Publicly traded IT staffing companies experienced a stronger than anticipated fourth quarter in 2013. These firms chalked up year-over-year median growth of 12 percent during the quarter, with only one of the seven companies we track showing decline in revenue as compared to the same period in 2012.
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On Assignment Inc.’s (NYSE: ASGN) Oxford grew 6 percent year over year during the quarter ended Dec. 31, 2013, and Apex, which was acquired by On Assignment in May 2012, grew more than 20.4 percent. On Assignment sold selected operating assets of its allied healthcare unit in December and retained its health information management, or HIM, practice of allied. The HIM practice is now integrated with Oxford's health care IT division. Oxford now also includes the results of CyberCoders, which was acquired in December 2013.
On Assignment President and CEO Peter Dameris said during a conference call that — with temporary labor continuing to see greater growth prospects than full-time labor — the staffing industry will continue to see a classic cyclical recovery in professional staffing. “As for IT staffing, we continue to see positive demand and a continuing adoption of staff augmentation, as a viable alternative to outsourcing, off-shoring, and consulting,” Dameris said.
Mastech Holdings Inc. (NYSE MKT: MHH) posted fourth quarter year-over-year growth of 20.3 percent. President and CEO Kevin Horner said he is very confident that company’s offshore recruiting business model will enable Mastech to outperform the industry’s growth by at least 1.5 times.
“I am more bullish than ever about the unique business model that we deploy when compared to most of our public peers,” Horner said. “Frankly, I’m convinced that our cost-effective centralized model is a better solution for our clients and our perspective clients in today’s MSP/VMS driven staffing environment.”
Professional staffing firm Kforce Inc. (NASD: KFRC) grew it’s IT staffing business by 18.3 percent. Temporary IT staffing accounts for 63.8 percent of the company’s total revenue.
“Overall our key performance indicators for technology remain at high levels for job orders, external committals and send outs, with fill ratios at an all-time high,” said Joe Liberatore, president of Kforce. “Candidate supply remains right, particularly for high demand skill sets such as Java .NET developers, projector managers, and business analysts. The industries that performed best in Q4 were healthcare, financial services, telecom, insurance, retail and computer hardware. Technology services within healthcare remain very healthy, as hospitals and healthcare organizations implement systems and transition their platforms to more of a shared services model.”
While Kforce saw strong growth with health information technology, Computer Task Group Inc. (NASD: CTGX) experienced a slowdown within the same business. Computer Task Group provides IT and business consulting solutions to the healthcare market, as well as managed services IT staffing for technology companies and large corporations. Solutions revenue in the fourth quarter of 2013 totaled $40.4 million, a decrease of 10.7 percent compared to the fourth quarter of 2012, primarily due to lower revenue from electronic medical record project. The company cited the government’s continued reduction in reimbursements the main reason for stalling the start of electronic medical records projects.
However, Jim Boldt, chairman, president and CEO of Computer Task Group, continues to be bullish about long-term growth in he HIT business.
“Longer term, we expect our healthcare business to return the growth as the EMR work is completed,” Boldt said. “In the short-term, we expect to see growth in outsourcing ICD-10 and healthcare IT consulting work.”
The company’s staffing revenue in the quarter decreased by $0.3 million or half a percent to $62.3 million, reflecting reductions in staffing from a large client offset by higher demand for technical resources from several other clients.