The Recruitment Process Outsourcing (RPO) market is forecast to grow at a CAGR of 19.6% by 2029. The cost savings gained from optimizing the hiring process drives growth in the RPO industry. Moreover, the rise of data analytics and artificial intelligence in RPO transforms talent acquisition by improving efficiency and precision.

Additionally, the rise of remote work, flexible arrangements, and the growing gig economy are reshaping staffing firms’ offerings. Generation Z is driving a focus on work-life balance and skills-based hiring. Industry experts predict that the global staffing market will grow by approximately 6% each year, with the United States leading in terms of revenue and expansion.

Against this backdrop, let’s compare two established staffing stocks to analyze which one holds the competitive edge: Korn Ferry (KFY - Get Rating) and Robert Half Inc. (RHI - Get Rating).

The Case for Korn Ferry Stock

Valued at $3.61 billion by market cap, Korn Ferry (KFY - Get Rating) engages in the provision of organizational consulting services worldwide. The company offers consulting services for organizational structure, culture, performance, development, and people and builds, sells, and delivers Digital talent technology products, including a talent suite that enables clients to make critical talent decisions in the flow of work across talent acquisition and talent development. 

KFY has gained 12.5% over the past nine months to close the last trading session at $70.06.

In terms of the trailing-12-month EBIT margin, KFY’s 1.61% is 1.6% higher than the 10.44% industry average. Likewise, its 8.55% trailing-12-month levered FCF margin is 25% higher than the industry average of 6.84%.

In the fiscal second quarter that ended on November 22, 2024, KFY’s revenue amounted to $682 million. The company’s operating income grew significantly from the prior-year quarter to $87.50 million.

Its net income came in at $60.80 million compared to a net loss of $1.70 million in the previous year’s quarter. Its earnings per share came in at $1.16, as compared to a loss per share of $0.04 in the previous year’s quarter.

Street expects KFY’s revenue for the fiscal third quarter (ending January 2025) to be $650.45 billion. Its EPS for the same period is expected to grow 5.5% year-over-year to $1.13. In addition, it surpassed the revenue and EPS estimates in three of the trailing four quarters, which is promising.

KFY’s POWR Ratings reflect mixed prospects. It has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

KFY is ranked #2 out of 17 stocks in the Outsourcing – Staffing Services industry. It has a B grade for Value and Stability. To see KFY’s Momentum, Growth, Sentiment, and Quality ratings, click here.

The Case for Robert Half Inc. Stock

Valued at $6.54 billion by market cap, Robert Half Inc. (RHI - Get Rating) provides talent solutions and business consulting services in North America, South America, Europe, Asia, and Australia. The company operates through Contract Talent Solutions, Permanent Placement Talent Solutions, and Protiviti segments.

RHI has plunged 9.4% over the past month to close the last trading session at $63.35.

In terms of the trailing-12-month gross profit margin, RHI’s 38.77% is 21.6% higher than the 31.89% industry average. However, its 4.17% trailing-12-month EBIT margin is 60.1% lower than the industry average of 10.44%.

RHI’s service revenues for the fourth quarter that ended December 31, 2024, were reported at $1.38 billion. However, the company’s net income and earnings per share declined 6.2% and 63.9% year-over-year to $54.29 million and $0.53, respectively.

Street expects RHI’s revenue for the first quarter ending March 2025 to decline 4.6% year-over-year to $1.41 billion. The company’s EPS for the same quarter is expected to decline 37.4% year-over-year to $0.38.

RHI’s mixed fundamentals are reflected in its POWR Ratings. The stock has an overall C rating, translating to a Neutral in our proprietary rating system.

RHI has a C grade in Momentum and Stability. It is ranked #10 in the same industry.

Click here for the additional POWR Ratings for RHI (Growth, Value, Sentiment, and Quality).

Korn Ferry (KFY) vs. Robert Half Inc. (RHI): Which Staffing Firm Holds the Competitive Edge?

The outsourcing staffing services industry is expected to grow as businesses seek cost-effective, flexible workforce solutions. Advancements in AI, automation, and data analytics are enhancing efficiency and reshaping talent acquisition strategies.

Leading staffing companies like KFY and RHI stand to capitalize on the optimistic industry outlook. However, KFY’s higher profitability and promising near-term outlook favor it as the better stock pick.

Our research shows that the odds of success increase when one invests in stocks with an Overall Rating of Strong Buy or Buy. View all the top-rated stocks in the Outsourcing – Staffing Services industry here.

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RHI shares were trading at $63.21 per share on Tuesday afternoon, down $0.14 (-0.22%). Year-to-date, RHI has declined -10.29%, versus a 2.72% rise in the benchmark S&P 500 index during the same period.

About the Author: Nidhi Agarwal

Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...

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