The Associated Press reported March 13 that the unemployment rate declined in 45 states in January. That’s good news for President Barack Obama and even better news for all the companies helping people find work. More jobs equate to more business, which ultimately means more profits.

There’s a number of different companies in the employment business. Let’s take a look at who’s winning thanks to the gradual uptick in hiring.

The staffing and outsourcing services industry is up 9.63% as of March 12, according to Morningstar — that’s dead even with the S&P 500.

The table above shows the performance of seven companies that compete in the staffing and outsourcing industry, as well as Monster Worldwide (NYSE:MWW) and LinkedIn (NYSE:LNKD) — two businesses that aren’t directly involved with staffing but do bring employers and employees together.

As you can tell by the numbers, LinkedIn has been the big winner so far in 2012, up almost 44% in less than three months. That’s impressive. However, LNKD still is down 3.8% since its second day of trading on May 20, 2011. What that says about its performance for the remainder of the year is anyone’s guess, but LinkedIn has managed to claw its way back near the $100 level it hit last July.

So which company is best positioned to take advantage of the improving jobs market? That depends on how you want to analyze it. If it’s strictly valuation, then let’s look at enterprise value to EBITDA, or perhaps the PEG ratio, which ties earnings growth to a company’s current P/E ratio.

Something I like to do when playing around with numbers is to mix and match. In this instance, let’s take EV/EBITDA and multiply that by the PEG ratio — and the company with the lowest product wins. Coming out on top is Korn/Ferry International, followed by Kelly Services, ManpowerGroup and TrueBlue. All four have PEG ratios of less than 1 and enterprise values less than 10 times EBITDA.

Korn/Ferry International is down the most year-to-date, however, so let’s figure out why before anointing it the best bet of the group.

The executive recruiter announced third-quarter earnings March 7 of 26 cents per share, 4 cents less than the analyst consensus estimate. Furthermore, it sees fourth-quarter EPS of 24 to 30 cents, also below analyst estimates of 31 cents. Missing and then guiding lower doesn’t instill investor confidence.

However, the reaction to the news hasn’t been harsh at all, with most of KFY’s decline coming in late January and early February. If you consider that Korn/Ferry’s fiscal 2012 earnings could be as high as $1.16 per share, it’s not the end of the world at this point. Its best three years in terms of earnings during the past decade were fiscal years 2006-08. The average net income over those three years was $60 million, just 13% higher than in 2012. Yet Korn/Ferry’s enterprise value is just 4.4 times EBITDA. It has no debt and $4.60 in cash.

At KFY’s March 13 closing price of $16.03, if you exclude cash, investors can buy $1 of earnings for $10. To buy the same dollar of earnings at LinkedIn, you’d have to pay $739. On a valuation basis, Korn/Ferry is the obvious winner.

If we’re talking about a company that’s growing profits and revenues, but also is available at a reasonable price, than TrueBlue is the better buy at this point. Especially when you consider that the blue-collar labor market will be the first to really pop when unemployment drops below 8% — further evidence that we are leaving behind the economic woes of the past three years.

In addition, while there hasn’t been much conversation recently about rising home prices, Zillow (NASDAQ:Z) suggests that once we get through 2012, home prices could start to increase by 2% to 4% per year. As the 29% of homeowners with negative equity start to see themselves with their heads above water, more Americans will think good times are just around the corner.

Of course, the entire conversation is moot if the unemployment rate doesn’t continue its gradual descent back to normal conditions.

Bottom Line

Of the nine companies mentioned in the table above, only LinkedIn can be considered truly expensive. The rest have been beaten down by a lousy job market that will continue to get stronger in the coming months. It’s too bad there’s not a single ETF that focuses on staffing and outsourcing. That would be the ultimate play. For now, it might be worth getting into a handful of this sector’s offerings.

As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.