Jasper Bibb: Hey, good morning. This is Jasper Bibb on for Tobey. The gross margin guidance for the first quarter looks really strong despite some of the headwinds we’ve talked about. I think historically, that’s easily been the weakest margin quarter for the company. How should we think about the seasonal pattern of margins over the balance of the year and any impact that some of your permanent placement businesses declining might have on margins over the course of the year?
Jack McGinnis: Thanks Jasper. Yes, you’re right – I think traditionally, we do typically see some pressure. I think the counter to that, though, is we have stepped up margin pretty progressively sequentially over the last number of quarters, and we take that into the first quarter. The rate of increase is slowing. We were up 100 basis points in Q4 year-over-year, it’s 70 basis points, and that’s just the comps starting to catch up a bit. No, I would say at the moment, we feel pretty good in terms of–as I mentioned earlier, in terms of pricing, staffing margin, perm continuing to contribute, and based on mix of the business as well, right? As we look out, we typically don’t talk about future quarters, but I think it is fair to say that generally, the second half of the year, we typically see a bit higher GP margins.
I think this year in 2023, the item that we’ll definitely keep a close eye on is perm and the contribution of perm to overall market, as we mentioned earlier. If perm slows more dramatically, then that will have an impact and we’ll start to see that come down. I think the good news is we’re already seeing the contribution of perm, as we talked about in previous questions, start to get back to more traditional levels as a percentage of GP, and as that continues to stabilize, that should have less volatility on GP margin as we go forward. That’s what I’d say, Jasper.
Jasper Bibb: Thanks, that makes sense. Then Europe PMI has been contracting month over month for most of the second half of ’22, but your organic revenue guidance for Europe is still roughly flat year-over-year in the first quarter. Could you speak to any differences in how managers are using temp labor in this environment and are they more, I guess, reticent to let people go, given the shortages we’ve seen in the past two years?
Jonas Prising: I’d say that they are definitely careful about letting their talent go. The uncertainty and the volatility in terms of the outlook and the economic conditions also mean that they prefer to have a more flexible workforce, which is helping us offset some of the demand weakness we may have seen. Employers use these workforce solutions that we provide through Manpower and, to a lesser degree in terms of economic cycle in the Experis side and Talent Solutions side to create some flexibility in their outlook and be able to quickly respond to either increases in activity or decreases in activity. I think that’s what we see. They have definitely and continue to be influenced by the difficulties in finding talent, and they are increasingly looking to us to help them provide that talent.
As you’ve heard from our prepared remarks, they are also very pleased with our increasing capabilities of up-skilling and re-skilling talent that isn’t available in the market. We see this as a tremendous opportunity both from a Manpower perspective as well as from an Experis perspective. As the demographic trends in Europe and in North America are clearly getting tougher over time with lower birth rates, the ability to tap into talent pools and to create skills that are missing in the market, we think is going to be a great competitive advantage for both Manpower and Experis at scale.
