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What changed in ROBERT HALF INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ROBERT HALF INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+257 added−223 removedSource: 10-K (2024-02-20) vs 10-K (2023-02-10)

Top changes in ROBERT HALF INC.'s 2023 10-K

257 paragraphs added · 223 removed · 188 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeMarketing and Creative includes the provision of creative professionals in the areas of creative, digital, marketing, advertising, and public relations in a variety of positions, such as creative directors, graphic designers, web designers, media buyers, front-end developers, copywriters, digital marketing managers, marketing analytics specialists, brand managers, and public relations specialists. Legal provides legal contract talent, including attorneys and paralegal professionals.
Biggest changeTechnology provides information technology contract professionals and offers managed services in areas ranging from multiple platform systems integration to end-user technical and desktop support, including specialists in software and application development, networking and cloud, systems integration and deployment, database design and administration, and security and business continuity. 1 Marketing and Creative includes the provision of creative professionals in the areas of creative, digital, marketing, advertising, and public relations in a variety of positions, such as creative directors, graphic designers, web designers, media buyers, front-end developers, copywriters, digital marketing managers, marketing analytics specialists, brand managers, user experience practitioners, and public relations specialists.
Protiviti and its independently owned Member Firms work collaboratively with its clients in over 25 countries to help them achieve their business objectives and deliver confidence in an ever-evolving and dynamic business world. Serving organizations across industry sectors, clients range from high-growth, pre-public/transactional established start-ups to the largest global companies and government entities.
Protiviti and its independently owned member firms work collaboratively with their clients in over 25 countries to help them achieve their business objectives and deliver confidence in an ever-evolving and dynamic business world. Serving organizations across industry sectors, clients range from high-growth, pre-public/transactional established start-ups to the largest global companies and government entities.
Also available on the Company’s website are its Corporate Governance Guidelines, its Code of Business Conduct and Ethics, and the charters for its Audit Committee, Compensation Committee, and Nominating and Governance Committee, each of which is available in print to any stockholder who makes a request to Robert Half International Inc., 2884 Sand Hill Road, Suite 200, Menlo Park, CA 94025, Attn: Corporate Secretary.
Also available on the Company’s website are its Corporate Governance Guidelines, its Code of Business Conduct and Ethics, and the charters for its Audit Committee, Compensation Committee, and Nominating and Governance Committee, each of which is available in print to any stockholder who makes a request to Robert Half Inc., 2884 Sand Hill Road, Suite 200, Menlo Park, CA 94025, Attn: Corporate Secretary.
By paying close attention to the results both at an aggregate enterprise level and at a department/business/workgroup level, across an employee’s life cycle, the Company has been able to enhance its culture of rewards and recognition, drive efforts to promote inclusion and diversity, increase communication in support of employee well-being and modernize its approach to foster a culture of continuous learning and feedback.
By paying close attention to the results at an aggregate enterprise level and at a department/business/workgroup level, across an employee’s life cycle, the Company has been able to enhance its culture of rewards and recognition, drive efforts to promote inclusion and diversity, increase communication in support of employee well-being and modernize its approach to foster a culture of continuous learning and feedback.
Item 1. Business Robert Half International Inc. (the “Company”) provides specialized talent solutions and business consulting services through the Robert Half ® and Protiviti ® company names. The Company’s business was originally founded in 1948.
Item 1. Business Robert Half Inc. (the “Company”) provides specialized talent solutions and business consulting services through the Robert Half ® and Protiviti ® company names. The Company’s business was originally founded in 1948.
Contract talent solutions Robert Half’s contract talent solutions business specializes in the provision of contract engagement professionals in the fields of finance and accounting, technology, marketing and creative, legal and administrative and customer support.
Contract talent solutions Robert Half’s contract talent solutions business specializes in the provision of contract engagement professionals in the fields of finance and accounting, technology, marketing and creative 1 , legal 1 , and administrative and customer support.
Order backlog is not a material aspect of the Company’s talent solutions business. Backlog is of greater importance to Protiviti and is typically realized within a 12-month period. The Company conducts business under various federal, state, and local government contracts, and no one such contract represented more than 1.0% percent of total service revenues in 2022.
Order backlog is not a material aspect of the Company’s talent solutions business. Backlog is of greater importance to Protiviti and is typically realized within a 12-month period. The Company conducts business under various federal, state, and local government contracts, and no one such contract represented more than 1.0% percent of total service revenues in 2023.
Finance and Accounting offers customers a reliable and economical means of dealing with uneven or peak workloads for accounting, finance, and accounting operations personnel caused by such predictable events as vacations, taking inventories, tax work, month-end activities, special projects, and such unpredictable events as illness and emergencies.
Finance and Accounting offers customers a reliable and economical means of dealing with uneven or peak workloads for accounting, finance, and accounting operations personnel caused by such predictable events as vacations, taking inventories, tax work, month-end activities, special projects, and such unpredictable events as illness, staff turnover and emergencies.
Other Information The Company is not dependent upon a single customer or a limited number of customers. The Company’s talent solutions business is generally more active in the first and fourth quarters of a calendar year. Protiviti is generally more active in the third and fourth quarters of a calendar year.
Other Information The Company is not dependent on a single customer or a limited number of customers. The Company’s talent solutions business is generally more active in the first and fourth quarters of a calendar year. Protiviti is generally more active in the third and fourth quarters of a calendar year.
The survey results were analyzed by an independent third-party and then reviewed by the executive officers. The results of these engagement surveys were shared with individual managers, who were then tasked with taking action based on their employees’ confidential feedback (both quantitative and qualitative).
The survey results were analyzed by an independent third-party and then reviewed by the executive officers. The results of these engagement surveys were shared with individual managers, who were then tasked with acting based on their employees’ confidential feedback (both quantitative and qualitative).
Employee feedback is then carefully reviewed and analyzed to identify trends, which are shared with senior leaders and communicated directly to employees. Actions being taken based on employee feedback are highlighted so that employees understand the importance of their input. Protiviti leverages surveys in the U.S. and internationally, including the Great Place to Work ® survey. Learning and Development .
Employee feedback is then carefully reviewed and analyzed to identify trends, which are shared with senior leaders and communicated directly to employees. Changes based on employee feedback are highlighted so that employees understand the importance of their input. Protiviti leverages surveys in the U.S. and internationally, including the Great Place to Work ® survey. Learning and Development .
As of December 31, 2022, the Company conducted its contract talent and permanent placement services operations through 317 offices in 42 states, the District of Columbia, and 18 foreign countries. Office managers are responsible for most activities of their offices, including business development, local advertising and marketing, and recruitment.
As of December 31, 2023, the Company conducted its contract talent and permanent placement services operations through 313 offices in 42 states, the District of Columbia, and 18 foreign countries. Office managers are responsible for most activities of their offices, including business development, local advertising and marketing, and recruitment.
The day-to-day operations of Protiviti are managed by a chief executive officer and a senior management team with operational and administrative support provided by individuals located in Menlo Park and San Ramon, California. As of December 31, 2022, Protiviti had 65 offices in 23 states and 13 foreign countries.
The day-to-day operations of Protiviti are managed by a chief executive officer and a senior management team. Operational and administrative support is provided by individuals located in Menlo Park and San Ramon, California. As of December 31, 2023, Protiviti had 65 offices in 23 states and 13 foreign countries.
It conducts public relations activities, including distributing press releases, sharing proprietary research findings and providing subject-matter experts for press interviews designed to enhance recognition of Protiviti’s brand and reputation, establish its expertise in key issues surrounding its businesses and promote its services. Protiviti promotes its brand name through digital and out-of-home advertising and its professional golf brand ambassador program.
It conducts public relations activities, including distributing news releases, sharing proprietary research findings and providing subject-matter experts for media interviews designed to enhance recognition of Protiviti’ s brand and reputation, establish its expertise in key issues surrounding its businesses and promote its services. Protiviti promotes its brand name through digital and out-of-home advertising and its professional golf brand ambassador program.
Robert Half Prior to 2022, the Company organized its talent solutions business (previously referred to as staffing) through separately branded divisions under the brand names of Accountemps ® , Robert Half ® Finance and Accounting, OfficeTeam ® , Robert Half ® Technology, Robert Half ® Management Resources, Robert Half ® Legal, and The Creative Group.
Robert Half Prior to 2022, the Company organized its talent solutions business through separately branded divisions under the brand names of Accountemps ® , Robert Half ® Finance and Accounting, OfficeTeam ® , Robert Half ® Technology, Robert Half ® Management Resources, Robert Half ® Legal, and The Creative Group.
Our operations could be impacted by legislative changes by these bodies, particularly with respect to provisions relating to payroll and benefits, tax and accounting, employment, worker classification and data privacy. Due to the complex regulatory environment that we operate in, we remain focused on compliance with governmental and professional organizations’ regulations.
Our operations could be impacted by legislative changes by these bodies, particularly with respect to provisions relating to payroll and benefits, tax and accounting, employment, worker classification and data privacy. Due to the complex regulatory environment that the Company operates in, the Company remains focused on compliance with governmental and professional organizations’ regulations.
The customer pays a fixed rate only for hours worked. Robert Half clients may fill their employment needs by using an employee on a trial basis and, if so desired, converting the contract position to a permanent position. The client typically pays a one-time fee for such conversions.
Robert Half clients may fill their employment needs by using an employee on a trial basis and, if so desired, converting the contract position to a permanent position. The client typically pays a one-time fee for such conversions.
In 2022, Robert Half and Protiviti formalized new hire surveys at specific points in a new hire's onboarding and departure surveys to exiting employees.
In 2023, Robert Half and Protiviti conducted new hire surveys at specific points in a new hire’s onboarding and departure surveys to exiting employees.
The Company had approximately 16,300 full-time internal staff, including approximately 7,000 employees engaged directly in Protiviti operations, as of December 31, 2022. In addition, the Company placed approximately 164,200 engagement professionals (which includes full time engagement professionals) on assignments with clients during 2022.
The Company had approximately 15,000 full-time internal staff, including approximately 7,000 employees engaged directly in Protiviti operations, as of December 31, 2023. In addition, the Company placed approximately 125,000 engagement professionals (which includes full-time engagement professionals) on assignments with clients during 2023.
Administrative and Customer Support operates in a similar fashion to Finance and Accounting. Permanent placement talent solutions The Company’s first division, established in 1948, was Robert Half ® Finance & Accounting which specialized in the placement of full-time accounting, finance, tax and accounting operations personnel.
Permanent placement talent solutions The Company’s first division, established in 1948, was Robert Half ® Finance & Accounting which specialized in the placement of full-time accounting, finance, tax and accounting operations personnel.
In addition, Robert Half expanded its participation in the Great Place to Work ® Survey to include all country locations to benchmark with other companies. Under its Leading with Empathy initiative, Protiviti uses an “ask, listen, respond, act” approach to building trust through global surveys where employees provide anonymous feedback.
In addition, Robert Half continued its participation in the Great Place to Work ® Survey to benchmark with other companies around the world. Protiviti uses an “ask, listen, respond, act” approach to building trust through global surveys where employees provide anonymous feedback.
In connection with this process, the Company’s current financial statement disclosures reflect new names for its reportable segments, including contract talent solutions (formerly temporary and consultant staffing), permanent placement talent solutions (formerly permanent placement staffing), and Protiviti (formerly risk consulting and internal audit services). Further information on these business segments follows.
In connection with this process, the Company’s current financial statement disclosures reflect the names of its reportable segments, including contract talent solutions, permanent placement talent solutions, and Protiviti. Further information on these business segments follows.
Industry and competency teams conduct targeted marketing efforts locally, nationally, and globally, including digital advertising, search advertising, email marketing, production and distribution of thought leadership, social media, and live and virtual speaking events. Protiviti regularly conducts a variety of programs to share its insights with clients on current and emerging business issues.
Protiviti markets its business consulting services to a variety of global clients in a range of industries. Industry and competency teams conduct targeted marketing efforts locally, nationally, and globally, including digital advertising, search advertising, email marketing, production and distribution of thought leadership, social media, and live and virtual speaking events.
As of December 31, 2022, approximately 34.0% of the Company's U.S. workforce was from underrepresented groups. Employee Engagement. A major component in supporting Employee Engagement is the Robert Half employee voice initiative to provide its employees with feedback opportunities. In 2022, the Company conducted two surveys to understand employee needs and gather feedback on a variety of focus areas.
A major component in supporting employee engagement is the Robert Half employee voice initiative to provide its employees with feedback opportunities. In 2023, the Company conducted two surveys to provide a forum to understand employee needs and gather feedback on a variety of focus areas.
The legal profession’s requirements (the need for confidentiality, accuracy and reliability, a strong drive toward cost-effectiveness, and frequent peak caseload periods) are similar to the demands of Finance and Accounting clients. Administrative and Customer Support provides contract office and administrative personnel, ranging from executive and administrative assistants to receptionists and customer service representatives.
Legal provides legal contract talent, including attorneys and paralegal professionals. The legal profession’s requirements (the need for confidentiality, accuracy and reliability, a strong drive toward cost-effectiveness, and frequent peak caseload periods) are similar to the demands of Finance and Accounting clients.
Businesses view the use of contract talent as a means of controlling personnel costs and converting such costs from fixed to variable. The cost and administrative burden to clients are significantly reduced by the use of contract talent resources. The contract talent engagement professionals are employees of Robert Half and are paid by Robert Half.
The cost and administrative burden to clients are significantly reduced by the use of contract talent resources. The contract talent engagement professionals are employees of Robert Half and are paid by Robert Half. The customer pays a fixed rate only for hours worked.
The principal competitors of Protiviti remain the “Big Four” accounting firms and other consultancies. Significant competitive factors include reputation, technology, tools, project methodologies, price of services, and depth of skills of personnel. Protiviti believes its competitive strengths lie in the collaborative approach it takes to working with clients, which drives knowledge transfer, understanding of client issues, and value creation.
Protiviti believes its competitive strengths lie in the collaborative approach it takes to working with clients, which drives knowledge transfer, understanding of client issues, and value creation.
To align with management’s short- and long-term objectives the Company’s compensation programs for all employees include competitive base pay and for some employees, short-term and long-term incentives. The Company offers a wide array of benefits including comprehensive health and welfare programs, generous time-off and leave, and retirement and financial support.
The Company offers fair, competitive compensation and benefits that support its employees’ overall well-being—financial, mental and physical. To align with management’s short- and long-term objectives, the Company’s compensation programs for all employees include competitive base pay and for some employees, short-term and long-term incentives.
Since 1986, the Company has significantly expanded operations at many of the acquired locations, opened hundreds of new locations, and acquired other local or regional providers of specialized contract personnel. The Company has also broadened the scope of its services by expanding product offerings to include administrative and customer support, technology, financial project, and consulting and legal talent solutions.
Since 1986, the Company has significantly expanded operations at many of the acquired locations, opened hundreds of new locations, and acquired other local or regional providers of specialized contract personnel.
We continued to deploy learning that supports our flexible working environment by providing both virtual and in-person learning opportunities. Our learning strategy supports equity of access, just in time learning and continued career development for our employees. 4 In Protiviti , at key career milestones, employees may participate in engaging learning events that prepare them to succeed at higher levels.
Our learning strategy supports equity of access, just in-time learning and continued career development for our employees. 4 In Protiviti, at key career milestones, employees may participate in engaging learning events that prepare them to succeed at higher levels. Each employee is assigned a career adviser who coaches them and recommends actions to help increase their impact, contribution, and engagement.
Finance and Accounting also provides senior-level engagement professionals in the accounting, finance, and business systems fields, including chief financial officers, controllers, senior financial analysts, internal auditors, and business systems analysts, for such tasks as financial systems conversions, business process re-engineering, business systems performance improvement and post-merger financial consolidation. 1 Technology provides information technology contract professionals and offers managed services in areas ranging from multiple platform systems integration to end-user technical and desktop support, including specialists in software and application development, networking and cloud, systems integration and deployment, database design and administration, and security and business continuity.
Finance and Accounting also provides senior-level engagement professionals in the accounting, finance, and business systems fields, including chief financial officers, controllers, senior financial analysts, internal auditors, and business systems analysts, for such tasks as financial systems conversions, business process re-engineering, business systems performance improvement and post-merger financial consolidation.
The Protiviti business was formerly referred to as the Company’s risk consulting and internal audit services segment. Marketing and Recruiting The Company markets its contract talent services to clients and employment candidates via both national and local advertising activities, including radio, digital advertising, job boards, alliance partners, and events.
Marketing and Recruiting The Company markets its contract talent and permanent placement services to clients and employment candidates via both national and local advertising activities, including radio, digital advertising, job boards, alliance partners, and events. The Company also markets its services via its website, blog and mobile app, as well as through targeted online tactics, email, and social media.
Our strategy is designed to empower employees to reach their full potential, and we provide a wide range of development programs, opportunities, and resources needed to be successful. The Company has specialized programs for all audiences, including new hires, tenured employees, and leadership.
The Company emphasizes employee development and training for our people and the organization. Training and development are key elements to the overall retention, engagement, and employee experience strategy. Our strategy is designed to empower employees to reach their full potential, and the Company provides a wide range of development programs, opportunities, and resources needed to be successful.
Operationally, the Company’s contract talent solutions are organized into the following functional specializations: ◦ Finance and Accounting ◦ Technology ◦ Marketing and Creative 1 ◦ Legal 1 ◦ Administrative and Customer Support 1 In the Company’s financial statements, both Marketing and Creative and Legal functional specializations are reported within Finance and Accounting.
Operationally, the Company’s contract talent solutions are organized into each of these functional specializations. 1 In the Company’s financial statements, both Marketing and Creative and Legal functional specializations are reported within Finance and Accounting. Businesses view the use of contract talent as a means of controlling personnel costs and converting such costs from fixed to variable.
Protiviti has enabled the Company to enter the market for business consulting and internal audit services, and the Company believes this market offers synergies with its traditional lines of business. Protiviti delivers an expanding set of services across its defined solution offerings of internal audit, technology consulting, risk and compliance consulting, digital transformation, legal consulting, and business performance improvement.
Protiviti has enabled the Company to enter the market for business consulting and internal audit services, and the Company believes this market offers synergies with its traditional lines of business. Protiviti provides a broad range of consulting and managed solutions to leaders in finance, technology, operations, data, analytics, digital, marketing, legal, HR, governance, risk and internal audit.
Protiviti also markets its capabilities through its broad partner ecosystem of professional associations and complimentary service and technology providers.
Protiviti regularly conducts a variety of programs to share its insights with clients on current and emerging business issues. Protiviti also markets its capabilities through its broad partner ecosystem of professional associations and complementary service and technology providers.
As a result of our flexible working environment in 2022, our learning strategy supports access and equity to all our employees through both in-person and virtual learning experiences. In 2022 we introduced comprehensive learning maps for the first year of our new hires and our front-line leaders which provide a more consistent, predictable and formal learning experience.
Comprehensive learning maps for the first year of our new hires and our front-line leaders provide a consistent, predictable and formal learning experience.
We provide mentorship opportunities, self-paced and instructor-led learning channels, and a catalog of vendor-provided courses, videos, resources, and books. The Company is committed to its employees' overall health and providing career progression by providing individual development, readiness, and transition plans as a part of its talent review and succession planning process.
The Company is committed to its employees’ overall health and providing career progression by providing individual development, readiness, and transition plans as a part of its talent review and succession planning process. Given our flexible work philosophy, our learning strategy supports access and equity to all employees, including in-person and virtual learning experiences.
These investments in the skills of our workforce also pay dividends in the marketplace and with our clients who value and rely upon our expertise. Compensation, Benefits and Well-being. The Company offers fair, competitive compensation and benefits that support its employees’ overall well-being.
Protiviti encourages and pays for employees to attain select recognized professional certifications. Annual operating plans include learning budget funding for employees. These investments in the skills of our workforce also pay dividends in the marketplace and with our clients who value and rely upon our expertise. Compensation, Benefits and Well-being .
The Company believes that its rich culture of diversity, equity and inclusion enables it to leverage the strengths of its workforce while also creating an environment where employees can connect, thrive, and grow.
The Company’s corporate culture of diversity, equity and inclusion (“DEI”) enables it to leverage the representation and strengths of its workforce.
Across Robert Half and Protiviti , there are now 16 Employee Network Groups spanning women, gender, race/ethnicity, sexual orientation, and mental health and well-being. Across both Robert Half and Protiviti , as of December 31, 2022, approximately 54.4% of the Company's global workforce was female and 47.1% of the Company’s employees in managerial and leadership roles were female.
Across Robert Half and Protiviti, as of December 31, 2023, approximately 53.5% of the Company’s global workforce identified as female and 47.6% of the Company’s employees in managerial and leadership roles identified as female. As of December 31, 2023, approximately 33.8% of the Company’s U.S. workforce was from underrepresented groups. Employee Engagement.
The Company provides emotional well-being services through its Employee Assistance Program as well as a number of perks and other convenience benefits. As an outcome of the coronavirus (“COVID-19”) pandemic we made a global shift to remote work models. We put people first by providing work options that support professional and personal needs.
The Company offers a wide array of benefits including comprehensive health and welfare programs, generous time off and leave, and retirement and financial support. The Company provides emotional well-being services through its Employee Assistance Program as well as other perks and convenience benefits.
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The Company also markets its services via its website, blog and mobile app, as well as through targeted online tactics, email, and social media. Direct marketing to customers is a significant portion of the Company’s total marketing efforts.
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The Company has also broadened the scope of its services by expanding product offerings to include administrative and customer support, technology, financial project, consulting, legal, and marketing and creative talent solutions.
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Joint marketing arrangements have been entered into with major software manufacturers and typically provide for the development of proprietary skills tests, cooperative advertising, joint campaigns, and similar promotional activities. The Company also actively seeks endorsements and affiliations with professional organizations in the accounting and finance, technology, legal, and creative and marketing fields.
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Administrative and Customer Support provides contract office and administrative personnel, ranging from executive and administrative assistants to receptionists and customer service representatives. Administrative and Customer Support operates in a similar fashion to Finance and Accounting.
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The Company also conducts public relations activities designed to enhance public recognition of the Company and its services. Central to the public relations activities are research-based content, targeted media relations and thought leadership.
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The Protiviti business was formerly referred to as the Company’s risk consulting and internal audit services segment.
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Robert Half employees are encouraged to be active in civic organizations and industry trade groups in their local communities. 2 Protiviti markets its business consulting services to a variety of global clients in a range of industries.
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Artificial Intelligence The Company utilizes a proprietary artificial intelligence (“AI”) engine to match candidates to jobs in order to assist talent solutions professionals with quickly providing skilled and experienced contract talent to clients, as well as through email marketing recommendation campaigns that proactively promote highly placeable talent to clients.
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In 2022, we continued our support of the CEO Action for Diversity & Inclusion pledge and furthered our commitment to advancing diversity, equity, and inclusion by establishing new strategic alliances with Black is Tech, Upward Women, and Hire Heroes.
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The Company also uses AI to assist with improving lead generation amongst past clients and determining which candidates are most likely to work on an assignment in the near term. The Company is also evaluating how generative artificial intelligence tools could enhance the business.
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Current key initiatives include integrating DEI into learning programs, deepening the reach of our Employee Network Groups (“ENGs”), and a focus on external strategic alliances to increase engagement and representation of underrepresented communities. The Company places a high value on inclusion, engaging employees in its ENG programs.
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Protiviti is expanding service offerings to include AI-enabled solutions, and is navigating clients through this complex and rapidly evolving technology with a particular focus on responsible AI. Many engagements begin with identifying opportunities for and applications of AI to accelerate positive business outcomes.
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These ENGs provide a forum for employees with diverse backgrounds, experiences, or characteristics who share a common interest in professional development, improving corporate culture, and delivering sustained business results. The Company also uses these groups to support the acquisition of diverse talent internally and externally. Each ENG is sponsored and supported by senior leaders across the enterprise.
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In addition to developing technology solutions, these engagements evolve into helping clients identify potential risks, defining their specific policies for AI, developing and enacting governance mechanisms to apply those policies, and incorporating these principles into technology selection and architecture.
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The Company emphasizes employee development and training as a priority for both our people and for the organization. Training and development are key elements to the overall retention, engagement, and employee experience strategy.
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Direct marketing to customers is a significant portion of the Company’s total marketing efforts. The Company 2 also actively seeks endorsements and affiliations with professional organizations in the accounting and finance, technology, legal, and creative and marketing fields. The Company also conducts public relations activities designed to enhance public recognition of the Company and its services.
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Each employee is assigned a career advisor who coaches them and recommends actions to help them increase their impact, contribution, and engagement. Protiviti encourages and pays for employees to attain select recognized professional certifications. Annual operating plans include learning budget funding for employees.
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Central to the public relations activities are research-based content, targeted media relations and thought leadership, and promotion of company accolades received from third-party organizations. Robert Half employees are encouraged to be active in civic organizations and industry trade groups in their local communities, as well as in professional social media channels.
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Subject to business requirements, employees have flexibility and choice to work where they feel comfortable and productive – remote, in-office or a hybrid approach. This model is based on fairness and equity, with a goal of allowing for a consistent employee experience, regardless of where one works.
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The principal competitors of Protiviti remain the “Big Four” accounting firms and other consultancies. Significant competitive factors include reputation, technology, tools, project methodologies, price of services, and depth of skills and breadth of availability of personnel.
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In doing so, an environment is created where the enterprise’s values anchor the work and cultivate a culture of growth and connection; attract, retain, and advance talented people; and positively impact clients and the communities where they live and serve.
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In 2023, the Company continued its support of the CEO Action for Diversity & Inclusion pledge, published its DEI e-book “A Shared Journey to Inclusivity,” and furthered its commitment by continuing to invest in key programs such as strategic alliance engagement, employee network group (“ENG”) maturation, and learning and development opportunities.
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The Company places a high value on inclusion, engaging employees in its ENG programs which provide a community for individuals with various backgrounds, experiences, and identities, and their allies. These employee-led groups convene around common interests by sharing heritage and cultural traditions, investing in professional development and mentoring, improving corporate culture, and delivering sustained business results.
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These groups support the attraction of historically underrepresented talent internally and externally. Each ENG is sponsored and supported by executive leaders across the enterprise. Across Robert Half and Protiviti, there are 17 ENGs spanning gender, race/ethnicity, sexual orientation, ability and mental health and well-being.
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The Company has specialized programs for all audiences, including new hires, tenured employees, and leadership. The Company provides mentorship opportunities, self-paced and instructor-led learning channels, and a catalog of vendor-provided courses, videos, resources, and books.
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In 2023, the Company devoted itself to focusing on our employees, including their careers, well-being, connections and impact they have on the Company and community. This commitment helps our leaders build successful teams and ensures employees feel valued and connected to our mission, while defining what they can expect working for the Company throughout their career journey.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe Company is dependent on its management personnel and employees, and a failure to attract and retain such personnel could harm its business. The Company is engaged in the services business. As such, its success or failure is highly dependent upon the performance of its management personnel and employees, rather than upon tangible assets (of which the Company has few).
Biggest changeAs such, its success or failure is highly dependent upon the performance of its management personnel and employees, rather than upon tangible assets (of which the Company has few). There can be no assurance that the Company will be able to attract and retain the personnel that are essential to its success.
In addition, if the Company does not maintain adequate financial and management personnel, processes and controls, it may not be able to accurately report its financial performance on a timely basis, which could cause its stock price to fall.
In addition, if the Company does not maintain adequate financial and management personnel and processes and controls, it may not be able to accurately report its financial performance on a timely basis, which could cause its stock price to fall.
If the Company does not sufficiently invest in new technology and keep pace with industry developments, appropriately implement new technologies, or evolve its business at sufficient speed and scale in 7 response to such developments, or if it does not make the right strategic investments to respond to these developments, the Company’s services, results of operations, and ability to develop and maintain its business could be negatively affected.
If the Company does not sufficiently invest in new technology and keep pace with industry developments, appropriately implement new technologies, or evolve its business at sufficient speed and scale in response to such developments, or if it does not make the right strategic investments to respond to these developments, the Company’s services, results of operations, and ability to develop and maintain its business could be negatively affected.
Any public health emergencies, including a real or potential global pandemic such as those caused by the avian flu, SARS, Ebola, coronavirus, or even a 6 particularly virulent flu, could decrease demand for the Company's services and the Company's ability to offer them.
Any public health emergencies, including a real or potential global pandemic such as those caused by the avian flu, SARS, Ebola, coronavirus, or even a particularly virulent flu, could decrease demand for the Company’s services and the Company’s ability to offer them.
Complying with the enhanced obligations imposed by the GDPR and other current and future laws and regulations relating to data transfer, residency, privacy and protection has increased and may continue to increase the Company’s operating costs and require significant management time and attention, while any failure by the Company or its subsidiaries to comply with applicable laws could result in governmental enforcement actions, fines, and other penalties that could potentially have an adverse effect on the Company’s operations, financial results and reputation.
Complying with the enhanced obligations imposed by the GDPR and other current and future laws and regulations relating to data storage, use, transfer, residency, privacy and protection has increased and may continue to increase the Company’s operating costs and require significant management time and attention, while any failure by the Company or its subsidiaries to comply with applicable laws could result in governmental enforcement actions, fines, and other penalties that could potentially have an adverse effect on the Company’s operations, financial results and reputation.
In addition, the Company and its 8 subsidiaries may become subject to similar lawsuits in the same or other jurisdictions, or to various other claims, disputes, and legal or regulatory proceedings that arise in the ordinary course of business.
In addition, the Company and its subsidiaries may become subject to similar lawsuits in the same or other jurisdictions, or to various other claims, disputes, and legal or regulatory proceedings that arise in the ordinary course of business.
In addition, some of these laws have accounting provisions that require the Company to maintain accurate books and records and a system of 9 internal accounting controls.
In addition, some of these laws have accounting provisions that require the Company to maintain accurate books and records and a system of internal accounting controls.
While such claims have not historically had a material adverse effect upon the Company, there can be no assurance that the Company will continue to be able to obtain insurance at a cost that does not have a material adverse effect upon the Company or that such claims (whether by reason of the Company not having sufficient insurance or by reason of such claims being outside the scope of the Company’s insurance) will not have a material adverse effect upon the Company.
While such claims have not historically had a material adverse effect on the Company, there can be no assurance that the Company will continue to be able to obtain insurance at a cost that does not have a material adverse effect on the Company or that such claims (whether by reason of the Company not having sufficient insurance or by reason of such claims being outside the scope of the Company’s insurance) will not have a material adverse effect on the Company.
In March 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (the “PPACA”) was signed into law in the U.S. In 2015, the Company redesigned its employee benefits to offer health insurance coverage to its contract talent in order to meet the requirements of the PPACA’s employer mandate. The U.S.
In March 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (the “PPACA”) were signed into law in the U.S. In 2015, the Company redesigned its employee benefits to offer health insurance coverage to its contract talent in order to meet the requirements of the PPACA’s employer mandate. The U.S.
Risks Related to the Company’s Information Technology, Cybersecurity and Data Protection Company and third-party computer, technology and communications hardware and software systems are vulnerable to damage, unauthorized access, and disruption that could expose the Company to material operational, financial, and reputational damage (including the unauthorized access to, or exposure of, personal and confidential information).
Risks Related to the Company’s Information Technology, Cybersecurity and Data Protection Company and third-party computer, technology and communications hardware and software systems are vulnerable to damage, unauthorized access, and disruption that could expose the Company to material operational, financial, and reputational damage (including the unauthorized access to, or exposure of, personal and confidential information and intellectual property).
In the ordinary course of business, the Company collects, uses, and retains personal information from its clients, employees, employment candidates, and contractors, including, without limitation, full names, government-issued identification numbers, addresses, birthdates, and payroll-related information.
In the ordinary course of business, the Company collects, uses, and retains personal information from its clients, employees, candidates, and contractors, including, without limitation, full names, government-issued identification numbers, addresses, phone numbers, birthdates, and payroll-related information.
Failure to identify and respond to risk issues in a timely manner could have a material adverse effect on the Company's business. Although the Company has processes in place to attempt to identify and respond to risk issues in a timely manner, the Company's efforts may not be sufficient.
Failure to identify and respond to risk issues in a timely manner could have a material adverse effect on the Company ’ s business. Although the Company has processes in place to attempt to identify and respond to risk issues in a timely manner, the Company’s efforts may not be sufficient.
The damage or disruption to Company or third-party systems, or unauthorized access to, or exposure of, personal or confidential information, could harm the Company’s operations, reputation and brand, resulting in a loss of business or revenue.
The damage or disruption to Company or third-party systems, or unauthorized access to, or exposure of, intellectual property or personal or confidential information, could harm the Company’s operations, reputation and brand, resulting in a loss of business or revenue.
Additionally, as the Company expands existing service offerings, adds new service offerings, or enters new markets, it may become subject to additional restrictions and regulations which may impede its business, increase costs and impact profitability. The Company’s business is subject to extensive government regulation and a failure to comply with regulations could harm its business.
Additionally, as the Company expands existing service offerings, adds new service offerings, or enters new markets, it may become subject to additional restrictions and regulations which may impede its business, increase costs and impact profitability. The Company ’ s business is subject to extensive government regulation and a failure to comply with regulations could harm its business.
The Company may also incur additional expenses, such as the cost of remediating incidents or improving security measures, the cost of identifying and retaining replacement vendors, increased costs of insurance, or ransomware payments. Cybersecurity threats continue to increase in frequency and sophistication, thereby increasing the difficulty of detecting and defending against them.
The Company may also incur additional expenses, including the cost of remediating incidents or improving security measures, the cost of identifying and retaining replacement vendors, increased costs of insurance, or ransomware payments. Cybersecurity threats continue to increase in frequency and sophistication, thereby increasing the difficulty of detecting and defending against them.
Item 1A. Risk Factors The Company’s business prospects are subject to various risks and uncertainties that impact its business. The most important of these risks and uncertainties are as follows: Risks Related to the Company’s Business Environment Any reduction in global economic activity may harm the Company’s business and financial condition.
Item 1A. Risk Factors The Company’s business prospects are subject to various risks and uncertainties that impact its business. The most important of these risks and uncertainties are as follows: Risks Related to the Company’s Business Environment Any reduction in global economic activity may harm the Company ’ s business and financial condition.
Because the principal factors upon which competition is based are reputation, technology, tools, project methodologies, price of services, and depth of skills of personnel, there can be no assurance that Protiviti will be successful in attracting and retaining clients or be able to maintain the technology, personnel, and other requirements to successfully compete. Protiviti’s operations could subject it to liability.
Because the principal factors upon which competition is based are reputation, technology, tools, project methodologies, price of services, and depth of skills of personnel, there can be no assurance that Protiviti will be successful in attracting and retaining clients or be able to maintain the technology, personnel, and other requirements to successfully compete. 7 Protiviti ’ s operations could subject it to liability.
The demand for the Company’s services related to regulatory compliance may decline. The operations of both the staffing services business and Protiviti include services related to Sarbanes-Oxley, Anti-Money Laundering Act of 2020 reviews, and other regulatory compliance services. There can be no assurance that there will be ongoing demand for these services.
The operations of both the staffing services business and Protiviti include services related to Sarbanes-Oxley, Anti-Money Laundering Act of 2020 reviews, and other regulatory compliance services. There can be no assurance that there will be ongoing demand for these services.
Further, continued or intensifying economic, political or regulatory uncertainty in the Company’s markets could reduce demand for the Company’s services. The Company’s business depends on a strong reputation and anything that harms its reputation will likely harm its results.
Further, continued or intensifying economic, political or regulatory uncertainty in the Company’s markets could reduce demand for the Company’s services. The Company ’ s business depends on a strong reputation and anything that harms its reputation will likely harm its results.
Government regulations may result in prohibition or restriction of certain types of employment services or the imposition of additional licensing or tax requirements that may reduce the Company’s future earnings. In many jurisdictions in which the Company operates, the employment services industry is heavily regulated.
Government regulations may result in prohibition or restriction of certain types of employment services or the imposition of additional licensing or tax requirements that may reduce the Company ’ s future earnings. In many jurisdictions in which the Company operates, the employment services industry is heavily regulated.
Further, detecting, investigating and resolving actual or alleged violations is expensive and can consume significant time and attention of the Company’s senior management. Health care reform could increase the costs of the Company’s contract staffing operations .
Further, detecting, investigating and resolving actual or alleged violations is expensive and can consume significant time and attention of the Company’s senior management. Health care reform could increase the costs of the Company ’ s contract staffing operations .
In addition, the Company’s systems contain personal and confidential information, including information of importance to the Company, and its employees, vendors, contractors, and clients.
In addition, the Company’s systems contain personal and confidential information and intellectual property, including information of importance to the Company, and its employees, vendors, contractors, and clients.
Changes in data privacy and protection laws and regulations in respect of control of personal information (and the failure to comply with such laws and regulations) could increase the Company’s costs or otherwise adversely impact its operations, financial results, and reputation.
Changes in data privacy and protection laws and regulations in respect of control of personal information (and the failure to comply with such laws and regulations) could increase the Company ’ s costs or otherwise adversely impact its operations, financial results, and reputation.
The Company’s results of operations and ability to grow could be materially negatively affected if it cannot successfully keep pace with technological changes impacting the development and implementation of its services and the evolving needs of its clients.
The Company ’ s results of operations and ability to grow could be materially negatively affected if it cannot successfully keep pace with technological changes impacting the development and implementation of its services and the evolving needs of its clients.
Although the Company has implemented policies and procedures designed to ensure compliance with Anti-Bribery Laws, economic sanctions, anti-forced labor and other laws and regulations, the Company cannot be sure that its employees, agents or other third parties will not violate such policies or applicable laws and regulations.
Although the Company has implemented policies and procedures designed to ensure compliance with Anti-Bribery Laws, U.S. export control laws, economic sanctions, anti-forced labor and other laws and regulations, the Company cannot be 10 sure that its employees, agents or other third parties will not violate such policies or applicable laws and regulations.
Risks Related to the Company’s Internal Controls and Accounting Policies Failure to maintain adequate financial and management processes and controls could lead to errors in the Company’s financial reporting. Failure to maintain adequate financial and management processes and controls could lead to errors in the Company’s financial reporting.
Risks Related to the Company’s Internal Controls and Accounting Policies Failure to maintain adequate financial and management processes and controls could lead to errors in the Company ’ s financial reporting. Failure to maintain adequate financial and management processes and controls could lead to errors in the Company’s financial reporting.
Cyberattacks, including attacks motivated by the desire for monetary gain, geopolitics, grievances against the business services industry in general or against the Company in particular, may disable or damage its systems or the systems of its vendors or clients, or allow unauthorized access to, or exposure of, personal or confidential information, including information about employees, vendors, candidates, contractors and clients.
Cyberattacks, including attacks motivated by the desire for monetary gain, embarrassment, geopolitics, and grievances against the business services industry in general or against the Company in particular, could potentially disable or damage its systems or the systems of its vendors or clients, or allow unauthorized access to, or exposure of, intellectual property and personal or confidential information, including information about employees, vendors, candidates, contractors and clients.
The Company’s ability to manage its operations through the use of these systems successfully is critical to its success and largely depends upon the efficient and uninterrupted operation of its computer, technology and communications systems, some of which are managed by third-party vendors.
The Company’s ability to manage its operations using these systems successfully is critical to its success and largely depends upon the efficient and uninterrupted operation of its and third parties’ computer, technology and communications systems, some of which are managed and run by third-party vendors.
Congress to further delay or, in some cases, remove the requirements of Sarbanes-Oxley for a number of public companies. These or other similar modifications of the regulatory requirements could decrease demand for Protiviti’s services. Demand for the Company’s services from government and public sector clients related to the COVID-19 pandemic may decrease over time.
Congress to further delay or, in some cases, remove the requirements of Sarbanes-Oxley for a number of public companies. These or other similar modifications of the regulatory requirements could decrease demand for Protiviti’s services. Demand for the Company ’ s services from government and public sector clients may decrease over time.
The Company’s security tools, controls and practices, including those relating to identity and access management, credential strength, and the security tools, controls and practices of its vendors and clients, may not prevent access, damage or disruption to Company or third-party systems or the unauthorized access to, exposure of, personal or confidential information.
The Company’s security tools, controls and practices, including those relating to identity and access management, credential strength, and the security tools, controls and practices of its vendors and clients, may not prevent or detect access, damage or disruption to Company or third-party computer, technology, and communications hardware and software systems or the unauthorized access to, or exposure of, intellectual property or personal or confidential information.
Whether or not there is alternative health care legislation enacted in the U.S., there is likely to be significant disruption to the health care market in the coming months and years, and the costs of the Company’s health care expenditures may increase.
Whether or not there is alternative health care legislation enacted in the U.S., there is likely to be significant disruption to the health care market in the coming months and years, and the costs of the Company’s health care expenditures may increase. U.S. federal tax regulations and interpretations could adversely affect the Company.
This transition to remote working has also increased the Company’s vulnerability to risks related to the Company’s computer and communications hardware and software systems and exacerbated certain related risks, including risks of phishing and other cybersecurity attacks.
The Company has transitioned a significant number of the Company’s employee population to remote work. This transition to remote working has also increased the Company’s vulnerability to risks related to the Company’s computer, technology, and communications hardware and software systems and has exacerbated certain related risks, including risks of phishing and other cybersecurity attacks.
It is unknown whether the shift in projects with state, local and other public sector clients will ultimately maintain the same level of business or to what extent business with the public sector may decrease as the effects of the pandemic lessen or change over time.
It is unknown whether the shift in projects with state, local and other public sector clients will ultimately maintain the same level of business or to what extent business with the public sector may decrease as the effects of the pandemic lessen or change over time. Long-term contracts do not comprise a significant portion of the Company ’ s revenue.
There are many approaches through which such systems could be damaged or disrupted, or information exposed or accessed, including through system vulnerabilities, improperly obtaining and using user credentials or the misuse of authorized user access.
There are many approaches through which such systems could be damaged or disrupted, or information exposed or accessed, including through system vulnerabilities, configuration errors, vendor vulnerabilities, failing to patch or upgrade systems, social engineering, cyberattacks, improperly obtaining and using user credentials, malfeasance or the misuse of authorized user access.
Notwithstanding the reduction in the corporate income tax rate, the overall impact of these changes on the Company’s results of operations will likely evolve as new regulations and interpretations relating to the TCJA are implemented.
On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) was signed into law. Notwithstanding the reduction in the corporate income tax rate, the overall impact of these changes on the Company’s results of operations will likely evolve as new regulations and interpretations relating to the TCJA are implemented.
There are many competitors, some of which have greater resources than Protiviti and many of which have been in operation far longer than Protiviti . In particular, Protiviti faces competition from the “Big Four” accounting firms, which have been in operation for a considerable period of time and have established reputations and client bases.
In particular, Protiviti faces competition from the “Big Four” accounting firms, which have been in operation for a considerable period of time and have established reputations and client bases.
During 2021 and 2022 the Company reported increased business from services rendered to the public sector during the pandemic due to, among other developments, the volume of unemployment claims and housing assistance claims, as well as the demands faced by public school districts that must meet the technical support requirements of virtual learning models.
In recent periods, the Company reported increased business from services rendered to the public sector due to, among other developments, the volume of unemployment claims and housing assistance claims, as well as the demands faced by public school districts.
Such suits seek, as applicable, unspecified amounts for unpaid overtime compensation, penalties, and other damages, as well as attorneys’ fees. It is not possible to predict the outcome of these lawsuits. However, these lawsuits may consume substantial amounts of the Company’s financial and managerial resources and might result in adverse publicity, regardless of the ultimate outcome of the lawsuits.
It is not possible to predict the outcome of these lawsuits. However, these lawsuits may consume substantial amounts of the Company’s financial and managerial resources and might result in adverse publicity, regardless of the ultimate outcome of the lawsuits.
The countries in which we operate may, among other things: • create additional regulations that prohibit or restrict the types of employment services that the Company currently provides; • require new or additional benefits be paid to the Company’s employees; • require the Company to obtain additional licensing to provide employment services; or • increase taxes, such as sales or value-added taxes, payable by the providers of temporary workers.
Additionally, trade unions in some countries have used the political process to target the industry in an effort to increase the regulatory burden and expense associated with offering or utilizing temporary staffing solutions. 9 The countries in which the Company operates may, among other things: • create additional regulations that prohibit or restrict the types of employment services that the Company currently provides; • require new or additional benefits be paid to the Company’s employees; • require the Company to obtain additional licensing to provide employment services; or • increase taxes, such as sales or value-added taxes, payable by the providers of temporary workers.
Furthermore, the potential risk of security breaches and cyberattacks may increase as the Company introduces new service offerings. Any future events impacting the Company or its third-party vendors that damages or interrupts the Company's or its third party vendors’ systems or exposes data or other confidential information could have a material adverse effect on our operations, reputation, and financial results.
Any future events impacting the Company or its third-party vendors that damages or interrupts the Company’s or its third-party vendors’ computer, technology, and communications hardware and software systems or exposes intellectual property or data or other confidential information could have a material adverse effect on our operations, reputation, and financial results.
The possession and use of personal information in conducting the Company’s business subjects it to a variety of complex and evolving domestic and foreign laws and regulations regarding data privacy, which, in many cases, apply not only to third-party transfers, but also to transfers of information among the Company and its subsidiaries.
The possession and use of personal information in conducting the Company’s business subjects it to a variety of complex and evolving domestic and foreign laws and regulations regarding data privacy.
In addition, we are in the process of establishing certain emissions targets and other environmental goals. Failure to achieve such goals, or a perception (whether valid or invalid) of our failure to achieve such goals, could result in market, reputational, regulatory or liability risks, client dissatisfaction, reduced revenue and profitability or shareholder lawsuits.
Failure to achieve such goals, or a perception (whether valid or invalid) of our failure to achieve such goals, could result in market, reputational, regulatory or liability risks, client dissatisfaction, reduced revenue and profitability or shareholder lawsuits. If the Company is unable to achieve our environmental goals, our business and reputation may be adversely affected.
While the Company has navigated the COVID-19 pandemic thus far, its continuation or worsening may have a negative impact on the Company’s business. Natural disasters and unusual weather conditions, pandemic outbreaks, terrorist acts, global political events and other serious catastrophic events could disrupt business and otherwise materially adversely affect the Company ’ s business and financial condition.
Natural disasters and unusual weather conditions, pandemic outbreaks, terrorist acts, global political events and other serious catastrophic events could disrupt business and otherwise materially adversely affect the Company ’ s business and financial condition.
The business of Protiviti consists of providing business consulting and internal audit services. Liability could be incurred, or litigation could be, and from time-to-time has been, instituted against the Company or Protiviti for claims related to these activities or to prior transactions or activities.
In some cases, the Company has agreed to indemnify its clients in respect of these types of claims. Liability could be incurred, or litigation could be, and from time-to-time has been, instituted against the Company or Protiviti for claims related to these activities or to prior transactions or activities.
In addition, certain geopolitical events, including the spread of COVID-19 and Russia’s invasion of Ukraine, have caused significant economic, market, political or regulatory uncertainty in some of the Company’s markets.
In addition, certain geopolitical events, including the ongoing war between Russia and Ukraine, the war between Israel and Hamas, and the expanding conflict throughout the Middle East have caused significant economic, market, political or regulatory uncertainty in some of the Company’s markets.
If cybersecurity incidents were to occur in such a way, the Company may face legal and contractual liability, reputational damage, loss of business, and other expenses. The Company also incurs a risk of liability to its clients resulting from allegations of errors, omissions or theft by its temporary employees, or allegations of misuse of client confidential information.
If cybersecurity incidents were to occur in such a way, the Company may face legal and contractual liability, reputational damage, loss of business, and other expenses.
To the extent climate change causes changes in weather patterns, certain regions where we operate could experience increases in storm intensity, extreme temperatures, wildfires, rising sea-levels and/or drought. Over time, these conditions could result in increases in our operating costs or business interruptions.
The physical effects of climate change could have a material adverse effect on our operations and business. To the 12 extent climate change causes changes in weather patterns, certain regions where the Company operates could experience increases in storm intensity, extreme temperatures, wildfires, rising sea-levels and/or drought.
For example, the Company is currently named as a defendant in litigation challenging its compliance with the Fair Credit Reporting Act.
For example, the Company is currently named as a defendant in litigation challenging its compliance with the Fair Credit Reporting Act, PAGA litigation in California alleging wage and hour and other Labor code compliance issues, and litigation in Washington relating to compliance with the Washington Equal Pay and Opportunities Act.
The Company’s processes, corporate culture and general ethical climate may not be sufficient to ensure timely identification and escalation of significant risk issues. Risks Associated With the Effects of Climate Change The physical effects of climate change could have a material adverse effect on our operations and business.
The Company’s processes, corporate culture and general ethical climate may not be sufficient to ensure timely identification and escalation of significant risk issues. Risks Associated With the Effects of Climate Change The Company may be adversely affected by global climate change or by legal, regulatory or market responses to such change.
Before the COVID-19 pandemic, unemployment in the U.S. was at historic lows and during the second half of 2021, as the economy recovered, competition for workers in a number of industries became intense. When unemployment levels are low, finding sufficient eligible candidates to meet employers’ demands is more challenging.
Candidates generally seek contract or permanent positions through multiple sources, including the Company and its competitors. Unemployment in the U.S. has been at historic lows in recent periods and competition for workers in a number of industries is intense. When unemployment levels are low, finding sufficient eligible candidates to meet employers’ demands is more challenging.
If the value of the U.S. dollar strengthens relative to other currencies, the Company’s reported income from these operations could decrease. For example, in 2022, the Company’s revenues were unfavorably impacted by currency exchange rates as the U.S. dollar strengthened against the Euro and British pound.
If the value of the U.S. dollar strengthens relative to other currencies, the Company’s reported income from these operations could decrease.
For example, our headquarters is located in an area of California where the incidence of wildfire has increased over time and may continue to increase. There can be no assurance that climate change will 11 not have a material adverse effect on our properties, operations or business.
Over time, these conditions could result in increases in our operating costs or business interruptions. For example, our headquarters is located in an area of California where the incidence of wildfire has increased over time and may continue to increase.
There can be no assurance that such liability or litigation will not have a material adverse impact on Protiviti or the Company. Legal and Regulatory Risks The Company and certain subsidiaries are defendants in several lawsuits that could cause the Company to incur substantial liabilities .
There can be no assurance that such liability or litigation will not have a material adverse impact on Protiviti or the Company. The Company is dependent on its management personnel and employees, and a failure to attract and retain such personnel could harm its business. The Company is engaged in the services business.
While Protiviti has retained its key personnel to date, there can be no assurance that it will continue to be able to do so. Protiviti operates in a highly competitive business and faces competitors who are significantly larger and have more established reputations. As with the Company’s staffing services business, the barriers to entry are quite low.
Protiviti operates in a highly competitive business and faces competitors who are significantly larger and have more established reputations. As with the Company’s talent solutions services business, the barriers to entry are quite low. There are many competitors, some of which have greater resources than Protiviti and many of which have been in operation far longer than Protiviti.
Although it is not possible to predict such events or their consequences, these events could materially adversely affect the Company's reputation, business and financial condition. Risks Related to the Company’s Operations The Company may be unable to find sufficient candidates for its talent solutions business. The Company’s talent solutions services business consists of the placement of individuals seeking employment.
Risks Related to the Company’s Operations The Company may be unable to find sufficient candidates for its talent solutions business. The Company’s talent solutions services business consists of the placement of individuals seeking employment. There can be no assurance that candidates for employment will continue to seek employment through the Company.
Removed
The outbreak of a novel coronavirus disease ( “ COVID-19 ”) in 2020 impacted demand for the Company’s services, disrupted the Company’s operations, and may continue to do so. The COVID-19 outbreak emerged as a serious threat to the health and economic well-being of the Company’s clients, candidates, employees, and the overall economy.
Added
For example, in 2023, the U.S. dollar strengthened against the Canadian Dollar and Australian Dollar, as well as weakened against the Euro, British Pound and Brazilian Real, the net of which resulted in a nominal impact to the Company’s revenues.
Removed
At various times during the outbreak, many counties, states and countries took dramatic action including, without limitation, ordering all nonessential workers to stay home, mandating the closure of schools and nonessential business premises, and imposing isolation measures on large portions of the population.
Added
Although it is not possible to predict such events or their consequences, these events could materially adversely affect the Company’s reputation, business and financial condition. 6 Failure to meet ESG commitments could harm the Company ’ s reputation. The Company has public environmental, social, and governance (“ESG”) commitments, including environmental targets designed to have a positive impact on climate.
Removed
These measures, while intended to protect human life, had serious adverse impacts on domestic and foreign economies and may do so in the future if they are reintroduced.
Added
The Company’s ability to achieve these goals is subject to a multitude of risks that may be outside of the Company’s control.
Removed
The emergence of new variants of the coronavirus or of other illnesses may cause a rapid deterioration of economic conditions and the financial and credit markets, which could have a material adverse impact on the Company’s business, financial condition, results of operations, and cash flows.
Added
The Company’s failure or perceived failure to achieve ESG goals or maintain ESG practices that meet evolving stakeholder expectations could harm the Company’s reputation, adversely impact the Company’s ability to attract and retain employees or clients, and expose the Company to increased scrutiny from the investment community and enforcement authorities.
Removed
There can be no assurance that candidates for employment will continue to seek employment through the Company. Candidates generally seek contract or permanent positions through multiple sources, including the Company and its competitors.
Added
The Company’s reputation also may be harmed by the perceptions that clients, employees and other stakeholders have about the Company’s action or inaction on social, ethical, or political issues.
Removed
There can be no assurance that the Company will be able to attract and retain the personnel that are essential to its success.
Added
Damage to the Company’s reputation and loss of brand equity may reduce demand for the Company’s services and thus have an adverse effect on future financial results, as well as require additional resources to rebuild the Company’s reputation and restore the value of the brands and could also reduce the Company’s stock price.
Removed
The future impact of the pandemic and its effects on the needs of the Company’s clients are impossible to fully predict, and there can be no assurance that the Company’s increased business in the public sector will be sustained. Long-term contracts do not comprise a significant portion of the Company’s revenue.
Added
The Company also incurs a risk of liability to its clients resulting from allegations of damages caused by temporary employees acting on phishing emails and cyber attacks and other errors, omissions or theft by its temporary employees, or allegations of compromise of client confidential information.
Removed
The nature of these arrangements further exacerbates the difficulty in predicting the Company's future results. Protiviti may be unable to attract and retain key personnel. Protiviti is a services business and is dependent upon its ability to attract and retain qualified, skilled personnel.
Added
The business of Protiviti consists of providing business consulting and internal audit services. Protiviti risks liability from allegations of damages caused by errors, omissions or misconduct by its employees working on consulting engagements or from damages caused by its employees acting on phishing emails and cyber attacks, or allegations of compromise of client confidential information.
Removed
Additionally, trade unions in some countries have used the political process to target the industry in an effort to increase the regulatory burden and expense associated with offering or utilizing temporary staffing solutions.
Added
A failure to retain key management personnel could disrupt the Company’s succession strategy, hindering a smooth transition to new leadership and potentially disrupting the Company’s operations.
Removed
In the past, the Company and its third-party vendors have experienced other data security incidents resulting from unauthorized access to the Company's systems and other fraudulent activities. 10 The Company has transitioned a significant number of the Company’s employee population to a remote work environment in an effort to mitigate the spread of COVID-19.
Added
The Company uses artificial intelligence in its services which may result in operational challenges, legal liability, reputational concerns and privacy and competitive risks.
Removed
If we are unable to achieve our environmental goals, our business and reputation may be adversely affected. General Risk Factors U.S. federal tax regulations and interpretations could adversely affect the Company. On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) was signed into law.
Added
The Company currently uses and intends to leverage its own and third parties’ artificial intelligence (“AI”) processes and algorithms and its own evolving and third parties’ cognitive, analytical and artificial intelligence applications in its daily operations for Protiviti and talent solutions, including by deploying generative AI into the Company’s talent solutions search operations.
Added
Protiviti expanded its service offerings to include AI risk analysis, policy creation, governance, and technology selection and architecture.
Added
The use of AI by talent solutions and provision of AI related services by Protiviti may result in operational challenges, legal liability, reputational concerns and privacy and competitive risks which could result in adverse effects to the Company’s financial condition, results or reputation.
Added
Generative AI products and services leverage existing and widely available technologies, such as Chat GPT-4 and its successors, or alternative large language models or other processes.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2022, contract talent solutions and permanent placement talent solutions activities were conducted through 317 offices located in the U.S., Canada, the United Kingdom, Belgium, Brazil, France, the Netherlands, Germany, Luxembourg, Switzerland, Japan, China, Singapore, Australia, New Zealand, Austria, the United Arab Emirates, Chile and Ireland.
Biggest changeAs of December 31, 2023, contract talent solutions and permanent placement talent solutions activities were conducted through 313 offices located in the U.S., Australia, Austria, Belgium, Brazil, Canada, Chile, China, France, Germany, Ireland, Japan, Luxembourg, the Netherlands, New Zealand, Singapore, Switzerland, the United Arab Emirates, and the United Kingdom.
As of December 31, 2022, Protiviti had 65 offices in the U.S., Canada, Australia, China, France, Germany, Italy, the Netherlands, Japan, Singapore, India, Switzerland and the United Kingdom. All of the offices are leased.
As of December 31, 2023, Protiviti had 65 offices in the U.S., Australia, Bulgaria, Canada, China, France, Germany, India, Italy, Japan, the Netherlands, Singapore, Switzerland and the United Kingdom. All of the offices are leased.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Company believes it has meritorious defenses to the allegations and the Company intends to continue to vigorously defend against the litigation. 12 The Company is involved in a number of other lawsuits arising in the ordinary course of business.
Biggest changeThe Company believes it has meritorious defenses to the allegations and the Company intends to continue to vigorously defend against the litigation. The Company is involved in a number of other lawsuits arising in the ordinary course of business.
At this stage of the litigation, it is not feasible to predict the outcome of or a range of loss, should a loss occur, from this proceeding and, accordingly, no amounts have been provided in the Company’s Financial Statements.
At this stage of the litigation, it is not feasible to predict the outcome of or a range of loss, should a loss occur, from this proceeding and, accordingly, no amounts have been provided in the Company’s Financial Statements.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+2 added−3 removed1 unchanged
Biggest changeIssuer Purchases of Equity Securities Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans Maximum Number of Shares that May Yet Be Purchased Under Publicly Announced Plans (b) October 1, 2022 to October 31, 2022 — $ — — 4,658,630 November 1, 2022 to November 30, 2022 222,790 $ 74.87 222,790 4,435,840 December 1, 2022 to December 31, 2022 667,311 (a) $ 73.24 602,357 3,833,483 Total October 1, 2022 to December 31, 2022 890,101 825,147 (a) Includes 64,954 shares repurchased in connection with employee stock plans, whereby Company shares were tendered by employees for the payment of applicable withholding taxes.
Biggest changeIssuer Purchases of Equity Securities Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans Maximum Number of Shares that May Yet Be Purchased Under Publicly Announced Plans (b) October 1, 2023 to October 31, 2023 50,000 $ 73.76 50,000 11,421,115 November 1, 2023 to November 30, 2023 287,783 (a) $ 79.76 287,341 11,133,774 December 1, 2023 to December 31, 2023 393,482 (b) $ 86.29 347,673 10,786,101 Total October 1, 2023 to December 31, 2023 731,265 685,014 (a) Includes 442 shares repurchased in connection with employee stock plans, whereby Company shares were tendered by employees for the payment of applicable withholding taxes.
The information presented in the graph was obtained by the Company from outside sources it considers to be reliable but has not been independently verified by the Company. (a) This index represents the cumulative total return of the Company and the following corporations providing temporary or permanent employment services: Kelly Services, Inc.; Kforce Inc.; ManpowerGroup; and Resources Connection Inc.
The information presented in the graph was obtained by the Company from outside sources it considers to be reliable but has not been independently verified by the Company. (a) This index represents the cumulative total return of the Company and the following corporations providing contract or permanent employment services: Kelly Services Inc.; Kforce Inc.; ManpowerGroup; and Resources Connection Inc.
(b) Commencing in October 1997, the Company's Board of Directors has, at various times, authorized the repurchase, from time to time, of the Company's common stock on the open market or in privately negotiated transactions depending on market conditions.
(c) Commencing in October 1997, the Company’s Board of Directors has, at various times, authorized the repurchase, from time to time, of the Company’s common stock on the open market or in privately negotiated transactions depending on market conditions.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Price, Dividends and Related Matters The Company’s Common Stock is listed for trading on the New York Stock Exchange under the symbol “RHI”. On January 31, 2023, there were 1,373 holders of record of the Common Stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Price, Dividends and Related Matters The Company’s Common Stock is listed for trading on the New York Stock Exchange under the symbol “RHI”. On January 31, 2024, there were 1,439 holders of record of the Common Stock.
Such plan authorizes the issuance of stock options, restricted stock, stock units and stock appreciation rights to directors, executive officers and employees. 14 Stock Performance Graph The following graph compares, through December 31, 2022, the cumulative total return of the Company’s Common Stock, an index of certain publicly traded employment services companies, and the S&P 500.
Since plan inception, a total of 138,000,000 shares have been authorized for repurchase, of which 127,213,899 shares have been repurchased as of December 31, 2023. 16 Stock Performance Graph The following graph compares, through December 31, 2023, the cumulative total return of the Company’s Common Stock, an index of certain publicly traded employment services companies, and the S&P 500.
Removed
Since plan inception, a total of 128,000,000 shares have been authorized for repurchase, of which 124,166,517 shares have been repurchased as of December 31, 2022.
Added
The Company has paid a quarterly dividend since April 2004. Future declarations of dividends and the establishment of future record dates and payment dates are subject to the final determination of the Company’s Board of Directors.
Removed
As disclosed in Note P— “ Subsequent Events ” to the Company’s Consolidated Financial Statements included under Part II—Item 8 of this report, on February 9, 2023, an additional 10,000,000 shares have been authorized for repurchase bringing the total repurchase authorization since plan inception to 138,000,000.
Added
(b) Includes 45,809 shares repurchased in connection with employee stock plans, whereby Company shares were tendered by employees for the payment of applicable withholding taxes.
Removed
Equity Compensation Plan Information Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights A Weighted average exercise price of outstanding options, warrants and rights B Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column A) C Equity compensation plans approved by security holders — — 3,606,195 Equity compensation plans not approved by security holders — — — Total — — 3,606,195 Since May 2005 all grants have been made pursuant to the Stock Incentive Plan which was approved by stockholders in May 2005, and re-approved in May 2008, May 2011, May 2013, May 2014, and May 2019.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

76 edited+17 added−10 removed23 unchanged
Biggest changeThe Company's selling, general and administrative expenses by reportable segment are summarized as follows (in thousands): Year Ended December 31, Relationships As Reported As Adjusted As Reported As Adjusted 2022 2021 2022 2021 2022 2021 2022 2021 Selling, General and Administrative Expenses Contract talent solutions $ 1,248,378 $ 1,251,565 $ 1,311,748 $ 1,204,844 27.5 % 31.0 % 28.9 % 29.8 % Permanent placement talent solutions 587,164 468,028 596,084 462,518 81.0 % 82.1 % 82.2 % 81.2 % Protiviti 281,754 231,689 281,754 231,689 14.2 % 12.5 % 14.2 % 12.5 % Total $ 2,117,296 $ 1,951,282 $ 2,189,586 $ 1,899,051 29.3 % 30.2 % 30.3 % 29.4 % The following tables provide reconciliations of the non-GAAP selling, general and administrative expenses to reported selling, general and administrative expenses for the years ended 2022 and 2021 (in thousands): Year Ended December 31, 2022 Contract talent solutions Permanent placement talent solutions Protiviti Total $ % of Revenue $ % of Revenue $ % of Revenue $ % of Revenue Selling, General and Administrative Expenses As Reported $ 1,248,378 27.5 % $ 587,164 81.0 % $ 281,754 14.2 % $ 2,117,296 29.3 % Adjustments (1) 63,370 1.4 % 8,920 1.2 % — — 72,290 1.0 % As Adjusted $ 1,311,748 28.9 % $ 596,084 82.2 % $ 281,754 14.2 % $ 2,189,586 30.3 % Year Ended December 31, 2021 Contract talent solutions Permanent placement talent solutions Protiviti Total $ % of Revenue $ % of Revenue $ % of Revenue $ % of Revenue Selling, General and Administrative Expenses As Reported $ 1,251,565 31.0 % $ 468,028 82.1 % $ 231,689 12.5 % $ 1,951,282 30.2 % Adjustments (1) (46,721) (1.2 %) (5,510) (0.9 %) — — (52,231) (0.8 %) As Adjusted $ 1,204,844 29.8 % $ 462,518 81.2 % $ 231,689 12.5 % $ 1,899,051 29.4 % (1) Changes in the Company’s deferred compensation obligations related to talent solutions operations are included in selling, general and administrative expenses, while the related investment (income) loss is presented separately.
Biggest changeThe Company’s selling, general and administrative expenses by reportable segment are summarized as follows (in thousands): Year Ended December 31, Relationships As Reported As Adjusted As Reported As Adjusted 2023 2022 2023 2022 2023 2022 2023 2022 Selling, General and Administrative Expenses Contract talent solutions $ 1,320,752 $ 1,248,378 $ 1,256,497 $ 1,311,748 33.9 % 27.5 % 32.3 % 28.9 % Permanent placement talent solutions 498,881 587,164 491,377 596,084 87.9 % 81.0 % 86.6 % 82.2 % Protiviti 287,898 281,754 287,898 281,754 14.9 % 14.2 % 14.9 % 14.2 % Total $ 2,107,531 $ 2,117,296 $ 2,035,772 $ 2,189,586 33.0 % 29.3 % 31.8 % 30.3 % The following tables provide reconciliations of the non-GAAP selling, general and administrative expenses to reported selling, general and administrative expenses for the years ended December 31, 2023, and 2022 (in thousands): Year Ended December 31, 2023 Contract talent solutions Permanent placement talent solutions Protiviti Total $ % of Revenue $ % of Revenue $ % of Revenue $ % of Revenue Selling, General and Administrative Expenses As Reported $ 1,320,752 33.9 % $ 498,881 87.9 % $ 287,898 14.9 % $ 2,107,531 33.0 % Adjustments (1) (64,255) (1.6 %) (7,504) (1.3 %) — — (71,759) (1.2 %) As Adjusted $ 1,256,497 32.3 % $ 491,377 86.6 % $ 287,898 14.9 % $ 2,035,772 31.8 % Year Ended December 31, 2022 Contract talent solutions Permanent placement talent solutions Protiviti Total $ % of Revenue $ % of Revenue $ % of Revenue $ % of Revenue Selling, General and Administrative Expenses As Reported $ 1,248,378 27.5 % $ 587,164 81.0 % $ 281,754 14.2 % $ 2,117,296 29.3 % Adjustments (1) 63,370 1.4 % 8,920 1.2 % — — 72,290 1.0 % As Adjusted $ 1,311,748 28.9 % $ 596,084 82.2 % $ 281,754 14.2 % $ 2,189,586 30.3 % (1) Changes in the Company’s employee deferred compensation plan obligations related to talent solutions operations are included in selling, general and administrative expenses, while the related investment (income) loss is presented separately.
Combined segment income is income before income taxes, adjusted for interest income and amortization of intangible assets. The Company provides combined segment income because it is how management evaluates segment performance.
Combined segment income is income before income taxes, adjusted for interest income and amortization of intangible assets. The Company provides combined segment income because it is how management evaluates performance.
The Company expects that internally generated cash will be sufficient to support the working capital needs of the Company, the Company’s fixed payments, dividends, and other obligations on both a short-term and long-term basis. There is limited visibility into future cash flows as the Company’s revenues and net income are dependent on macroeconomic conditions.
The Company expects that internally generated cash will be sufficient to support the working capital needs of the Company, the Company’s fixed payments, dividends, and other obligations on both a short-term and long-term basis. There is limited visibility into future cash flows as the Company’s revenues and net income are largely dependent on macroeconomic conditions.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Certain information contained in Management’s Discussion and Analysis and in other parts of this report may be deemed forward-looking statements regarding events and financial trends that may affect the future operating results or financial positions of Robert Half International Inc. (the “Company”).
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Certain information contained in Management’s Discussion and Analysis and in other parts of this report may be deemed forward-looking statements regarding events and financial trends that may affect the future operating results or financial positions of Robert Half Inc. (the “Company”).
While management believes that its judgments and interpretations regarding income taxes are appropriate, significant differences in actual experience may materially affect the future financial results of the Company. 17 Recent Accounting Pronouncements See Note B— “ New Accounting Pronouncements ” to the Company’s Consolidated Financial Statements included under Part II—Item 8 of this report.
While management believes that its judgments and interpretations regarding income taxes are appropriate, significant differences in actual experience may materially affect the future financial results of the Company. 19 Recent Accounting Pronouncements See Note B— “ New Accounting Pronouncements ” to the Company’s Consolidated Financial Statements included under Part II—Item 8 of this report.
The Company’s investments in headcount are typically structured to proactively support and align with expected revenue growth trends and productivity metrics. Visibility into future revenues is limited not only due to the dependence on macroeconomic conditions noted above, but also because of the relatively short duration of the Company’s client engagements.
The Company’s investments in headcount are typically structured to proactively support and align with expected revenue growth trends and productivity metrics. Visibility into future revenues is limited not only due to the dependence on macroeconomic and labor market conditions noted above, but also because of the relatively short duration of the Company’s client engagements.
The Company’s talent solutions business conducts placement activities through 317 offices in 42 states, the District of Columbia, and 18 foreign countries, while Protiviti has 65 offices in 23 states and 13 foreign countries. Non-GAAP Financial Measures The financial results of the Company are prepared in conformity with accounting principles generally accepted in the U.S.
The Company’s talent solutions business conducts placement activities through 313 offices in 42 states, the District of Columbia, and 18 foreign countries, while Protiviti has 65 offices in 23 states and 13 foreign countries. Non-GAAP Financial Measures The financial results of the Company are prepared in conformity with accounting principles generally accepted in the U.S.
Years ended December 31, 2021 and 2020 A discussion of changes regarding the Company's financial condition and results of operations for the year ended December 31, 2021, compared to the year ended December 31, 2020, can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on February 14, 2022, which is available free of charge on the SEC’s website at www.sec.gov and at www.roberthalf.com/investor-center.
Years ended December 31, 2022 and 2021 A discussion of changes regarding the Company’s financial condition and results of operations for the year ended December 31, 2022, compared to the year ended December 31, 2021, can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 10, 2023, which is available free of charge on the SEC’s website at www.sec.gov and at www.roberthalf.com/investor-center.
Because reimbursable expenses for permanent placement talent solutions are de minimis, the increase in gross margin dollars is substantially explained by the increase in revenues previously discussed. Gross margin dollars for Protiviti represent revenues less costs of services, which consist primarily of professional staff payroll, payroll taxes, benefit costs, and reimbursable expenses.
Because reimbursable expenses for permanent placement talent solutions are de minimis, the decrease in gross margin dollars is substantially explained by the decrease in revenues previously discussed. Gross margin dollars for Protiviti represent revenues less costs of services, which consist primarily of professional staff payroll, payroll taxes, benefit costs, and reimbursable expenses.
(“GAAP”) and the rules of the SEC. To help readers understand the Company’s financial performance, the Company supplements its GAAP financial results with the following non-GAAP measures: adjusted gross margin; adjusted selling, general and administrative expense; combined segment income; and as adjusted revenue growth rates.
(“GAAP”) and the rules of the SEC. To help readers understand the Company’s financial performance, the Company supplements its GAAP financial results with the following non-GAAP measures: adjusted gross margin; adjusted selling, general and administrative expenses; combined segment income; and as adjusted revenue growth rates.
In the event the Company vacates a location prior to the end of the lease term, the Company may be obliged to continue making lease payments. For further information, see Note F— “ Leases ” to the Company’s Consolidated Financial Statements included under Part II—Item 8 of this report. 24 Purchase Obligations.
In the event the Company vacates a location prior to the end of the lease term, the Company may be obliged to continue making lease payments. For further information, see Note G— “ Leases ” to the Company’s Consolidated Financial Statements included under Part II—Item 8 of this report. Purchase Obligations.
Additional stock repurchases were made in connection with employee stock plans, whereby Company shares were tendered by employees for the payment of applicable statutory withholding taxes. During the years ended December 31, 2022 and 2021, such repurchases totaled 0.4 million shares, at a cost of $38 million, and 0.3 million shares, at a cost of $30 million, respectively.
Additional stock repurchases were made in connection with employee stock plans, whereby Company shares were tendered by employees for the payment of applicable statutory withholding taxes. During the years ended December 31, 2023 and 2022, such repurchases totaled 0.3 million shares, at a cost of $26 million, and 0.4 million shares, at a cost of $38 million, respectively.
These risks and uncertainties include, but are not limited to, the following: changes to or new interpretations of United States of America (“U.S.”) or international tax regulations, the global financial and economic situation; the duration and impact of the COVID-19 pandemic and efforts to mitigate its spread; changes in levels of unemployment and other economic conditions in the U.S. or foreign countries where the Company does business, or in particular regions or industries; reduction in the supply of candidates for contract employment or the Company’s ability to attract candidates; the entry of new competitors into the marketplace or expansion by existing competitors; the ability of the Company to maintain existing client relationships and attract new clients in the context of changing economic or competitive conditions; the impact of competitive pressures, including any change in the demand for the Company’s services, on the Company’s ability to maintain its margins; the possibility of the Company incurring liability for its activities, including the activities of its engagement professionals, or for events impacting its engagement professionals on clients’ premises; the possibility that adverse publicity could impact the Company’s ability to attract and retain clients and candidates; the success of the Company in attracting, training, and retaining qualified management personnel and other staff employees; the Company’s ability to comply with governmental regulations affecting personnel services businesses in particular or employer/employee relationships in general; whether there will be ongoing demand for Sarbanes-Oxley or other regulatory compliance services; the Company’s reliance on short-term contracts for a significant percentage of its business; litigation relating to prior or current transactions or activities, including litigation that may be disclosed from time to time in the Company’s Securities and Exchange Commission (“SEC”) filings; the ability of the Company to manage its international operations and comply with foreign laws and regulations; the impact of fluctuations in foreign currency exchange rates; the possibility that the additional costs the Company will incur as a result of health care or other reform legislation may adversely affect the Company’s profit margins or the demand for the Company’s services; the possibility that the Company’s computer and communications hardware and software systems could be damaged or their service interrupted or the Company could experience a cybersecurity breach; and the possibility that the Company may fail to maintain adequate financial and management controls and as a result suffer errors in its financial reporting.
These risks and uncertainties include, but are not limited to, the following: changes to or new interpretations of United States of America (“U.S.”) or international tax regulations; the global financial and economic situation; changes in levels of unemployment and other economic conditions in the U.S. or foreign countries where the Company does business, or in particular regions or industries; reduction in the supply of candidates for contract employment or the Company’s ability to attract candidates; the development, proliferation and adoption of artificial intelligence (“AI”) by the Company and the third parties it serves; the entry of new competitors into the marketplace or expansion by existing competitors; the ability of the Company to maintain existing client relationships and attract new clients in the context of changing economic or competitive conditions; the impact of competitive pressures, including any change in the demand for the Company’s services, on the Company’s ability to maintain its margins; the possibility of the Company incurring liability for its activities, including the activities of its engagement professionals, or for events impacting its engagement professionals on clients’ premises; the possibility that adverse publicity could impact the Company’s ability to attract and retain clients and candidates; the success of the Company in attracting, training, and retaining qualified management personnel and other staff employees; the Company’s ability to comply with governmental regulations affecting personnel services businesses in particular or employer/employee relationships in general; whether there will be ongoing demand for Sarbanes-Oxley or other regulatory compliance services; the Company’s reliance on short-term contracts for a significant percentage of its business; litigation relating to prior or current transactions or activities, including litigation that may be disclosed from time to time in the Company’s SEC filings; the ability of the Company to manage its international operations and comply with foreign laws and regulations; the impact of fluctuations in foreign currency exchange rates; the possibility that the additional costs the Company will incur as a result of health care or other reform legislation may adversely affect the Company’s profit margins or the demand for the Company’s services; the possibility that the Company’s computer and communications hardware and software systems could be damaged or their service interrupted or the Company could experience a cybersecurity breach; and the possibility that the Company may fail to maintain adequate financial and management controls and as a result suffer errors in its financial reporting.
“Quantitative and Qualitative Disclosures About Market Risk” of this report for further discussion of the impact of foreign currency exchange rates on the Company’s results of operations and financial condition. 18 Years ended December 31, 2022 and 2021 Service Revenues.
“Quantitative and Qualitative Disclosures About Market Risk” of this report for further discussion of the impact of foreign currency exchange rates on the Company’s results of operations and financial condition. 20 Years ended December 31, 2023 and 2022 Service Revenues.
As of December 31, 2022, the Company is authorized to repurchase, from time to time, up to 3.8 million additional shares of the Company’s common stock on the open market or in privately negotiated transactions, depending on market conditions.
As of December 31, 2023, the Company is authorized to repurchase, from time to time, up to 10.8 million additional shares of the Company’s common stock on the open market or in privately negotiated transactions, depending on market conditions.
When appropriate, a valuation allowance is recorded against deferred tax assets to offset future tax benefits that may not be realized. Valuation allowances of $23.6 million and $24.2 million were recorded as of December 31, 2022, and 2021, respectively. The valuation allowances recorded relate primarily to net operating losses in certain international operations.
When appropriate, a valuation allowance is recorded against deferred tax assets to offset future tax benefits that may not be realized. Valuation allowances of $25.8 million and $23.6 million were recorded as of December 31, 2023, and 2022, respectively. The valuation allowances recorded relate primarily to net operating losses in certain international operations.
As realized and unrealized investment gains and losses occur, the Company’s employee deferred compensation obligation to employees changes and adjustments are recorded in selling, general and administrative expenses, or in the case of Protiviti, costs of services. The value of the related investment trust assets also changes by the equal and offsetting amount, leaving no net costs to the Company.
As realized and unrealized investment gains and losses occur, the Company’s employee deferred compensation plan obligations change and adjustments are recorded in selling, general and administrative expenses, or in the case of Protiviti, costs of services. The value of the related investment trust assets 24 also changes by the equal and offsetting amount, leaving no net costs to the Company.
Liquidity and Capital Resources The change in the Company’s liquidity during the years ended December 31, 2022 and 2021, is primarily the net effect of funds generated by operations and the funds used for capital expenditures, investment in employee deferred compensation trusts, net of redemptions from employee deferred compensation trusts, repurchases of common stock, and payment of dividends.
Liquidity and Capital Resources The change in the Company’s liquidity during the years ended December 31, 2023 and 2022, is primarily the net effect of funds generated by operations and the funds used for capital expenditures, investments in employee deferred compensation trusts, net of redemptions from employee deferred compensation trusts, repurchases of common stock, and payments of dividends.
As of December 31, 2022, the Company incurred contractual purchase obligations of $251.3 million primarily related to software subscriptions, services, telecom services and software maintenance agreements. Of this amount, $113.5 million is expected to be paid within the next twelve months. These purchase obligations are incurred during the normal course of business. Employee Deferred Compensation Plan.
As of December 31, 2023, the Company incurred contractual purchase obligations of $201.6 million primarily related to software subscriptions, services, telecom services and software maintenance agreements. Of this amount, $105.3 million is expected to be paid within the next twelve months. These purchase obligations are incurred during the normal course of business. Employee Deferred Compensation Plan.
Revenues from international operations increased 4.9% to $1.53 billion (21.1% of total revenue) for the year ended December 31, 2022, compared to $1.45 billion (22.5% of total revenue) for the year ended December 31, 2021. Contributing factors for each reportable segment are discussed below in further detail.
Revenues from international operations decreased 5.9% to $1.44 billion (22.5% of total revenue) for the year ended December 31, 2023, compared to $1.53 billion (21.1% of total revenue) for the year ended December 31, 2022. Contributing factors for each reportable segment are discussed below in further detail.
As of December 31, 2022, the Company reported deferred compensation plan obligations of $474.1 million in its accompanying Consolidated Statements of Financial Position. The balances are due to employees based upon elections they make at the time of deferring their funds.
As of December 31, 2023, the Company reported employee deferred compensation plan obligations of $572.9 million in its accompanying Consolidated Statements of Financial Position. The balances are due to employees based upon elections they make at the time of deferring their funds.
Repurchases of shares have been funded with cash generated from operations. The Company’s working capital as of December 31, 2022, included $659 million in cash and cash equivalents and $1.02 billion in net accounts receivable, both of which will be a significant source of ongoing liquidity and financial resilience.
Repurchases of shares have been funded with cash generated from operations. The Company’s working capital as of December 31, 2023, included $732 million in cash and cash equivalents and $861 million in net accounts receivable, both of which will be a significant source of ongoing liquidity and financial resilience.
Key drivers of Protiviti revenues are the billable hours worked by consultants on client engagements and average hourly bill rates. The increase in Protiviti revenues for 2022 was primarily due to a 16.5% increase in average hourly bill rates, partially offset by a 9.6% decrease in billable hours.
Key drivers of Protiviti revenues are the billable hours worked by consultants on client engagements and average hourly bill rates. The decrease in Protiviti revenues for 2023 was primarily due to a 6.6% decrease in billable hours, partially offset by a 4.1% increase in average hourly bill rates.
Cash and cash equivalents were $659 million and $619 million at December 31, 2022, and 2021, respectively. Operating activities provided $684 million during the year ended December 31, 2022, offset by $117 million and $509 million of net cash used in investing activities and financing activities, respectively.
Operating activities provided $684 million during the year ended December 31, 2022, offset by $117 million and $509 million of net cash used in investing and financing activities, respectively.
This was composed of net income of $658 million adjusted upward for non-cash items of $254 million, offset by net cash used in changes in working capital of $228 million. Net cash provided by operating activities for the year ended December 31, 2021, was $603 million.
This was composed of net income of $658 million, adjusted upward for non-cash items of $254 million, offset by net cash used in changes in working capital of $228 million. Investing activities—Cash used in investing activities for the year ended December 31, 2023, was $112 million.
The Company’s gross margin dollars were $3.09 billion for the year ended December 31, 2022, up 14.8% from $2.70 billion for the year ended December 31, 2021. Contributing factors for each reportable segment are discussed below in further detail.
The Company’s gross margin dollars were $2.58 billion for the year ended December 31, 2023, down 16.8% from $3.09 billion for the year ended December 31, 2022. Contributing factors for each reportable segment are discussed below in further detail.
In establishing its deferred income tax assets and liabilities and its provision for income taxes, the Company makes judgments and interpretations based on the enacted tax laws that are applicable to its operations in various jurisdictions.
The Company’s operations are subject to U.S. federal, state, local and foreign income taxes. In establishing its deferred income tax assets and liabilities and its provision for income taxes, the Company makes judgments and interpretations based on the enacted tax laws that are applicable to its operations in various jurisdictions.
Historically, demand for permanent placement services is even more sensitive to economic and labor market conditions than demand for contract talent solutions and this is expected to continue. Protiviti revenues were $1.98 billion for the year ended December 31, 2022, increasing by 6.9% compared to revenues of $1.85 billion for the year ended December 31, 2021.
Historically, demand for permanent placement talent solutions is even more sensitive to economic and labor market conditions than demand for contract talent solutions and this is expected to continue. Protiviti revenues were $1.93 billion for the year ended December 31, 2023, decreasing by 2.5% compared to revenues of $1.98 billion for the year ended December 31, 2022.
Capital expenditures, including $40 million related to cloud computing implementations, in 2022, totaled $101 million, approximately 80.0% of which represented investments in software initiatives and technology infrastructure, both of which are important to the Company’s sustainability and future growth opportunities.
Capital expenditures, including $35 million related to cloud computing implementations, in 2023, totaled $81 million, approximately 67% of which represented investments in software initiatives and technology infrastructure, both of which are important to the Company’s sustainability and future growth opportunities.
Contract talent solutions revenues were $4.53 billion for the year ended December 31, 2022, increasing by 12.2% compared to revenues of $4.04 billion for the year ended December 31, 2021. Key drivers of contract talent solutions revenues include average hourly bill rates and the number of hours worked by the Company’s engagement professionals on client engagements.
Contract talent solutions revenues were $3.90 billion for the year ended December 31, 2023, decreasing by 14.1% compared to revenues of $4.53 billion for the year ended December 31, 2022. Key drivers of contract talent solutions revenues include average hourly bill rates and the number of hours worked by the Company’s engagement professionals on client engagements.
This included repurchases of $320 million in common stock and $189 million in dividends paid to stockholders. Cash used in financing activities for the year ended December 31, 2021, was $459 million. This included repurchases of $288 million in common stock and $171 million in dividends paid to stockholders.
This included repurchases of $255 million in common stock and $206 million in dividends paid to stockholders. Cash used in financing activities for the year ended December 31, 2022, was $509 million. This included repurchases of $320 million in common stock and $189 million in dividends paid to stockholders.
As a percentage of revenues, reported selling, general and administrative expenses were 29.3% in 2022, down from 30.2% in 2021. As a percentage of revenues, adjusted selling, general and administrative expenses were 30.3% in 2022, up from 29.4% in 2021. Contributing factors for each reportable segment are discussed below in further detail.
As a percentage of revenues, adjusted selling, general and administrative expenses were 31.8% in 2023, up from 30.3% in 2022. Contributing factors for each reportable segment are discussed below in further detail.
The Company currently expects 2023 capitalized expenditures will range from $100 million to $120 million, of which $65 million to $75 million relates to software initiatives and technology infrastructure, including capitalized costs relating to the implementation of cloud computing arrangements. Financing activities—Cash used in financing activities for the year ended December 31, 2022, was $509 million.
The Company currently expects 2024 capitalized expenditures will range from $90 million to $110 million, of which $45 million to $55 million relates to software initiatives and technology infrastructure, including capitalized costs relating to the implementation of cloud computing arrangements. Financing activities—Cash used in financing activities for the year ended December 31, 2023, was $461 million.
During the years ended December 31, 2022 and 2021, the Company repurchased 3.3 million shares, at a cost of $280 million, and 2.8 million shares, at a cost of $260 million, on the open market, respectively.
During the years ended December 31, 2023 and 2022, the Company repurchased 3.0 million shares, at a cost of $232 million, and 3.3 million shares, at a cost of $280 million, on the open market, respectively.
For the Company’s international operations, 2022 revenues increased 3.4% on a reported basis, and increased 14.8% on an as adjusted basis, compared to 2021. 19 A reconciliation of the non-GAAP year-over-year revenue growth rates to the reported year-over-year revenue growth rates for the year ended December 31, 2022, is presented in the following table: Global United States International Contract talent solutions As Reported 12.2 % 14.7 % 3.5 % Billing Days Impact 0.4 % 0.1 % 0.7 % Currency Impact 1.9 % — 9.0 % As Adjusted 14.5 % 14.8 % 13.2 % Permanent placement talent solutions As Reported 27.2 % 32.7 % 15.0 % Billing Days Impact 0.3 % 0.2 % 0.7 % Currency Impact 3.0 % — 9.7 % As Adjusted 30.5 % 32.9 % 25.4 % Protiviti As Reported 6.9 % 7.8 % 3.4 % Billing Days Impact 0.2 % 0.1 % 0.7 % Currency Impact 2.2 % — 10.7 % As Adjusted 9.3 % 7.9 % 14.8 % Gross Margin .
International revenues for 2023 revenues decreased 2.1% on a reported basis, and decreased 1.8% on an as adjusted basis, compared to 2022. 21 A reconciliation of the non-GAAP year-over-year revenue growth rates to the reported year-over-year revenue growth rates for the year ended December 31, 2023, is presented in the following table: Global United States International Contract talent solutions As Reported -14.1 % -16.4 % -5.0 % Billing Days Impact 0.2 % 0.2 % 0.3 % Currency Impact — — -0.1 % As Adjusted -13.9 % -16.2 % -4.8 % Permanent placement talent solutions As Reported -21.7 % -23.3 % -17.9 % Billing Days Impact 0.1 % 0.2 % 0.3 % Currency Impact 0.1 % — 0.4 % As Adjusted -21.5 % -23.1 % -17.2 % Protiviti As Reported -2.5 % -2.7 % -2.1 % Billing Days Impact 0.1 % 0.2 % 0.3 % Currency Impact — — — As Adjusted -2.4 % -2.5 % -1.8 % Gross Margin .
Permanent placement talent solutions revenues were $725 million for the year ended December 31, 2022, increasing by 27.2% compared to revenues of $570 million for the year ended December 31, 2021. Key drivers of permanent placement talent solutions revenues consist of the number of candidate placements and average fees earned per placement .
Permanent placement talent solutions revenues were $567 million for the year ended December 31, 2023, decreasing by 21.7% compared to revenues of $725 million for the year ended December 31, 2022. Key drivers of permanent placement talent solutions revenues consist of the number of candidate placements and average fees earned per placement .
As a percentage of revenues, adjusted gross margin dollars for Protiviti were 27.9% in 2022, down from 29.0% in 2021.
As a percentage of revenues, adjusted gross margin dollars for Protiviti were 24.6% in 2023, down from 27.9% in 2022.
The Company’s selling, general and administrative expenses consist primarily of staff compensation, advertising, variable overhead, depreciation, and occupancy costs. The Company’s selling, general and administrative expenses were $2.12 billion for the year ended December 31, 2022, up 8.5% from $1.95 billion for the year ended December 31, 2021.
The Company’s selling, general and administrative expenses consist primarily of staff compensation, advertising, variable overhead, depreciation, and occupancy costs. The Company’s reported selling, general and administrative expenses were $2.11 billion for the year ended December 31, 2023, down 0.5% from $2.12 billion for the year ended December 31, 2022.
This was composed of capital expenditures of $61 million, investments in employee deferred compensation trusts of $67 million and $19 million cash paid for an acquisition, partially offset by proceeds from employee deferred compensation trust redemptions of $30 million. Cash used in investing activities for the year ended December 31, 2021, was $88 million.
This was composed of capital expenditures of $61 million, investments in employee deferred compensation trusts of $67 million, and $19 million cash paid for an acquisition, partially offset by proceeds from employee deferred compensation trust redemptions of $30 million.
The Company’s variable direct costs related to its contract talent solutions business will largely fluctuate in relation to its revenues. The Company has an unsecured revolving credit facility (the “Credit Agreement”) of $100 million, which matures in May 2024.
The Company’s variable direct costs related to its contract talent solutions business will largely fluctuate in relation to its revenues. In May 2023, the Company entered into an amendment to extend the maturity of its $100 million unsecured revolving credit facility (the “Credit Agreement”) to May 2026.
The year-over-year decrease in adjusted gross margin percentage was primarily due to lower staff utilization rates. 20 The Company's gross margin by reporting segment is summarized as follows (in thousands): Year Ended December 31, Relationships As Reported As Adjusted As Reported As Adjusted 2022 2021 2022 2021 2022 2021 2022 2021 Gross Margin Contract talent solutions $ 1,804,029 $ 1,598,716 $ 1,804,029 $ 1,598,716 39.8 % 39.6 % 39.8 % 39.6 % Permanent placement talent solutions 723,706 568,983 723,706 568,983 99.8 % 99.8 % 99.8 % 99.8 % Protiviti 566,314 528,329 552,465 537,176 28.6 % 28.5 % 27.9 % 29.0 % Total $ 3,094,049 $ 2,696,028 $ 3,080,200 $ 2,704,875 42.7 % 41.7 % 42.6 % 41.9 % The following tables provide reconciliations of the non-GAAP adjusted gross margin to reported gross margin for the years ended 2022 and 2021 (in thousands): Year Ended December 31, 2022 Contract talent solutions Permanent placement talent solutions Protiviti Total $ % of Revenue $ % of Revenue $ % of Revenue $ % of Revenue Gross Margin As Reported $ 1,804,029 39.8 % $ 723,706 99.8 % $ 566,314 28.6 % $ 3,094,049 42.7 % Adjustments (1) — — — — (13,849) (0.7 %) (13,849) (0.1 %) As Adjusted $ 1,804,029 39.8 % $ 723,706 99.8 % $ 552,465 27.9 % $ 3,080,200 42.6 % Year Ended December 31, 2021 Contract talent solutions Permanent placement talent solutions Protiviti Total $ % of Revenue $ % of Revenue $ % of Revenue $ % of Revenue Gross Margin As Reported $ 1,598,716 39.6 % $ 568,983 99.8 % $ 528,329 28.5 % $ 2,696,028 41.7 % Adjustments (1) — — — — 8,847 0.5 % 8,847 0.2 % As Adjusted $ 1,598,716 39.6 % $ 568,983 99.8 % $ 537,176 29.0 % $ 2,704,875 41.9 % (1) Changes in the Company’s deferred compensation obligations related to Protiviti operations are included in costs of services, while the related investment (income) loss is presented separately.
The year-over-year decrease in adjusted gross margin percentage was primarily due to lower staff utilization rates. 22 The Company’s gross margin by reporting segment is summarized as follows (in thousands): Year Ended December 31, Relationships As Reported As Adjusted As Reported As Adjusted 2023 2022 2023 2022 2023 2022 2023 2022 Gross Margin Contract talent solutions $ 1,549,312 $ 1,804,029 $ 1,549,312 $ 1,804,029 39.8 % 39.8 % 39.8 % 39.8 % Permanent placement talent solutions 566,381 723,706 566,381 723,706 99.8 % 99.8 % 99.8 % 99.8 % Protiviti 459,311 566,314 475,572 552,465 23.8 % 28.6 % 24.6 % 27.9 % Total $ 2,575,004 $ 3,094,049 $ 2,591,265 $ 3,080,200 40.3 % 42.7 % 40.5 % 42.6 % The following tables provide reconciliations of the non-GAAP adjusted gross margin to reported gross margin for the years ended December 31, 2023, and 2022 (in thousands): Year Ended December 31, 2023 Contract talent solutions Permanent placement talent solutions Protiviti Total $ % of Revenue $ % of Revenue $ % of Revenue $ % of Revenue Gross Margin As Reported $ 1,549,312 39.8 % $ 566,381 99.8 % $ 459,311 23.8 % $ 2,575,004 40.3 % Adjustments (1) — — — — 16,261 0.8 % 16,261 0.2 % As Adjusted $ 1,549,312 39.8 % $ 566,381 99.8 % $ 475,572 24.6 % $ 2,591,265 40.5 % Year Ended December 31, 2022 Contract talent solutions Permanent placement talent solutions Protiviti Total $ % of Revenue $ % of Revenue $ % of Revenue $ % of Revenue Gross Margin As Reported $ 1,804,029 39.8 % $ 723,706 99.8 % $ 566,314 28.6 % $ 3,094,049 42.7 % Adjustments (1) — — — — (13,849) (0.7 %) (13,849) (0.1 %) As Adjusted $ 1,804,029 39.8 % $ 723,706 99.8 % $ 552,465 27.9 % $ 3,080,200 42.6 % (1) Changes in the Company’s deferred compensation obligations related to Protiviti operations are included in costs of services, while the related investment (income) loss is presented separately.
The Company's non-GAAP combined segment income is summarized as follows (in thousands): Year Ended December 31, 2022 % of Revenue 2021 % of Revenue Combined Segment Income Contract talent solutions $ 492,281 10.9 % $ 393,872 9.8 % Permanent placement talent solutions $ 127,622 17.6 % $ 106,465 18.7 % Protiviti $ 270,711 13.7 % $ 305,487 16.5 % Total $ 890,614 12.3 % $ 805,824 12.5 % The following table provides a reconciliation of the non-GAAP combined segment income to reported income before income taxes for the years ended December 31, 2022, and 2021 (in thousands): Year Ended December 31, 2022 % of Revenue 2021 % of Revenue Income before income taxes $ 896,955 12.4 % $ 803,780 12.4 % Interest income, net (8,008) (0.1 %) (197) 0.0 % Amortization of intangible assets 1,667 0.0 % 2,241 0.1 % Combined segment income $ 890,614 12.3 % $ 805,824 12.5 % Provision for income taxes .
The Company’s non-GAAP combined segment income is summarized as follows (in thousands): Year Ended December 31, 2023 % of Revenue 2022 % of Revenue Combined Segment Income Contract talent solutions $ 292,815 7.5 % $ 492,281 10.9 % Permanent placement talent solutions 75,004 13.2 % 127,622 17.6 % Protiviti 187,674 9.7 % 270,711 13.7 % Total $ 555,493 8.7 % $ 890,614 12.3 % The following table provides a reconciliation of the non-GAAP combined segment income to reported income before income taxes for the years ended December 31, 2023, and 2022 (in thousands): Year Ended December 31, 2023 % of Revenue 2022 % of Revenue Income before income taxes $ 576,583 9.0 % $ 896,955 12.4 % Interest income, net (23,973) (0.3 %) (8,008) (0.1) % Amortization of intangible assets 2,883 0.0 % 1,667 0.0 % Combined segment income $ 555,493 8.7 % $ 890,614 12.3 % Provision for income taxes .
Gross margin dollars for contract talent solutions were $1.80 billion for the year ended December 31, 2022, up 12.8% from $1.60 billion for the year ended December 31, 2021. As a percentage of revenues, gross margin dollars for contract talent solutions were 39.8% in 2022, up from 39.6% in 2021.
Gross margin dollars for contract talent solutions were $1.55 billion for the year ended December 31, 2023, down 14.1% from $1.80 billion for the year ended December 31, 2022. As a percentage of revenues, gross margin dollars for contract talent solutions were 39.8% in both 2023 and 2022.
The increase in contract talent solutions revenues for 2022 was primarily due to a 9.5% increase in average bill rates and a 2.2% increase in the number of hours worked by the Company's engagement professionals. On an as adjusted basis, contract talent solutions revenues increased 14.5% for 2022, compared to 2021.
The decrease in contract talent solutions revenues for 2023 was primarily due to a 20.8% decrease in the number of hours worked by the Company’s engagement professionals, partially offset by a 7.7% increase in average bill rates. On an as adjusted basis, contract talent solutions revenues decreased 13.9% for 2023, compared to 2022.
Combined segment income was $891 million, or 12.3% of revenues, for the year ended December 31, 2022, up from $806 million, or 12.5% of revenues, for the year ended December 31, 2021.
Combined segment income was $555 million, or 8.7% of revenues, for the year ended December 31, 2023, down from $891 million, or 12.3% of revenues, for the year ended December 31, 2022.
Revenues from U.S. operations increased 14.1% to $5.71 billion (78.9% of total revenue) for the year ended December 31, 2022, compared to $5.01 billion (77.5% of total revenue) for the year ended December 31, 2021.
Revenues from U.S. operations decreased 13.2% to $4.96 billion (77.5% of total revenue) for the year ended December 31, 2023, compared to $5.71 billion (78.9% of total revenue) for the year ended December 31, 2022.
As of December 31, 2022, the Company reported current and long-term operating lease liabilities of $86.1 million and $151.8 million, respectively. These balances consist of the minimum rental commitments for 2023 and thereafter, discounted to reflect the Company’s cost of borrowing, under non-cancelable lease contracts executed as of December 31, 2022. The majority of these leases are for real estate.
These balances consist of the minimum rental commitments for 2024 and thereafter, discounted to reflect the Company’s cost of borrowing, under non-cancelable lease contracts executed as of December 31, 2023. 26 The majority of these leases are for real estate.
Gross margin dollars for Protiviti were $566 million for the year ended December 31, 2022, up 7.2% from $528 million for the year ended December 31, 2021. As a percentage of revenues, reported gross margin dollars for Protiviti were 28.6% in 2022, up from 28.5% in 2021.
Gross margin dollars for Protiviti were $459 million for the year ended December 31, 2023, down 18.9% from $566 million for the year ended December 31, 2022. As a percentage of revenues, reported gross margin dollars for Protiviti were 23.8% in 2023, down from 28.6% in 2022.
Selling, general and administrative expenses for contract talent solutions were $1.25 billion for the year ended December 31, 2022, flat compared to the year ended December 31, 2021. As a percentage of revenues, reported selling, general and administrative expenses for contract talent solutions were 27.5% in 2022, down from 31.0% in 2021.
Selling, general and administrative expenses for contract talent solutions, on an as-reported basis, were $1.32 billion for the year ended December 31, 2023, increasing 5.8% from $1.25 billion the year ended December 31, 2022. As a percentage of revenues, reported selling, general and administrative expenses for contract talent solutions were 33.9% in 2023, up from 27.5% in 2022.
This was composed of net income of $599 million, adjusted upward for non-cash items of $89 million, offset by net cash used in changes in working capital of $85 million. 23 Investing activities—Cash used in investing activities for the year ended December 31, 2022, was $117 million.
This was composed of net income of $411 million, adjusted upward for non-cash items of $79 million, and cash provided by changes in working capital of $147 million. Net cash provided by operating activities for the year ended December 31, 2022, was $684 million.
In the U.S., 2022 revenues increased 14.7% on a reported basis, and increased 14.8% on an as adjusted basis, compared to 2021. For the Company’s international operations, 2022 revenues increased 3.5% on a reported basis, and increased 13.2% on an as adjusted basis, compared to 2021.
In the U.S., 2023 revenues decreased 16.4% on a reported basis, and decreased 16.2% on an as adjusted basis, compared to 2022. International revenues for 2023 decreased 5.0% on a reported basis, and decreased 4.8% on an as adjusted basis, compared to 2022.
In the U.S., 2022 revenues increased 7.8% on a reported basis, and increased 7.9% on an as adjusted basis, compared to 2021.
On an as adjusted basis, Protiviti revenues decreased 2.4% for 2023 compared to 2022. In the U.S., 2023 revenues decreased 2.7% on a reported basis, and decreased 2.5% on an as adjusted basis, compared to 2022.
There were no borrowings under the Credit Agreement as of December 31, 2022, or December 31, 2021. On February 9, 2023, the Company announced a quarterly dividend of $0.48 per share to be paid to all shareholders of record as of February 24, 2023. The dividend will be paid on March 15, 2023. Material Cash Requirements from Contractual Obligations Leases.
On February 13, 2024, the Company announced a quarterly dividend of $0.53 per share to be paid to all shareholders of record as of February 23, 2024. The dividend will be paid on March 15, 2024. Material Cash Requirements from Contractual Obligations Leases.
The Company’s (income) loss from investments held in employee deferred compensation trusts was a loss of $86 million for the year ended December 31, 2022, down from income of $61 million for the year ended December 31, 2021.
The Company’s (income) loss from investments held in employee deferred compensation trusts was income of $88 million for the year ended December 31, 2023, and a loss of $86 million for the year ended December 31, 2022. The income from trust investments was due to positive market returns during 2023. Income Before Income Taxes and Segment Income.
Operating activities provided $603 million during the year ended December 31, 2021, offset by $88 million and $459 million of net cash used in investing and financing activities, respectively. Operating activities—Net cash provided by operating activities for the year ended December 31, 2022, was $684 million.
Cash and cash equivalents were $732 million and $659 million at December 31, 2023, and 2022, respectively. Operating activities provided $637 million during the year ended December 31, 2023, offset by $112 million and $461 million of net cash used in investing activities and financing activities, respectively.
The increase in permanent placement talent solutions revenues for 2022 was primarily due to an 18.6% increase in the number of placements and an 8.6% increase in average fees earned per placement. On an as adjusted basis, permanent placement talent solutions revenues increased 30.5% for 2022 compared to 2021.
The decrease in permanent placement talent solutions revenues for 2023 was due to a 24.1% decrease in the number of placements, partially offset by a 2.4% increase in average fees earned per placement. On an as adjusted basis, permanent placement talent solutions revenues decreased 21.5% for 2023 compared to 2022.
The Company’s revenues were $7.24 billion for the year ended December 31, 2022, increasing by 12.0%, compared to $6.46 billion for the year ended December 31, 2021.
The Company’s revenues were $6.39 billion for the year ended December 31, 2023, a decrease of 11.7%, compared to $7.24 billion for the year ended December 31, 2022.
For further information, see Note I— “ Employee Deferred Compensation Plans ” to the Company’s Consolidated Financial Statements included under Part II—Item 8 of this report.
Assets of these plans are held by an independent trustee for the benefit of participating employees and consist of money market funds and mutual funds. For further information, see Note J— “ Employee Deferred Compensation Plans ” to the Company’s Consolidated Financial Statements included under Part II—Item 8 of this report.
Selling, general and administrative expenses for permanent placement talent solutions were $587 million for the year ended December 31, 2022, increasing by 25.5% from $468 million for the year ended December 31, 2021. As a percentage of revenues, reported selling, general and administrative expenses for permanent placement talent solutions services were 81.0% in 2022, down from 82.1% in 2021.
As a percentage of revenues, reported selling, general and administrative expenses for permanent placement talent solutions services were 87.9% in 2023, up from 81.0% in 2022.
In the U.S., 2022 revenues increased 32.7% on a reported basis, and increased 32.9% on an as adjusted basis, compared to 2021. For the Company’s international operations, 2022 revenues increased 15.0% on a reported basis, and increased 25.4% on an as adjusted basis, compared to 2021.
In the U.S., 2023 revenues decreased 23.3% on a reported basis, and decreased 23.1% on an as adjusted basis, compared to 2022. International revenues for 2023 revenues decreased 17.9% on a reported basis, and decreased 17.2% on an as adjusted basis, compared to 2022.
This year-over-year improvement in gross margin percentage was primarily due to higher conversion revenues. Gross margin dollars for permanent placement talent solutions represent revenues less reimbursable expenses. Gross margin dollars for permanent placement talent solutions were $724 million for the year ended December 31, 2022, up 27.2% from $569 million for the year ended December 31, 2021.
Gross margin dollars for permanent placement talent solutions represent revenues less reimbursable expenses. Gross margin dollars for permanent placement talent solutions were $566 million for the year ended December 31, 2023, down 21.7% from $724 million for the year ended December 31, 2022.
Borrowings under the Credit Agreement will bear interest in accordance with the terms of the borrowing, which typically will be calculated according to the LIBOR, or an alternative base rate, plus an applicable margin. The Credit Agreement is subject to certain financial covenants and the Company was in compliance with these covenants as of December 31, 2022.
Borrowings under the Credit Agreement will bear interest in accordance with the terms of the borrowing which, effective May 2023, will be calculated according to the Adjusted Term Secured Overnight Financing Rate (“SOFR”), or an alternative base rate, plus an applicable margin.
The decrease in income from trust investments was due to negative market returns in 2022. 22 Income Before Income Taxes and Segment Income. The Company’s total income before income taxes was $897 million, or 12.4% of revenues, for the year ended December 31, 2022, up from $804 million or 12.4% of revenues for the year ended December 31, 2021.
The Company’s total income before income taxes was $577 million, or 9.0% of revenues, for the year ended December 31, 2023, down from $897 million or 12.4% of revenues for the year ended December 31, 2022.
These statements may be identified by words such as “estimate,” “forecast,” “project,” “plan,” “intend,” “believe,” “expect,” “anticipate,” or variations or negatives thereof or by similar or comparable words or phrases. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the statements.
Forward-looking statements are not guarantees or promises that goals or targets will be met. These statements may be identified by words such as “anticipate,” “estimate,” “forecast,” “target,” “project,” “plan,” “intend,” “believe,” “expect,” “should,” “could,” “would,” “may,” “might,” “will,” or variations or negatives thereof or by similar or comparable words or phrases.
Because long-term contracts are not a significant part of the Company’s business, future results cannot be reliably predicted by considering past trends or extrapolating past results. Executive Overview During 2022 the Company unified its family of Robert Half brands to focus on its key brand, Robert Half.
Because long-term contracts are not a significant part of the Company’s business, future results cannot be reliably predicted by considering past trends or extrapolating past results. Executive Overview The Company’s results were impacted by the ongoing macroeconomic uncertainty that affects client and candidate confidence, lengthening decision cycles.
This was composed of capital expenditures of $37 million and investments in employee deferred compensation trusts of $85 million, partially offset by proceeds from employee deferred compensation trust redemptions of $34 million.
This was composed of capital expenditures of $46 million, investments in employee deferred compensation trusts of $103 million and $1 million cash paid for an acquisition, partially offset by proceeds from employee deferred compensation trust redemptions of $38 million. Cash used in investing activities for the year ended December 31, 2022, was $117 million.
As a percentage of revenues, adjusted selling, general and administrative expenses for permanent placement talent solutions was 82.2% in 2022, up from 81.2% in 2021, due primarily to higher staff compensation costs. 21 Selling, general and administrative expenses for Protiviti were $282 million for the year ended December 31, 2022, increasing by 21.6% from $232 million for the year ended December 31, 2021.
As a percentage of revenues, adjusted selling, general and administrative expenses for contract talent solutions were 32.3% in 2023, up from 28.9% in 2022, due primarily to negative leverage as revenues decreased as a result of economic conditions. 23 Selling, general and administrative expenses for permanent placement talent solutions were $499 million for the year ended December 31, 2023, decreasing by 15.0% from $587 million for the year ended December 31, 2022.
As a percentage of revenues, adjusted selling, general and administrative expenses for contract talent solutions were 28.9% in 2022, down from 29.8% in 2021, due primarily to positive leverage from an increase in revenues.
As a percentage of revenues, selling, general and administrative expenses for Protiviti were 14.9% in 2023, up from 14.2% in 2022, due primarily to negative leverage as revenues decreased as a result of economic conditions.
The provision for income taxes was 26.6% and 25.5% for the years ended December 31, 2022 and 2021, respectively. The higher tax rate for 2022 can be primarily attributed to higher non-deductible expenses in 2022, as well as lower stock compensation deductions due to the Company's stock price.
The provision for income taxes was 28.7% and 26.6% for the years ended December 31, 2023 and 2022, respectively. The higher tax rate for 2023 can be attributed to an increased impact of nondeductible expenses and fewer tax credits.
See Note C— “ Revenue Recognition ” to the Company’s Consolidated Financial Statements included under Part II—Item 8 of this report. Income Taxes. The Company’s operations are subject to U.S. federal, state, local and foreign income taxes.
Revenues are recognized when promised goods or services are delivered to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. See Note C— “ Revenue Recognition ” to the Company’s Consolidated Financial Statements included under Part II—Item 8 of this report. Income Taxes.
Accordingly, the Company’s headcount and other investments are typically assessed on at least a quarterly basis. During 2022 the Company increased headcount across all segments, when compared to prior year-end levels. Critical Accounting Policies and Estimates As described below, the Company’s most critical accounting policies and estimates are those that involve subjective decisions or assessments. Service Revenues.
Accordingly, the Company’s headcount and other investments are typically assessed on at least a quarterly basis. During 2023 the Company decreased headcount for its contract talent solutions and permanent placement talent solutions segments, while full-time headcount for its Protiviti segment remained flat, when compared to prior year-end levels.
The U.S. economic backdrop during 2022 was conducive to growth for the Company as real gross domestic product (“GDP”) increased 2.1% in 2022, compared to an increase of 5.7% in 2021, while the unemployment rate declined from 3.9% in December 2021, to 3.5% in December 2022. Although recent metrics have come off all-time highs, talent shortages persist.
Demand for the Company’s contract talent solutions, permanent placement talent solutions, and Protiviti is largely dependent upon general economic and labor trends both domestically and abroad. The U.S. real gross domestic product increased 2.5% in 2023, compared to an increase of 2.1% in 2022, while the unemployment rate rose from 3.5% in December 2022, to 3.7% in December 2023.
In the U.S., unemployment stands at a 50-year low and remains even lower for those with a college degree, where the rate is 1.9%. Similar reports across the global also point to labor market resilience. While there remains volatility in the macroeconomic environment, the Company is optimistic about its outlook for 2023.
Although recent metrics are modestly off their peaks, global labor markets remain tight and the scarcity of talent persists. In the U.S., unemployment stands near a 50-year low and remains even lower for those with a college degree, where the rate is 2.1%.
The timing of these payments may change based upon factors including termination of the Company’s employment arrangement with a participant. Assets of these plans are held by an independent trustee for the sole benefit of participating employees and consist of money market funds and mutual funds.
The timing of these payments may change based upon factors including termination of the Company’s employment arrangement with a participant. These obligations are funded through contributions to investment trusts whose assets at December 31, 2023, are substantially equal to the obligations.
The Company derives its revenues from three segments: contract talent solutions, permanent placement talent solutions, and Protiviti. Revenues are recognized when promised goods or services are delivered to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
Critical Accounting Policies and Estimates As described below, the Company’s most critical accounting policies and estimates are those that involve subjective decisions or assessments. Service Revenues. The Company derives its revenues from three segments: contract talent solutions, permanent placement talent solutions, and Protiviti.
As a percentage of revenues, selling, general and administrative expenses for Protiviti were 14.2% in 2022, up from 12.5% in 2021, due primarily to operating expenditures returning to more normal levels following lower levels of expenditures experienced during the COVID-19 pandemic.
As a percentage of revenues, adjusted selling, general and administrative expenses for permanent placement talent solutions were 86.6% in 2023, up from 82.2% in 2022, due primarily negative leverage as revenues decreased as a result of economic conditions.
Removed
This simplifies the Company’s go-to-market brand structure for clients and candidates, provides leverage for greater brand awareness, and allows future flexibility to expand the Company’s existing functional specializations.
Added
In addition, historical, current, and forward-looking information about the Company’s environmental, social, and governance (“ESG”) and compliance programs, including targets or goals, may not be considered material for the Securities and Exchange Commission (“SEC”) reporting purposes and may be based on standards for measuring progress that are still developing, on internal controls, diligence, or processes that are evolving, and on assumptions that are subject to change in the future.
Removed
In connection with this process, the Company’s current financial statement disclosures reflect new names for its reportable segments, including contract talent solutions (formerly temporary and consultant staffing), permanent placement talent solutions (formerly permanent placement staffing) and Protiviti (formerly risk consulting and internal audit services). What was previously referred to as staffing operations is now referred to as talent solutions.
Added
Forward-looking statements are estimates only, based on management’s current expectations, currently available information and current strategy, plans, or forecasts, and involve certain known and unknown risks, uncertainties, and assumptions that are difficult to predict and often beyond our control and are inherently uncertain.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeBecause substantially all the Company’s international operations generated revenues and incurred expenses within the same country and currency, the effect of lower reported revenues is largely offset by the decrease in reported operating expenses. Reported net income was $6.5 million, or 1.1% lower in 2022, due to the effect of foreign currency exchange rates.
Biggest changeBecause substantially all the Company’s international operations generated revenues and incurred expenses within the same country and currency, the impact of foreign currency exchange rates on reported net income was also nominal for the year ended December 31, 2023.
Although currency fluctuations impact the Company’s reported results and shareholders’ equity, such fluctuations generally do not affect cash flow or result in actual economic gains or losses. The Company generally has few cross-border transfers of funds, consisting of dividends from the Company’s foreign subsidiaries, and transfers to and from the U.S. related to intercompany working capital requirements. 25
Although currency fluctuations impact the Company’s reported results and shareholders’ equity, such fluctuations generally do not affect cash flow or result in actual economic gains or losses. The Company generally has few cross-border transfers of funds, consisting of dividends from the Company’s foreign subsidiaries, and transfers to and from the U.S. related to intercompany working capital requirements. 27
If foreign currency exchange rates were to remain at January 2023 levels throughout 2023, the currency impact on the Company’s full-year reported revenues would be favorable, offset by an unfavorable impact on operating expenses. These results will likely have an immaterial impact on reported net income.
If foreign currency exchange rates were to remain at January 2024 levels throughout 2024, the currency impact on the Company’s full-year reported revenues would be favorable, offset by an unfavorable impact on operating expenses. These results will likely have an immaterial impact on reported net income.
For the one month ended January 31, 2023, the U.S. dollar has weakened against the Euro, British Pound, Australian Dollar, Canadian Dollar and the Brazilian Real since December 31, 2022.
For the one month ended January 31, 2024, the U.S. dollar has weakened against the British pound, Brazilian real, the Euro, Canadian dollar and Australian dollar since December 31, 2023.
Exchange rates impact the U.S. dollar value of the Company’s reported revenues, expenses, earnings, assets and liabilities. For the year ended December 31, 2022, approximately 21.1% of the Company’s revenues were generated outside of the U.S.. These operations transact business in their functional currency, which is the same as their local currency.
Exchange rates impact the U.S. dollar value of the Company’s reported revenues, expenses, earnings, assets and liabilities. For the year ended December 31, 2023, approximately 22.5% of the Company’s revenues were generated outside of the U.S. These operations transact business in their functional currency, which is the same as their local currency.
Consequently, as the value of the U.S. dollar changes relative to the currencies of the Company’s international markets, the Company’s reported results vary. During 2022, the U.S. dollar generally strengthened against the primary currencies in which the Company conducts business, compared to one year ago.
Consequently, as the value of the U.S. dollar changes relative to the currencies of the Company’s international markets, the Company’s reported results vary.
Removed
Foreign currency exchange rates had the effect of decreasing reported service revenues by $139.1 million, or 2.2%, in 2022. The general strengthening of the U.S. dollar also affected the reported level of expenses incurred in the Company’s international operations.
Added
During 2023, the U.S. dollar had mixed results against the primary currencies in which the Company conducts business, compared to one year ago, strengthening against the Australian dollar and Canadian dollar, and weakening against the Euro, British pound and the Brazilian real. These fluctuations resulted in a nominal impact on reported revenues for the year ended December 31, 2023.

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