $925 million. Ettain will become part of Experis, and current Ettain leadership will continue.
