The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon current expectations that involve risks and uncertainties. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, the words "believes," "anticipates," "plans," "expects," "intends," and similar expressions are intended to identify forward-looking statements. Our actual results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, the following: (1) actual demand for our services, (2) our ability to attract, train and retain qualified staffing consultants, (3) our ability to remain competitive in obtaining and retaining temporary staffing clients, (4) the availability of qualified contract nurses and other qualified contract professionals, (5) our ability to manage our growth efficiently and effectively, (6) continued performance of our information systems, (7) our ability to successfully make or integrate new acquisitions, and
(8) other risks detailed from time to time in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K, under the section "Risk Factors" for the year ended December 31, 2007, as filed with the SEC on March 17, 2008, our Quarterly Report on Form 10-Q, under the section "Risk Factors" for the quarter ended March 31, 2008, as filed with the SEC on May 12, 2008 and our Quarterly Report on Form 10-Q, under the section "Risk Factors" for the quarter ended June 30, 2008, as filed with the SEC on August 8, 2008. Other factors also may contribute to the differences between our forward-looking statements and our actual results. All forward-looking statements in this document are based on information available to us as of the date we file this Quarterly Report on Form 10-Q, and we assume no obligation to update any forward-looking statement or the reasons why our actual results may differ.

OVERVIEW

On Assignment, Inc. is a diversified professional staffing firm providing flexible and permanent staffing solutions in specialty skills including Laboratory/Scientific, Healthcare/Nursing/Physicians, Medical Financial, Information Technology and Engineering. We provide clients in these markets with short-term or long-term assignments of contract professionals, contract-to-permanent placement and direct placement of these professionals. Our business currently consists of four operating segments: Life Sciences, Healthcare, Physician, and IT and Engineering.

The Life Sciences segment includes our domestic and international life science staffing lines of business. We provide locally-based, contract life science professionals to clients in the biotechnology, pharmaceutical, food and beverage, medical device, personal care, chemical, nutraceutical, materials science, consumer products, environmental petrochemical and contract manufacturing industries. Our contract professionals include chemists, clinical research associates, clinical lab assistants, engineers, biologists, biochemists, microbiologists, molecular biologists, food scientists, regulatory affairs specialists, lab assistants and other skilled scientific professionals.

The Healthcare segment includes our Nurse Travel and Allied Healthcare lines of business. We offer our healthcare clients contract professionals, both locally-based and traveling, from more than ten healthcare and allied healthcare occupations. Our contract professionals include nurses, specialty nurses, health information management professionals, dialysis technicians, surgical technicians, imaging technicians, x-ray technicians, medical technologists, phlebotomists, coders, billers, claims processors and collections staff.

Our Physician segment consists of VISTA Staffing Solutions, Inc. (VISTA) which we acquired on January 3, 2007. VISTA is a leading provider of physician staffing, known as locum tenens, and permanent physician search services based in Salt Lake City, Utah. We provide short and long-term locum tenens and coverage and full-service physician search and consulting in the United States with capabilities in Australia and New Zealand. We work with physicians from nearly all medical specialties, placing them in hospitals, community-based practices, and federal, state and local facilities.

Our IT and Engineering segment consists of Oxford Global Resources, Inc. (Oxford) which we acquired on January 31, 2007. Oxford, based in Beverly, Massachusetts, delivers high-end consultants with expertise in specialized information technology; software and hardware engineering; and mechanical, electrical, validation and telecommunications engineering fields. We combine international reach with local depth, serving clients through a network of Oxford International recruiting centers in the United States and Europe, and Oxford & Associates branch offices in major metropolitan markets across the United States.

Third Quarter 2008 Update

During the third quarter, we continued our revenue growth despite the weakening of the U.S. economy. However, we remain cautious going into the fourth quarter of 2008 given the seasonality of our business, as discussed below, as well as the challenging economic environment in which we are currently operating. Although an overall demand environment still

exists, key indicators of demand (i.e. permanent placement and conversion revenues, number of new assignments and/or terminations, bill/pay spread, amount of time it takes customers to make a hiring decision on a qualified candidate and number of hours being worked by a billable employee) have weakened. We believe our Healthcare and Physician segments are best positioned to grow due to end market demand. Our IT and Engineering segment is seeing reduced demand relative to that experienced in the first nine months of 2008. The demand for services in our Life Sciences segment, which is perhaps most related to the general economic conditions, weakened in the first half of 2008, yet improved slightly in the current quarter. Our focus will remain on improving the diversity of our customer and skill mix, maintaining our gross margins, leveraging our back office infrastructure and generating cash.

Seasonality

Demand for our staffing services historically has been lower during the first and fourth quarters due to fewer business days resulting from client shutdowns and a decline in the number of contract professionals willing to work during the holidays. This year due to the weakening economy, we expect certain employers to extend holiday closures, in addition the timing of the holidays may further reduce billing days. As is common in the staffing industry, we run special incentive programs to encourage our contract professionals, particularly nurses, to work through the holidays. Demand for our staffing services usually increases in the second and third quarters of the year. In addition, our cost of services typically increases in the first quarter primarily due to the reset of payroll taxes.

RESULTS OF OPERATIONS



The following table summarizes selected statements of operations data expressed
as a percentage of revenues:



                                                  Three Months Ended       Nine Months Ended
                                                    September 30,            September 30,
                                                  2008         2007         2008        2007
                                                     (Unaudited)              (Unaudited)
Revenues                                            100.0 %      100.0 %     100.0 %     100.0 %
Cost of services                                     67.4         68.0        67.9        68.4
Gross profit                                         32.6         32.0        32.1        31.6
Selling, general and administrative expenses         24.2         25.8        25.0        26.9
Operating income                                      8.4          6.2         7.1         4.7
Interest expense                                     (1.4 )       (2.0 )      (1.6 )      (1.9 )
Interest income                                       0.1          0.2         0.1         0.2
Other income (expense)                                0.3         (0.6 )       0.1        (0.1 )
Income before income taxes                            7.4          3.8         5.7         2.9
Provision for income taxes                            3.1          1.6         2.4         1.2
Net income                                            4.3 %        2.2 %       3.3 %       1.7 %

CHANGES IN RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007

Revenues



                                        Three Months Ended
                                          September 30,            Change
                                         2008        2007         $        %
                                           (Unaudited)
Revenues by segment (in thousands):
Life Sciences                         $   33,948   $  34,431   $   (483 ) (1.4 )%
Healthcare                                47,999      44,524      3,475    7.8 %
Physician                                 23,612      19,138      4,474   23.4 %
IT and Engineering                        56,388      50,564      5,824   11.5 %
Total Revenues                        $  161,947   $ 148,657   $ 13,290    8.9 %

Revenues increased 8.9 percent to $161.9 million as a result of growth in our Healthcare, Physician, and IT and Engineering segments. The growth was due to both demand in our end markets as well as an expanded and more experienced sales and fulfillment team. In the latter half of 2007, we made management changes and realigned certain geographic markets in our Healthcare segment in order to generate higher revenue growth.

Life Sciences segment revenues decreased $0.5 million, or 1.4 percent, to $33.9 million primarily due to an 8.0 percent decrease in the average number of contract professionals on assignment and a decrease in direct hire and conversion fee, which typically occurs in a weakening economy. This decrease was partially offset by a 5.3 percent increase in the average bill rate.

The overall increase in Healthcare segment revenues, which include our Nurse Travel and Allied Healthcare lines of business, resulted from an increase in both Nurse Travel and Allied Healthcare lines of business revenues. Nurse Travel revenues increased $2.6 million, or 8.5 percent, to $33.4 million. The increase in revenues was primarily attributable to a 9.8 percent increase in the average number of nurses on assignment, as well as a 1.4 percent increase in the average bill rate. Allied Healthcare revenues increased $0.9 million, or 6.2 percent, to $14.6 million due to a 2.0 percent increase in the average bill rate and in increase in billable expenses, partially offset by a 1.2 percent decrease in the average number of contract professionals on assignment. Demand for Allied Healthcare services declined sequentially in the third quarter in part due to fewer elective procedures and postponement of preventative care due to the worsening economic environment.

Physician segment revenues increased $4.5 million, or 23.4 percent, to $23.6 million. The increase in revenues in 2008 was primarily due to a 14.7 percent increase in average number of contract professionals on assignment as well as a 7.7 percent increase in the average bill rate as a result of a strong demand environment.

The IT and Engineering segment revenues increased $5.8 million, or 11.5 percent, to $56.4 million primarily due to a 5.2 percent increase in the average number of contract professionals on assignment, and a 2.6 percent increase in the average bill rate. Although this segment of our business has some correlation to economic conditions we have been successful in finding customers who have continuing needs and effectively supporting them.

Gross profit and gross margin

                                                 Three Months Ended September 30,
                                               2008                           2007
                                                       Gross                           Gross
                                     Gross Profit      Margin       Gross Profit      Margin
                                                           (Unaudited)
Gross Profit by segment (in
thousands):
Life Sciences                       $       11,609        34.2 %   $       11,585         33.6 %
Healthcare                                  12,265        25.6 %           11,295         25.4 %
Physician                                    7,455        31.6 %            5,564         29.1 %
IT and Engineering                          21,480        38.1 %           19,083         37.7 %
Total Gross Profit                  $       52,809        32.6 %   $       47,527         32.0 %

The year-over-year gross profit increase was due to growth in revenues in the IT and Engineering, Physician and Healthcare segments and a 64 basis point expansion in consolidated gross margin. The expansion in gross margin was primarily due to the expansion in gross margin in all segments and the higher proportion of revenues from the IT and Engineering segment, which has higher gross margins than the other segments. Demand for direct hire and conversion services and demand in general may be impacted by a weakening economy, and therefore we do not expect continued gross margin expansion in the fourth quarter of 2008.

Life Sciences segment gross profit increased $24,000, or 0.2 percent. The increase in gross profit was primarily due to an increase of 55 basis points in gross margin offset by a 1.4 percent decrease in the segment revenues. The increase in gross margin was predominantly due to a 6.5 percent increase in bill/pay spread as a result of our continued focus on pricing policies and increased direct hire revenues.

Healthcare segment gross profit increased $1.0 million, or 8.6 percent. The increase in gross profit was due to a 7.8 percent increase in the segment revenues and an increase in gross margin. Gross margin for the segment increased 18 basis points due to an increase in the bill/pay spread, partially offset by an increase in other contract employee expenses. This segment includes gross profit from the Nurse Travel and Allied Healthcare lines of business. Allied Healthcare gross profit increased 4.5 percent and gross margin decreased 52 basis points while Nurse Travel gross profit increased 11.2 percent and gross margin increased 56 basis points.

Physician segment gross profit increased $1.9 million, or 34.0 percent. The increase in gross profit was primarily attributable to a 23.4 percent increase in revenues as well as an increase in gross margin. Gross margin for the segment increased 250 basis points primarily due to an increase in bill/pay spread, partially offset by increased medical malpractice expense and decreased direct hire fee revenues.

IT and Engineering segment gross profit increased $2.4 million, or 12.6 percent, primarily due to an 11.5 percent increase in revenues and an increase in gross margin for the segment. Gross margin for the segment increased 35 basis points, primarily due to an increase in direct hire and conversion fee revenues and an increase in bill/pay spread partially offset by a decrease in reimbursable revenue and an increase in other contract employment expenses.

Selling, general and administrative expenses

Selling, general and administrative (SG&A) expenses include field operating expenses, such as costs associated with our network of staffing consultants and branch offices for each of our four segments: Life Sciences, Healthcare, Physician Staffing and IT and Engineering including staffing consultant compensation, rent and other office expenses, as well as marketing and recruiting for our contract professionals. SG&A expenses also include our corporate and branch office support expenses, such as the salaries of corporate operations and support personnel, recruiting and training expenses for field staff, marketing staff expenses, rent, expenses related to being a publicly-traded company and other general and administrative expenses.

For the three months ended September 30, 2008, SG&A expenses increased $0.9 million, or 2.3 percent, to $39.2 million from $38.3 million for the same period in 2007. In the third quarter of 2008, SG&A increased $2.0 million primarily due to an increase in salaries, commissions and benefits in part as a result of increased revenues and a $0.2 million increase in marketing and advertising expenses. The increase in SG&A expense was partially offset by a $1.8 million decrease in depreciation and amortization expenses, primarily related to a reduction of the amortization amount for other intangibles in 2008.

Total SG&A expenses as a percentage of revenues decreased to 24.2 percent for the three months ended September 30, 2008 from 25.8 percent in the 2007 period, primarily due to the decrease in depreciation and amortization expense. We do not expect SG&A expenses to change significantly in the fourth quarter of 2008.

Interest expense, interest income and the change in fair value of interest rate swap

Interest expense was $2.4 million and $2.9 million for the three months ended September 30, 2008 and 2007, respectively. The decrease in interest expense was primarily due to lower average debt balances in 2008 due to an $8.0 million principal payment in 2007, and lower interest rates during the third quarter of 2008 compared with the same period in 2007.

Interest income was $0.2 million and $0.3 million for the three months ended September 30, 2008 and 2007, respectively.

On May 2, 2007, we entered into a transaction with a financial institution to fix the underlying rate on $73.0 million of our outstanding bank loan for a period of two years beginning June 30, 2007. This transaction, commonly known as a swap, essentially fixes our base borrowing rate at 4.9425 percent as opposed to a floating rate, which resets at selected periods. The current base rate on the loan balance in excess of $73.0 million, which will be reset on December 31, 2008, is 3.76188 percent. The new base rate for this portion of the debt will depend on the conditions we choose at the time. The borrowing rate consists of the base rate plus an incremental rate, currently 2.25 percent, which is dependent on several factors,

including the amount we borrowed and the amount of earnings before interest, taxes, depreciation and amortization (EBITDA), it is generating. On September 30, 2008, the value of the swap was marked-to-market, and we recorded a gain of $0.5 million for the quarter ended September 30, 2008, which is shown in the Condensed Consolidated Statements of Operations as the change in fair value of interest rate swap, and the related liability of $0.9 million is included in the Condensed Consolidated Balance Sheets in other current liabilities. On September 30, 2007, the value of the swap was marked-to-market, and we recorded a loss of $0.9 million for the quarter ended September 30, 2007.

Provision for income taxes

The provision for income taxes was $5.0 million for the three months ended September 30, 2008 compared with $2.4 million for the same period in the prior year. The estimated annualized effective tax rate, which excludes the effects of any discrete items, remained relatively consistent at 42.2 percent for the three months ended September 30, 2008 compared to 41.0 percent for the same quarter in the prior year.

CHANGES IN RESULTS OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007

Revenues



                                        Nine months Ended
                                          September 30,           Change
                                        2008        2007         $        %
                                           (Unaudited)
Revenues by segment (in thousands):
Life Sciences                         $  98,653   $  99,488   $   (835 ) (0.8 )%
Healthcare                              138,368     130,825      7,543    5.8 %
Physician                                66,005      55,237     10,768   19.5 %
IT and Engineering                      167,416     129,590     37,826   29.2 %
Total Revenues                        $ 470,442   $ 415,140   $ 55,302   13.3 %

Revenue increased 13.3 percent as a result of growth in the IT and Engineering, Physician and Healthcare segments. The growth was due to both demand in our end markets as well as an expanded and more experienced sales and fulfillment team. The 2008 period included nine months of activity from the IT and Engineering segment, as opposed to only eight months in the 2007 period. In the latter half of 2007, we made management changes and realigned certain geographic markets in our Healthcare segment in order to facilitate generating a better growth rate.

Life Sciences segment revenues decreased $0.8 million, or 0.8 percent, primarily due to a 7.6 percent decrease in average number of contract professionals on assignment as well as a slight decrease in direct hire and conversion fee revenues in part due to decreased spending by our large pharmaceutical customers. The decrease was partially offset by a 5.7 percent increase in the average bill rate.

The overall increase in the Healthcare segment revenues, which include our Nurse Travel and Allied Healthcare lines of business, consisted of an increase in the both the Nurse Travel and Allied Healthcare lines of business revenues. Nurse Travel revenues increased $7.4 million, or 8.4 percent, to $95.9 million. The increase in revenues was primarily attributable to a 3.8 percent increase in the average number of nurses on assignment as well as a 3.4 percent increase in the average bill rate. The Nurse Travel revenues in 2008 also included $2.4 million related to supporting a long standing customer that experienced a labor disruption. Allied Healthcare revenues increased $0.1 million, or 0.3 percent, to $42.5 million due to a 4.9 percent increase in the average bill rate, partially offset by an 8.0 percent decrease in the average number of contract professionals on assignment. In addition, direct hire and conversion fee revenues in the Allied Healthcare line of business decreased.

The Physician segment revenue increased $10.8 million, or 19.5 percent, primarily due to a 12.1 percent increase in the average number of contract professionals on assignment, as well as a 5.6 percent increase in the average bill rate as a result of a strong demand environment.

The IT and Engineering segment revenues increased $37.8 million, or 29.2 percent. The increase in revenues was primarily due to nine months of reportable activity in 2008 versus eight months in 2007, as we completed its acquisition of Oxford on January 31, 2007. In addition, there was a 10.3 percent increase in the average number of contract professionals on assignment, as well as a 4.6 percent increase in the average bill rate as a result of increased demand and revenue mix.

Gross profit and gross margin

                                                 Nine months Ended September 30,
                                              2008                           2007
                                                       Gross                          Gross
                                     Gross Profit     Margin       Gross Profit      Margin
                                                           (Unaudited)
Gross Profit by segment (in
thousands):
Life Sciences                       $       32,926       33.4 %   $       33,361         33.5 %
Healthcare                                  35,121       25.4 %           32,882         25.1 %
Physician                                   19,967       30.3 %           16,511         29.9 %
IT and Engineering                          62,887       37.6 %           48,474         37.4 %
Total Gross Profit                  $      150,901       32.1 %   $      131,228         31.6 %

The year-over-year increase in gross profit was due to growth in revenues in the IT and Engineering, Physician and Healthcare segments and a 47 basis point expansion in consolidated gross margin. The expansion in gross margin is primarily attributable to the Physician and Healthcare segments and to a higher proportion of revenues from the IT and Engineering segment, which has higher gross margins than the other segments. The 2008 period included nine months of reportable activity from the IT and Engineering segment as compared with only eight months in the 2007 period.

Life Sciences segment gross profit decreased $0.4 million, or 1.3 percent. The decrease in gross profit was primarily due to a 0.8 percent decrease in the segment revenues and a 16 basis point decrease in gross margin. The gross margin decrease was primarily due to increased workers' compensation expense partially offset by an increase in the bill/pay spread.

Healthcare segment gross profit increased $2.2 million, or 6.8 percent. The increase in gross profit in 2008 was due to a 5.8 percent increase in the segment revenues as well as an increase in gross margin. Gross margin for the segment increased 25 basis points due to an increase in the bill/pay spread and a reduction in housing and travel related expenses, partially offset by increased other contract employee expense and workers' compensation insurance expense. This segment includes gross profit from the Nurse Travel and Allied Healthcare lines of business. Allied Healthcare gross profit decreased 1.3 percent and gross margin decreased 50 basis points while Nurse Travel gross profit increased 12.5 percent and gross margin increased 83 basis points.

Physician segment gross profit increased $3.5 million, or 20.9 percent. The increase in gross profit was primarily attributable to a 19.5 percent increase in revenues as well as an increase in gross margin. Gross margin for the segment increased 36 basis points in 2008 due to an increase in the bill/pay spread, partially offset by increased medical malpractice expense. The segment has begun matching movements in the bill rates simultaneously with movements in the pay rates when possible.

IT and Engineering segment gross profit increased $14.4 million, or 29.7 percent, primarily due to a 29.2 percent increase in revenues, as the 2008 period included nine months of reportable activity versus eight months in 2007, as well as an increase in gross margin for the segment. Gross margin for the segment increased 16 basis points, primarily due to an increase in average bill/pay spread, offset partially by increased other contract employee expenses.

Selling, general and administrative expenses

SG&A expenses increased $6.1 million, or 5.5 percent, to $117.7 million from $111.6 million. The increase in SG&A expenses was primarily due to a $10.2 million increase in compensation and benefits as a result of increased revenues and in addition, SG&A expenses of the IT and Engineering segment being included . . .