Willis Towers Watson Public Limited Company (NASDAQ:WTW) Q4 2022 Earnings Call Transcript

Gregory Peters: Good morning everyone. For my first question, I’m going to focus in on both the adjusted operating margin. If I look at the full year and your results, it’s up 100 basis points from prior year. And in your prepared remarks, you talked about all the new hires that you successfully executed on last year. Can you talk about how those hires affected the margin results, the margin expansion results in 2022? And I guess when I’m thinking about 2023 and 2024 as those employees get the new hires get more €“ get onboarded and they become more productive in year two and year three, maybe there’s some tailwind on margin from that. So some perspective there would be helpful.

Carl Hess: Yes, Greg. So with regard to talent, I mean, we’re really pleased with the progress we’ve made on our higher efforts during the year. Net hiring for the year is positive. Our headcount is up by almost 2,500 to 46,600 employees, which is kind of back to 2019 levels, and that’s despite the divestitures we’ve made since then. We do expect the contribution to the improvement in our talent base fee become more meaningful into 2023, and we’ve already seen positive trends as we progress through 2022. I think that’s reflected in the revenue growth numbers from quarter-to-quarter. We’re continuing to hire opportunistically in the number of open positions and base position, of course, are going to vary at any given time based on our needs.

But we’re really encouraged by the progress we’ve made, and we’re going to continue to focus on expanding our talent base as necessary to achieve our growth targets. You’ll probably see some further detail on our higher efforts in goals in our 10-K, which will be filed later in the month.

Gregory Peters: And just a point of clarification on that. I sort of viewed 2022 as like a hiring super cycle for you guys €“ is it €“ when I think about 2023, is it more €“ are we back to more normalized run rate type of additions? Or are you still €“ would you still think of 2023 is still looking out to make a substantial addition to your workforce?

Carl Hess: Well, we are continuing to hire opportunistically, as I said, Greg. And yes, there’s always going to be some areas in a firm that is the span of services we do where you look and say, okay, we need to kind of advance what we’re doing more substantially than others. But I think we’re opportunistically is key, right? Whereas coming into 2022. As we talked about in earlier calls, we had more pronounced needs across the organization.

Gregory Peters: Yes, that makes sense. Okay. My second question, I guess, is my third technically, but my last question will be on organic revenue guidance. You provided the mid-single-digit guidance and I know you don’t want to get mired down in the detail, but I’m wondering if you could give us some idea of how you think the pieces inside Health, Wealth and Career and Risk and Broking might perform in 2023 in the context of the 2023 guidance. And I guess the reason why I’m asking about this, as I look at the ICT results that were really strong, and I’m just wondering if that’s something like that can sustain itself? Thank you.