And then we’ve got a very smart solution oriented with industry expertise team on the top, which are helping architect the solutions to meet the industry need of the customer. And that’s working just great. And so it will continue to build, but I think our model is going to be here that we’re definitely on project teams going to bring our contingent labor to bear on it because they are a more perfect fit. They’re in the right place at the right price point with a more perfect skill set, the right industry experience, and so we can craft that in every team as we go here. So that’s been a winning proposition for our customer and the all-in cost of that is really competitive. And you can see that we win work not only because of our price point, but also the expertise we bring to bear.
So we’re going to stay the course there.
Surinder Thind: Excellent. And then in terms of just, I guess, following up on the price point question here. How much of a difference is there between what you’re able to bill for your consulting services versus the staffing services? I assume is it material at this point? How should we think about the difference? And then maybe just some commentary on kind of the bill rate trends, I guess, at this point in terms of how that maybe trended over ’23? And what’s your outlook for ’24 is?
Theodore Hanson: Well, for sure, the bill rate is better and it’s evidenced by the fact we can get a better margin, right? So we tell you that our margin in consulting is 300 or 400 basis points better than what we get in IT staffing. And it is because we’re taking on some responsibility here for a certain amount of light or deliverables or milestones. And so from that, we’re able to get a better bill rate. I mean, there’s no question about that. And what was the second part of your question, Surinder, I’m sorry.
Surinder Thind: In terms of the outlook for ’24 pricing and the conversations that you’re having with clients, I mean, are clients asking for better rates? Or are you able to kind of hold rate steady? Or is — or as you talk about in wanting to do more AI projects, that you can maybe use that to your advantage to maybe get a little bit better rate because those are harder skill sets to find?
Theodore Hanson: Well, look, I think anytime it’s a harder skill set to find we can get a better rate, and it doesn’t matter whether it’s in and — it’s really in the solution orientation, right? If it’s a higher-end solution orientation, we can get a better rate. So all that stands past. Our margins, our markups, if you will, have been pretty steady here and our bill rates are slightly rising, and I think that is part and parcel with the mix of more consultative work that we’re doing. And yes, more work we do in AI here, that will only support and improve those.
Surinder Thind: Got it. So I apologize if I didn’t ask the question. I wasn’t referring to the mix. I was actually referring to the actual apples-to-apples comparison of what you could charge for a certain level of engineer in ’23 versus what you think you may be able to charge them in ’24?
Theodore Hanson: We’re not seeing a trend that is down. I mean I expect that — typically, we’ll get a slight increase in our bill rates year-to-year. I would expect it in ’24 versus ’23. We don’t see anything underlying that would tell us any different right now.
Randolph Blazer: Ted, can I add — Can I add something, Surinder. Keep in mind, as our consulting business grows and grows, it’s cost per job, not cost per hour, and staffing, its cost per hour. And there are built in escalators to bill rates and there are exceptions to the bill rates depending on skill types, the status of availability of skills, important projects. But a lot of what you’re asking applies more to staffing where bill rates for an individual hour are highly discussed and it’s consulting that grows with us. It’s discussing what the cost of the job is and what are the benefits associated with that.
Surinder Thind: But I just — I guess maybe to help me clarify, I just want to make sure I don’t miss in turn that comment. Is that implying that you’re doing a lot more fixed price projects in? Because generally, most consulting firms do not want to do fixed price projects. They want to bill by the hour. So you have engineers…
Randolph Blazer: No. Does not imply that, but the cost — the conversations with the clients start around what’s the total cost of doing — taking on this job. When we — you can build it by looking at timing material type work. You can build it by time and material, but the ultimate conversation and decision around a competitive choice is around the cost and the — any risks associated with delivering that work and where the benefit of that work.
Operator: And our next question comes from the line of Heather Balsky with Bank of America.
Emily Marzo: This is Emily Marzo on for Heather Balsky. I was wondering if you could talk to us about what you’re seeing in permanent staffing. And what was the percentage of sales you saw for staffing this quarter?
Theodore Hanson: Marie, do you want…
Marie Perry: Yes, absolutely. So yes, for the fourth quarter, we actually — perm as a percent of total revenue was 2.4%.
Theodore Hanson : And I think what you’re seeing there, Heather, again, it’s very steady. I mean I’d say it’s not historic low percent of the mix, and there’s really no change, if you will, from the third to the fourth or our expectation here for the first quarter is in similar ranges.
Operator: And we have reached the end of our question-and-answer session. I’ll now turn the call back over to Ted Hanson for closing remarks.
Theodore Hanson: Great. Well, I appreciate everyone’s attention here today for the release of our fourth quarter and Q&A that followed, and we look forward to being with you very soon to discuss our first quarter 2024 results.
Operator: Thank you. This concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation.
