<PAGE>

                       Right Management Consultants, Inc.
                             Selected Financial Data
  (Dollars and Shares in Thousands Except Earnings Per Share and Stock Prices)

<TABLE>
<CAPTION>

                                                                                     Year Ended December 31,
                                                                 ----------------------------------------------------------------
                                                                     1998         1997         1996         1995        1994
                                                                 ----------------------------------------------------------------
Results of Operations (1)
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>          <C>          <C>          <C>          <C>    
Total revenue                                                        $168,258     $125,786     $125,269     $114,005     $89,134
---------------------------------------------------------------------------------------------------------------------------------
Costs and expenses                                                    155,186      121,366      108,994      101,090      79,345
---------------------------------------------------------------------------------------------------------------------------------
Income before income taxes                                             13,072        4,420       16,275       12,915       9,789
---------------------------------------------------------------------------------------------------------------------------------
Net income                                                              6,607        2,073        9,675        7,819       5,714
---------------------------------------------------------------------------------------------------------------------------------
Diluted earnings per share (2) (3)                                     $ 0.98       $ 0.31       $ 1.45       $ 1.24      $ 0.93
---------------------------------------------------------------------------------------------------------------------------------
Diluted weighted average number of
 shares outstanding (2) (3)                                             6,758        6,725        6,663        6,290       6,125
---------------------------------------------------------------------------------------------------------------------------------

Balance Sheet Data
---------------------------------------------------------------------------------------------------------------------------------
Working capital                                                       $15,281      $15,491      $25,342      $13,134      $9,883
---------------------------------------------------------------------------------------------------------------------------------
Total assets                                                          114,595       81,704       73,935       60,231      48,969
---------------------------------------------------------------------------------------------------------------------------------
Long-term obligations                                                  10,850       10,597        8,768        7,360       6,004
---------------------------------------------------------------------------------------------------------------------------------
Shareholders' equity                                                   56,818       50,450       47,801       33,626      24,405
---------------------------------------------------------------------------------------------------------------------------------
Total debt-to-equity ratio                                                25%          25%          17%          28%         28%
---------------------------------------------------------------------------------------------------------------------------------
Return on average equity                                                  12%           4%          24%          27%         27%
---------------------------------------------------------------------------------------------------------------------------------

Stock Price Ranges
---------------------------------------------------------------------------------------------------------------------------------
Low price (3)                                                         $ 11.00       $ 8.75      $ 15.00       $ 6.89      $ 6.55
---------------------------------------------------------------------------------------------------------------------------------
High price (3)                                                          15.75        23.50        27.50        19.50       11.11
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) See Note C to the Consolidated Financial Statements for information
    regarding acquisitions.
(2) See Note K to the Consolidated Financial Statements for information
    regarding earnings per share.
(3) Amounts presented have been restated for both the November 1995 and July
    1996 three-for-two stock splits (see Note J to the Consolidated Financial
    Statements).


<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Board of Directors and Shareholders of
Right Management Consultants, Inc.


 We have audited the accompanying consolidated balance sheets of Right
Management Consultants, Inc. (a Pennsylvania corporation) and subsidiaries as of
December 31, 1998 and 1997, and the related consolidated statements of income,
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

 We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

 In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Right Management
Consultants, Inc. and subsidiaries as of December 31, 1998 and 1997, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1998 in conformity with generally accepted
accounting principles.



/s/ ARTHUR ANDERSEN LLP


Philadelphia, Pennsylvania
   February 2, 1999


<PAGE>

                       Right Management Consultants, Inc.
                           Consolidated Balance Sheets
                    (Dollars in Thousands Except Share Data)

                                                                  
<TABLE>
<CAPTION>
                                                                                              December 31,
                                                                                   1998                         1997
                                                                            -------------------          --------------------


                          Assets                                      

Current Assets:
<S>                                                                                   <C>                            <C>    
  Cash and cash equivalents                                                           $ 20,800                       $ 7,583
  Accounts receivable, trade, net of allowance for doubtful accounts
    of $1,066 and $663 in 1998 and 1997, respectively                                   33,271                        21,888
  Royalties and fees receivable from Affiliates                                          3,809                         2,511
  Prepaid expenses and other current assets                                              2,189                         1,681
  Deferred income taxes                                                                    815                         1,074
                                                                            -------------------          --------------------
       Total current assets                                                             60,884                        34,737

Property and equipment, net                                                             15,983                        13,342


Intangible assets, net                                                                  33,947                        30,703
Deferred income taxes                                                                    1,937                         1,426
Other                                                                                    1,844                         1,496
                                                                            -------------------          --------------------
       Total Assets                                                                  $ 114,595                      $ 81,704
                                                                            ===================          ====================



                      Liabilities and Shareholders' Equity


Current Liabilities:
  Current portion of long-term debt and other obligations                              $ 5,124                       $ 3,943
  Accounts payable                                                                       7,514                         4,651
  Commissions payable                                                                    2,572                         1,431
  Accrued incentive compensation and benefits                                           15,490                         2,022
  Other accrued expenses                                                                 8,191                         4,272
  Deferred income                                                                        6,712                         2,927
                                                                            -------------------          --------------------
       Total current liabilities                                                        45,603                        19,246
                                                                            -------------------          --------------------

Long-term debt and other obligations                                                     9,065                         8,775
                                                                            -------------------          --------------------

Deferred compensation                                                                    1,785                         1,822
                                                                            -------------------          --------------------

Minority interests in subsidiaries                                                       1,324                         1,411
                                                                            -------------------          --------------------

Commitments and Contingent Liabilities (Notes E, G and I)

Shareholders' Equity (Note J):
  Preferred stock, no par value; 1,000,000 shares authorized; no
    shares issued                                                                            -                             -
  Common stock, $.01 par value; 20,000,000 shares authorized;
    7,255,765 and 7,084,104 shares issued in 1998 and 1997, respectively                    72                            71
  Additional paid-in capital                                                            16,448                        14,492 
  Retained earnings                                                                     44,970                        38,363 
  Accumulated other comprehensive income                                                  (727)                         (580)
                                                                            -------------------          --------------------
                                                                                        60,763                        52,346 
  Less treasury stock, at cost, 547,952 and 380,452 shares in 1998                                                           
    and 1997, respectively                                                              (3,945)                       (1,896)
                                                                            -------------------          --------------------
       Total shareholders' equity                                                       56,818                        50,450 
                                                                            -------------------          --------------------
       Total Liabilities and Shareholders' Equity                                    $ 114,595                      $ 81,704 
                                                                            ===================          ====================


</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                        2

<PAGE>

                       Right Management Consultants, Inc.
                        Consolidated Statements of Income
        (Dollars and Shares in Thousands Except Earnings per Share Data)


<TABLE>
<CAPTION>

                                                                          Year Ended December 31,

                                                              1998                  1997               1996
                                                              -----                 -----              ----

Revenue:
<S>                                                             <C>                   <C>                <C>      
Company office revenue                                          $ 163,847             $ 122,281          $ 120,679
Affiliate royalties                                                 4,411                 3,505              4,590
                                                         -----------------    ------------------  -----------------

Total revenue                                                     168,258               125,786            125,269
                                                         -----------------    ------------------  -----------------

Expenses:
Consultants' compensation                                          68,550                52,085             47,402
Office sales and consulting support                                10,854                 7,291              6,367
Office administration                                              56,675                47,767             41,617
General sales and administration                                   18,378                13,438             13,644
Restructuring costs (Note B)                                            -                   630                  -
                                                         -----------------    ------------------  -----------------

                                                                  154,457               121,211            109,030
                                                         -----------------    ------------------  -----------------

Income from operations                                             13,801                 4,575             16,239
                                                         -----------------    ------------------  -----------------

Other income (expense):

Interest income                                                       496                   663                606
Interest expense                                                   (1,225)                 (818)              (570)
                                                         -----------------    ------------------  -----------------

                                                                     (729)                 (155)                36
                                                         -----------------    ------------------  -----------------

Income before income taxes                                         13,072                 4,420             16,275

Provision for income taxes                                          5,882                 2,009              6,600

Minority interests in net income of subsidiaries                      583                   338                  -
                                                         -----------------    ------------------  -----------------

Net income                                                        $ 6,607               $ 2,073            $ 9,675
                                                         =================    ==================  =================

Basic earnings per share                                           $ 0.99                $ 0.31             $ 1.55
                                                         =================    ==================  =================

Diluted earnings per share                                         $ 0.98                $ 0.31             $ 1.45
                                                         =================    ==================  =================

Basic weighted average shares outstanding                           6,674                 6,596              6,252
                                                         =================    ==================  =================

Diluted weighted average shares outstanding                         6,758                 6,725              6,663
                                                         =================    ==================  =================


</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                        3





<PAGE>
                       Right Management Consultants, Inc.
                 Consolidated Statements of Shareholders' Equity
                    (Dollars in Thousands Except Share Data)
<TABLE>
<CAPTION>
                                                                                       Accumulated
                                                                                          Other                            Total
                                         Common Stock         Additional   Retained  Comprehensive    Treasury Stock   Shareholders 
                                      Shares     Par Value  Paid-in Capital Earnings      Income     Shares     Cost       Equity   
                                      -------    ---------  --------------- --------      ------     ------      ----       ------  
<S>                                   <C>          <C>        <C>          <C>           <C>         <C>        <C>        <C>      
Balance, January 1, 1996              4,313,816    $ 43       $ 7,655      $ 26,636      $ (191)     252,952    $ (517)    $ 33,626 
                                                                                                                                    
Stock options exercised                 316,039       3         1,332             -           -            -         -        1,335 
                                                                                                                                    
Tax benefit from exercise             
of stock options                              -       -         2,223             -           -            -         -        2,223
                                                                                                                                   
Shares issued under restricted                                                                                                     
stock awards                             29,250       -           658             -           -            -         -          658
                                                                                                                                    
Three-for-two stock split             2,050,100      21             -           (21)          -            -         -            - 
                                                                                                                                    
Shares issued under the Employee                                                                                                    
Stock Purchase Plan                       4,368       -            88             -           -            -         -           88 
                                                                                                                                    
Comprehensive Income:                                                                                                               
                                                                                                                                    
Net income                                    -       -             -         9,675           -            -         -        9,675 
                                                                                                                                    
Translation adjustment                        -       -             -             -         196            -         -          196 
                                                                                                                           --------
   Total comprehensive income                                                                                                 9,871 
                                      ---------    ----      --------      --------        ----      -------    ------     --------
Balance, December 31, 1996            6,713,573    $ 67      $ 11,956      $ 36,290        $  5      252,952    $ (517)    $ 47,801 

Stock options exercised                 236,095       3         1,198             -           -            -         -        1,201 
                                                                                                                                    
Tax benefit from exercise             
of stock options                              -       -           597             -           -            -         -          597 
                                                                                                           
Davidson & Associates                                                                                                               
  acquisition (Note C)                   96,577       1           988             -           -            -         -          989 
                                                                                                                                    
Shares issued under the Employee                                                                                                    
Stock Purchase Plan                      37,859       -           386             -           -            -         -          386 
                                                                                                                                    
Restricted stock compensation                 -       -          (633)            -           -            -         -         (633)
                                                                                                                                    
Repurchase of common stock                    -       -             -             -           -      127,500    (1,379)      (1,379)
                                                                                                                                    
Comprehensive Income:                                                                                                               
                                                                                                                                    
Net income                                    -       -             -         2,073           -            -         -        2,073 
                                                                                                                                    
Translation adjustment                        -       -             -             -        (585)           -         -         (585)
                                                                                                                           -------- 
   Total comprehensive income                                                                                                 1,488 
                                      ---------    ----      --------      --------        ----      -------    -------    --------
Balance, December 31, 1997            7,084,104    $ 71      $ 14,492      $ 38,363      $ (580)     380,452    $(1,896)   $ 50,450 
                                                                                                                                    
Stock options exercised                 169,500       1         1,208             -           -            -         -        1,209 
                                                                                                                                    
Tax benefit from exercise             
of stock options                              -       -           364             -           -            -         -          364
                                                                                                                                    
Shares issued under the Employee                                                                                                    
Stock Purchase Plan                      36,151       -           384             -           -            -         -          384 
                                                                                                                                    
Restricted stock forfeiture/                                                                               
  cancellations                         (33,990)      -             -             -           -            -         -            - 
                                                                                                                                    
Repurchase of common stock                    -       -             -             -           -      167,500    (2,049)      (2,049)
                                                                                                                                    
Comprehensive Income:                                                                                                               
                                                                                                                                    
Net income                                    -       -             -         6,607           -            -         -        6,607 
                                                                                                                                    
Translation adjustment                        -       -             -             -        (147)           -         -         (147)
                                                                                                                           --------
   Total comprehensive income                                                                                                 6,460 
                                      ---------    ----      --------      --------        ----      -------    -------    --------
Balance, December 31, 1998            7,255,765    $ 72      $ 16,448      $ 44,970      $ (727)    547,952  $  (3,945)    $ 56,818 
                                     ==========   =====     =========     =========      =======   ========  =========     ======== 
</TABLE>                                                  
                                                           
              The accompanying notes are an integral part of these   
                       consolidated financial statements.           
                                                                    
                                        4                           
  
<PAGE>
                       Right Management Consultants, Inc.
                      Consolidated Statements of Cash Flows
                             (Dollars in Thousands)

<TABLE>
<CAPTION>

                                                                                   Year Ended December 31,

                                                                      1998                  1997                  1996
                                                                      -----                 -----                 ----

Operating Activities:
<S>                                                                      <C>                    <C>                  <C>   
  Net income                                                             $6,607                 $2,073               $9,675
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation and amortization                                       8,039                  6,494                4,923
      Deferred income taxes                                                (252)                  (510)                (169)
      Restricted stock compensation                                           -                   (633)                 658
      Restructuring costs (Note B)                                            -                    630                    -
      Revenue recognized upon completion of incomplete
       contracts assumed in acquisitions                                    (90)                  (807)                (512)
      Provision for doubtful accounts                                       576                    329                   28
      Minority interests in net income of subsidiaries                      583                    338                    -
      Other non-cash items                                                  411                   (332)                 444
      Changes in operating accounts:
          Accounts receivable, trade and from Affiliates                (13,273)                   531                 (460)
          Prepaid expenses and other assets                                (582)                  (596)                 499
          Accounts payable and accrued expenses                          19,925                 (5,620)                 640
          Commissions payable and other liabilities                       1,141                  1,414               (1,782)
          Deferred income                                                 3,785                   (941)                 459
                                                                  --------------        ---------------       --------------

  Net cash provided by operating activities                              26,870                  2,370               14,403
                                                                  --------------        ---------------       --------------

Investing Activities:
  Purchase of property and equipment                                     (7,786)                (5,201)              (4,873)
  Acquisitions, net of cash acquired                                     (6,285)               (13,199)              (3,401)
                                                                  --------------        ---------------       --------------

  Net cash utilized by investing activities                             (14,071)               (18,400)              (8,274)
                                                                  --------------        ---------------       --------------

Financing Activities:
  Borrowings under credit agreements                                      6,012                  7,500                2,935
  Payment of long-term debt and other obligations                        (4,770)                (2,458)              (3,660)
  Cash dividends paid to minority interests (Note J)                       (670)                     -                    -
  Tax benefit from the exercise of stock options                            364                    597                2,223
  Repurchase of common stock                                             (2,049)                (1,379)                   -
  Proceeds from stock issuances                                           1,593                  1,587                1,420
                                                                  --------------        ---------------       --------------

  Net cash provided by financing activities                                 480                  5,847                2,918
                                                                  --------------        ---------------       --------------

Effect of exchange rate changes on cash and
 cash equivalents                                                           (62)                  (289)                  43
                                                                  --------------        ---------------       --------------

Increase (decrease) in cash and cash equivalents                         13,217                (10,472)               9,090

Cash and cash equivalents, beginning of year                              7,583                 18,055                8,965
                                                                  --------------        ---------------       --------------

Cash and cash equivalents, end of year                                  $20,800                 $7,583              $18,055
                                                                  ==============        ===============       ==============



Supplemental Disclosures of Cash Flow Information
  Cash paid for:

     Interest                                                            $1,019                  $ 687                $ 351
                                                                  ==============        ===============       ==============

     Income taxes                                                        $3,031                 $3,395               $5,252
                                                                  ==============        ===============       ==============
</TABLE>




                     The accompanying notes are an integral
                part of these consolidated financial statements.

                                        5

<PAGE>

31


                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
         ACCOUNTING  POLICIES

Description of business

Right Management Consultants, Inc. (the "Company") operations are segregated
into two lines of business: career transition and human resources and career
management consulting. Through a worldwide network of Company and Affiliate
offices, Right Management Consultants, Inc. develops and delivers career
transition services and provides human resources and career management
consulting services, specializing in change management, communication, strategy
implementation, merger integration and executive development. The Company
primarily delivers its services to mid-size and large industrial and service
companies, with no concentration in specific companies or industries.

Principles of consolidation

The consolidated financial statements include the accounts of Right Management
Consultants, Inc. and its wholly-owned and majority-owned subsidiaries. All
significant intercompany transactions and balances have been eliminated in
consolidation.

Use of estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Revenue recognition

The Company recognizes contract revenue and the related direct compensation for
the services provided by Company offices upon the performance of its obligations
under consulting service contracts. Revenue, recorded at the start of
performance of services, is deferred and recognized over the estimated average
period within which the contracts are essentially completed. All direct and
indirect costs are charged to expense in the period in which the obligations are
incurred.

Franchise revenue

Royalties from the members of the Company's network arise from agreements made
with Affiliates, which generally operate exclusively in designated regional
locations. The terms of these agreements require the Affiliates to provide
services under the Company's service marks in accordance with programs and
standards developed by the Company. Affiliate royalties are typically 10% of
each Affiliate's gross billings and are recorded when the Affiliate bills its
customers for services.

                                       6
<PAGE>


                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
         ACCOUNTING POLICIES (Continued)

Cash equivalents

The Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.

Property and equipment

Property and equipment is carried at cost, or allocated cost for companies
acquired in a purchase transaction. Depreciation is provided on the
straight-line method over the estimated useful lives of the assets, which are
generally three to seven years for furniture, fixtures and computer equipment.
Leasehold improvements are depreciated using the straight-line method over the
shorter of the estimated useful life of the asset or the remaining term of the
lease.

Intangible assets
<TABLE>
<CAPTION>

                                                                                 Amortization
                                                      (Dollars in Thousands)        Period
                                                       1998             1997       (Years)
                                                       ----             ----       -------
<S>                                                 <C>              <C>              <C>
Trademarks                                          $ 1,150          $ 1,644          5
Contact lists and Affiliate agreements                  129              538          5
Covenants not to compete                                 --            1,118       5 to 10
Goodwill                                             40,782           38,239      15 to 40
                                                     ------           ------
                                                     42,061           41,539
Less accumulated amortization                         8,114           10,836
                                                    -------          -------
                                                    $33,947          $30,703
                                                    =======          =======
</TABLE>

Amortization of these intangible assets was $2,761,000, $2,311,000, and
$1,868,000 in 1998, 1997 and 1996, respectively.

Impairment of Long-Lived Assets

Pursuant to Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to
Be Disposed Of", the Company is required to evaluate the potential impairment
of long-lived assets and certain intangible assets on a periodic basis. The
Company reviews the realizability of its long-lived assets and certain
intangible assets by analyzing the projected cash flows and profitability of the
acquired entities and adjusts the net book value of recorded assets when
necessary. No material adjustments have been recorded for each of the three
years in the period ended December 31, 1998.

                                       7
<PAGE>


                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT 
         ACCOUNTING POLICIES (Continued)

Accounting for Interest Rate Swaps

In June 1998, SFAS No. 133, " Accounting for Derivative Instruments and Hedging
Activities, " was issued and is effective for fiscal years beginning after June
15, 1999. SFAS No. 133, as it applies to the Company, requires the impact of
fluctuations in interest rates on hedging instruments to be reported in other
comprehensive income. The Company uses interest rate swaps to reduce exposure to
adverse fluctuations in interest rates. While these hedging instruments are
subject to fluctuations in value, such fluctuations are offset by the change in
value of the underlying exposures being hedged. The Company will adopt SFAS No.
133 effective January 1, 2000.

Earnings per Share

The Company utilizes SFAS No. 128, "Earnings per Share," to compute earnings per
share. SFAS No. 128 requires dual presentation of basic and diluted earnings per
share ("EPS") for complex capital structures on the Statements of Income. Basic
EPS is computed by dividing net income by the weighted-average number of common
shares outstanding for the period. Diluted EPS reflects the potential dilution
from the exercise or conversion of securities into common stock. See Note K for
further disclosure.

Currency translation

The accounts of the international subsidiaries are translated in accordance with
SFAS No. 52, "Foreign Currency Translation", which requires that assets and
liabilities of international operations be translated using the exchange rate in
effect at the balance sheet date, and that the results of operations be
translated at average exchange rates during the year. The effects of exchange
rate fluctuations in translating assets and liabilities of international
operations into U.S. dollars are accumulated and reflected as the cumulative
translation adjustment in shareholders' equity. The effects of exchange rate
fluctuations in translating the foreign currency transactions are included in
general sales and administration expense for 1998, 1997 and 1996. There are no
material transaction gains or losses in the accompanying Consolidated Financial
Statements for each of the three years in the period ended December 31, 1998.

Accumulated Other Comprehensive Income

In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS No.
130, "Reporting Comprehensive Income" which is effective for financial
statements issued for fiscal years beginning after December 15, 1997.
Comprehensive income is defined as net income plus revenues, expenses, gains and
losses that, under generally accepted accounting principles, are excluded from
net income. These items, which are excluded from net income, represent
accumulated other comprehensive income. The Company's accumulated other
comprehensive income is comprised of unrealized gains and losses from foreign
currency translation adjustments and is presented in the Consolidated Statements
of Shareholders' Equity. Prior year financial statements have been reclassified
to conform to the SFAS No. 130 requirements. The earnings associated with the
Company's investment in its foreign subsidiaries are considered to be
permanently invested and no provision for U.S. federal and state income taxes on
those earnings or translation adjustments has been provided.


                                       8
<PAGE>

                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
         ACCOUNTING POLICIES (Continued)

Income taxes

The Company accounts for income taxes pursuant to SFAS No. 109, "Accounting for
Income Taxes." In accordance with SFAS No. 109, the liability method is used in
accounting for income taxes. Under this method, deferred tax assets and
liabilities are determined based on differences between the financial reporting
and tax basis of assets and liabilities and are measured using enacted tax rates
and laws that are expected to be in effect when the difference is reversed.

Euro Conversion

On January 1, 1999, eleven of the fifteen member countries of the European Union
established fixed conversion rates between their existing sovereign currencies
and the euro. The participating countries have agreed to adopt the euro as the
common legal currency. The Company has European operations in the United
Kingdom, France, and Belgium. France is a participating country in this euro
conversion. The Company does not anticipate any material impact to its business
or financial condition resulting from the conversion to the euro currency.

Reclassifications

Certain amounts have been reclassified in the prior years' Consolidated
Financial Statements and Notes to the Consolidated Financial Statements to
conform with the 1998 presentation.

NOTE B - RESTRUCTURING COSTS

During the first quarter 1997, the Company announced a corporate restructuring.
The restructuring charge of $630,000 ($380,000 or $0.06, net of taxes) was
primarily for severance payments related to reductions in employees and lease
termination costs for the closure of several small "satellite" offices with
limited future economic benefit to the Company. The Company has completed all
payments for severance and office closures during 1998.

NOTE C - ACQUISITIONS AND LICENSING AGREEMENT

Effective January 1, 1998, the Company acquired certain assets and the business
of Manus Associates ("Manus"), a Stamford, Connecticut human resource consulting
firm, for a combination of cash and future defined incentives. The Company
borrowed the full purchase price of $3,600,000 from its revolving credit
facility in order to complete this transaction.

Effective April 1, 1998, the Company acquired 51% of the outstanding shares of
Teams International, Inc. ("Teams"), a technology-based assessment firm
specializing in 360-degree feedback instruments to support a wide spectrum of
organizational change initiatives. The purchase price of this acquisition,
including costs of acquisition, approximated $2,308,000. The Company borrowed
$2,300,000 from its revolving credit facility in order to complete this
transaction. As a part of the purchase agreement, the minority shareholders of
Teams have provided the Company with an option to acquire the remaining 49% of


                                       9
<PAGE>

                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE C - ACQUISITIONS AND LICENSING AGREEMENT (Continued)

the outstanding shares of Teams beginning on April 1, 2001. Additionally, the
minority shareholders of Teams have the right to require the Company to purchase
the remaining 49% of the outstanding shares of Teams over a three year period
beginning on April 1, 2001. If either of these options is exercised, the
purchase price will be based on a multiple of gross revenues.

These transactions were accounted for as purchases. The accompanying
consolidated financial statements reflect the year to date results from the
effective dates of acquisition for all of the above transactions.

For the year ended December 31, 1998, the aggregate purchase price for
acquisitions was approximately $6,285,000, including the costs of acquisitions
and adjustments for prior acquisitions. The purchase price exceeded the fair
value of the assets acquired by $6,375,000.

Additionally, effective January 1, 1998, the Company entered into an exclusive
licensing agreement with The Atlanta Consulting Group ("TACG"), an
organizational consulting firm located in Atlanta, Georgia. Under this exclusive
licensing agreement, the Company sells and delivers TACG's full range of
products and methodologies and hired all former TACG employees.

Effective January 1, 1997, the Company acquired the assets and/or the
outstanding stock of six career transition firms and one search firm for a
combination of cash and future defined incentive payments. The six career
transition firms included Nelson, O'Connor & Associates (Phoenix, Arizona),
Corporate Resource Group (San Francisco, California), Cavendish Partners
(London, England) and the former St. Louis, Missouri, Knoxville, Tennessee, and
Richmond, Virginia Affiliates. The search firm acquired was Nelson, O'Connor &
Cox (Tucson, Arizona).

Effective April 1, 1997, the Company acquired the outstanding stock of another 
career transition firm, Chapel Stowell, Inc. (Portland, Oregon).

Effective July 1, 1997, the Company acquired 51% of the outstanding shares of
the Australia based career management firm, Davidson & Associates, Pty., Ltd
("Davidson & Associates"). Davidson & Associates has operations in eleven
locations throughout Australia, New Zealand, Singapore and Hong Kong. The
purchase price of this acquisition approximated $6,935,000, including costs of
acquisition, 85% of which was paid in cash (approximately $5,946,000) and the
remaining 15% in shares of the Company's common stock (96,577 shares). The
Company borrowed $5,500,000 from its revolving credit facility in order to
complete this transaction. As a part of the purchase agreement, the minority
shareholders of Davidson & Associates have provided the Company with an
option to acquire the remaining 49% of the outstanding shares of Davidson &
Associates, at fair value as defined, beginning on July 1, 2000. Additionally,
the minority shareholders of Davidson & Associates have the right to require the
Company to purchase in 10% annual increments, the remaining 49% of the
outstanding shares of Davidson & Associates, at fair value as defined, beginning
on July 1, 2000.

Effective August 1, 1997, the Company acquired the business and certain assets
of a Minneapolis, Minnesota career management firm, Career Dynamics, Inc. The
purchase was funded through a borrowing of $2,000,000 under the Company's
revolving credit facility. The acquisition included future defined incentives
contingent upon the results of the operations in Minnesota subsequent to the
transaction.

                                       10

<PAGE>

                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE C - ACQUISITIONS AND LICENSING AGREEMENT (Continued)

Effective December 1, 1997, the Company acquired the business and certain assets
of a Houston, Texas career transition firm, Michael D. McKee & Associates. The
acquisition included future defined incentives contingent upon the results of
the operations in the Company's southwest region subsequent to the transaction.

The aggregate purchase price of these eleven acquisitions was approximately
$15,556,000, including costs of acquisitions. The purchase price exceeded the
fair value of the net tangible assets acquired by approximately $14,847,000,
which will be amortized over a period of fifteen years.

The following represents the assets acquired and liabilities assumed to arrive
at net cash paid for acquisitions discussed above for each of the two years in
the period ended December 31, 1998:

                                                   (Dollars in Thousands)
                                                     1998           1997
                                                     ----           ----
Assets acquired:
Accounts receivable                                  $ 12          $2,875
Prepaid expenses and other assets                     149             423
Fixed assets                                          245           2,983
Intangible assets                                   6,375          14,847
                                                    -----          ------
                                                    6,781          21,128
Liabilities acquired:                                         
Accounts payable and accrued expenses                 104           4,765
Assumption of incomplete contracts                     90             807
Long term debt                                        274              --
                                                    -----          ------
                                                      468           5,572
Cash acquired                                          28           1,368
Equity issued                                          --             989
                                                    -----          ------
Net cash paid for acquisitions                     $6,285         $13,199
                                                   ======         =======
                                                            
Each acquisition has been accounted as a purchase and the operating results of
each entity have been consolidated with the Company's results since the
effective date of the respective acquisition. The purchase price of each
acquisition has been allocated to the assets acquired based upon their estimated
fair value at the date of acquisition.

The pro forma effect of the acquisitions detailed above on the Company's results
of operations as if the acquisitions had occurred at January 1, 1997, is
immaterial and has been omitted.

                                       11
<PAGE>


                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE D - PROPERTY AND EQUIPMENT

                                                    (Dollars in Thousands)
                                                    1998            1997
                                                    ----            ----
   Furniture and computer equipment               $32,125          $25,577
   Leasehold improvements                           5,944            4,696
                                                  -------          -------
                                                   38,069           30,273
   Less accumulated depreciation                   22,086           16,931
                                                  -------          -------
                                                  $15,983          $13,342
                                                  =======          =======

Depreciation expense was $5,278,000,  $4,183,000,  and $3,055,000 in 1998, 1997,
and 1996, respectively.

NOTE E - DEBT AND OTHER OBLIGATIONS

Credit Agreement

On December 20, 1996, the Company signed a new Credit Agreement (the "Credit
Agreement") with its two primary lenders (the "Lenders") to increase its maximum
unsecured revolving line of credit to $40,000,000. The Credit Agreement became
effective December 23, 1996.

The Credit Agreement has a three year maturity. Subsequent to the first
anniversary, and annually thereafter, the Company has the ability to extend the
Credit Agreement for an additional year upon Lenders' approval. In September
1998, the Company extended the Credit Agreement from December 31, 1999 to
December 31, 2000. The Company may borrow, repay and re-borrow during the term
of the Credit Agreement, with any balance due at maturity. Interest rates are
tiered at LIBOR plus a margin contingent upon certain financial ratios of the
Company. The Company also has the option to borrow at a base rate equal to the
lesser of the Lenders' Prime Rate less 1/4% or the Federal Funds Effective Rate
plus 1%.

Long-term debt and other obligations consist of the following:
<TABLE>
<CAPTION>

                                                                             (Dollars in Thousands)
                                                                                  December 31,
                                                                               1998          1997
                                                                               ----          ----

<S>                                                                           <C>           <C>   
Floating rate borrowings under the Credit Agreement repaid in 1998            $    --       $1,900

Borrowings under the Credit Agreement, bearing interest at
a weighted average variable rate of 6.06%                                      13,516        9,708

Other                                                                             673        1,110
                                                                              -------      -------
                                                                               14,189       12,718
Less current portion                                                            5,124        3,943
                                                                              -------      -------   
                                                                              $ 9,065      $ 8,775
                                                                              =======      =======


</TABLE>

                                       12
<PAGE>


                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE E - DEBT AND OTHER OBLIGATIONS (Continued)

Under the Credit Agreement, the major covenants require the maintenance of
certain minimum financial ratios and restrict the level of indebtedness with
other banks, as defined. At December 31, 1998, the Company is in compliance with
all such covenants.

For the years subsequent to December 31, 1998, aggregate maturities on long-term
debt and other obligations, are as follows:

                                                      (Dollars in Thousands)
        Year Ending December 31,                               Amount
        -------------------------                              ------
                 1999                                         $ 5,124
                 2000                                           8,653
                 2001                                             301
                 2002                                             108
                 2003                                               3
                                                              -------
                                                              $14,189
                                                              =======

The Company intends to make scheduled quarterly payments during 1999 to reduce
the outstanding balance under the Credit Agreement to agree with the notional
principal balance under its fixed interest rate swap agreements. Therefore, the
scheduled 1999 payments are presented in the current portion of the long term
debt. The remaining amounts due under the Credit Agreement is shown as maturing
as of December 31, 2000.

Interest Rate Swaps

During 1998 and 1997, the Company entered into two and three fixed interest rate
swap agreements ("Swap Agreements"), respectively, with an aggregate notional
principal at December 31, 1998 of $13,516,000 with scheduled quarterly
reductions of notional principal over three to five years. The fixed interest
rates under these Swap Agreements range from 5.79% to 7.08% at December 31,
1998. The purpose of these Swap Agreements is to fix interest rates on variable
rate debt and reduce exposure to interest rate fluctuations. Under these Swap
Agreements, the Company pays its Lenders interest at a weighted average fixed
rate of 6.61% and its Lenders are paying the Company interest at a weighted
average variable rate of 6.06% at December 31, 1998. The notional amounts do not
represent amounts exchanged by the parties and thus are not a measure of
exposure of the Company. The amounts exchanged are normally based on the
notional amounts and other terms of the swaps. The weighted average variable
rates are subject to change over time as LIBOR fluctuates.

At December 31, 1998, the Company has no exposure to credit loss on these
interest rate swaps. The Company is not a party to leveraged derivatives and
does not hold or issue financial instruments for speculative purposes. The
Company has made adjustments to interest expense for the net cash paid or
received on interest rate swap agreements. The impact of the above interest rate
swap agreements on interest expense has been immaterial to date.

                                       13

<PAGE>


                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  F - INCOME TAXES

The provision for income taxes consists of the following:

                                                  (Dollars in Thousands)
                                                  Year Ended December 31,
                                                 1998       1997      1996
                                               -------    -------    -------
Current:
  Federal                                      $ 3,499    $ 1,388    $ 5,429
  State                                            662        561        861
  Foreign                                        1,973        570        479
                                               -------    -------    -------
                                                 6,134      2,519      6,769
                                               -------    -------    -------
Deferred:
  Federal                                         (295)      (226)      (290)
  State                                            (58)        60        (59)
  Foreign                                          101         51        (12)
                                               -------    -------    -------
                                                  (252)      (115)      (361)
                                               -------    -------    -------
Utilization and benefit of foreign operating
  loss carryforwards                              --         (203)      --
                                               -------    -------    -------
                                                 5,882      2,201      6,408
Provision for valuation allowance                 --         (192)       192
                                               -------    -------    -------
                                               $ 5,882    $ 2,009    $ 6,600
                                               =======    =======    =======

The total tax provision for each year differs from the amount that would have
been provided by applying the statutory U.S. Federal income tax rate to income
before income taxes. The reconciliation of these differences is as follows:

                                                      1998       1997     1996
                                                      ----       ----     ----
U.S. Federal income tax rate                            34%        34%      34%
Provision for tax contingencies                          4          4       --
State income taxes, net of federal tax benefit           3          4        4
Nondeductible expenses                                   2          4        1
Foreign earnings not subject to U.S. Federal             2          1        1
  income tax, net of foreign taxes
Deferred tax valuation allowance                        --         (4)       1
Other                                                   --          2       --
                                                    ------     ------    -----
                                                        45%        45%      41%
                                                    ======     ======    =====

Income before income taxes is comprised of domestic and foreign components,
respectively, as follows: 1998 -- $7,488,000 and $5,584,000, 1997 -- $1,565,000
and $2,855,000, and 1996 -- $14,184,000 and $2,091,000.



                                       14
<PAGE>



                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  F - INCOME TAXES (Continued)

Deferred income taxes arise primarily as a result of utilizing depreciation
lives for income tax reporting that are in excess of those used for financial
reporting purposes, as well as recognizing deferred compensation expense, the
provision for doubtful accounts and certain accrued expenses for financial
reporting purposes, which are not currently deductible for income tax purposes.

Taxes on income of international subsidiaries are provided at the tax rates
applicable to their respective tax jurisdictions. The Company's share of the
cumulative undistributed earnings of such subsidiaries was approximately
$8,093,000 and $4,167,000 at December 31, 1998 and 1997, respectively. No
provision has been made for additional income taxes on the undistributed
earnings of the international subsidiaries because earnings are expected to be
reinvested indefinitely in the subsidiaries' operations or because under
existing law, international tax credits would be available to substantially
reduce U.S. taxes payable in the event of distribution.

The deferred tax asset as of December 31, 1998 and 1997 is comprised of the
following:

                                                        (Dollars in Thousands)
                                                         1998        1997
                                                         ----        ----
   Allowance for doubtful accounts                       $ 409         $ 254
   Accruals not currently deductible for income taxes      406           134
   Deferred compensation                                   687           641
   Depreciation and amortization                         1,175         1,295
   Tax benefit of foreign net operating losses              75           176
                                                       -------       ------
   Net deferred tax asset                              $ 2,752       $ 2,500
                                                       =======       =======

NOTE G - BENEFIT AND COMPENSATION AGREEMENTS

The Company has a non-qualified supplemental executive retirement plan (the
"Plan") for its Founding Chairman. The Plan is designed to provide retirement
income based on past compensation, reduced by other retirement sources.
Effective January 1, 1997, the Founding Chairman began collecting benefits in
accordance with the Plan.

The Company accounts for this Plan in accordance with the provisions of SFAS No.
87, "Employer's Accounting for Pensions." SFAS No. 87 requires the Company to
recognize a liability equal to the amount by which the actuarial present value
of the accumulated benefit obligation exceeds the fair value of the Plan's
assets. This liability was approximately $1,116,000 and $1,151,000 for 1998 and
1997, respectively, using a discount rate of 7.25%. Since the Plan is not funded
by the Company, the recorded liability equals the present value of the
accumulated benefit obligation.

The Company has non-qualified supplemental executive retirement plans for its
Chief Executive Officer, Vice Chairman and President/Chief Operating Officer to
which a percentage of compensation, including base salary and incentive bonuses,
is credited annually. Deferred amounts earn annual interest equal to the
two-year Guaranteed Investment Contract Index on November 30 of the current plan
year, or 6%, whichever is higher (6% at both November 30, 1998 and 1997). The
account balance is payable as a life annuity in equal monthly installments with


                                       15
<PAGE>

                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE G - BENEFIT AND COMPENSATION AGREEMENTS (Continued)

interest on the unpaid balance upon termination of service with the Company. The
Chief Executive Officer and Vice Chairman's interest in the plans vest at the
rate of 10% and 20% per year, respectively, which began in 1993 and 1996,
respectively. The President's interest in the plan vests at 20% per year which
begins at the age of 61.

The Company also maintains life insurance policies on the lives of key
executives, naming the Company as the beneficiary. The cash surrender value of
these policies is included in the Other non-current assets section of the
Consolidated Balance Sheets.

The Company also maintains employment agreements and incentive compensation
agreements with certain key management employees. The agreements typically
result from the Company's acquisitions of outside firms. The agreements provide
for additional compensation over and above the individual's annual salary, based
upon the achievement of certain levels of overall Company, individual group or
region performance. These agreements provide for aggregate minimum annual
compensation for these employees of approximately $3,023,000 in 1999, $1,533,000
in 2000, $195,000 in 2001, and $35,000 in 2002.

NOTE H - EMPLOYEE BENEFIT PLANS

The Company maintains a defined contribution savings plan, available to
substantially all employees, under Section 401(k) of the Internal Revenue Code.
Under this plan, the Company will contribute 25% of the participating employee's
annual contribution. In 1998 and 1996, in connection with achieving a certain
level of targeted Company profits, the Company contributed an additional 12.5%
of the participating employee's contribution for a total of 37.5%. The Company
made no additional contribution for 1997 based on the Company's failure to meet
internal targets. Employee contributions are generally limited to 10% of their
compensation subject to Internal Revenue Code limitations. Company contributions
were approximately $764,000, $469,000, and $704,000 for 1998, 1997 and 1996,
respectively.

In addition, the Company maintains a non-qualified deferred compensation plan
for certain employees. Under the plan, participants may defer payment of up to
10% of their annual cash compensation reduced by amounts contributed to the
Company's 401(k) plan. Deferred amounts earn annual interest equal to the
two-year Guaranteed Investment Contract Index on November 30 preceding each plan
year or 6%, whichever is higher (6% at both November 30, 1998 and 1997). The
deferred amounts will be paid from the general assets of the Company and are
included in deferred compensation as of December 31, 1998 and 1997.




                                       16
<PAGE>


                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE I - LEASE OBLIGATIONS

The Company leases office space and equipment at various locations and accounts
for these obligations as operating leases. Rentals relating to these leases are
recorded on a straight-line basis. Rental expense approximated $16,037,000,
$14,350,000 and $13,000,000 in 1998, 1997, and 1996, respectively. Contingent
rentals may be due each year under the terms of the various office space leases
as the result of certain increases in building operating expenses over the base
year amounts. The following is a schedule, by year, of future minimum rental
payments required under operating leases with remaining non-cancelable lease
terms in excess of one year as of December 31, 1998:

                                           (Dollars in Thousands)
          Year Ending December 31,                 Amount
          -------------------------                ------
             1999                                 $12,889
             2000                                  11,164
             2001                                   8,808
             2002                                   4,993
             2003                                   2,925
             2004 and subsequent years              2,060
             
NOTE J - SHAREHOLDERS' EQUITY

Stock Splits

Effective November 10, 1995, the Company's Common Stock split into three shares
for each two shares outstanding. Additionally, effective July 26, 1996, the
Company's Common Stock split a second time into three shares for each two shares
outstanding. The stated par value per share of Common Stock was not changed for
both stock splits from its existing amount of $0.01 per share. All share and per
share amounts referred to in the financial statements and notes thereto have
been restated to reflect both stock splits, including rounding up for fractional
shares, where appropriate.

Stock Option Plans

The Company has a 1986 Stock Option Plan (the "1986 Plan") under which 968,000
shares of Common Stock are reserved for issuance upon the exercise of incentive
stock options, stock appreciation rights or non-qualified stock options that may
be granted to employees. Outstanding options granted under this plan are
exercisable, cumulatively, in three or four equal annual installments beginning
one year from the date of grant. Effective September 8, 1996, no further stock
options can be granted under the 1986 Plan.

The Company also has a 1993 Stock Incentive Plan, as amended in 1996, with
2,475,000 shares of Common Stock reserved for issuance upon the exercise of
incentive stock options or non-qualified stock options that may be granted to
employees. Outstanding options granted under this plan have ten year terms and
are exercisable, cumulatively, in three equal annual installments, beginning one
year from the date of grant. At December 31, 1998, 870,368 shares were available
for issuance under this plan.

In addition, in January 1995, the Company Shareholders adopted amendments to the
1993 Stock Incentive Plan permitting awards of restricted stock under such plan.
The amendments to the 1993 Stock Incentive Plan permit awards of up to an
aggregate of 675,000 shares of the Company's Common Stock to certain


                                       17
<PAGE>

                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE J - SHAREHOLDERS' EQUITY (Continued)

officers and key employees. Restrictions generally limit the sale or transfer of
the shares during a restricted period of approximately three years. Thereafter,
the restricted stock will either vest, in whole or in part, with the participant
or be forfeited, in whole or in part, back to the Company based on its earnings
performance for this three year period. During 1996 and 1995, 29,250 and 44,550
shares of restricted stock were awarded, respectively. Also during 1996 and
1995, approximately $658,000 and $230,000, respectively, was charged to general
sales and administration expenses for compensation expense related to these
shares. Due to the Company's decreasing stock price during 1997 and the
forfeiture of certain awards, total compensation expense related to restricted
stock grants included within general sales and administration expenses was
reduced by approximately $633,000 in 1997 and no compensation expense related to
restricted stock grants was charged in 1998. During 1998, 21,750 shares of
restricted stock awards were cancelled due to employment terminations. Pursuant
to the Restricted Stock Award Agreement dated January 1, 1995, under the 1993
Stock Incentive Plan, 12,240 shares of the remaining restricted shares awarded
during 1995 were forfeited due to the Company's failure to achieve certain
earnings per share targets.

The Company also has a Directors' Stock Option Plan, under which 225,000 shares
of Common Stock are reserved for issuance upon the exercise of incentive stock
options or non-qualified stock options that may be granted to non-employee
Directors of the Board of Directors. Outstanding options granted under this plan
have five year terms and are exercisable, cumulatively, in three equal annual
installments, beginning one year from the date of grant. At December 31, 1998,
153,000 option shares were available for issuance under this plan.

The Company has elected to follow APB No. 25, "Accounting for Stock Issued to
Employees" in accounting for its stock options. Under APB No. 25, no
compensation expense is recognized because the exercise price of the Company's
stock options equals the market price of the underlying stock on the date of the
grant. Had compensation cost for these plans been determined with SFAS No. 123,
"Accounting for Stock-Based Compensation", the Company's net income and earnings
per share for 1998, 1997 and 1996 would have been reduced to the following pro
forma amounts:

                                            1998           1997          1996
                                            ----           ----          ----
          Net income - as reported      $6,607,000     $2,073,000    $9,675,000
          Net income - pro forma        $4,788,000      $ 108,000    $8,389,000
          Basic EPS - as reported            $0.99          $0.31         $1.55
          Basic EPS - pro forma              $0.72          $0.02         $1.34
          Diluted EPS - as reported          $0.98          $0.31         $1.45
          Diluted EPS - pro forma            $0.71          $0.02         $1.26

The fair value of the options was estimated at the date of grant using a
Black-Scholes option pricing model. The following weighted-average assumptions
used for grants in 1998 were a risk-free interest rate of 5.3%, no dividend
yield, expected volatility of 75%, and a weighted-average expected life of the
option of 7 years. The same weighted-average assumptions were used for grants in
1997 and 1996, except for the risk-free interest rate which was 6.4% for both
1997 and 1996 and the expected volatility of 70% for both 1997 and 1996. Under
SFAS No. 123, total compensation expense, net of tax benefit, approximated
$1,819,000, $1,965,000, and $1,286,000 in 1998, 1997, and 1996, respectively.

                                       18
<PAGE>

                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE J - SHAREHOLDERS' EQUITY (Continued)

A summary of the status of the Company's stock option plans at December 31,
1998, 1997 and 1996 and changes during the years then ended is presented in the
table and narrative below:
<TABLE>
<CAPTION>

                                                1998                        1997                        1996
                                                ----                        ----                        ----
                                                     Weighted                    Weighted                    Weighted
                                                      Average                     Average                     Average
                                                     Exercise                    Exercise                    Exercise
                                        Shares         Price         Shares        Price        Shares         Price
                                        ------         -----         ------        -----        ------         -----
<S>                                     <C>            <C>        <C>             <C>         <C>              <C>  
Outstanding at beginning of year        1,200,238      $13.26     1,238,295       $10.92      1,274,534        $7.89
Granted                                   154,250       13.42       241,788        17.31        311,300        16.77
Exercised                                (169,500)       7.14      (236,095)        5.08      (316,039)         4.23
Canceled                                  (46,075)      14.51       (43,750)       13.08       (31,500)        15.29
                                        ---------      ------     ---------       ------      --------        ------   
Outstanding at end of year              1,138,913      $14.14     1,200,238       $13.26      1,238,295       $10.92

Exercisable at end of year                764,348      $13.39       672,492       $10.93        610,247        $7.63

Weighted average fair value                             $9.87                     $12.10                      $11.21
of options granted
</TABLE>

Exercise prices for options outstanding as of December 31, 1998 ranged from
$7.78 to $24.33. The weighted average remaining contractual life of these
options is approximately 6 years.

Employee Stock Purchase Plan

On May 9, 1996, the Company Shareholders approved the creation of the Company's
1996 Employee Stock Purchase Plan (the "ESPP"). Effective July 1, 1996, 150,000
shares were reserved for issuance under the ESPP. The ESPP permits employees to
purchase Company Common Stock at 85% of the average market price on the last day
of the applicable quarterly period. All Company employees, except executive
employees, are eligible to participate in the ESPP. During 1998, 1997, and 1996,
36,151, 37,859, and 4,368 shares, respectively, were purchased through the ESPP.

Repurchase of Common Stock

In March 1997, the Board of Directors approved a stock repurchase program under
which the Company is authorized to repurchase up to 10% of its currently
outstanding Common Stock. Any shares repurchased will be held as treasury shares
and be available to the Company for use in various benefit plans and, when
authorized by the Board, for other general corporate purposes. The Board of
Directors has authorized Company management to pursue the repurchase program in
open market transactions from time-to-time, depending upon market conditions and
other factors.

During 1998 and 1997, the Company repurchased 167,500 and 127,500 shares of
Common Stock at an aggregate purchase price of $2,049,000 and $1,379,000,
respectively.

Subsequent to December 31, 1998, the Company repurchased 40,000 shares of Common
Stock at an aggregate purchase price of $605,000.

                                       19
<PAGE>

                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE J - SHAREHOLDERS' EQUITY (Continued)

Dividends

The Company has never paid any dividends on its Common Stock and currently
expects that all of its earnings will be retained and reinvested in the
Company's business.

During 1998, Davidson & Associates paid cash dividends to its shareholders. The
Company recognized no dividend income for its 51% ownership of Davidson &
Associates as this is an intercompany transaction which eliminates in
consolidation. However, the Company recorded the remaining 49% of the dividends
paid and declared in 1998 as a reduction in minority interest.

NOTE K - EARNINGS PER SHARE

In 1997, the Company adopted SFAS No. 128, "Earnings per Share". The
calculations of earnings per share ("EPS") under SFAS No. 128 are detailed
below.

                                          For the year ended 12/31/98
                                        Income         Shares         EPS
                                        ------         ------         ---
    Basic EPS:
    Net income                          $6,607,000      6,674,000      $0.99
                                                                       =====
    Impact of options                          ---         84,000
                                        ----------      ---------
    Diluted EPS:
    Net income                          $6,607,000      6,758,000      $0.98
                                        ==========      =========      =====

                                          For the year ended 12/31/97
                                        Income         Shares         EPS
                                        ------         ------         ---
    Basic EPS:
    Net income                          $2,073,000      6,596,000      $0.31
                                                                       =====
    Impact of options                          ---        129,000
                                        ----------      ---------
    Diluted EPS:   
    Net income                          $2,073,000      6,725,000      $0.31
                                        ==========      =========      =====

                                          For the year ended 12/31/96
                                        Income         Shares         EPS
                                        ------         ------         ---
    Basic EPS:
    Net income                          $9,675,000      6,252,000      $1.55
                                                                       =====
    Impact of options                          ---        411,000
                                        ----------      ---------
    Diluted EPS:
    Net income                          $9,675,000      6,663,000      $1.45
                                        ==========      =========      =====


For the year ended December 31, 1998, outstanding options to purchase 861,514
shares of Company Common Stock at $13.25 to $24.33 were excluded from the
computation of diluted EPS, as the options' exercise price was greater than the
average market price of the Common Stock.



                                       20
<PAGE>

                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE K - EARNINGS PER SHARE (Continued)

As a result of the Company's adoption of SFAS No. 128, the Company's reported
EPS for 1996 was restated. The effect of this accounting change on previously
reported EPS data was as follows:

    Per Share Amounts:                            1996
                                                  ----
    Primary EPS as reported                      $1.45
    Effect of SFAS No. 128                        0.10
                                                 -----
    Basic EPS as restated                        $1.55
                                                 =====

    Fully diluted EPS as reported                $1.44
    Effect of SFAS No. 128                        0.01
                                                  ----
    Diluted EPS as restated                      $1.45
                                                 =====

NOTE L - SEGMENTS

In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information," was issued effective for fiscal years ending after
December 15, 1998. SFAS No. 131 establishes standards for reporting information
about operating segments and related disclosures about products and services,
geographic areas, and major customers. Operating segments are defined as
components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance.

The Company's operations are segregated into two lines of business: career
transition and human resources and career management consulting ("consulting").
The Company operates these lines of business across the geographic areas of the
United States, Canada, Europe and Asia-Pacific. These operations offer different
services and require different marketing strategies. Career transition offers
support for organizational realignment and redeployment, as well as career
development and restructuring planning. Consulting offers organizational and
individual assessment, interventions in change management, leadership and
executive development, transformation planning and cultural integration in
mergers and acquisitions. With more than 170 service locations worldwide, the
Company manages operations by geographic area to enhance global growth and
establish major accounts with global clients. The Company primarily delivers its
services to mid-size and large industrial and service companies, with no
concentration in specific companies or industries.

                                       21
<PAGE>


                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE L - SEGMENTS (Continued)

Summarized operations of each of the Company's geographic segments in the
aggregate for each of the three years in the period ended December 31, 1998, are
as follows (See Note A for discussion relating to currency translation and Note
F for discussion relating to income taxes):
<TABLE>
<CAPTION>

                                                                         (Dollars in Thousands)
1998                                     United States       Canada      Europe      Asia-Pacific      Consolidated
----                                     -------------       ------      ------      ------------      ------------
<S>                                         <C>             <C>          <C>              <C>             <C>     
Identifiable assets                         $91,588         $7,562       $9,668           $5,777          $114,595
                                            =======         ======       ======           ======           =======

Revenue                                     127,353         10,884       15,836           14,185           168,258
                                            =======         ======       ======           ======           =======
                                                         
Operating income (1)                          7,536          1,784        2,394            2,087            13,801
                                            =======         ======       ======           ======           =======
                                                         
Depreciation and amortization                 6,379            523          501              636             8,039
                                            =======         ======       ======           ======           =======
                                                         
Capital expenditures                          6,250            435          298              803             7,786
                                            =======         ======       ======           ======           =======
                                                         
1997                                     United States       Canada      Europe      Asia-Pacific      Consolidated
----                                     -------------       ------      ------      ------------      ------------
Identifiable assets                         $63,881         $7,006       $5,600           $5,217           $81,704
                                            =======         ======       ======           ======           =======

Revenue                                      97,358          9,784       11,475            7,169           125,786
                                            =======         ======       ======           ======           =======
                                                          
Operating income (1)                          1,720          1,138          598            1,119             4,575
                                            =======         ======       ======           ======           =======
                                                          
Depreciation and amortization                 5,500            245          444              305             6,494
                                            =======         ======       ======           ======           =======
                                                          
Capital expenditures                          3,893            126          755              427             5,201
                                            =======         ======       ======           ======           =======
                                                          
1996                                     United States       Canada      Europe      Asia-Pacific      Consolidated
----                                     -------------       ------      ------      ------------      ------------
Identifiable assets                         $ 60,414        $ 7,155      $ 6,366            $ ---          $ 73,935
                                            ========         ======       ======           ======           =======
                                                          
Revenue                                      105,028          9,167       11,074              ---           125,269
                                            ========         ======       ======           ======           =======
                                                          
Operating income (1)                          14,115          1,142         982               ---            16,239
                                            ========         ======       ======           ======           =======
                                                          
Depreciation and amortization                  4,038            475          410              ---             4,923
                                            ========         ======       ======           ======           =======
                                                          
Capital expenditures                           4,707             80           86              ---             4,873
                                            ========         ======       ======           ======           =======
</TABLE>
                                                       
(1)  The operating income reported for the United States segment includes total
     general sales and administration expense reported on the Consolidated
     Statements of Income.

                                       22


<PAGE>


                       RIGHT MANAGEMENT CONSULTANTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE L - SEGMENTS (Continued)

Revenues and expenses of the Company's lines of business for the Company
offices, excluding the total general sales and administration expenses and
Affiliate royalties, are evaluated by management. The Company does not measure
assets by lines of business as assets are generally not distinctive to a
particular line of business and they are not fundamental in assessing segment
performance. Revenue and Company office operating income for each of the
Company's lines of business in the aggregate for each of the three years for the
period ended December 31, 1998, excluding the $630,000 restructuring charge (see
Note B) in 1997, are as follows:
<TABLE>
<CAPTION>

                                             Career
1998                                       Transition      Consulting       Consolidated
----                                       ----------      ----------       ------------
<S>                                            <C>            <C>               <C>     
 Company office revenue                        $139,903       $23,944           $163,847
                                               ========       =======           ========

 Company office operating                        25,440         2,328             27,768
 income                                          ======         =====             ======


                                              Career
1997                                       Transition      Consulting       Consolidated
----                                       ----------      ----------       ------------                            
 Company office revenue                        $111,181       $11,100           $122,281
                                               ========       =======           ========

 Company office operating                        13,510          1,628            15,138
 income                                          ======          =====            ======


                                             Career
1996                                       Transition      Consulting       Consolidated
----                                       ----------      ----------       ------------                        

 Company office revenue                        $111,110         $9,569          $120,679
                                               ========         ======          ========

 Company office operating                        24,990            303            25,293
 income                                          ======            ===            ======


</TABLE>



NOTE M - SUBSEQUENT EVENTS

Subsequent to December 31, 1998, the Company acquired the outstanding stock of
two European consulting firms and one European career transition firm for a
combination of cash and future defined incentive payments. The firms included
Groupe ARJ, with offices in Lyon and Paris France, Jouret Management Center,
based in Brussels, Belgium, and N.V. Claessens Belgium S.A., with four offices
in Belgium. All of these transactions were effective January 1, 1999. The
aggregate purchase price for these acquisitions totaled approximately $5,337,000
and will be accounted for using the purchase method. The Company has funded
$5,100,000 of these acquisitions through borrowings under the Credit Agreement
with the remainder being funded through working capital.


                                       23
<PAGE>



                       RIGHT MANAGEMENT CONSULTANTS, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

The following table sets forth results of operations before income taxes for the
years indicated. Certain amounts have been reclassified in the 1997 and 1996
Consolidated Statements of Income to conform with the 1998 presentation. This
discussion and analysis is to be read in conjunction with the consolidated
financial statements and accompanying notes thereto.

<TABLE>
<CAPTION>

                                                  (Dollars in Thousands)
                                                  Year Ended December 31,
                                              1998        1997         1996
                                              ----        ----         ----
<S>                                          <C>        <C>           <C>     
   Company office revenue                    $163,847   $122,281      $120,679
   Company office expenses                    136,079    107,143        95,386
                                             --------   --------      --------
   Company office margin                       27,768     15,138        25,293
   Affiliate royalties                          4,411      3,505         4,590
   General sales and administration           (18,378)   (13,438)      (13,644)
   Restructuring costs (Note B)                    --       (630)           --
   Interest income (expense), net                (729)      (155)           36
                                             --------   --------      --------
   Income before income taxes                $ 13,072    $ 4,420      $ 16,275
                                             ========    =======      ========
</TABLE>


1998 Compared to 1997

For the year ended December 31, 1998, revenue generated by Company offices
increased by 34% or $41,566,000 over 1997. This increase is attributable to the
combination of $18,092,000 in incremental revenues from acquisitions, and a 19%
same office revenue increase. The significant same office revenue increase is
due primarily to the strong career transition environment throughout the
network, and the growth in the consulting line of business discussed below. The
revenue increase is also attributable to the new and continued high unit volume
of programs from clients with national or international operations. In contrast
with the compression in the length of the programs, which negatively impacted
the average fees by program in 1997, the Company experienced more stable average
program fees during 1998.

The Company's consulting line of business reported total revenues of
$23,944,000, which represents a 116% increase over 1997. The increase is due to
$9,242,000 in incremental revenues primarily from the two consulting
acquisitions and the licensing agreement made during 1998 and a 33% same office
increase. As reflected by the acquisitions consummated and the favorable results
achieved in the consulting line of business in 1998, the Company is committed to
further growth in this line of business.

For the year ended December 31, 1998, Affiliate royalties increased 26%, or
$906,000 from 1997. The increase is attributable to the previously mentioned
strong career transition market throughout the network.


                                       24

<PAGE>


                       RIGHT MANAGEMENT CONSULTANTS, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (CONTINUED)

For the year ended December 31, 1998, total Company office expenses increased
27% or $28,936,000 over 1997. This increase is due to approximately $17,137,000
in incremental costs from acquisitions. The Company's same office expenses
increased by approximately $11,799,000 from 1997 due primarily to incentive
compensation funding for operating results significantly above target
performance.

Aggregate Company office margins were 17% and 12% for 1998 and 1997,
respectively. The increase in margins is attributable primarily to the
previously mentioned increase in career transition and consulting revenues,
partly offset by the incremental incentive funding for operating performance
significantly above target.

For the year ended December 31, 1998, general sales and administration expenses
increased by 37% or $4,940,000 over 1997. This increase was largely attributable
to incentive compensation, increased charges for consulting services, and an
increase in depreciation and amortization expense. Despite these increases, for
the year ended December 31, 1998, general sales and administration expenses as a
percentage of total revenues remained at 11%, as in 1997.

For the year ended December 31, 1998, the Company's effective tax rate was
approximately 45%, consistent with that of 1997. An additional provision of
$200,000 was made for the expected results of pending tax audits during the
fourth quarter of 1998. See Note F to the Consolidated Financial Statements for
the composition of the Company's effective tax rate.

1997 Compared to 1996

For the year ended December 31, 1997, revenue generated by Company offices
increased by 1%, or $1,602,000 over 1996. This increase is due to $15,662,000 in
incremental revenues from acquisitions, offset by a 12% same office revenue
decrease. The year to date 1997 incremental revenues from acquisitions include
the results of the entities detailed in Note C to the Consolidated Financial
Statements, as well as two additional months' revenue from the People Tech
acquisition consummated effective March 1, 1996. The same office revenue
decrease is due to a general slow down in both the North American and European
career transition markets associated with the continued strength of each
economy. Additionally, the Company experienced compression in the length of
career transition programs provided which negatively impacted office revenues by
lowering average fees by program.

The Company's consulting line of business reported total revenues of
$11,100,000, which represents a 16% increase over 1996. The Company is committed
to the growth of this line of business as evident in the two acquisitions and
the licensing agreement announced subsequent to December 31, 1997.

For the year ended December 31, 1997, Affiliate royalties decreased 24%, or
$1,085,000 from 1996. The decrease is attributable to the aforementioned decline
in the North American career transition market, as well as the acquisitions of
three former Affiliates in the first quarter 1997 (see Note C to the
Consolidated Financial Statements). Revenue from the acquisition of the three
former Affiliates is reflected as Company office revenue subsequent to the
acquisition. On a same office basis, Affiliate royalties decreased 19% or
$816,000 from 1996.


                                       25
<PAGE>


                       RIGHT MANAGEMENT CONSULTANTS, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (CONTINUED)

For the year ended December 31, 1997, total Company office expenses, exclusive
of formal restructuring costs (see Note B to the Consolidated Financial
Statements), increased 12% or $11,757,000 over 1996. This increase is due to
approximately $12,959,000 in incremental costs from acquisitions, as well as
approximately $1,150,000 in additional office level charges for severance, lease
reductions and strategic planning during the fourth quarter of 1997. Exclusive
of costs from acquisitions, formal restructuring costs and the one time charges
during the fourth quarter, the Company's same office expenses decreased by
approximately $2,352,000 from 1996 due to general cost containment measures
implemented by the Company necessary to align the cost infrastructure with the
decreased same office revenues.

Aggregate Company office margins, exclusive of formal restructuring costs, were
12% and 21% for 1997 and 1996, respectively. The decrease in margins is
attributable primarily to the previously mentioned decline in career transition
revenues and program compression, partly offset by improved margins in the
consulting line of business and favorable results for the Company's Davidson &
Associates acquisition (see Note C to the Consolidated Financial Statements).

For the year ended December 31, 1997, general sales and administration expenses
decreased by 2% or $206,000 over 1996. Due to the Company's decreasing stock
price during 1997 and the forfeiture of certain awards of common stock, total
compensation expense related to restricted stock grants included within general
sales and administration expenses was reduced by approximately $633,000 for
1997. This decrease is offset by the fourth quarter 1997 costs associated with
the Company's updated strategic plan, amortization costs associated with the
Company's eleven acquisitions during 1997 (see Note C to the Consolidated
Financial Statements), and the additions of key management personnel during the
latter half of 1996 and throughout 1997. For the years ended December 31, 1997
and 1996, general sales and administration expenses as a percentage of total
revenues were both approximately 11%.

For the year ended December 31, 1997, the Company's effective tax rate was
approximately 45% versus 41% for 1996. The increase in the effective tax rate is
due primarily to the impact of an income tax charge of approximately $190,000
related to the expected results of pending tax audits (see Note F to the
Consolidated Financial Statements).

Capital Resources and Liquidity

At December 31, 1998 and 1997, the Company had cash and cash equivalents of
$20,800,000 and $7,583,000, respectively. The significant increase in cash and
cash equivalents is the result of higher net income, improved collection results
on accounts receivable and significantly lower cash payments made for
acquisitions and 1997 incentive compensation.

At December 31, 1998, with the increase in account receivable balance offset by
the increase in accrued incentive compensation resulting from a record revenue
year, the Company's working capital was $15,281,000, approximately the same
level as that of December 31, 1997.

                                       26
<PAGE>


                       RIGHT MANAGEMENT CONSULTANTS, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (CONTINUED)

Net cash utilized by investing activities amounted to $14,071,000 and
$18,400,000 for 1998 and 1997, respectively. The Company continues to purchase
equipment and technology to meet the needs of its expanding operations and to
enhance its operating efficiency. During 1998, in addition to the completed
license agreement, the Company acquired two consulting firms for a combination
of cash and future defined incentive payments (see Note C to the Consolidated
Financial Statements).

During 1997, the $13,199,000 net cash paid for acquisitions on the Consolidated
Statement of Cash Flows is net of $1,368,000 of cash acquired from acquisitions.
Additionally, in connection with the Davidson & Associates acquisition (see Note
C to the Consolidated Financial Statements), the net cash paid for acquisitions
on the Consolidated Statement of Cash Flows excludes the value of the issuance
of 96,577 shares which is considered a non-cash investing activity.

Net cash provided by financing activities amounted to $480,000 and $5,847,000 in
1998 and 1997, respectively. The net cash provided by financing activities for
1998 was mostly the result of $5,900,000 in borrowings from the Company's
revolving credit facility in order to complete two acquisitions (see Note C to
the Consolidated Financial Statements) and proceeds from the issuance of stock.
Net cash provided by financing activities are partly offset by repayments on the
Company's borrowings, defined incentives for acquisitions made in previous years
and dividend payments made by Davidson & Associates, as well as the repurchase
of Common Stock (see Note J to the Consolidated Financial Statements).

In addition to cash flow provided by operations, the Company has borrowing
facilities to provide for increased working capital needs as well as to provide
for future acquisition opportunities. During 1996, the Company increased its
borrowing capacity to $40,000,000 from the previous $15,000,000 level through
the execution of its Credit Agreement with its two primary lenders (See Note E
to the Consolidated Financial Statements). The Company had approximately
$26,484,000 and $28,392,000 available under the Credit Agreement at December 31,
1998 and 1997, respectively. Subsequent to December 31, 1998, the Company
announced the acquisition of two European consulting firms and one European 
career transition firm for a combination of cash and future defined incentive
payments (see Note M to the Consolidated Financial Statements). The Company
funded these acquisitions through borrowings under the Credit Agreement. The
Company plans to utilize the Credit Agreement in future periods to assist in the
financing of acquisitions as they arise, and for other general corporate
purposes.

The Company anticipates that its cash and working capital will be sufficient to
service its existing debt and maintain Company operations at current levels for
the foreseeable future. The Company will continue to consider expansion
opportunities as they arise, although the economics, strategic implications and
other circumstances justifying the expansion will be key factors in determining
the amount and type of resources the Company will devote to further expansion.





                                       27
<PAGE>




                       RIGHT MANAGEMENT CONSULTANTS, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (CONTINUED)

Year 2000

In 1998, the Company completed its evaluation of the potential impact of the
year 2000 and developed a project plan ("the Y2K Plan") to ensure the compliance
of its major operating systems by the year of 2000. As a service company, the
Company's operating systems principally include financial, operational and
communication applications. As part of its year 2000 project plan, the Company
is developing a replacement billing system which is progressing on schedule and
is expected to be completed prior to the middle of 1999. The Y2K Plan also
details the timetable to upgrade or replace non-compliant systems in the above
areas as well as to confirm year 2000 compliance with the Company's key vendors.
At this time, the Company is progressing in accordance with the timetable set
forth with respect to all aspects of the Y2K Plan and believes that the
potential risks to its business operations are not material. The Company
estimates that the total capital expenditures to be incurred under the Y2K Plan
will be in the range of $1,400,000 to $1,600,000 during 1999, of which
approximately $800,000 is attributable to normal costs for systems upgrades or
replacements that the Company normally would undertake in its ongoing
operations. Capitalized items will be depreciated over the useful life of the
asset. Non-capitalizable costs related to year 2000 issues are estimated to be
$300,000, which will be expensed as incurred. The Company does not expect these
costs to have a material impact on its business, operations or its financial
condition.

Forward-Looking Statements

Statements included in this Report on Form 10-K, including within this
Management's Discussion and Analysis of Financial Condition and Results of
Operations which are not historical in nature, are intended to be, and hereby
are identified as "forward looking statements" for purposes of the safe harbor
provided by the Private Securities Litigation Reform Act of 1995. The Company
cautions readers that forward looking statements, including without limitation
those relating to the Company's future business prospects, revenues, working
capital, liquidity, capital needs, interest costs and income, are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those indicated in the forward looking statements due to several
important factors hereafter identified, among others, as well as other risks and
uncertainties identified from time to time in the Company's reports filed with
the Securities and Exchange Commission. Readers of this Report are cautioned not
to place undue reliance upon these forward looking statements, which speak only
as of the date hereof. The Company undertakes no obligation to publicly release
any revisions to these forward looking statements or reflect events or
circumstances after the date hereof.

Among the factors that create risk and uncertainty are (i) government regulation
of the Company's Affiliates; (ii) the Company's ability to maintain good
relationships with its remaining Affiliates; (iii) competition within the highly
fragmented career transition and human resource consulting services industries;
(iv) the dependence on key management or operating personnel within the Company
or an Affiliate; (v) economic conditions on a local, regional, national and
international basis, which affect the demand for the Company's services; for
example, a stronger economy can lead to easier and more rapid job change and
reentry, which can reduce the demand for the Company's services or compress the
length of the services provided, thereby negatively impacting prices. Weaker
economic conditions can also lead to reluctance on outside companies' part to
incur the expenditure associated with the Company's services.

                                       28
<PAGE>

                       RIGHT MANAGEMENT CONSULTANTS, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (CONTINUED)

As discussed in Note E, the Company believes that its interest risk associated
with the Swap Agreements would have an immaterial impact on the financial
position, the results of operations and cashflow of the Company. Furthermore, as
discussed in Note A, the Company has international operations and does not
anticipate any material currency risk to its business or financial condition
resulting from currency fluctuations.


                       RIGHT MANAGEMENT CONSULTANTS, INC.
               STATEMENT OF MANAGEMENT'S FINANCIAL RESPONSIBILITY

Management has prepared and is responsible for the integrity and objectivity of
the financial statements and related financial information contained in this
Annual Report. The financial statements are in conformity with generally
accepted accounting principles consistently applied and reflect management's
informed judgment and estimation as to the effect of events and transactions
that are accounted for or disclosed.

Management maintains a system of internal control. This system, which undergoes
periodic evaluation, is designed to provide reasonable assurance that assets are
safeguarded and records are adequate for the preparation of reliable financial
data. In determining the extent of the system of internal control, management
recognizes that the cost should not exceed the benefits derived. The evaluation
of these factors requires estimates and judgment by management.

Arthur Andersen LLP is engaged to render an opinion as to whether management's
financial statements present fairly Right Management Consultants, Inc.'s
financial position, results of operations and cash flows. The scope of their
engagement included a review of the internal control system to the extent deemed
necessary to render an opinion on these financial statements. The Report of
Independent Public Accountants is presented in the enclosed document.

The Audit Committee of the Board of Directors meets directly with the
Independent Public Accountants and management to ascertain whether they are
properly discharging their responsibilities.

               Right Management Consultants, Inc.

               /s/ G. Lee Bohs
               ------------------------------------------------
               G. Lee Bohs
               Executive Vice President,
               Chief Financial Officer, Treasurer and Secretary


                                       29


<PAGE>


                       RIGHT MANAGEMENT CONSULTANTS, INC.

DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>

<S>                                                <C>    
Richard J. Pinola                                  Chairman of the Board of Directors and Chief Executive
                                                   Officer
Frank P. Louchheim                                 Founding Chairman and Director
Joseph T. Smith                                    Vice Chairman of the Board of Directors
John J. Gavin                                      President, Chief Operating Officer and Director
Larry A. Evans                                     Executive Vice President and Director
Dr. Marti D. Smye                                  Executive Vice President and Director
Frederick Davidson                                 Chairman of Davidson & Associates and Director

DIRECTORS
John R. Bourbeau                                   President of Right Associates(R) of the Great Lakes
                                                   Region, an Affiliate of the Company
Raymond B. Langton                                 President and Chief Executive Officer of SKM Applied
                                                   Technology Partners
Rebecca J. Maddox                                  President of Capital Rose, Inc.
Catherine Y. Selleck                               Business Consultant

OTHER EXECUTIVE OFFICERS
G. Lee Bohs                                        Executive Vice President, Chief Financial Officer,
                                                   Treasurer and Secretary
Peter J. Doris                                     Executive Vice President
James E. Greenway                                  Executive Vice President
Erik A. Dithmer                                    Executive Vice President - Northeast Group
Terry W. Szwec                                     Executive Vice President - Canadian Group
Gilbert A. Wetzel                                  Executive Vice President - Southeastern Group
Joan Strewler                                      Executive Vice President - North Central Group
Timothy D. Dorman                                  Executive Vice President - Western Group
Suzanne B. Levasseur                               Executive Vice President - International Group

Corporate Headquarters                             Independent Public Accountants
Right Management Consultants, Inc.                 Arthur Andersen LLP
1818 Market Street                                 Philadelphia, Pennsylvania
33rd Floor
Philadelphia, Pennsylvania 19103

General Counsel
Fox, Rothschild, O'Brien & Frankel, LLP     
Philadelphia, Pennsylvania
</TABLE>

                                       30

<PAGE>


                       RIGHT MANAGEMENT CONSULTANTS, INC.
<TABLE>
<CAPTION>


<S>                                                <C>   
Subsidiaries                                       Right Associates Government Services, Inc.
                                                   Conviction Right France, SA
                                                   Right Human Resources, Inc.
                                                   Right Associates License, Inc.
                                                   Right License Holding, Inc.
                                                   Right D&A Pty. Ltd. (51% ownership)
                                                   Teams International, LLC (51% ownership)
                                                   Right Associates, Ltd.
                                                   Right Associates (Belgium), Inc.
                                                   Right Associates (France), Inc.
                                                   Right Associates & Co., SNC
                                                   R.M.C. & Co., SNC




Service Marks and                                  Right Associates, THinc, Partners in Managing
Trade Marks                                        Change, The Right Fit, Key Executive Service, 
                                                   Zeroing-in-Process (Z.I.P.), Right Match, Zenith, People
                                                   Tech, Matrix, Compass, and the Globe Design are
                                                   registered Service Marks of Right Management
                                                   Consultants, Inc. and its wholly owned subsidiaries.

                                                   The Right Report is a registered Trademark of Right
                                                   Management Consultants, Inc.

                                                   Right Management Consultants is a Service Mark of
                                                   Right Management Consultants, Inc.


</TABLE>

                                       31
<PAGE>



                       RIGHT MANAGEMENT CONSULTANTS, INC.

Right Management Consultants, Inc.'s Common Stock trades on The NASDAQ Stock
Market under the symbol RMCI.

Common Stock Data

           1998                                 High        Low
           ----                                 ----        ---
                      First Quarter             13 1/8     11 1/4
                      Second Quarter            15         11 3/8
                      Third Quarter             15         11
                      Fourth Quarter            15 3/4     11 1/8

           1997                                 High        Low
           ----                                 ----        ---
                      First Quarter             23 1/2     8 3/4
                      Second Quarter            11 3/4     9 5/8
                      Third Quarter             11 1/2     9 1/4
                      Fourth Quarter            13 1/2     9 1/8


The above prices reflect interdealer prices, without retail markup, markdown or
commission and may not necessarily represent actual transactions.

As of March 18, 1999, there were 142 record holders and approximately 2,125
beneficial owners of the Company's Common Stock.

The Company has never paid any dividends on its Common Stock and currently
expects that all of its earnings will be retained and reinvested in the
Company's business.

Registrar and                   StockTrans, Inc.
Transfer Agent                  Ardmore, Pennsylvania

Availability of                 A copy of the Company's Annual Report
10-K Annual Report              to the Securities and Exchange
                                Commission on Form 10-K may be obtained by
                                writing to:

                                Cindy Ng
                                Vice President and Controller
                                Right Management Consultants, Inc.
                                1818 Market Street
                                Thirty-third Floor
                                Philadelphia, PA 19103


                                       32





<PAGE>

                                     [LOGO]
                       RIGHT MANAGEMENT CONSULTANTS, INC.
                       ----------------------------------
                       
The Company's global operations are structured into seven geographic groups that
provide management, leadership and resources to more than 170 service locations
around the world.
<TABLE>
<CAPTION>


<S>                         <C>                           <C>                      <C>   
UNITED STATES                Illinois                     New York                 Utah
                             Chicago                      Buffalo                  Salt Lake City
WORLD                        Northbrook                   Melville
HEADQUARTERS                 Oak Brook                    New York City            Virginia
Philadelphia, PA                                                                   Fairfax
                             Indiana                      North Carolina           Richmond
Alabama                      Fort Wayne                   Charlotte                Vienna
Birmingham                   Indianapolis                 Greensboro
                                                          Raleigh                  Washington
Alaska                       Iowa                                                  Seattle
Anchorage                    Des Moines                   Ohio
                                                          Cincinnati               West Virginia
Arizona                      Kansas                       Cleveland                Charleston
Phoenix                      Wichita                      Columbus
Tucson                                                    Dayton                   Wisconsin
                             Kentucky                     Toledo                   Madison
California                   Lexington                                             Milwaukee
Cupertino                    Louisville                   Oklahoma
Irvine                                                    Oklahoma City            PUERTO RICO
Los Angeles                  Louisiana                    Tulsa                    San Juan
Pasadena                     New Orleans
Sacramento                                                Oregon                   CANADA
San Bernardino               Maryland                     Portland                 Alberta
San Diego                    Hunt Valley                                           Calgary
San Francisco                                             Pennsylvania             Edmonton
San Ramon                    Massachusetts                Allentown
Woodland Hills               Boston                       Erie                     British Columbia
                             Burlington                   Lancaster                Vancouver
Colorado                                                  Malvern
Colorado Springs             Michigan                     Philadelphia             Manitoba
Denver                       Detroit                      Pittsburgh               Winnipeg
                             Grand Rapids
Connecticut                  Kalamazoo                    Rhode Island             New Brunswick
Hartford                     Lansing                      Providence               Moncton
Stamford                     Midland                                               St. John
                                                          South Carolina
Delaware                     Minnesota                    Greenville               Nova Scotia
Wilmington                   Minneapolis                                           Halifax
                                                          Tennessee
District of Columbia         Missouri                     Knoxville                Ontario
Washington                   Kansas City                  Memphis                  Kingston
                             Saint Louis                  Nashville                London
Florida                                                                            Mississauga
Boca Raton                   Nebraska                     Texas                    Ottawa
Fort Lauderdale              Omaha                        Austin                   Richmond Hill
Jacksonville                                              Dallas                   Toronto
Miami                        Nevada                       Fort Worth
Orlando                      Las Vegas                    Houston                  Quebec
Palm Beach                                                San Antonio              Montreal
Saint Petersburg             New Jersey                                            Quebec City
Tampa                        Parsippany
                             Princeton
Georgia                      Upper Saddle River
Atlanta
                             New Mexico
                             Albuquerque


</TABLE>
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<PAGE>

<TABLE>
<CAPTION>


<S>                         <C>                           <C> 
AFRICA                       The Netherlands              LATIN AMERICA
South Africa                 Amersfoort                   Argentina
Cape Town                    Amsterdam                    Buenos Aires
Durban                       Breda
East London                  Rotterdam                    Brazil
Johannesburg                                              Rio de Janeiro
Port Elizabeth               Norway                       Sao Paulo
                             Oslo
EUROPE                                                    Chile
Austria                      ASIA/PACIFIC REGION          Santiago
Vienna                       Australia
                             Adelaide                     Colombia
Belgium                      Brisbane                     Bogota
Antwerp                      Canberra                     Cali
Brussels                     Melbourne                    Medellin
                             Perth
Denmark                      Sydney                       Mexico
Copenhagen                                                Mexico City
                             China
England                      Hong Kong                    THE MIDDLE EAST
London                                                    Israel
Swindon                      Japan                        Tel Aviv
                             Fukuoka
Finland                      Nagoya
Helsinki                     Osaka
                             Tokyo
France
Paris                        Malaysia
Lyon                         Kuala Lumpur

Germany                      New Zealand
Berlin                       Auckland
Bonn                         Wellington
Dusseldorf
Frankfurt                    Singapore
Hamburg
Munich
Stuttgart

Ireland
Cork
Dublin
Galway
Limerick
Waterford

Italy
Bologna
Genoa
Milan
Rome
Teramo
Turin

</TABLE>


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