Having said that, orders have not dried up. We want to make that clear. It’s just taking longer to get them closed. Our clients are less urgent. They’re taking more steps. They want to see more candidates. They want to involve more people in an interview process. It simply lengthens the sales cycle. We still have orders. Orders have not dried up.
John Kennedy: That helps. And maybe just shift gears to margins and the dynamics of margin drivers. Could you talk about the importance of mix and conversions versus, I think, what most people less familiar with Robert Half would think is place an emphasis on wage rate and inflation and bill pay spreads?
Keith Waddell: Well, as we talked earlier from a bill rate increase, pay bill spread increase, the point is, for the most part, at these elevated levels, they’ve been pass-throughs. So we’ve been 7%, 8%, 9% higher wage rates, bill rates recently, which have had very little margin impact. Conversions on the other hand, have almost a dollar-for-dollar percent-per-percent impact. And so conversions so far this cycle at a high were 4%, 4.1%. I think this quarter, we’re back down to 3.7%. And so clearly, they have a margin impact, but we talked earlier on the call about the traditional range. And while they do show volatility on the downside, as I mentioned, they show volatility on the upside as well. And you’ll see if you study prior up cycles, perm and conversions recover the most quickly as clients ramp up their staff, particularly if they’re coming from tight labor markets, they want to lock up their good staff early in an up cycle, which benefits perm, which benefits conversions.
John Kennedy: Got it. Thank you. Appreciate it.
Operator: Your next question comes from the line of Stephanie Moore with Jefferies. Please go ahead.
Stephanie Moore: Hi. Good afternoon. Thanks for the question. I wanted to know if you have seen any maybe signs of wage inflation being a little bit more subdued or even the other side companies pushing back on what has been a really tight market and a tight wage inflationary environment. So any improvement there?
Keith Waddell: Well, we would say we’re definitely seeing clients pushing back more than they were in part because they think they can, which is understandable. As I talked earlier as well, we would expect some dialing back of the wage rate pressures we’re seeing as well as the bill rates that go along with that. So as things soften a bit, we would expect pay rates and bill rates to dial back a bit. But as I talked about, we don’t think that have much of a margin impact for reasons that I talked.
Stephanie Moore: Right. No, absolutely. And then just continuing, as we think about €“ as you look at across talent solutions for the quarter, finance and accounting, administrative and customer support and tech. Were there any of those that surprised you in terms of the performance?
Keith Waddell: Well, the biggest positive surprises were we had strong double-digit growth in management resources, and we had really strong double-digit growth in full-time engagement professionals. And so that was good. On the negative side, I’d say ACS was a little more impacted. I think clients as they get more cost conscious, tend to go first to their administrative staff in dealing with that, and we saw that in our ACS numbers.
Stephanie Moore: Thank you.
