But we do think there’s upside on the EBITDA margin.
Trevor Romeo: Okay. Thank you. That was helpful. I’ll turn it over.
Operator: Your next question comes from the line of George Tong from Goldman Sachs. Please go ahead.
George Tong: Hi. Thanks. Good morning. Your Consulting and Digital businesses are seeing good growth and you’re making inroads with your Interim Search business. Can you provide some additional stats on cross referrals and cross selling involving these lines of businesses across the broader organization?
Gary Burnison: Digital is a huge opportunity for us. When we look at the cross referrals into the Digital offerings, it’s been underweighted compared to the rest of the portfolio. And so the cross referrals, George, for this quarter, I think, it was about 25%. Year-to-date I think is about 25%, something like that. The cross referral percentages into Pro Search, Interim substantially higher, like way higher. RPO is the same thing historically, maybe not as much recently. Digital is an undersized penetration that we have to get at and that’s opportunity for us. And I think right off the top of my head, George, I want to say that that cross referral percentage into Interim is probably, and Bob, can correct me on all this, but it’s probably like 15% or so. Consulting, which is a good sign, that cross referral percentage into Digital is like 30%. But for a firm overall, it’s underweighted, underweighted which creates nothing but opportunity for us.
Bob Rozek: Yeah. George, Bob, just maybe a little bit more color on the Interim. So if you go back to the point in time when we acquired Lucas Group and you roll the clock forward to today, as a result of being part of — those businesses being part of the Korn Ferry ecosystem, we’ve had somewhere around 1,500 to 1,600 incremental opportunities that were identified between lines of business in Interim and they’ve won in the neighborhood of like 850 to 900 of those, creating kind of $50 million to $60 million of incremental fee revenue that those businesses never would have gotten had they not been part of our ecosystem.
George Tong: Got it. That’s helpful. In recent periods, you’ve undertaken some cost rationalization actions, most of which are complete at this point. Do you envision needing to take additional cost or head count actions or do you think at this point the organization is right sized for where we are in the cycle?
Gary Burnison: We are always looking at our talent in terms of promotion and development opportunities. That’s something we’re constantly at work at. No, I don’t see any kind of workforce actions other than our normal talent management processes.
Bob Rozek: Yeah. George, I would say from a cost perspective, too, we’re managing our BD and travel down to a number that I think is sustainable at this point as the business goes forward. And as I said in the past on the real estate side, we have some opportunities, but the big opportunities are behind us at this point. To me it’s really all about what Gary said earlier. It’s productivity and that we’re going to get leverage out of the topline growth once the clouds lift.
George Tong: Great. Very helpful. Thank you.
Operator: Your next question comes from the line of Josh Chan from UBS. Please go ahead.
Josh Chan: Good morning. Thanks for taking my questions. On the Digital business, so you’ve run the business at about 30% margin for the last two quarters now. About a year ago it was 25% to 26% margin. So is the difference mainly the people that have kind of come out of the business? And if that’s the case, what does that mean in terms of the long-term growth potential in the Digital business going forward?
Gary Burnison: Well, I think, we’re scratching the surface of what the Digital business can be. I mean, we have to make sure that we’re driving the entire firm across this IP that we have and creating knowledge transfer to clients. And could this be three or four times the size of what it is today? Absolutely could be. But we have to invest in the platform, which we’re continuing to do. The profitability is clearly up, not just because of the cost reductions, but also because of the collaboration between Consulting and Digital. I’ve never seen it to be higher. Clearly, it should be the most profitable part of our business. It creates, I think, enormous opportunity for shareholders. If we were to do nothing, but double or triple that business, you can imagine what that could do for shareholder value.
So it’s clearly a focus of ours. But we’ve taken a very systematic approach to it in trying to build partnerships and an ecosystem and also investing in the platform and the technology platform that we have.
Josh Chan: Okay. Yeah. Thanks for the comment there, Gary. Yeah. That’s helpful. And on the Consulting side, I guess, growth has been sustained by Europe’s strength over the last couple quarters. So does Europe continue to look strong on Consulting business or at some point does that become a tougher compare as we kind of look ahead here?
Gary Burnison: Well, clearly, it could be a tougher compare. But I think overall in terms of where the Consulting business is, again, it’s the beginning, not the end. We just continue to see. We have a fabulous team, a great leader in Mark Arian and his strategy was to move the business towards bigger, more impactful, transformational assignments. And the business many years ago started out with assessments and smaller ticket engagements, and over time, through incredible team and the IP that we have and a firm-wide push, we have systematically moved that towards bigger organizational strategy assignments. And you see it in the numbers. You see it in the bill rate. I mean, that bill rate, I don’t know the exact time, but it’s like three years or four years ago.
I think that bill rate was sub $300 an hour. Now it’s $438. That’s a combination of everything in the strategy working. So, yeah, do the compares get a little bit tougher? For sure they do. No question about it. But in terms of the long-term potential of this business, we’re at the beginning.
Bob Rozek: Hey, Josh…
Josh Chan: Great.
Bob Rozek: …Bob…
Josh Chan: Yeah.
