Staffing firms report a rough Q3 as US hiring slips

The US job market has been softening for months, with uneven gains and record layoffs continuing throughout October, HR Brew reported. Now it seems staffing firms, the performance of which often mirrors that of the market, are stalling.

Q3 earnings from Robert Half, Kelly Services, and Randstad all revealed YoY revenues in decline, sending their stock prices plummeting in a sign of the times, according to Barrons.

“While we aren’t getting regular weekly and monthly payrolls data from the government right now, the action in these stocks seems to be painting a grim picture,” according to a report from Bespoke Investment Group, Barrons reported.

Robert Half saw its YoY revenue decline by 8% to $1.3 billion, as caution around the market sidelined some employers and job seekers, according to its Oct. 22 earnings call.

“While the macroeconomic backdrop is generally unchanged, we are seeing some early signs of improvement as trade policy volatility becomes business as usual and the probability of multiple interest rate cuts rises,” M. Keith Waddell, president and CEO of Robert Half, said during the call.

Jorge Vazquez, CFO at Randstad, echoed that sentiment during the staffing firm’s Oct. 22 earnings call.

“While clients and caution are favoring flexibility, the actual hiring confidence remained extremely low and our permanent placements felt that impact,” Vazquez said.

Randstad and Kelly Services also saw YoY revenues decline—by 1.2% to $6.7 billion and by 9.9% to $935 million, respectively—as their customers navigated a weakened job market. In September, Kelly Services announced the appointment of its new CEO, Chris Layden, followed by a restructuring and 2% reduction in force, as part of a move toward efficiency, Business Insider reported.

“The operating environment is evolving, driven by a dynamic macroeconomic landscape, global and domestic policy shifts, a sluggish labor market, and the AI boom,” Layden said in prepared remarks during the firm’s Nov. 6 earnings call.

The Adecco Group appeared to be an outlier, with its YoY revenue increasing by 3.4% to $6.7 billion, driven in part by 20% YoY revenue growth in North America, as well as the firm’s coaching and skilling services, executives said during the Nov. 6 earnings call.

“Companies, even with AI, they will need people and we need experts to recruit permanently,” Denis Machuel, CEO of The Adecco Group, said. “This is a moment where we’re a bit low on that business, but progressively, I believe it will recover, but not now.”