Q4 2020 Robert Half International Inc Earnings Call
Hello, and welcome to the Robert half fourth quarter 2020 conference call. Our hosts for todays call are Mr. Keith Waddell, President and Chief Executive Officer of Robert half and Mr. Michael Buckley, Chief Financial Officer, Mr. Waddell you may begin.
Thank you Hello, everyone. We appreciate your time today before we get started and I like to remind you that the comments made on today's call contain forward looking statements, including predictions and estimates about our future performance.
These statements represent our current judgment of what the future holds however, they are subject to risks and uncertainties that could cause actual results to differ materially from the forward looking statements. These risks and uncertainties are described in today's press release and and our most recent 10-K chin.
K and 10-Q filed with the SEC.
We assume no obligation to update the statements made on today's call.
During this presentation, we may mention some non-GAAP financial measures and reference these figures as as adjusted reconciliations and further explanations of these measures are included and a supplemental schedule to our earnings press release.
In addition, we'd like to remind you that beginning last quarter, we modified our presentation of revenues and the related growth rates for Accountemps office team, Robert half technology, and Robert half management resources to include their inter segment revenues from services provided to <unk>.
In connection with the company's blended staffing and consulting solutions.
Okay.
This is how we measure and manage these divisions internally the combined amount of divisional inter segment revenues with Protiviti is also separately disclosed.
The supplemental schedule as just mentioned also include a revenue schedule showing this information back for 2018, 2019, as well as 'twenty and 'twenty for.
For your convenience our prepared remarks for today's call are available and the Investor Centre of our website at Robert half Dot Com.
Fourth quarter results for both our Protiviti and staffing operations were very strong and exceeded the top end of our guidance range.
Protiviti reported its 13th consecutive quarter of year on year revenue gains with particular strength and it's technology consulting practice and managed solutions with staffing.
Staffing operations reported broad based double digit quarter on quarter sequential revenue growth on an as adjusted basis.
Could not be more proud of our teams have managed through this extraordinary year over the past several months they've made significant impacts, helping our clients succeed and job candidates find meaningful work.
Companywide revenues were 1.3 dollars 4 billion and the fourth quarter of 'twenty and 'twenty down 15% from last year's fourth quarter on a reported basis and down 16% when and as adjusted basis.
Net income per share and the fourth quarter was 84 cents compared to 98 cents and the fourth quarter one year ago.
Cash flow before financing activities during the quarter was 85 million and December we distributed a 34 cents per share cash dividend to our shareholders of record.
For a total cash outlay of $39 million. We also acquired 1.1 million Robert half shares during the quarter for $63 million. We have nine 9 million shares available for repurchase under our board approved stock repurchase plan.
Turn on invested capital for the company was 31% and the fourth quarter.
Now I'll turn the call over to our CFO, Mike Buckley.
Thank you Keith and Hello, everyone.
Let's start with revenues as Keith noted global revenues were 1.304 billion and the fourth quarter. This is a decrease of 15% from the fourth quarter, one year ago on a reported basis and a decrease of 16% on an as adjusted basis.
On an as adjusted basis fourth quarter staffing revenues were down 24% year over year.
U S staffing revenues were $723 million down 25% from the prior year non.
Non U S staffing revenues were $219 million down 23% year over year on an as adjusted basis.
We have 326 staffing locations worldwide, including 88 locations in 17 countries outside the United States.
And the fourth quarter, there were 61, seven billing days equal to the number of billing days and the fourth quarter one year ago.
The current first quarter has 62, three billing days compared to 63, one billing days in the first quarter one year ago.
The billing days for 2021 by quarter or 62, 363.4, 64.4, and 61.7 for a total of 251 eight days, which is approximately one day less than the 2000 and 2020 due.
To it being a leap year.
Currency exchange rate movements during the fourth quarter had the effect of increasing reported year over year staffing revenues by $8 million. This increased our year over year reported staffing revenue growth rate by 0.7 percentage points temp.
Temporary and consulting and bill rates for the quarter increased 2% compared to a year ago adjusted for changes in the mix of revenues by line of business. This rate for Q3 2020 was three 1%.
Now, let's take a closer look at revenues for Protiviti.
Global revenues in the fourth quarter were $362 million.
And $294 million and that is from business within the United States and $68 million is from operations outside the United States on an as adjusted basis Global fourth quarter Protiviti revenues were up 18% versus the year ago period with U S. Protiviti revenues up 23% non U.
<unk> revenues were down 2% on an as adjusted basis exchange rates had the effect of increasing year over year, protiviti revenues by $3 million and increasing its year over year reported growth rate by one percentage point.
Protiviti and its independently owned member firms serve clients through a network of 86 locations in 28 countries.
Turning to SG&A presentation.
And as first noted last quarter changes and the company's deferred compensation obligations are now included in SG&A or in the case of productivity direct cost with offsetting changes in the investment trust assets presented separately below SG&A.
As a reminder, our historical discussion of consolidated operating income has been replaced with a non-GAAP measure of combined segment income.
This is calculated as consolidated income before income taxes adjusted for interest income and amortization of intangible assets.
For your convenience we've added another supplemental schedule to today's earnings release on pages, 12, and 13, highlighting the impact of changes and the deferred compensation accounts to the summary of operations for the fourth quarter and full year 2020, and 2019. This is a non-GAAP disclosure.
And so we also show a reconciliation to GAAP.
Turning now to gross margin.
And our temporary and consulting and staffing operations fourth quarter gross margin was 38, 5% of applicable revenues compared to 38% of applicable of applicable revenues in the fourth quarter one year ago.
The year over year increase and gross margin percentage is primarily due to lower payroll taxes insurance and other fringe costs.
Our permanent placement revenues and the fourth quarter were nine 7% of consolidated staffing revenues versus 10, 3% of consolidated staffing revenues in the same quarter, one year ago, when combined with temporary and consulting gross margin overall staffing gross margin increased 10 basis points compared to the year ago Force.
Quarter to 44, 4%.
For Protiviti gross margin was $96 million in the fourth quarter or 26, 5% of Protiviti revenues. This includes $5 million or one 5% of Protiviti revenues of day.
FERC compensation expenses related to increases and the underlying trust investment assets.
One year ago gross margin for Protiviti was $90 million or 29, 7% of protiviti revenues, including $2 million of deferred compensation expense or 0.7% Protiviti revenues related to investment trust activities.
Companywide selling general and administrative costs were 32, 6% of global revenues in the fourth quarter compared to 32, 8% and the same quarter one year ago.
Deferred compensation expenses related to increases and underlying trust investments had the impact of increasing SG&A as a percent of revenue to two 7% in the current third quarter, and one 2% and the same quarter one year ago.
Staffing SG&A costs were 39, 7% of staffing revenues and the fourth quarter versus 36, 7% and the fourth quarter of 2019 and.
Included in staffing SG&A costs was deferred compensation expense related to increases in the underlying trust and investment assets of three 7% and one 5% respectively.
We ended 2020 with 7800 full time internal staff and our staffing divisions down 32% from the prior year.
Fourth quarter SG&A costs for Protiviti were 14, 1% of Protiviti revenues compared to 17, 1% of revenues and the year ago period.
We ended 2020 was 7300 full time, protiviti employees and contractors up 34% from the prior year.
Operating income for the quarter was $89 million. This includes $41 million of deferred compensation expense related to increases in the underlying investment trust assets combined segment income was therefore $130 million and the fourth quarter <unk>.
Combined segment margin was nine 9% fourth quarter segment income from our staffing divisions was $79 million with a segment margin of eight 4%.
<unk> income for productivity and the fourth quarter was 51 million with a segment margin of 13, 9%.
Our fourth quarter tax rate was 27% for both the current and prior period years.
Accounts receivable at the end of the fourth quarter accounts receivable was $714 million and implied days sales outstanding or DSO was 49 four days.
Before we move on to first quarter guidance, Let's review some of the monthly revenue trends, we saw in the fourth quarter of 2020, and so far in January 2021, all adjusted for currency and billing days.
Our temporary and consulting staffing divisions exited the fourth quarter with December revenues down 28% versus the prior year compared to a 23, 8% decrease for the fourth for the full quarter.
Revenues in the first three weeks of January were down 23% compared to the period compared to the same period one year ago.
Permanent placement revenues and December were down 25, 4% versus December of 2019. This compares to a 28, 5% decrease for the full quarter.
The first three weeks of January permanent placement revenues were down 20% compared compared to the same period in 2020.
We provide this information so that you have and insight into some of the trends we saw during the fourth quarter and into January but as you know these are very brief time periods, we caution against reading too much into them.
With that in mind, we offer the following first quarter guidance revenues 129 billion to 1.3 dollars 7 billion Inc.
Income per share 74.
To 84.
The midpoint of our guidance implies a year over year revenue decline of 11, 7% on an as adjusted basis, including Protiviti and EPS returning to prior year levels.
The major financial assumptions underlying the midpoint of these assumptions are as follows.
Revenue growth on a year over year basis, staffing down, 19% to 21% Protiviti up 23% to 25% overall down 11% to 13%.
Gross margin gross margin percentages.
Temporary and consulting staffing and 37% to 38%.
Protiviti, 25% to 26% overall, 38% to 39%.
SG&A as a percentage of revenues, excluding deferred compensation investment impacts.
Wrapping, 35% to 36% productivity, 14% to 15% overall, 29% to 30%.
Segment income.
Staffing, 8% to 9% productivity, 10% to 12% overall, 8% to 10%.
2021 capital expenditures and capitalized cloud computing cost for the year $85 million to $95 million with $15 million to $20 million in the first quarter.
Tax rate, 27% to 28% shares $113 million.
And limit our guidance to one quarter. All estimates we provide on this call are subject to the risks mentioned in today's press release and in our SEC filings now and I'll turn the call back over to Keith. Thank.
Thank you Mike.
We enter 2021 with renewed optimism about Robert Half's positioning for future growth. We've retained our key staff and they are committed to driving our success as the backbone of the enterprise and our aggressive go to market strategy during the pandemic with clients and the public sector and financial institutions.
<unk> of all sizes has yielded meaningful wins and new relationships.
Technology investments have facilitated remote working models internally and with our advanced AI driven capabilities are providing clients with a real time choices of candidates from outside their local market area.
Owing to its diversified solution offerings Protiviti continues its record of multiyear double digit revenue growth and very positive pipeline there.
And the collaboration between Protiviti and staffing is at an all time high as evidenced by the 82% year on year revenue growth this quarter from the unique blend of consulting and staffing solutions.
Staffing services provided to our mid cap clients now approaches one third of our revenues and growing and this is incremental to our traditional focus on SMB clients and prospects.
And with multiple vaccines now rolling out throughout the world and physical and monetary policy support expected to continue globally.
<unk> are increasingly expecting GDP GDP growth to follow.
GDP driven early cycle growth is traditionally, particularly robust for SMB clients that are lean and nimble from the downturn and half pent up demand to restore and upskill their workforce as they returned to growth.
More than ever we believe the strength of our brands our people our technology and our professional business model position us for future success, and 'twenty 'twenty, one and beyond now Mike and I'd be happy to answer your questions. Please ask just one question and a single follow up as needed if there is.
And we'll come back to you for additional questions.
At this time and he would like to ask a question press star one on your telephone to withdraw your question press the pound key.
Our first question comes from the line of Mark Marcon with Baird. Your line is open.
And good afternoon and congrats.
Congratulation wondering can you talk about.
About the opportunities that you're seeing cross productivity, obviously, you're accelerating it seems like there would be a lot of opportunities and a lot.
And the areas within it.
<unk> cyber security audits, particularly and the week.
Solar wind and.
And you know.
And you did make the acquisition with regards to identity.
Just wondering if you could talk a little bit about the areas of growth that youre seeing there and kind of what inning, Inc.
And then I've got a follow up for the staffing side.
So the good news for activity is that it's.
Its success is broad based it's led by technology consulting and managed solutions on the tech side, which we've talked about for a few quarters now it's cloud and cyber its privacy, it's digital transformation and the managed solutions with staffing its public.
<unk> <unk>.
Led by unemployment housing education and vaccine.
S side continues to lead with anti money laundering, and consumer lending regulatory actions, leaving that way.
Internal audits down 8% to 10% year on year. Some work got delayed some scope Scott produced theres, a little bit of fee pressure.
As we've talked about now for a few quarters Protiviti is pipeline remains very strong as to which inning. We're in it's clearly not a late inning because not only do we have.
Macro coming back and discretionary spending that will benefit, particularly internal audit and <unk>.
And so you've got a new administration and the United States debts viewed to be more regulatory friendly, which is a better thing and not as it relates to protiviti. So we feel great about where they are we feel great about her prospects and we feel like it's early innings.
That's terrific and can you talk a little bit about the fit with the most recent acquisition and and the opportunities there I know, it's really small and just.
<unk> 40 people, but it seems like it would be a really good fit in terms of any sort of audit.
And its that Youre doing well sure and identity access management is clearly and important.
Component of cyber security and we've got a team.
Very expert and a certain platform a leading platform in that space. So we're happy to have and part of the family we feel like we can leverage our existing database.
We also grow theirs, and we feel good about that as well.
Terrific and then can you talk a little bit about the staffing side.
We come out of this keep and Mike obviously.
We're just in the early stages of inflicting.
And nobody knows how long this cycle is going to be but you.
Youre really seeing a nice improvement in terms of productivity your head count was down 32% on the staffing side revenue down a lot less and that you've put in place and number of different.
You know tools to increase productivity. So how should we think about the productivity over the course of the.
The current cycle as we continue to come out of this and.
And what I'm wondering is it looks like you picked up your hiring but it's not a super robust pace yet.
And just how should we think about that.
Well as we've talked for a few quarters now.
We've retained our tenured staff and their productivity is always.
Greater than the less experienced staff we.
We feel like we've got additional capacity with that group.
We think we can leverage that capacity as we grow without adding in and outsized way to heads and theres, a little bit of and offset and that our incentive plans are graduated rate plans hockey stick. If you will so as these more tenured people get further and further up the hockey.
Sick.
Some of that leverage will go back to them appropriately so, but we'll still benefit overall and we expect to have some profitability upside as we continue to grow relative to where we were at same revenue points and the past.
Terrific. Thank you.
Thank you. Our next question comes from Andrew Steinman with J P. Morgan. Your line is open hi, guys.
Two questions. The first one day when thinking about that year ago first quarter of 'twenty and 'twenty. Obviously the month of March was that that COVID-19 affected quarter, I mean, COVID-19 effected a month how.
And how did you taken to that.
That kind of a year over year consideration, when giving first quarter 'twenty one.
Staffing and when I say staffing I mean, both flex and Perm revenue guidance and that's my first question and I'll give you. My second question at the same time and my second question is how should we think about flex staffing revenue sequentially in the first quarter of 'twenty, one recalling that our first quarter is a slower seasonal time for flex staffing.
And so your two questions are related.
We are effectively took our fourth quarter actual results superimposed a typical sequential progression into the first quarter and that was the basis for our Q1 guidance and the year on year Andrew fell out.
And whatever it was because we felt like.
Using where we currently are I E fourth quarter as the baseline for our forecast rather than a year ago, which did have a big impacts of that March month and it.
And we felt like Q4 was a better baseline and.
And the sequential embedded in our forecast is typical first quarter sequential patterns chip and Perm.
Okay.
Yes.
And answers my question could you just give us a sense of if you think temp or Perm will do better and the first quarter.
Well, we hope they both do better and we're just coming off a quarter, where they both have a lot better. So we were happy about the momentum that we've had our people would tell you. It's one of our best restarts to a new year and a long time, so anecdotally I can I can assure you the enthusiasm level is.
Very high.
That said, we thought it prudent to given the big step up we had in Q4 to confirm that into Q1 with normal patterns, but not be more aggressive than that.
Keith Thank you.
Thank you. Our next question comes from Jeff Silber.
And with BMO capital markets. Your line is open.
Thanks, so much.
Appreciate you guys, giving the head count numbers like you typically do at the end of every year and I wanted to focus on the internal staff and staffing.
It was down pretty substantially but again your revenues werent down as bad. So we saw some productivity there what do you need to see to start hiring internal staff and your staffing division and when do you think that'll happen.
Well as we've said because we have a more tenured staff.
And because they have productivity capacity as we speak.
We're going to.
Utilize that capacity before we aggressively add more heads.
It's good for them, it's good for their compensation and it's good for US. So we don't think certainly in the next quarter or two.
That will have to add to staff and a meaningful way, but can still grow nicely. As we just showed we could do with the existing staff. Our staff cutbacks were primarily and the second quarter.
And so the increases we saw and the third quarter without or without any additional staff and we think theres room to go with who we already half. So I certainly wouldn't take our lack of hiring either as evidenced by our job postings or otherwise as any indication that we're not bullish and we do.
I think we can grow instead.
We believe there's significant unused capacity of our current tenured staff.
Okay, that's really helpful.
Follow up Heath, you pointed out at the end of your prepared remarks.
About your services to the mid cap clients now about a third of their revenues can you talk about that what have you been doing there differently and.
What do you think that could be over time. Thanks.
Well I'd say, what we've done differently is a few things one we focused on it and we've had success with it too.
With Protiviti with many of those companies and even larger cap companies, we come through the consulting door, rather than the staffing door and by so doing it's not margin dilutive than it might otherwise be so the combination of the focus the success.
SaaS and the ability to.
Leverage protiviti and its relationships and its contractual relationships all plays a part.
We continue to believe there is upside there as you know traditionally we've been principally SMB and Trust me we're not.
Walking away from SMB, we're not deemphasizing SMB to the contrary, we feel like it's the perfect time and the cycle to be SMB and the last couple of quarters and they've been more impacted than mid cap and beyond so we've endured the bad side of that if you will so now and now it's time to endure the.
Good side of SMB, and we're excited about how well we can leverage our SMB client base as we've demonstrated in the past that said, we do think mid cap is incremental to that we've done well we've done it without any net margin dilution and we continue to invest in the half.
Okay. That's really helpful. Thanks, so much.
Okay.
And.
Thank you. Our next question comes from Hamzah <unk> with Jefferies. Your line is open.
No.
Hi, This is Mario <unk> filling in for Hamzah I appreciate the time.
Maybe you can just touch on or remind us of your exposure to the travel and leisure industry.
And the 10 staffing perspective and.
And maybe you can talk about outside of that.
How do you think the impact of the vaccine will have on your business.
And so we have very little exposure to travel and leisure.
Clearly that industry is most impacted by the shutdowns and restarts and shutdowns and so just looking at our numbers Theres really no correlation between geography shut downs.
Cause we have so little exposure to travel and leisure and clearly the impact of the vaccine can be nothing but positive while on the one hand, our clients have by and large adjusted to the current environment and it become very virtual.
On the other hand, I think everybody's excited about the possibility of not being virtual and on that score I thought it was interesting. This week we were recognized.
As a top 20 company and a fortune 500 for embracing remote work. So we thought that was pretty cool.
Yes.
Great. Thank you and then on gross margin.
Maybe you could help us understand or maybe give us a sense for how we should think about gross margins going forward, obviously and the quarter you had some.
Fringe benefits and insurance things like payroll.
But could you give us a sense for some of the puts and takes that you're expecting in 2021.
Okay, and lets talk a little bit about gross margin because first of all if you look at prior downturns peak to trough, we've lost 300 basis points and gross margin.
Happy to report that this time around and we lost a third of that 100 basis points and even further happy to report that we're now back. This most recent quarter were now back to peak gross margins and.
Our chip businesses.
For 2021.
Given that we are already back while there might be some upside as we move through the year.
We certainly had modeled a lot of upside remembering that we have the highest gross margins and the industry by leaps and bounds as it is but trust.
Trust Me I think one of the things. We're most proud of is how we've managed our gross margins a during the pandemic the height of the pandemic, how we've gotten them back and how we intend to sustain that and the 'twenty 'twenty one.
Yes.
Thank you from our next question comes from Kevin Mcveigh with Credit Suisse. Your line is open.
Great. Thanks, so much and congratulations.
And any sense of how the bill rates have been trending in the quarter versus prior quarter and maybe year on year can you break that out and maybe by segment.
Well.
We said and our prepared remarks that they were up 2% year on year adjusted for mix.
That was down a little bit from the prior quarter. It all starts with pay rates and with higher unemployment.
We arent paying quite as much still more than we were a year ago, but the rate of wage inflation.
S subsided to some degree, but all things considered to have still have a little bit of low single digit wage inflation and then bill rate inflation.
And protect our margins so the differential is.
Where we are and where we're happy to be.
And I understand and then just real quick.
The tax rate assumed in Q1, and then for the full year 2021, if you have that.
Yes, I think it's with 27, 5% and Mike and it's going to be at about the same for the full year, yeah. So between 27 28.
Okay. Thank you so much.
Thank you. Our next question comes from Gary Bisbee with Bank of America and your line is open.
Hey, good afternoon.
Just wanted to ask and another one about protiviti. So a quarter ago, you told US your expectation was 5% to 7% revenue growth and it did 18 and and obviously youre, calling for even further acceleration in Q1.
What sort of happens and the last three months and what is I understand all of the areas of strength you frankly been discussing for several years now.
What changed there and what's happening and how.
Durable are sustainable are the drivers of that that recent acceleration.
The thing that changed the most is we had more public sector demand right to the end of the year than we expected.
We service that primarily with contractors, which is why when you look at the supplemental schedules, where we break out.
And the inter segment revenues you see there was a $30 million spike between quarters, three and four and the lion share of that was public sector related.
Yes as to sustainability.
The jury's out that said we have relationships, we've never had before we've certainly got a look into many.
Local regional and state governments and their business processes and we certainly are excited at the opportunity to improve those processes.
Overpayments.
A lot and the press about some fraud as it relates to payment of unemployment claims and.
So again.
And there's no question that Theres, some spike and that as it relates to elevated unemployment claims that the states are having to process. The same for housing assistance and same for remote learning support for school systems.
That said, we do believe we're confident and we've got Ah.
Teams.
Put together, whose objective is just what you described as far as ensuring the sustainability and leveraging these new relationships that we've never had traditionally our revenues from government related entities was less than 1% of revenue. So it was almost nothing so everything we're doing.
Good day is virtually incremental.
Thanks, and then.
Do you feel like.
Either through that.
Discussion you gave or just more broadly how you've gone to market and leverage the staffing businesses.
Who are you gaining share from.
Outgrowing almost everyone else and in any kind of consultative type of approach we see it.
Is there a certain place you're taking that from.
I think.
It's somewhat in the on the staffing side and it's somewhat on the consulting side, because neither have a full picture.
And there are many staffing firms that can provide.
Customers support people, where their client and manages and them there are virtually non that do that where we also provide the management and theyre not only is it the management, it's with a view toward constant optimization.
Which has been quite the winter and so.
But for US who would have gotten that work. My guess is some of it would've gone and gone to the consulting firms the accounting firms some of it would've gone to the staffing firms.
None of those players have what we have.
And it's actually pretty incredible how well it's done it grew 82%, 82% this quarter.
82%.
That's a big number and ability question for sure, but yes, no. It was outstanding. Thank you I appreciate the color.
Thank you. Our next question comes from Tobey Sommer with twist Securities. Your line is open.
Yeah.
Thank you could you.
Tell us what you think the increased exposure to mid cap clients does to your Tam.
Yeah.
Well.
There's no question that staffing at mid and large cap companies.
As many times the size as the opportunity with smaller businesses.
Traditionally we haven't focus there because.
Margin pressures were such that we felt like we were better off offering are better candidates to small businesses and that would pay that pay us for them, but as I said earlier.
It's a whole new world when we go hand in hand, with Protiviti and its theres, the umbrella of and honest to God consulting arrangement with honest to God deliverables.
Such that we do think it's a new day and clearly the addressable market is much larger.
Which is why we're investing.
Think about just during the pandemic our exposure to mid cap has gone from low 20% to the day, it's 34% that's huge that's huge and it's in a small period of time and it was done in a period, where we didn't dilute our margins.
Right right.
As my follow up I wanted to ask you a question on the cost side of delivering your service.
Every every call we start with.
Talking about the number of locations that you deliver your services to particularly from a staffing side, but also productivity.
Are there any meaningful opportunities from the experience and 2020 and now into this year to adjusted the cost structure, so as to favorably impact margins.
Over the course of the whole cycle.
Well.
Our biggest cost is our internal payroll cost and we've talked earlier about we think we've got.
With a large assist with the technology, we've developed and the last three to four years, we think our internal staff can inherently be more productive.
Across this entire cycle.
Real estate is more nuanced.
On the one hand traditionally.
Our real estate is very dense we put a lot of people and our space.
Theres not a lot of square footage traditionally per person.
And today's world of distancing.
Even post pandemic.
Worry, whether we'll have to relax that somewhat and offset what we had otherwise save if we're on a hybrid model where everybody doesn't come in every day.
So the jury is out on that and our current thinking is probably more of a push than anything but it's early days and we don't know we don't know ultimately how many people are going to want to work remotely versus come in.
Excuse me excuse me and further we don't know whether the density we've traditionally had which kind of creates a.
And electricity and energy level, and an office, which has been helpful. We don't know, whether we're going to have to spread people out more for obvious reasons.
It's kind of interesting Australia.
And has some of the fewest number of cases, and so I would argue they're most along post pandemic and.
And they've been surprised how much people want to come in and don't want to work remotely and in fact.
And that they talk about is 90% to 95% of the staff want to come back into the office that surprises me, whether thats sustainable and Australia itself or whether you can replicate data and other places I don't know, but that's what they report.
Thank you very much.
Thank you. Our next question comes from George Tong with Goldman Sachs. Your line is open.
Hi, Thanks, good afternoon.
Revenue trends and office team stepped up pretty meaningfully in the quarter. What were the main drivers of that improvement and were there any one time revenue benefits you'd call out in the quarter and that particular business.
Let's say a couple of things so first of all fourth quarter George office team always benefits from E commerce customer support.
And they've got some fourth quarter lift from that again. They also get all open enrollment support lift and the fourth quarter. They got some of that again traditional.
But this public sector work with Protiviti that I've been talking about a lot of that has been customer service driven call center, driven and office team is the beneficiary of that.
Office teams had an incredible couple of three quarters.
Who would have believed that office team and Protiviti would have gone to market together best at anytime and much less during a pandemic.
Got it very helpful.
You mentioned that revenues in the first three weeks of January were down 23%, you'll be you're compared to down 21% in December and which areas did you see the most moderation and growth moving from December to January.
But first thing you need to zoom out from that and consider what January.
Post quarter results mean, and what they don't mean and in fact, if you go back and time and you compare January post quarter to what with hindsight you learn about the entire quarter. It's one of the least predictive post quarter.
Periods that we have because of the holiday impacts and so I would tell you that we tend to discount January post quarter more than most and therefore, the fact that day year over year growth rates change by three percentage points, we don't.
Ascribe much importance too.
Got it.
And I said earlier we're.
We're very happy with our restart.
And the enthusiasm Susie azzam level of our people has never been higher and.
And we got one more week of data this morning, and frankly, it was even better yet again.
Very helpful. Thank you.
Thank you our next question comes.
From Kevin Mcveigh with credit Suisse. Your line is open.
Great Keith Keith and Mike just one follow up.
And then when you talk about the public sector work is that primarily COVID-19 related work, where youre, hoping they'll be some follow through or is there any way to frame maybe how much of it is kind of COVID-19 related that that youre looking to all day.
Net.
Exchange once things start to normalize and to more normal relationships.
Well and so yes.
Helping states deal with their unemployment claims and customer service claims processing claims adjudication.
Housing.
Processing assistance claims its customer service call centers into that and <unk>.
Patient, it's helping school systems and deal with tech support for remote learning.
The vaccine again customer service call Center people, calling in and wanting to register and it's helping with check in and it is helping with the government reporting once it's done and so it's a whole host of things that clearly are.
Initially related to Covid, if you will but as I said earlier, it's given us a look into their internal systems and.
And we think it's a target rich environment to do follow up work, which we are very focused on doing.
Net sales and Thats, all state and federal or a combination of both it's more state and local.
More state and local.
Okay.
And is there any way to maybe frame how much that was in the quarter.
In terms of revenue.
Well.
We've disclosed to you the staffing and Protiviti.
Revenue magnitude between the two.
This quarter going back.
We've told you there was a $30 million lift and we've told you that a large part of that lift will relate to what I. Just described so you can kind of use those puzzle puzzle pieces and come back to what Youre looking for.
Very helpful. Thank you.
Okay, operator, I think that's our last question.
Thank you very much everyone for participating on the call.
Yes.
This concludes today's teleconference. If you missed any part of the call it will be archived and audio format and the Investor Center of Robert half website at Www Dot Robert half Dot Com you can also dial the conference call replay dial in details and the conference I'd I can tell.
And in the company's press release issued earlier today.
Okay.
Okay.
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Yes.
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And.
And then.
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Yes.
Uh huh.
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