Korn Ferry Posts 29 Percent Revenue Drop; Recruiting Revenues Dive 36 Percent
September 3, 2020 – Korn Ferry (NYSE:KFY) has posted fiscal first quarter revenues of $344.1 million, a 29 percent decline. The results missed Wall Street expectations. Three analysts surveyed by Zacks expected $357.4 million.
For the quarter, professional search was down 36 percent (35 percent at constant currency) and RPO was down 23 percent (22 percent at constant currency), both compared to the year-ago quarter.
First quarter earnings were $30.8 million, or diluted loss per share of $0.58 and adjusted diluted loss per share was $0.19. Adjusted diluted loss per share for the first quarter excludes an aggregate of $20.6 million, net of tax or $0.39 per share, of restructuring charges, net, due to the COVID-19 pandemic, and integration/acquisition costs, relating to the acquisition of Miller Heiman Group, AchieveForum and Strategy Execution.
“It’s been nearly six months since the pandemic was declared, and the world temporarily paused,” said CEO Gary D. Burnison. “Certainly, that pause impacted our business.”
Korn/Ferry shares have fallen 27 percent since the beginning of the year. The stock has fallen 18 percent in the last 12 months.
“Consequently, and consistent with our approach to the fourth quarter of FY’20 and first quarter of FY’21, we will not issue any specific revenue or earnings guidance for the second quarter of FY’21,” Korn Ferry said. “We plan to reassess the suspension of our guidance once we are comfortable that the coronavirus uncertainties have largely passed.”
Virtual Recruiting Solution
In response to the COVID-19 pandemic, Korn Ferry is quietly entering new markets in a bid for enhanced sources of revenue. One area is outplacement – a field that would have been unheard of entering until COVID-19 struck. As it laid off and furloughed employees earlier this year, and cut pay for nearly every level of employee within its company, the talent leader was seen shifting gears. Instead of bringing people into corporate roles, it is now tapping into ways to help businesses remove them. Conflicts are expected, according to several well-placed sources within the staffing giant.
Big Search Firm to Reduce Office Footprint on Grand Scale
Heidrick & Struggles wants to reduce its U.S. real estate footprint of about 230,000 square feet across 15 offices. The firm is looking to combine offices, downsize or shut down city locations in a bid to save millions and boost efficiency, CFO Mark Harris said in an interview. “Its really about not spending money needlessly where you don’t need to, so you can invest back into your people,” he said.
Korn Ferry also recently launched Korn Ferry Recruit, Nimble, a fully integrated, virtual technology solution for high-volume hiring. It is part of the firm’s line of Nimble solutions. Nimble uses best-in-class AI, along with the proven recruitment intellectual property of Korn Ferry. The firm said that the new solution “is designed to leverage a client’s brand, shifting to a candidate-driven experience by sourcing, attracting, assessing and selecting the right people for the job at an affordable cost-per-hire.”
“Nimble is an efficient and effective tool for organizations that need to quickly ramp up high-volume hiring,” said Jeanne MacDonald, president, Korn Ferry global RPO solutions. “Nimble not only helps widen the net of qualified candidates, it creates success profiles that ensure the people with the rights skills are short-listed. Nimble offers a positive candidate experience in a virtual environment that increases the chances the candidate will accept an offer and stay on the job.”
“Nimble starts at the beginning of the high-volume hiring journey by first creating success profiles that identify candidate attributes needed to be successful in a particular job,” Korn Ferry said. “This ensures the right fit for a role and increases chances of longer tenure once the candidate is on the job.”
It then creates a sourcing strategy using AI to find internal and external candidates. There is a “text to apply” feature, and an AI assistant (a chatbot named Juno) provides 24/7 candidate support. Candidates are guided through each phase of the process, having their questions answered and being updated as to where they stand in the process.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media
