M. Keith Waddell: For internal hiring, we’re always looking at the productivity of our existing staff. We’ve been through a process where based on individual performance, we’ve had to reduce staff that weren’t performing to expectation. That said, we’re always in the market for, highly talented, experienced staff and would continue to look so, but the point is given the current environment, we’re certainly not aggressively adding to internal staff. We feel good about the dry powder we have and the skill set of the dry powder, which is both sales oriented and recruiting oriented. And those are the people that are performing best in this environment. Those are the people that have the best productivity in this environment. We feel like we’ve got some pretty decent capacity in that way. But we’re always on the lookout for great people.
Princy Thomas: Got it. Thank you.
Operator: And our next question will come from Trevor Romeo with William Blair.
Trevor Romeo: Hi, good afternoon. Thanks for taking the questions. One on the talent solutions business, could you talk maybe about demand by client industry vertical? Are there any types of clients that are maybe holding up better than others in this environment, or vice versa?
M. Keith Waddell: Well, on the Talent Solutions side, we’re 70% SMB. And so we certainly don’t have that many large clients. Financial Services on the mid cap and larger cap on the Protiviti side is holding in there reasonably well, probably down mid, single digits year on year, but there’s no real industry story per se, outside of that. It’s pretty broad based. But both by geography and by industry. Maybe California are a little more impacted because it’s big tech heavy. But there are no major stories there.
Trevor Romeo: Okay. Understood. Thanks. And then one on Protiviti. I think you mentioned some budget pressure on the internal audit and the tech consulting practices. Just wondering if you could maybe give some more detail on, what those conversations with clients look like on consulting projects in particular since we are kind of approaching the year end budget cycle for a lot of companies.
M. Keith Waddell: Well, part of what’s happened, particularly in internal audit, with their large FSI clients, we’ve talked about in the past, a lot of what Protiviti does is co-sourcing where they split the responsibilities with clients as to their internal audit work program. And as clients get more budget conscious, they allocate more of that work to their internal staff and less to third party such as Protiviti. I think that environment is expected to continue. But as I said earlier, Protiviti feels like the marketplace is pretty stable as it relates to their services as we speak. And feels pretty good about where they are including in the budget cycle for the coming year. The first quarter is a big quarter for signing new internal audit contracts. And they’re relatively bullish about that. So we feel good.
Trevor Romeo: Okay. Great. Thank you, Keith.
Operator: And moving on to Kartik Mehta with Northcoast Research.
Kartik Mehta: Hey. Good afternoon. Keith, you talked about your ability to maintain pricing, and I’m wondering from a competitive standpoint, you’ve seen any change. If there’s any pricing competition, at all, or what your competitors might be doing?
M. Keith Waddell: Well, on the talent solutions side, there’s always price competition. We never operate in the absence of price competition. There are local regional firms that always in every part of a cycle, try to compete based on price. But given how tight the labor market is, frankly, he or she that has the best candidate wins. And given our brand, given our positioning, we typically can compete quite effectively on quality of talent we can provide, which is also aided by the AI, I just talked about. So it’s more about candidate quality than price, but that’s not to say we don’t get undercut every day by a local competitor as to price. On the Protiviti side, I’d say the Big 4, based on how heavily they hired, what their position has been relative to the campus hires that were coming some of which have been deferred.
Some of them have certain locations that have excess capacity. And in those locations, those Big 4 firms will get quite competitive as to price, but that’s just part and parcel to the environment Protiviti has been operating, and it’s been that way for a couple of three quarters.
Kartik Mehta: And just on E&Y, Keith, just you know, now that they’ve decided to go another direction, does that help, hurt, or is it neutral, do you think for Robert Half?
M. Keith Waddell: I’d say neutral helps a little bit. We were already seeing partners, managing directors that weren’t happy with how they thought that was going to shake out. The fact that it didn’t happen wasn’t a surprise given all of the first-hand knowledge the Protiviti MDs had of when Anderson, Anderson Consulting split and what the challenges are there. The thing about Ernst & Young, they didn’t have a lot of external audit financial services clients where they’re conflicted from providing consulting services. So they weren’t going to be freed up in a major way to provide consulting in Protiviti’s largest industry group, which is FSI. So it was already not expected to have a huge negative impact for that reason. But the fact that it didn’t happen, it’s kind of business as usual.
Nothing’s new, but there is a little more activity with some of their partners, managing directors that would be interested with Protiviti. I said the other thing about the Big 4 generally, most have a very young early retirement practice. I say that because I’m 66 and I would be passed their limit. But we’re the beneficiary of many of those early retired partners across the Big 4 that have many productive years left in their careers.
Kartik Mehta: Thank you very much. I appreciate it.
Operator: And our next question will come from Jeff Silber with BMO Capital Markets.
Unidentified Analyst: Hey. Thanks so much. This is Ryan on for Jeff. Over the past couple of quarters, there has been a larger delta between the US and international business. Was just curious if you can explain where you’re seeing the relative strength internationally?
M. Keith Waddell: Your observation is correct. And international zone generally speaking has outperformed US for several quarters. Most of that’s been in Europe. Within Europe, Germany has been the strongest Belgium has always been solid. It’s been good lately. And even the UK, which gets a fair amount of negative press. For us, the UK’s been good. So we continue to have a better quarter year on year and sequentially outside the US than in the US, which is great.
