Unidentified Analyst: Got it. And then I know you talked about some of the cost actions during the quarter, and I’m sure that’s reflected in the SG&A guidance. Just more broadly, can you offer any thoughts on where you are from expense side going forward?
M. Keith Waddell: As I said earlier, our overarching goal is not to optimize trough margins. But is instead to right size and have the right kind of capacity when things get better. And we’ve gone through a process the last several quarters individually based on productivity. And based on capabilities to right size our staff, we’ve gone through that process. Those savings are reflected in our SG&A. I think this quarter alone, we saved $42 million per quarter relative to a year ago in Talent Solutions. So we’ll continue to watch revenues and to the extent we have to make further adjustments based on, what plays out. We’ll be looking at that. But again, not with the view that there’s some magical, trough margin we’re not going to go below, but instead, what’s the right thing to do relative to having the capability we want to have as things get better.
As we’ve also said in prior calls, many of the actions clients take during a downturn reduce their capacity. And as soon as things get better, they need capacity and we’re a great source for them to scale their own internal capacity when things get better for which we need our own internal resources.
Operator: And our next question will come from Tobey Sommer with Truist.
Tobey Sommer: Thank you very much. I’m wondering what growth would look like if this is a mid cycle slowdown on the other side, if the decline has been half as steep as fire, recession is in down periods, does the up cycle on the other side does that kind of difference inform what we should expect on the other side?
M. Keith Waddell: Well, the only reason I would say no to that is to me the absolute level of job openings are much, much higher than in the past. So even though it’s been half as negative on the downside, those job openings, which are future hires, for which the velocity does speed up when things get better, they’re there. So that gives me confidence that just because it’s been half as negative going down, it’s only going to be half as positive going up. Look at that huge job openings number, which is almost double what it would typically be coming out of a down cycle.
Tobey Sommer: And even with unemployment at these low levels, you think that those jobs is a high level of job, so it can be filled and propeller more aggressive and typical upturn as environment –
M. Keith Waddell: I understand that typically in the early part of an upturn, a major source of candidates for us are those, that are between jobs because they were employed during the downturn. And clearly, there are fewer of them, but we’re not near as concerned about supply just as during the peak of the last two to three years, when labor was really tight, you never heard us talking about our growth was constrained because of supply because we have several levers. We’ve got a Canada database of 30 million people. We’ve got AI that can pinpoint a short list of the right candidates to fill those positions with remote work, which remains viable, particularly at upper skills that expands the candidate base. And maybe more important than everything I’ve just said, this full time engagement professionals there, we’re recruiting from people that already have a full time job.
And so that’s not relying on people that were displaced during a downturn. That’s having people switch from their current full time job to work for Robert Half full time and be deployed as a contractor. So I’m very bullish on the supply side that as things get better, even though there won’t be the traditional tranche of unemployed people for us to rely on for supply, we have alternatives that are just as good if not better as we demonstrated the last couple of years.
Tobey Sommer: Thanks. If I could sneak one in, how has remote job opportunities, how are those trended as a proportion of the jobs that your clients are looking for you to fill, you know, year to date and how does that compare to 2021, 2022 when it might have been sort of on site.
M. Keith Waddell: And so without giving firm statistics, we would say, it’s certainly different at higher skills and lower skills where much more prevalent at higher skills. Next, we would say the movement has been more between fully remote and hybrid then it has been to totally on-site. And so not a lot of movement between totally on-site and the others but there has been a fair amount of movement between remote to hybrid. But if you add remote and hybrid together, another way of saying what I just said is that that’s fairly stable, particularly at higher skills.
Tobey Sommer: Thank you very much.
M. Keith Waddell: And it still want the flexibility to not come in every day. That hasn’t changed. At higher skills, and particularly for project skills, clients still very much accept remote work. Even more so, I would argue than they do with their own full-time staff. They have a special project. There are very pinpointed high skills that they need for that project. They remain very willing that that be staffed on a remote basis. That’s where those high skills are.
Tobey Sommer: Thank you.
Operator: And our next question come from George Tong with Goldman Sachs.
George Tong: Hi. Thanks. Good afternoon. Your contract Talent Solutions revenue exited the third quarter, down 17%, which was relatively comparable to the full quarter down 16%. To what extent does your 4Q guide assume stabilization in your various end markets with respect.
M. Keith Waddell: I looks at the sequential trends for the fourth quarter over many years. And that trend line we discount based on the experience of the last few quarters. Since this most recent quarter, the trend line improved we’ve reflected that improvement in our Q4 guide. That said, we’ve still significantly discounted what the traditional trend line would be for a typical fourth quarter. And by the way, the fourth quarter given the shorter number of days due to holidays and for perm placement, the month of December is always volatile. Clients run out of budget. Clients go on holiday. Clients decide to defer hiring until next year. So December perm placement is always variable into how we perform, but by and large, we’ve reflected some of the improvement that we saw sequentially in the third quarter in our guide for the fourth quarter, but certainly not all of it.
Said differently that weekly sequential stabilization, we partially reflected in Q4, not totally reflected.
George Tong: And that’s just for conservatism.
M. Keith Waddell: Right. It’s for conservatism, and it’s because it’s the fourth quarter and because fourth quarter holiday impacts change fourth quarter perm hiring demand changes.
George Tong: Got it. That’s helpful. And then in the quarter, you delivered, above consensus numbers for revenue and profitability. As you think about internal metrics, what areas of the business surprised you to the upside and what areas would you call out would be surprises to the downside that you saw in the quarter?
