Kforce Inc. (KFRC): PESTLE Analysis [Nov-2025 Updated]

You're looking for a clear-eyed view of Kforce Inc.'s (KFRC) operating environment, and honestly, the landscape is a mix of high-demand pockets and regulatory friction. The near-term risks center on interest rate sensitivity in client hiring budgets, but the long-term opportunity is defintely in specialized tech and finance roles; Kforce is projected to finish the 2025 fiscal year with revenues near $1.55 billion, but this estimate hides the slowing growth rate in the back half of the year as economic uncertainty pushes clients to pause large-scale projects. This PESTLE breakdown maps the critical forces-from Generative AI creating new roles to evolving state-level worker classification laws-that will shape how Kforce captures that revenue and manages its risk profile over the next 12 months.

Kforce Inc. (KFRC) - PESTLE Analysis: Political factors

The political environment in the US is creating a high-stakes, two-sided coin for Kforce Inc. On one hand, stricter immigration and compliance rules are raising operational costs and limiting the foreign talent pool. But on the other, escalating US-China tech tensions are forcing clients to onshore critical work, which directly fuels demand for Kforce's specialized domestic technology consultants. You need to be ready to pay more for talent, but you'll also see more high-value, domestic project work.

Shifting US H-1B visa policies impact foreign skilled talent supply

Immigration policy changes are defintely making the skilled talent pipeline tighter and more expensive. For a firm like Kforce, which specializes in placing technology and finance professionals, the ability to access global talent is crucial. The recent policy shift, effective September 21, 2025, introduced a massive $100,000 fee for all new H-1B visa petitions. This change, while not impacting renewals for workers already in the US, is a significant barrier for companies looking to bring in new foreign talent. Here's the quick math: that fee alone can erase the profit margin on a new contract placement.

Stricter enforcement is also a real factor. Industry projections for 2025 show H-1B denial rates are expected to rise to over 24%, up sharply from 6% a decade ago. Plus, staffing firms are seeing their I-9 compliance costs increase by about 18% as audits become more frequent. Still, Kforce is navigating this well for existing talent, as evidenced by their 2025 Labor Condition Application (LCA) data.

H-1B LCA Data (FY 2025 - as of Q3)	Amount / Rate	Implication for Kforce
Total LCAs Filed by Kforce Inc.	617	Sustained need for foreign skilled talent, particularly in Technology.
LCAs Approved	608	High internal approval rate (approx. 98%) shows strong compliance and strategic filing.
New H-1B Petition Fee (Effective Sept. 2025)	$100,000	Massive cost increase for new hires, driving a shift toward onshore or nearshore talent acquisition.

Increased scrutiny on federal contractor compliance and reporting standards

Kforce works with several top government and defense agencies, which means they are highly exposed to the political winds of federal compliance. The regulatory environment is getting more complex, not simpler. The risk isn't just fines; it's the potential for an adverse determination on the status of independent contractors, which could hit Kforce with substantial back taxes and liabilities.

To combat this, Kforce is actively placing talent in roles focused purely on compliance, such as a Compliance Business Analyst to ensure adherence to federal Domestic Content and Start of Construction requirements for clients. This is a clear opportunity for their Finance & Accounting and Technology segments. The key is that the federal government is now demanding:

• Rigor in federal Domestic Content documentation.
• Zero tolerance for human trafficking or forced labor in the supply chain.
• Robust, audit-ready data processes for tax incentives.

Potential changes to corporate tax rates affecting client capital expenditure budgets

The stability of the corporate tax rate is a major swing factor for client capital expenditure (CapEx) budgets, which directly fund Kforce's project work. The corporate tax rate was permanently reduced from 35% to 21% under the 2017 Tax Cuts and Jobs Act (TCJA). While Kforce's CEO noted that a bill in mid-2025 removed some tax policy uncertainty, the expiration of other major TCJA provisions at the end of 2025 is keeping CFOs cautious.

This uncertainty makes clients hesitant to commit to large, multi-year IT transformation projects. To be fair, Kforce's own effective tax rate (ETR) guidance for Q3 2025 was a manageable 21.0%, right in line with the current corporate rate. But, if political gridlock forces a corporate tax rate hike in the future, client CapEx will be the first thing cut, which will hit Kforce's project-based revenue hard.

US-China trade tensions influence client tech supply chain and hiring decisions

The US-China relationship has fully evolved into a 'tech war,' and this is a significant, if complex, opportunity for Kforce. While a May 2025 trade truce did lower US tariffs on Chinese imports from 145% to 30%, providing some tactical relief, the strategic conflict over technology is intensifying. For Kforce's clients, especially in the semiconductor and advanced electronics space, this means a major supply chain restructuring.

The US Commerce Department's export controls on advanced semiconductors actually increased by 18% month-over-month in June 2025, forcing companies to reshore (bring production back to the US) or nearshore (move it to nearby countries) their operations. This shift creates immediate, high-paying demand for US-based talent in:

• Cybersecurity and data governance.
• Strategic sourcing and supply chain resilience.
• R&D for domestic manufacturing.

This geopolitical tension is a strong tailwind for Kforce's core business, even as their overall Technology segment revenue saw a 5.5% year-over-year decline in Q3 2025, the demand for this specialized, high-security work is growing. Finance: draft a risk-adjusted model for Q4 2025 Technology segment revenue based on a 15% CapEx reduction from the top 10 tech clients by Friday.

Kforce Inc. (KFRC) - PESTLE Analysis: Economic factors

The economic environment in 2025 presents a clear paradox for Kforce Inc.: a cautious corporate spending climate is slowing overall hiring, but the relentless need for specialized technical expertise is keeping pricing power strong. You're seeing clients pull back on long-term commitments, which hits permanent placement revenue, but they are still paying a premium for project-based, flexible talent.

For the first nine months of 2025, Kforce's total revenue declined by 6.1% to nearly $1.00 billion, and net income dropped a stark 24.6% to $29.7 million compared to the same period in 2024. That's a clear signal of macroeconomic headwinds hitting the top and bottom lines. The shift is not a total collapse in demand, but a strategic reallocation of client spend.

High interest rates are slowing corporate hiring for non-essential projects

High interest rates, which have persisted into 2025, create a chilling effect on new corporate spending, especially for non-essential or discretionary technology projects. When the cost of capital is high, companies scrutinize every investment, leading to slower approval cycles and a 'measured approach' to technology roadmaps, as Kforce's management noted.

This caution is most visible in permanent hiring, which is often tied to long-term, non-critical expansion plans. Kforce's Direct Hire revenue saw a significant reduction of 14.8% for the third quarter ended September 30, 2025. This decline indicates that while mission-critical initiatives are still prioritized, anything that can be deferred or done with a smaller, temporary team is being pushed out. It's a classic risk-off move by CFOs.

Persistent wage inflation increases the cost of acquiring and retaining skilled consultants

Even with a general economic slowdown, the market for highly skilled IT professionals remains tight, forcing Kforce to manage persistent wage inflation. The average wages for US IT workers are projected to rise by a median of 3.3% in 2025. This is higher than the previous year's projection, showing the labor market for specialized talent is defintely not cooling off enough.

For Kforce, this pressure translates directly into higher operating costs. In Q3 2025, Selling, General, and Administrative (SG&A) expenses as a percentage of revenue increased by 60 basis points year-over-year, partly due to revenue deleverage and higher healthcare costs, which are proxies for rising talent acquisition and retention expenses. To be fair, the US is seeing the largest share of IT salary increases in the 3.1% to 6% bracket, affecting 63.3% of employees, so this cost pressure is industry-wide.

Recession fears are driving clients to favor temporary contract staffing over permanent hiring

The lingering fear of a recession, with 80% of U.S. hiring managers bracing for one, is accelerating the structural shift toward flexible staffing models. Companies are looking for agility and cost-efficiency; a contract worker can be scaled up or down quickly without the long-term financial burden and severance costs of a permanent employee. This is a huge opportunity for Kforce's Flex revenue segment.

Here's the quick math on how client behavior is changing, based on Kforce's Q3 2025 results:

• Direct Hire Revenue (Permanent): Fell 14.8% year-over-year.
• Total Flex Revenue (Contract): Fell 5.7% year-over-year.

The nearly three-fold greater decline in permanent placements versus contract placements proves that clients are using temporary staffing to bridge skill gaps and execute mission-critical projects while avoiding long-term headcount commitments. Honestly, this is a core business advantage in a volatile economy.

Strong demand for specialized IT skills is keeping bill rates elevated despite economic headwinds

Despite the overall revenue decline, Kforce is maintaining pricing stability in its core Technology segment due to the strong, non-cyclical demand for specialized skills like Artificial Intelligence (AI), cloud computing, and cybersecurity. The average bill rate in Kforce's Technology segment remained stable at approximately $90 per hour in Q3 2025. This rate has held steady for roughly three years, which is a testament to the inelastic demand for top-tier tech talent.

Specialized consultants in high-demand areas, such as finance and fintech, can command even higher rates, sometimes ranging from $200 to $400 per hour. Kforce is actively building its pipeline in high-value areas like AI and data, which supports a higher-margin, consulting-oriented mix of business. This strategic focus allows the company to offset volume declines with premium pricing.

Kforce Inc. (KFRC) Key Financial Metric	Q3 2025 Value (US$ Millions)	Year-over-Year Change	Economic Factor Impact
Total Revenue	$332.6 million	-5.9%	Overall economic uncertainty and high interest rates slowing spending.
Net Income	$11.1 million	-22.1%	Revenue deleverage and rising operational/talent costs (wage inflation).
Direct Hire Revenue	$6.382 million	-14.8%	Recession fears driving clients to favor temporary over permanent hiring.
Technology Flex Revenue	$304.272 million	-5.5%	Resilience in contract staffing for critical IT projects.
Technology Average Bill Rate	~$90 per hour	Flat	Strong demand for specialized IT skills keeping rates elevated.

Kforce Inc. (KFRC) - PESTLE Analysis: Social factors

The social landscape for Kforce Inc. in 2025 is defined by a fundamental shift in how, where, and why people work, creating both a wider talent pool and a more demanding client base. The core takeaway is that the staffing model must now be fully national, not just local, and must prioritize soft skills and cultural fit alongside technical expertise.

Kforce's business, which specializes in Technology and Finance & Accounting (FA) staffing, is directly impacted by these trends. For context, the company reported Q3 2025 revenue of $332.6 million and diluted Earnings Per Share (EPS) of $0.63, so every social trend that affects the supply or demand for skilled professionals hits their top and bottom line immediately.

Widespread adoption of remote and hybrid work models expands the talent pool geographically

The shift to flexible work is no longer a perk; it's a standard operating model that dramatically expands Kforce's geographic reach for talent. As of Q3 2025, 24% of new job postings in the U.S. were hybrid and 12% were fully remote, meaning over one-third of the market is open to non-traditional arrangements. This is a huge opportunity, but it also creates a new challenge: managing a distributed workforce.

For Kforce, this means they can source a high-demand Technology consultant in a low-cost region for a client in a high-cost city like New York or San Francisco, where hybrid roles saw the highest prevalence in Q3 2025. This capability is a key competitive advantage in a tight labor market. However, companies must also manage the fact that 64% of talent professionals report that the biggest challenge is finding candidates willing to work in the office at all. The hybrid model is here to stay, with 76% of companies having adopted it.

• Hybrid roles dominate: 24% of new U.S. job postings in Q3 2025 were hybrid.
• Fully remote remains significant: 12% of new U.S. job postings in Q3 2025 were fully remote.
• Staffing firms see benefits: 68% of staffing agencies report improved talent attraction due to remote work.

Post-pandemic 'Great Reshuffle' continues to fuel high demand for specialized talent

The 'Great Reshuffle'-a term for the ongoing, high-volume movement of labor-has settled into a persistent talent shortage for specialized skills. Despite some macroeconomic uncertainty reflected in Kforce's Q3 2025 Technology Flex revenue decreasing 1.2% sequentially, demand for high-end technical talent remains structurally strong. This is a high-margin opportunity for Kforce's consulting-led approach.

Honesty, the market is still incredibly tight for the right people. About 69% of organizations are still reporting significant difficulties filling full-time, regular positions. This difficulty is driven by the rapid need for new skills, with over 28% of organizations requiring new skills for full-time roles. For Kforce's core business, the long-term growth projections are clear:

Specialized Role (U.S. Projected Growth 2024-2034)	Projected Job Growth	Median Annual Pay (Approx.)
Data Scientist	$\approx$ 34%	$\approx$ $112,600
Information Security Analyst	$\approx$ 29%	$120,360 (2023 data)

This persistent skill gap is why Kforce's Technology average bill rate has remained stable around $90/hour over the last three years, showing that clients will pay a premium for scarce, specialized expertise.

Growing client focus on Diversity, Equity, and Inclusion (DEI) initiatives influences staffing mandates

Client demand for diverse teams is a powerful social force that is increasingly influencing staffing mandates, turning DEI into a business requirement, not just a moral one. This is especially true for attracting younger generations, as 77% of Gen Z workers and 63% of millennials value DEI in the workplace. Companies with diverse teams are simply more profitable, with those in the top quartile for ethnic diversity being 39% more likely to financially outperform their peers.

To be fair, the DEI landscape is fragmented in 2025, with some corporate pullbacks due to political and economic pressures. Still, the core business case remains robust, and it directly impacts Kforce's ability to attract top talent. When 67% of job seekers consider a diverse workforce an important factor when choosing a company, a staffing firm's ability to source diverse candidates becomes a non-negotiable part of their value proposition. The focus is shifting to data-driven strategies, with 65% of organizations that collect DEI data reporting a better understanding of their workforce demographics.

Increased client demand for consultants with strong soft skills alongside technical expertise

In the age of Artificial Intelligence (AI) and automation, the value of a consultant's technical skill is increasingly being matched by their soft skills. Clients are looking for people who can not only write the code or build the model but also manage the organizational change that comes with it. This is a key differentiator for Kforce's consulting-led model.

The data is clear: 75% of HR professionals now say they value Emotional Intelligence (EQ) more than IQ. For a consultant, technical know-how is table stakes; the real value comes from being able to translate complex data into actionable business strategy and navigate stakeholder politics. Companies with emotionally intelligent leadership are 22 times more likely to outperform. This means Kforce must prioritize screening for key soft skills in their talent pool:

• Empathy and Active Listening: Essential for understanding true client pain points.
• Adaptability: Necessary to meet shifting client demands and project scope.
• Effective Communication: Crucial for translating technical findings into business insights.
• Collaboration and Teamwork: Required for success in virtual and hybrid teams.

This trend means Kforce isn't just a staffing firm; they are a provider of strategic change agents. This is defintely a high-value position in the 2025 market.

Kforce Inc. (KFRC) - PESTLE Analysis: Technological factors

Rapid adoption of Generative AI is creating new demand for AI-specific IT roles, like prompt engineering

The Generative AI (GenAI) wave is defintely the biggest technological driver right now, but it's a nuanced picture for staffing. Kforce Inc. is actively positioning itself for what it calls 'AI foundational readiness,' which means helping clients get their data and infrastructure in order before they fully deploy large-scale AI models.

You're seeing a clear shift in the talent profile. While the initial hype was around the pure 'Prompt Engineer' role-the person who writes the best queries-that demand is already starting to plateau by late 2025. Instead, the market is surging for more technical, governance-focused roles. This includes AI Trainers and AI Data Specialists, who ensure the models are fed clean, structured data, which is the most critical factor for AI accuracy. Kforce is seeing meaningful opportunities with market-leading companies to assist them in aspects of their overall GenAI journey.

Here's the quick math on Kforce's pivot: Management is confident the momentum they've seen will carry into Q4 2025, expecting sequential billing day growth in the Technology business. This confidence is tied directly to their ability to provide these higher-skill, consulting-led engagements in areas like AI and digital transformation.

Cybersecurity threats are driving urgent, high-margin contract needs across all client sectors

Cybersecurity is no longer just an IT problem; it's a board-level imperative, and that translates directly into high-margin contract work for Kforce. The global cost of cybercrime is projected to reach an astronomical $10.5 trillion annually in 2025, making security a non-negotiable budget item for every client.

The talent shortage here is acute and structural, meaning the demand isn't going away anytime soon. The U.S. alone has a cybersecurity workforce gap of over half a million vacancies. In the 12 months leading up to June 2025, employers sought over 514,000 cybersecurity jobs, representing a 12% increase from the prior year. Kforce has seen 'unprecedented client demand for security professionals' beyond the normal Security Operations Center (SOC) and operational roles. This persistent, urgent demand is a key factor keeping Kforce's Technology segment average bill rate stable at approximately $90 per hour.

• Global cybercrime cost: $10.5 trillion (2025 projection).
• US cybersecurity talent gap: Over 500,000 vacancies.
• Kforce Technology average bill rate: $90 per hour (Stable).

Automation of routine finance and accounting tasks is shifting demand toward analytical and strategic roles

The automation of basic, repetitive tasks in Finance & Accounting (FA)-think invoice processing or simple reconciliation-is shifting Kforce's demand profile in that segment. This isn't about eliminating jobs entirely, but rather changing the skills needed. Clients are moving away from data entry clerks and toward financial planning and analysis (FP&A) professionals, who can interpret the data the new systems produce. This is a good thing for Kforce.

The company's FA segment is already reflecting this shift toward higher-skilled roles, seeing robust sequential growth of approximately 7% in Q3 2025. The average bill rate in the FA segment is approximately $53 per hour, which is a reflection of the higher-skilled, strategic consultants Kforce is placing. This is why Kforce is increasingly integrating its FA service offering with its core Technology service offering-the two are becoming synergistic, focused on digital transformation projects that span both IT and the business functions it supports.

Cloud migration projects continue to be a primary driver for Kforce's Technology segment revenue

Despite macroeconomic uncertainties, clients are not stopping their core digital transformation and cloud migration projects. These are considered 'mission-critical initiatives' that proceed regardless of headline noise because they drive long-term cost efficiency and competitive advantage. Kforce's strategy is built around delivering solutions in these areas, specifically including cloud, data, and application engineering practice areas.

The backlog of technology investments among clients remains significant, and this pent-up demand provides a resilient foundation for Kforce's Technology segment revenue. The company's Technology Flex revenue (temporary staffing) was $304.3 million in Q3 2025, which, while down year-over-year, still represents the vast majority of the firm's overall revenue base and is supported by this ongoing project work. The consistent demand for cloud security specialists, in particular, is a major tailwind, as cloud computing security is one of the most significant skills gaps organizations are currently trying to address.

Kforce Technology Segment Key Metrics (Q3 2025)	Value	Implication
Technology Flex Revenue	$304.3 million	Represents the core, project-driven revenue base.
Technology Flex Revenue YoY Change	-5.5%	Reflects client caution and project delays due to macro factors.
Technology Flex Margin Sequential Change	+50 basis points	Indicates successful shift toward higher-margin, specialized consulting work.
Average Technology Bill Rate	Approx. $90 per hour	Stability reflects high demand for specialized skills (AI, Cyber, Cloud).

Kforce Inc. (KFRC) - PESTLE Analysis: Legal factors

Evolving state-level worker classification laws (e.g., California's AB5) pose risks to the contractor model

The legal landscape for classifying workers is a significant near-term risk for Kforce Inc.'s flexible staffing model, especially for its Technology and Finance and Accounting (FA) Flex services. The core issue is the divergence between the federal and state standards, creating a compliance nightmare for a national firm.

The US Department of Labor (DOL) adopted a new six-factor 'Economic Realities' test in 2024, but states like California, Massachusetts, and New Jersey continue to use the stringent 'ABC test,' which presumes a worker is an employee unless the hiring entity can prove all three conditions are met. Specifically, California's Assembly Bill 5 (AB5) requires the work to be outside the usual course of the hiring entity's business (Condition B), a high bar for a staffing firm's core business of placing contractors.

This ambiguity fuels costly litigation. Misclassification exposes firms to back wages, overtime violations, and IRS penalties. In the broader industry, misclassification class action settlements have reached substantial seven-figure amounts, such as a $24.75 million settlement in one recent case. Kforce must defintely invest in state-specific compliance audits to mitigate this exposure.

Stricter enforcement of non-compete agreements impacts talent mobility and recruitment costs

The ability to restrict talent movement through non-compete agreements is rapidly eroding, which increases the cost and difficulty of retaining top-tier consultants. The trend is a patchwork of state-level restrictions, especially targeting lower-wage and specialized professionals.

For Kforce Inc., which specializes in high-skill Technology and FA talent, the impact is felt through increased talent mobility and higher recruitment costs to replace departing staff. Several new state laws are in effect for 2025, further restricting these agreements, particularly in the healthcare sector, which is a part of the broader professional services market Kforce serves.

For example, Virginia's Senate Bill 1218, effective July 1, 2025, expands the non-compete ban to include employees entitled to overtime compensation under the Fair Labor Standards Act (FLSA), regardless of their earnings. Violations carry a stiff civil penalty of $10,000 for each instance, a clear financial risk. You need to assume your non-competes are unenforceable for a large portion of your workforce now.

New federal and state data privacy regulations require clients to hire compliance and security experts

The fragmentation of US data privacy law is a significant compliance burden but also a strong revenue driver for Kforce Inc.'s Technology segment. The lack of a unified federal law means businesses must comply with a growing number of state-specific regulations.

Eight new comprehensive state privacy laws take effect in 2025, adding complexity to the existing framework. These laws mandate new requirements like data protection assessments and honoring opt-out preference signals (e.g., Global Privacy Control or GPC). The California Privacy Rights Act (CPRA) is particularly relevant as it applies to employee (HR) data and covers businesses with annual revenue exceeding $26.6 million in 2025.

This regulatory environment directly increases client demand for specialized talent in cybersecurity, data governance, and compliance, which Kforce Inc. is well-positioned to supply. It's a risk for Kforce's own internal operations, but a clear opportunity in its core business offerings.

Here is a snapshot of the new state laws taking effect in 2025:

State	Effective Date (2025)	Key Feature for Compliance
Delaware	January 1	Requires data protection assessments for high-risk processing.
Iowa	January 1	Consumer rights to access, delete, and opt out of sale of personal data.
Nebraska	January 1	Applies to all companies operating in the state, regardless of data volume or revenue.
New Hampshire	January 1	Requires businesses to honor opt-out preference signals (like GPC).
New Jersey	January 15	Allows consumers to opt-out of profiling that produces legal or similarly significant effects.
Tennessee	July 1	Requires data protection assessments for processing sensitive information.
Minnesota	July 31	May require businesses to designate a privacy officer.
Maryland	October 1	Strict data minimization requirements and a complete ban on the sale of sensitive data.

Increased litigation risk related to contractor misclassification and co-employment claims

The regulatory and legal focus on worker classification translates directly into elevated litigation risk for the entire staffing industry. Kforce Inc. must manage both direct misclassification claims and the more complex co-employment claims from its clients.

The risk is not theoretical. The US Department of Labor (DOL) is actively pursuing cases, such as a suit seeking $140,976 in back wages and liquidated damages for 41 healthcare workers misclassified as independent contractors by a rival staffing agency. The financial exposure is compounded by the fact that regulatory bodies and plaintiff attorneys are increasingly targeting industries with high rates of contractor use, including professional services.

The co-employment risk-where a client is deemed a joint employer with the staffing firm-is a constant client concern. While some recent California case law suggests a joint employer is only liable for its own actions and not the staffing firm's, the threat of being pulled into a lawsuit still requires Kforce Inc. to provide robust indemnification and contractual clarity to its clients. Given Kforce Inc.'s third quarter 2025 revenue of $332.6 million, any large-scale class action settlement could materially impact profitability, especially since Selling, General, and Administrative (SG&A) expenses were already 22.8% of revenue in that quarter.

Key litigation risks to monitor include:

• Back pay and overtime claims under the FLSA.
• State-level unemployment insurance and workers' compensation liabilities.
• Class action lawsuits under state wage and hour laws.
• Lawsuits alleging misclassification as a form of unfair competition.

Kforce Inc. (KFRC) - PESTLE Analysis: Environmental factors

Growing client demand for Environmental, Social, and Governance (ESG) reporting expertise

You need to understand that the demand for ESG expertise is no longer a niche trend; it's a compliance and competitive necessity for our clients, especially those in the Fortune 500. The US Securities and Exchange Commission (SEC) and influential institutional investors are placing increasing importance on non-financial impacts, which directly translates to client mandates for Kforce Inc.

Our clients are now requiring Kforce Inc. to adhere to their internal corporate ESG commitments, creating a direct revenue opportunity in our core Technology and Finance & Accounting (FA) segments. This is a high-value shift. The Technology segment, which accounted for approximately 92% of total revenues in 2024, is evolving to include more consulting-oriented engagements that require specialists in data governance, analytics, and reporting frameworks for ESG disclosures.

Need for consultants to manage supply chain sustainability and compliance projects

The regulatory push for transparency means companies must map their Scope 3 emissions (indirect emissions from the value chain), which requires specialized consultants. While Kforce Inc. is primarily a solutions firm, its strategic pivot toward consulting-oriented engagements positions it to capture this market.

The Finance & Accounting segment, though smaller at roughly 8% of total revenues in 2024, is the natural home for this compliance work. We are supplying the talent-the auditors, financial analysts, and project managers-who help clients:

• Integrate environmental data into financial statements.
• Audit supplier compliance against Kforce's own Supplier Code of Conduct, which mandates ethical and environmental stewardship.
• Manage the technology platforms required for complex supply chain data tracking and reporting.

This is a defintely a high-margin area, so we need to be aggressive in curating this talent pool.

Kforce's own operational shift to remote work reduces its corporate carbon footprint

Kforce Inc.'s 'Office Occasional®' remote-first work model is a significant environmental advantage, not just a labor strategy. This model directly and meaningfully reduces the firm's operational carbon footprint by cutting down on employee commuting, business travel, and in-office electricity use.

The operational data for 2024, as reported in early 2025, shows concrete results:

• Total Scope 1, 2, and 3 Greenhouse Gas (GHG) emissions have been reduced by 59% compared to the 2019 baseline.
• GHG emissions were further reduced by 11% in 2024 alone versus 2023 levels.
• The overall leased square footage was reduced by 17% in 2024 through seven projects, building on a prior reduction of nearly 40% in 2022.

This low-footprint model lowers overhead costs and serves as a powerful proof point when consulting with clients on their own sustainability goals. The new Tampa headquarters is even LEED Silver and Fitwel certified.

Investor pressure for transparency on climate risk influences client's long-term project planning

Investor scrutiny on climate risk is driving client behavior, forcing them to prioritize long-term, strategic technology and finance projects. When institutional investors demand transparency, our clients respond by launching projects that require our specialized talent.

The firm's Board of Directors established an ESG Committee to oversee these risks and opportunities, which signals to the market that Kforce Inc. is taking this factor seriously. This pressure influences client capital allocation, leading to a 'significant backlog of strategically imperative technology investments' that clients are ready to execute once macroeconomic visibility improves.

Environmental Metric (2024 Data, reported 2025)	Value	Impact on Kforce Inc.
Reduction in Total GHG Emissions (vs. 2019 baseline)	59%	Significant reduction in operational risk and cost; strong ESG marketing tool.
Reduction in GHG Emissions (2024 vs. 2023)	11%	Demonstrates continuous improvement in environmental stewardship.
Leased Square Footage Reduction (2024)	17%	Direct cost savings on real estate, contributing to operating margin.
Q3 2025 Revenue	$332.6 million	The firm's core business remains financially stable while pivoting to high-value consulting.

Finance: draft a 13-week cash view by Friday to model the impact of a 5% drop in Q1 2026 billable hours.