Rick Hermanns: I remember it—never mind sorry, I don’t mean to cut you off. I remember now. So as far as capacity, look when we did the acquisition of MRI at the end of 2022, I just sat there and if you just add it back what their system-wide sales were what ours were kind of running at that point out of — if the economy would have stayed normal, I’d have that they say, “well, shoot ” I don’t know how we’d miss 700 million of system-wide sales in 2023. Well, obviously, that didn’t happen. I mean clearly, that didn’t happen. Now we made certain cuts that — had that not happened, we might have kept staffing levels a bit higher than what they were. But I would argue that we could — so long as it’s let’s say, like a tech staffing type deal where it’s like right down the fairway for us, I could easily see us being able to add $50 million to $100 million of sales without materially adding any staff.
Okay, because realizing that probably a quarter of our staff is IT. And sort of like and so you that’s one of those things where that’s where like you start getting into, obviously, a decline in sales really hurts us from that perspective because you don’t quickly let go with programmers. You just don’t — you say you just don’t do it because they’re so hard to find. And so you — and again, obviously, you’re really fighting for your future. And — but anyway, I would definitely argue that we could — like I said, 50 million to 100 million without adding any significant amount of fixed costs.
Peter Rabover: Great. That mean I appreciate all the colors. That was a great. I will let somebody else take other question.
Operator: Next question comes from Mike Baker with D.A. Davidson. Please proceed.
Mike Baker: Hi, thanks. Hi, since you brought it up, wondering if you care to talk about any of the green shoots that you might be — or potentially false positives that you’re seeing, which business lines, etcetera? Just curious what you meant by that comment?
Rick Hermanns: Well, we look very carefully, obviously at how our sales track with the prior year. And clearly, it’s kind of funny, we got spoiled because over the last — you know, mostly the last — most of the last 30 years most of the last 30 years, it’s always up, up and up and also it’s like, just kind of saying this — it’s not nearly as fun being on the downside of that and — but that gap has closed rapidly. And now this is where it could be a false — it could be a false positive because obviously, I’m talking one or two weeks. I’m not talking — I’m saying I’m not talking the first quarter. So maybe we finally crossed that Rubicon [ph]. Maybe the staffing industry is reaching more of its historic norm versus saying and people are, let’s say, because I really do believe in 2023, a lot of what happened is that temporary employees were being replaced with perm staff and driving down the staffing industry’s revenues, that’s what I think.
And again, I could be 100% wrong. But there was, in fact, an article I read in the Wall Street — I think it was a Wall Street Journal again, but I was talking about two different measures of how the government accounts for the unemployment rate. Because you said the thing 3.6%, 3.7% unemployment rate is a main thing. Historically, and then almost by any definition, you sit there and say, well, why, is it then that employment companies are down. And there are two different surveys that take place. There’s a household survey and there’s a business survey. And they really come up with a lot different internal dynamics. And one of them, I don’t recall which one it is. One of them SKUs kind of lumps together, I’ll say, gig work and temporary work, it treats it more like a traditional permanent job.
And — but the results were a lot different when you looked at it differently. And I really think that is part of, once again, really what we experienced in 2023. But like I said, in — at least to me, economically, things always manage to find their level and I just think sooner or later, we’re going to hit that level again. And I’m just hoping it’s in March of 2024 and I’m saying not six months from now.
Mike Baker: Right, understood. So if I can clarify what your point of the two different measures of employment is that perhaps the employment situation isn’t quite as strong as it looks like in the — was it think 3.9% was the latest number for unemployment. Was that what you were saying?
Rick Hermanns: Well, or what happened is that it — like the overall unemployment rate maybe went up a little bit, but there are — actually that there are more permanent job that basically, they are more permanent employees than there are temporary employees now or that some of the gig employees went away. It’s just how you define it and like the 3.9% may include a lot less temporary employees than the other survey and I wish I had the article in front of me. I probably just brought it up. But I’m just simply saying there are absolutely two different ways of looking at it. And I’m just saying, if you really — if you think about it, why in the world — and you can look at any staffing company’s numbers, they’re all down. Well, why are we all down when in reality, the economy is still growing, that shouldn’t happen.
