When ASGN (ASGN) got its start in the 1980s, it was nothing more than a healthcare staffing business. It helped scientific companies fill roles, both temporary and full-time.

This was the biggest segment of its business and it’s called Assignment.

Over time though, the company realized it had a great set of experts at its disposal. While it could make money staffing those people elsewhere, it could also benefit from keeping those experts close by. So, ASGN decided to transform itself.

Back in 2012, the company bought a business called Apex Systems that helped it grow into both IT staffing… and more importantly, consulting.

Consulting is a more profitable business because the projects are higher-value. Rather than staffing a handful of people and collecting a small part of their salaries, ASGN had the chance to bill clients directly for transformative work.

The company offers IT services, digital transformation, digital marketing consulting, and technical staffing, all of which come with much higher price tags than staffing.

With a business model that primarily caters to technology companies (75%) and government agencies (25%), ASGN has demonstrated a unique ability to adapt and evolve in its sector.

While it still has a sizeable staffing business, recently, consulting has become the largest revenue driver.

Assignment accounted for 58% of the company’s business in Q1 2022 and now it’s reduced to 45%.

This shift was a smart move towards more profitable services.

Consulting in digital transformation and marketing was a natural step for ASGN, using its deep knowledge and technical skills to offer more valuable services.

This strategic change brought real financial benefits to ASGN.

It improved the company’s Uniform return on assets (“ROA”), which is a way of measuring how well a company is using its assets to make money.

The company managed to improve its Uniform ROA from 15% in 2011, right before moving into consulting, to 45% in 2023.