Jonas Prising: I would say that at the current time, the industry verticals that we’re seeing pressure on from an enterprise perspective in our Experis and in Manpower are the same industry verticals, where we’re seeing the opportunities in Right Management. So I would not characterize our outplacement business to be strong because of broad-based layoffs. That is not the case; it is industry specific. It is in certain geographies and that is what we’re seeing from a Right Management business. And remember that last year, amongst the hiring boom is, of course, also when we saw very low Right Management or placement activity. So the strength that we’re seeing today is really from the same sectors that are feeling the pressure on the enterprise side for Manpower and Experis and notably in the U.S. and the U.K. but it’s not broad-based.
Operator: Our next question comes from Kartik Mehta with Northcoast Research.
Kartik Mehta: I think you obviously talked about kind of pricing what it’s doing now and it seems to be behaving — everybody seems to be behaving fairly well. I’m wondering when you look at previous downturns or previous contractions, when does pricing become an issue? Do you see your competitors waiting until we’re fairly into the contraction? I’m just wondering how in the past it’s played out?
Jonas Prising: Well, I think it very much depends on the depth of any economic cycle. And as we mentioned early on, in this call as well as in our last quarter call, all of the data that we’re looking at inside our company and the industry data is indicative of a — but we will characterize as a garden variety recession but we’re not economists. It could be a technical recession. It could be an economic slowdown. Whatever it is, our industry is operating at a moderate economic downturn level. And if you combine that with very strong and resilient labor markets that so far haven’t shown any sign from a broad perspective of softening in a material way, we feel very good about our ability to maintain pricing levels because access to talent is so important and labor markets are tight and talent shortages abound.
And if there was a deeper recession, that would, of course, be a time when you could think about whether pricing would be impacted as the market would contract significantly and then competitors would try to maintain share and compete on price. But we’re certainly not seeing that today. The fundamental drivers of the strength of the labor market, if you look at demographics, if you look at technological change, if you look at our move up into higher skill sets, both in Experis and in Manpower through our specialization initiatives tend to — it go for profiles that are in demand today and will be an even greater demand into the future and that should provide us with additional pricing strength that could offset any other pricing pressure. But at this point, as I mentioned earlier, we believe that pricing is rational but it is always a very competitive market.
So we are competing for every deal but the overall demand is still positive from a pricing perspective.
Kartik Mehta: And then, Jack, on the French business tax, I think when we’ve talked in the past or you stated that kind of the next data point is September of this year, is that still accurate? Or has anything changed for that?
Jack McGinnis: Yes, Kartik. Yes, that’s still accurate. I think at this point and when we see the preliminary budget for next year, that usually comes out mid-September, that’s when we expect to see more color. We do know that President Macron continues to have very strong feelings that the French business tax, the repeal of the French business tax, this final component is very important to the future of the competitiveness of France. So that makes us feel good that there’s a very good chance that, that will go through as planned. But we really won’t know until to confirm it until we see it in the preliminary budget. And so we’ll know in a couple of months. And as we said before, when that happens, that is a significant benefit for us that will improve our global effective rate by another 1.5% downwards. So we’re looking forward to that and look forward to giving an update on that on our next earnings call.
