Jonas Prising : Well, Manav, the perfect environments for us are global demand for our services and solutions is booming, but that is not the case for our industry in this moment, at least. But I would say when we think about the demand for our services, this is an economic cycle that is increasingly looking similar to many other cycles that we have seen. As we discussed in our last quarter earnings call, from what we’re seeing, whilst our industry is absorbing a lessening of demand, taking within a historical context, this is still within the realms of a softer economy, whether it’s a soft landing or a lighter recession that’s for others to say. But there, the stabilization of PERM recruitment across a number of quarters now in the context of a strong labor market means that companies are still hiring people.
They are just being much more deliberate, much more cautious, and much more precise in what kind of talent they’re bringing in. And I’d say the same thing applies for temporary staffing. Yes, we’ve seen a drop in demand, in particular, from an enterprise client perspective and in certain sectors, but overall, both geographically in LATAM and in Asia Pacific, as well as in other parts of Europe, you can see that there is still demand for temporary staffing and our Experis consultants with the IT skills and specializations that they have. So what we believe is going to be an important turning point is when employers caution moves into employer confidence in an improved outlook. And as we’ve seen in past recoveries, the time when employers are more confident but not fully confident in the recovery is when we see a big move upwards in demand for our services and solutions across our brands.
Because a lot of companies, of course, are reducing their own hiring, their talent acquisitions, teams are either gone or are reduced. And that means they need additional capacity to ramp up the workforce they need to be able to compete and to prepare to execute and continue their business strategy. And that’s, I think, where we are. Right now, employers are more cautious. They think it’s manageable and you can see that in our overall numbers. But when they get more confident and they feel the turning point is here, that’s when we will see it in our business, both in the US as well as in Europe.
Manav Patnaik: Got it. And just as a quick follow-up, I mean, given a lot of this, as you’ve described, is kind of an economic cycle. When you review your businesses, like in Germany, Proservia, and then even Netherlands or whatever, like at what point do you decide it’s more, like how do you decide it’s more than just an economic cycle and you need to get out of those businesses? Like what are some of the common traits that lead you to that decision?
Jonas Prising : Well, I think the Germany example with Proservia is really a unique one-off situation. With a specific business that we took over from a client, it ran very well for a number of years, but then structural issues within that business have proven to be very difficult for us to turn around. And at this point, and with the German economy being the state that it is, we feel that it’s time to make a significant change, which is what you saw us doing. The other aspect of the Proservia business is also non-core to our strategies. So it is really a unique situation in Germany, and that’s why we made the change. The situation in Netherlands is not at all on the same — at that level. It’s a market that’s struggling and where we felt that this was a good time to make this adjustment. But overall, we expect to compete and do well in Netherlands over time, just as we expect and feel really good about the German market.
Operator: The next question comes from Tobey Sommer with Truist Securities.
Tobey Sommer: Thanks. I wanted to touch on something you just mentioned. We’ve heard that large companies in general have not reduced their own internal recruiting capacity as much as might be normal by historic terms in slowdowns. Could you talk about what you’re seeing in terms of internal recruiting capacity at customers and what that may imply for demand for staffing PERM RPO, for example, in a recovery?
Jonas Prising : Toby, I think what we’re hearing is that the teams, since there’s not a lot of hiring going on in many sectors, those individuals have been reallocated. And as you look at two other functions and or have left and are doing different things. So in our conversations, as it relates to, for instance, opportunities within our RPO, many of our customers are getting ready for an upturn or asking us to prepare. They are not ready to pull the trigger yet, but they are clearly thinking about the recovery and what they need to be doing when they are confident that the market is coming back for their product and services. So we really expect this to play out more or less the same way that we’ve seen other returns and bounce back as far as the industry is concerned, both here in the US and across the world, frankly.
Tobey Sommer: Okay, so it sounds like internal recruiting capacity at corporations is being drawn down. Great. What are you experiencing in domestic IT staffing demand? And in particular, I was wondering if you could comment on the financial services vertical and in tech, including global tech. Thanks.
Jonas Prising : As we mentioned in a couple of calls ago, the first hold down really came from enterprise tech and what we’ve seen there is a stabilization at the lower level. Convenience clients are holding up much better than enterprise tech and they are actually significantly better because of the skills shortages still prevalent in that market. So I would say the tech demand has stabilized at a lower level, better for convenience than for large enterprise organization. The banking and the finance sector are now feeling a bit more headwind but I would characterize it as manageable and you saw our outlook for Experis overall is sequentially stable to slightly improved in the US looking into the first quarter.
