What happened

Economic uncertainty is causing companies to rethink their growth plans, which in turn is taking a toll on employment search firms. Shares of Robert Half International (RHI 2.13%) traded down more than 10% on Friday after the company's third-quarter numbers fell short of estimates and it guided for lower-than-expected fourth-quarter results.

So what

Robert Half is an executive search and consulting firm with close ties to numerous large industries, including tech, financial services, and marketing. It has been a strong business over the years, but it can't escape the realities of the business cycle. Major employers in a wide range of industries have announced plans to scale back growth and hiring.

Late Thursday, Robert Half reported third-quarter earnings of $1.53 per share on revenue of $1.83 billion, falling short of the consensus estimates for earnings of $1.63 per share on $1.92 billion in sales. Revenue was up 7% year over year, and the company's Protiviti consulting firm subsidiary reported sales that set a new quarterly record.

But there are signs the momentum is fading. Robert Half said it expects to report fourth-quarter earnings of between $1.31 per share and $1.41 per share on revenue of $1.7 billion to $1.78 billion. The analysts' consensus had been for $1.54 per share in earnings on revenue of $1.88 billion.

Now what

This is a good business stuck in a bad moment. Robert Half is a quality operator, but there is only so much the company can do in a decelerating economic environment where businesses are being increasingly cautious. No amount of marketing by Robert Half is going to convince its clients to ramp up hiring as long as recession risk is top of mind.

Indeed, given the macroeconomic risk, it is quite possible things could get worse for the company before they get better. Robert Half shares are now down 35% year to date, and investors should be prepared for further volatility from here. For investors with a long-term focus, this could be a buying opportunity, but be warned: You could have a long wait for this investment to pay off.