Q3 2022 TrueBlue Inc Earnings Call
Some of today's call.
And a full transcript and audio replay will also be available soon after the call.
Okay, Let's now turn the call over to Steve.
Thank you Derek and welcome everyone to today's call.
<unk> revenue was $576 million were roughly flat compared to Q3 2021.
People ready demand softened yet.
Yet, we still have a higher proportion of jobs as worker supply continued to improve.
People Scout results were solid as hiring volumes at our clients were strong.
While people management trends held steady.
Operating income and margin were higher due to historically widespread between bill and pay rates as the labor market remains tight.
People already revenue for the quarter was down 4%.
While demand slowed worker supply improved leading to an increase in our job order fill rates.
People already is our largest segment representing 57% of total trailing 12 month revenue and.
And 57% of total segment profit.
People already as a leading provider of on demand labor and skilled trades in the North American industrial staffing market.
We service our clients via a national footprint of physical branch locations supported by our job stack mobile App.
People Scout revenue was up 10% compared to a year ago.
Demand for RPM services remained strong at existing and new clients due to the high number of job openings.
Our highest margin segment people scout represents 14% of total trailing 12 month revenue and.
And 33% of our total segment profit.
People Scout as a global leader in filling permanent positions through our recruitment process outsourcing services.
Turning to our third segment people management.
Revenue growth remains steady at 4%.
Commercial driver services contributed the bulk of the year over year expansion.
People management represents 29% of total trailing 12 month revenue and.
And 10% of total segment profit.
People management provides on site industrial staffing and commercial driver services in North America.
The essence of a typical people management engagement is supplying an outsourced workforce that involves multi year multi million dollar onsite or driver relationships.
I will now shift the discussion to our strategies.
Before ending with additional views on the current environment.
Are people ready a key strategy is to use digitalization to supplement our nationwide branch footprint.
Gain market share and improve efficiency.
The United States temporary day labor market is highly fragmented with the bulk of the market made up of smaller companies in the industrial staffing segment, where people are ready to compete.
The smaller more regional companies are typically not able to invest in digital applications like our job stack app.
Job stack provides a unique user experience for our associates and clients.
Allowing both groups to connect at anytime.
The application is used by over 90% of our associates.
And has over 30000 client users the.
The majority of our competitors also lack our expansive branch footprint, which spans across most major markets in the United States. This combination is what makes us a leading provider within the on demand industrial staffing market.
We are able to service customers that need a nationwide one stop shop. In addition to taking care of local clients.
Job stack makes it easier for both national accounts and local accounts to access the labor they need when they need it without all the friction involved in a branch based business alone.
Turning to people scout.
Our strategy Leverages, our strong brand reputation to capture opportunities in a growing industry.
Companies today are confronted by people shortages.
Our ability to hire large volumes of people enables us to meet the demand for existing clients and has positioned us to capture new clients for long and short term engagements.
As we move forward, we will continue to expand our product offerings to meet the growing needs of our clients and helping them source.
Onboard and effectively manage their employees.
For people management, our strategy is centered around operational execution and geographic expansion.
Improving our customer and associate experience is mission number one.
We have made targeted investments in these areas to enhance the service levels in an effort to improve retention.
Turning to geographic expansion.
Within the onsite offering our business development activities are targeting local in underserved markets specifically in the western part of the United States.
Meanwhile, we are focused on increasing market share in the eastern part of the country with the commercial trucking business.
With this being my first full quarter back as CEO I wanted to provide you all with my assessment of the business and our main priorities.
First I continue to be impressed with our leaders and our people.
I've had the opportunity to reengage with all facets of the company.
The feedback I've received about the business has been consistent.
Demand is softening and labor is tight.
The uncertainty surrounding the economy is causing some buyers to pause spending.
Which is impacting our business in different ways as Derek will discuss later.
However, with over 10 million job opening throughout the United States, many lower paid blue collar jobs, where we specialize.
This implies the labor market will remain tight for some time.
Our multitude of services and ability to connect people with work has the team focused and excited about our growth prospects.
People are our number one priority.
We know our clients in the industries they serve.
The long term relationships. Our teams have developed is what makes us great.
In times of uncertainty committing to our employees as ever so important.
The tight labor market gives people options.
As such we have doubled down our focus on retaining and developing our teams.
This will require us to be diligent about maintaining the appropriate level of staffing needs.
With the right positions and in the right locations supplemented with training and resources to ensure success.
The result, a clue.
First mentality defined by excellent customer service and superior delivery.
Our goal is to be ready to bounce back quickly when economic uncertainty eases and it's our people who will make this possible.
This leads me to our next priority.
Technology.
To further enable our people serve existing clients and reach new markets, we recognize the importance technology plays.
At people Scout, we are a differentiated tool in the Phoenix to service our appeal clients.
Over the past year within people already.
We have been on a journey to update the underlying technology platform.
The goal of the transformation is to reduce process friction.
Which has a cascading effect.
Freeing up time enhances employee productivity and allows for more interaction with customers.
It also increases the scalability of our business lowering the cost to deliver our services.
When paired with job stack, we create differentiation and gain a competitive advantage in the markets we service.
Each of our businesses are poised to grow market share, especially within our niche and high margin product offerings at.
People ready and people management the opportunity is to accelerate market expansion, mainly in the eastern half of the United States within skilled trades and commercial trucking services.
These investments pay back quickly.
And have a proven track record producing high double digit returns.
We also have a lot of green space to grow people already renewable energy presence.
Recently, the Biden administration passed the inflation reduction act, which provides developers.
Developers access to tax credits too.
To fund new solar projects.
Our long term client relationships combined with the ability to scale quickly positions us strongly to capture market share.
Finally at people scout the Sky's the limit for our highest margin business, we see big potential to not only enter fast growing verticals, such as life Sciences and technology.
But also find ways to grow our geographic footprint.
By expanding our relationships with our existing client base.
We find ourselves in a unique position with this current downturn.
Unlike the past recessions. This time, we're focused on investing for the future.
Don't get me wrong.
We will remain disciplined on costs.
And with the right strategies and investments, we will be well positioned to capitalize on the rebound and maximize profit across the cycle to achieve our long term goals.
I'll now pass the call over to Derek who will share greater detail around our financial results.
Thank you Steve.
Total revenue for Q3, 2022 was $576 million are roughly flat to Q3 last year.
People ready revenue was down.
While revenue grew at People's Scout and people management.
Lower workers' compensation expense and a positive spread between bill and pay rate inflation led to bottom line growth and margin expansion.
Net income grew 11% and adjusted EBITDA grew 18%, while net income and adjusted EBITDA margins grew 40% and 90 basis points respectively.
Adjusted EBITDA margin expanded more than net income margin due.
Due to people ready technology upgrade costs this year, which were excluded from our adjusted results.
Gross margin for Q3, 2022, or 27, 1% was up 170 basis points.
Key contributors included 110 basis points from lower workers' compensation expense.
And 100 basis points from Bill pay spreads.
Which were partially offset by a higher proportion of revenue contribution from our lower margin people management business.
The workers compensation results are from a combination of favorable development of prior year reserves.
And fewer workplace injuries.
Q3, 2022, SG&A increased 5%, which is less than a 10% increase in Q2. This year due to cost management actions given the current level of demand for our services.
Our effective income tax rate was 17%.
Which was in line with our expectations.
Before discussing the performance metrics of each of our segments.
I'd like to provide some big picture commentary on how the current environment is impacting our business.
Inflation and higher interest rates are clearly, causing consumers and businesses to rethink their level of consumption and investment resulting in demand uncertainty for many businesses.
Demand uncertainty is translating into future workforce uncertainty for many of our customers.
Which is impacting our three lines of business.
Be it in slightly different ways.
Yeah.
The demand impact is most noticeable in our people ready business.
In a slowing or accelerating economy, we typically see the revenue impact first in this business due to the short duration of job assignments.
Combined with the fact that many customers rely on people ready as a variable supplement to their core workforce.
On the flip side, the short duration of job assignments allows people ready to continuously reprice its business in a favorable way.
Given the talent shortages that exist.
In fact, the favorable spread between bill and pay rate inflation. This quarter was the largest I have seen in my 20 year history with the company.
And people management, many of our customers use our services as an integrated part of their core workforce.
Demand changes here are less volatile in comparison with people already.
As customers often vary the use of people management services in tandem with adjustments to their core workforce.
As a result recent demand trends have been more steady than that people ray.
However, we have seen uncertainty when it comes to new customers.
While the pipeline for new customers remains healthy.
Or are hesitating on making labor supplier changes due to uncertainty about their future workforce needs.
Similar to people management potential new people scale customers are hesitant to make commitments on multiyear deals.
But demand for new short term projects has been very strong this year and remains healthy.
With record levels of open jobs and the economy.
Employees have many choices.
Resulting in higher levels of employee turnover for our clients, creating additional demand from our customers.
Now, let's turn to the specific relative results of our segments.
People ready revenue decreased 4%, while segment profit increased 16% and <unk>.
<unk> profit margin was up 150 basis points.
Improving job order fill rates helped to offset the decline in demand improving by five points from Q2 to Q3 this year.
Segment profit and the related margin growth came from lower workers' compensation expense and favorable bill pay spreads.
Bill rates grew nine 7% while pay rates grew seven 5%.
People Scout revenue and segment profit increased 10% and segment profit margin was relatively flat.
Growth was driven by higher volume within our core <unk> business as well as short term RPM projects.
People management revenue increased 4% with segment profit up 89% and segment profit margin was up 120 basis points.
Commercial driver services contributed the majority of the year over year revenue performance.
Segment profit and margin were up due to an increase in mix from commercial driving.
And lower recruiting and candidate marketing costs, which were at a high point last year due to worker supply challenges.
Now, let's turn to the balance sheet and cash flows.
<unk> finished the quarter with $44 million in cash and no outstanding debt.
The business is producing strong cash flows with year to date cash flow from operations totaling $80 million.
Now I'd like to take a moment to provide additional color on a couple forward looking revenue items.
For Q4 this year, we expect a revenue decline of 12% to 8% compared to Q4 last year.
In Q4 last year people already benefited from a demand surge across the business as our customers found themselves in desperate need for labor during the peak of the post.
Post Covid recovery.
This surge is not expected to reoccur this year.
Which will create a 9% headwind for.
For total company revenue in Q4 this year.
In October our weekly sequential revenue trends are holding steady in comparison with typical historical patterns.
I'd also like to point out a couple of things for 2023.
In Q1 next year revenue growth will be suppressed for the same reason as Q4, this year, which will create a 6% drag for Q1 2023.
Finally, the 2023 fiscal year, we will have 53 weeks.
Which is a typical occurrence every five years to six years since we operate on a 52 week year versus a calendar year.
This extra week will provide incremental revenue for the year of $22 million to $27 million.
But will not contribute additional profit due to it being an annual low point for weekly revenue.
For additional details on our outlook for the fourth quarter. Please see our earnings presentation filed today.
Okay.
This concludes our prepared remarks, operator, please open the call now for questions.
As a reminder, if you would like to ask a question Press Star then the number one on your telephone keypad.
Your first question today comes from the line of Jeff Silber with BMO capital markets.
Your line is now open.
Thank you so much I appreciate all the detail you gave in your prepared remarks is it possible to get a little bit more color by end market vertical I'm. Just wondering if there are specific end markets doing better or worse than others.
Hey, Jeff Thanks for that question, it's Derrek here and I'll I'll take that question.
From.
Pressure perspective, when it comes to results the two areas, where we're seeing the most of that are in retail and hospitality.
Most of that is because we're coming up on tougher prior year comps, but also part of that is because.
We've seen some softening in both of those markets, particularly retail to <unk>.
Give you some perspective on this.
In retail we were up 16% in Q2, we were down 7% in Q3.
Our hospitality business is still growing is up mid single digits, but that's been a really big grower for us for several quarters up over 50%.
On the on the other side of the equation construction.
Construction and manufacturing actually held steady.
The growth rates or minor decline, depending on which one of those industries you pick stayed pretty steady with where it was in Q2.
Yes.
Okay. That's really helpful. I appreciate that you also talked a little bit about what's going on in October I am just wondering if we can step back into last quarter and talk about intra quarter trends if possible by the different lines of business.
Sure.
So for talking intra quarter trends people scout stayed at steady at about 10% all throughout the quarter.
People management steady as well June July was up 4%, 2% as they exited the quarter.
And people ready is where we saw the most step down.
Going from minus 2% in July them to minus 6%.
At the end of the quarter.
Going into October , though our staffing businesses are holding pretty steady with the typical sequential trends that we would expect so we haven't seen any softening in the run rates.
From a year over year perspective, the declines are getting larger we're running probably about 8% down.
In the first three weeks of October , but thats not from any softening in our weekly trends if we compare to typical historical patterns. It's more about the prior year comparisons that I pointed out in my prepared comments.
Okay. That's helpful and if I can just sneak in one more based on that.
Just curious what's implied in your revenue guidance for the quarter and I do appreciate you guys, giving us revenue guidance once again.
Yeah, you bet. So the the midpoint of our guidance for Q4 is minus 10% and the trends that we're seeing in October are right in line with our expectations of where we should be in October compared to the guidance that we gave.
Okay, great I'll jump back into queue. Thanks, so much.
Okay.
Your next question comes from the line of Mark Mark Hahn with Baird. Your line is now open.
Hi, Good afternoon, I just wanted to follow on from Jeff's questions, just with regards to the midpoint in terms of being down 10% how would you expect that to breakdown between.
People ready people management and people scout.
And as is all of the.
The onetime drag all concentrated in people ready in terms of what you cited.
Yes.
People ready, we'll be above that 10% would be in the low teens.
People management flattish and people of scout.
Still still growing.
Yeah.
What was the second part of your question Mark.
Just ensuring that.
All of the drag from the one particularly large client.
Don't expect to replicate that Thats all in people ready.
The vast majority of it is there Mark we also had a nice sequential step up in our people scale.
Run rate from Q3 to Q4, as we brought on a pretty sizeable.
Customers, so the headwind increases there as well in that segment, but from a total company perspective, the overwhelming majority sits in the paper business.
Okay, and so people ready exclusive of that drag.
Would be more like down three ish.
Yes, that's right excluding that would be down three to four ish.
Yeah.
Okay.
Is that because your expectation is.
Hey, we're going to.
The economy softening, obviously, there's lots of uncertainty and so the expectation is.
That.
Those trends should continue and particularly in retail and to a degree.
Also perhaps in hospitality and some of the more cyclically sensitive end markets.
Well the we don't have a lot of softening built up I mean, we exited the quarter people already at 6% there was a little bit of prior year headwind in there from some of the comps, but we exited at 6%. So we're sand going into Q4, it'll be around three or 4%. So it's a pretty steady case.
As far as from what we've seen in October and then building off of that we didn't throw a lot and for additional softening, which is trying to try to give it to you based on what we're seeing.
Okay, and then with regards to people scout.
<unk> there was a fairly significant difference between Q2 versus Q3 were there any end markets that ended up having a change of pace or how should we think about the sequential trend.
Yes, I'm glad you asked that question. So people scout was down sequentially $12 million and Theres really two things going on there.
One there is less than a handful of clients that reduced their spend in Q3 compared to Q2. However, Q2 was an all time peak for their businesses. So I would say, it's less off of more of coming off of a peak than any fundamental softening in their businesses.
Actually the businesses that I just.
That less than handful of clients their business look looks quite strong.
Whenever there is one client that makes up the other half I would put this client in the category of being somewhat of a luxury retailer.
And their business is suffering they are quite high on inventory.
And they are facing their own host of demand challenges as consumers shift down to lower cost brands, given what's going on with inflation right now.
Okay.
Okay.
Okay.
Then as we as we think about just the margin impacts you called out you, obviously had a benefit from workers comp, which <unk> had multiple years.
Or are you thinking about that impact in terms of the fourth quarter and.
Are there any considerations that we should put in place for next year as we think about that sure.
Well Theres, probably three things to think about here I'm just going to paint. This big picture. Some of it will also cascade into our fourth quarter conversation when we see take a step back from our performance. This year I'm going to focus in right here on gross margin.
<unk>.
A pretty good year when it comes to favorable development on our workers' compensation reserves, that's helped reduce workers' compensation this year.
Year to date compared to the same period last year by.
About 50 basis points.
Ultimately, that's not something that's sustainable that prior year reserves. So you could expect to see that go the other way at some point.
From a pricing perspective, that's been very strong for us.
We're running a there was a 100 basis points of positive gross margin contribution this quarter really all from people ready and the favorable built pay spreads that we talked about in the prepared comments.
If we were to do nothing and just kind of hold our ground right now that would probably.
Okay.
End up being around 50 basis points for next year.
That's just the math we did nothing.
Any guidance there now obviously, if we get into a deeper darker recession and theres a bunch of job losses, and that's not what we're thinking right now but that will take to.
Would be the case that could go the other way.
And then you've got with with Pete the people ready dynamic right now with our revenue.
In decline.
Our people management business is taking up a larger proportion of the sales mix.
And that lower margin businesses, having a negative impact on gross margin of about 30 to 40 basis points. So I suspect that would be a reasonable assumption for that to continue if you continue to have in your estimates.
The people management.
Revenue trends are better than the people excuse me the people management trends better than the people ready trends.
That's very helpful.
And then with regards to <unk>.
Next year, how are you thinking about.
Managing your own head count on expenses and capital allocation given the uncertainty in the environment.
Well I'm glad you asked this question.
When we're growing we're investing and when we're not drilling were making adjustments and.
And you've seen in our trends this year SG&A was up 10% in Q2 as it was 5% here in Q3 and the midpoint of our SG&A guidance for Q4 is for it to be down 5%.
So we'll continue to make adjustments however, they might not be as pronounced as they have been in prior recessions.
We've kind of been an industry leader when it come to cost cuts.
And we made $40 million of reductions in the people ready business in 2000, most of those are still with us.
So.
When we take a look at our revenue per employee at people already it's running 20% to 25% higher than it did before COVID-19 hit that sounds great from a productivity perspective of course, but it also has US wondering yes, we are.
Or if thats turning out to be a net negative for us in the amount of gross profit dollars, we could be producing in comparison with some of the expense that we're saving on the staffing side. So.
So that's to say as we go into next year, we'll make some adjustments.
Not be as much as.
We have in the past.
If we get into a deeper Dr recession, we would reevaluate that but the way that we're looking at it as we go into recession. Our responsibility is to take some actions to help mitigate the drop in profitability.
But the big picture is as we need to maximize profit across the whole economic cycle.
And we're feeling you know if it's a reasonably shallow recession, you just won't see much of that cost cutting on the on the people ready side.
We may actually make some investments there too to fill some positions that we've got open, particularly with our branch managers.
Okay, and what about capital allocation in terms of like buybacks didn't look like you bought back anything during the quarter.
Yeah from a capital allocation perspective.
We're making sure the balance sheet stay strong, but we do like to return excess capital back to our shareholders and we'd like to do it at favorable prices.
So we're going to keep an eye on both of those and make decisions as we move forward.
From an acquisition perspective, that's not something we're not particularly interested in doing any acquisitions.
And the staffing side of the business our strategies there are really all about.
Making better use of the assets that we've got by Digitalized. The businesses now over on the RFP side, that's a different that's a different story.
We would be interested in acquisitions, there and increasing our mix of white collar work that we do professional we have quite a bit of that already so we really like the secular trends in technology, we like the secular trends in life Sciences. So additions there could really increase our street credibility on new deals.
We'd be interested in pursuing something on that side for the right price.
Great. Thank you.
Your next question comes from the line of Kartik Mehta with Northcoast Research. Your line is now open.
Good evening. This is Jack Boyle and place them Kartik Mehta I just have a quick question.
<unk>.
With the demand there are you guys seeing any difference amongst your larger or smaller clients.
And their demand behaviors, if you could give us a little bit of color on that.
Yeah.
I'll go ahead and take that one and see if you want to add any color feel free.
When it comes to larger customers excuse me on to clear my throat real quick.
Okay.
Sorry about that nothing like coming down to that call on earnings reinstate my apologies.
So when it comes to the differences between large customers and small customers, what we're seeing with our larger customers on our people management business our people scout business.
Is more its less about movements in there their use of our services.
Yeah.
<unk> been holding pretty steady where we've been seeing more.
Hesitation as new deals those larger customers have.
That are in our pipeline many of them hesitating, they're just they're hesitant to make a choice and changing providers with all the uncertainty going on they don't know what their demand is in some cases in which means that they don't know what their their workforce needs are.
Now keep in mind, those two businesses Prime we primarily serving customers in our core workforce.
They're either need somewhat up and down with their core workforce over on the people ready side, though we have been seeing.
I would say equal proportions of softening between both small customers and large customers and as you know with that business. That's more of a many of the customers use us as a variable supplement there and so it's one of the first things that gets turned off as things start slowing economically and one of the first things that get turned back on.
Thank you and just as a follow up are you seeing any difference amongst changes and bill spreads amongst some of the different John positions that you were mentioning just a few moments ago.
Well, our bill and pay rates that we quote it's all out of the people ready business and we've been getting equal.
Benefit on both sides of the house with large customers and small customers, but more benefit with small customers.
And those particular circumstances, where often dealing with the business owner.
And operations manager versus dealing with a.
Our purchasing department, but with virtually all customers, we've been getting the pay rates pushed through that part hasnt been a problem getting it through our bill rates and.
And we're getting some.
Extra spread with both small and large customers, but a little more with our smaller customers.
Great I appreciate the color. Thank you.
Okay.
Your next question comes from the line of Marc Riddick with Sidoti. Your line is now open.
Hey, good afternoon.
Hey, Mark.
So first of all want to thank you for all the detail that you've already provided and you've covered quite a bit between the slides in the prior Q&A I was wondering if you could talk a little bit about maybe.
There are any.
Misperceptions or misunderstanding that you think you are seeing out there as far as what.
Either investors may be thinking about or maybe some of your clients.
What's what.
What tends to take place going into a recession and maybe versus what's actually taking place and maybe you could sort of talk a little bit about.
If you feel as though some folks are off on anything in particular.
So it would be helpful to hear your thoughts there.
Well, Mark I'll start off and let Derrick filling the gaps on some of this but.
It's definitely different than than different recessions and I think we mentioned that in our last quarter and as we're trying to plan our business and trying to see what our clients are doing everyone's just trying to grasp.
Deep and long this might be and Derrek just mentioned in his last question that that were playing the cards here.
That.
We want to bounce back.
Oh impact and so as we listen to our clients and the people that we're aligning ourselves with is to be ready for them and make sure that our business is solid and so not cutting as deep as we might have in past recessions is really important to us.
And that's all based on the question you've asked here is what's going on and how deep it might be and what might be the outcome of this.
It's a real mixed signal.
That growth still seems to be available in some sectors in.
Obviously in others, it's still a little bit steeper, Derek talked about retail and they're making some adjustments and not understand it and have a holiday is going to hit.
Yes.
As far as our alignment with our clients.
We just have to stay really close in a time like this.
Our commitment to our clients and our people through this reset this coming recession is.
We will stay nimble yet, we're not going to slash like we have.
In the past I think our clients.
Are happy about the hearing that knowing that we will be here, we will be prepared and were going to be ready to balance with them.
It's good for our shareholders, but it's really good for the client situation that we had so we don't feel disconnected with our clients and all of the information. We've shared today is definitely client driven through lots of conversations and staying close to the data around there.
I'll, let derrick.
Answer the question more about the street and the investors in <unk> were misaligned, there, but we feel really connected to where our clients are.
While mark from an Investor perspective, I don't think there's any big callouts, where I see anything there where theres misalignment I guess, we'll see as we go into the fourth quarter. If there's further if there is any of that.
I think everybody, including the markets everybody is just looking at information week by week. It can swing one way or the other but I don't see I don't see any fundamental fundamentals that are off at our alignment.
Do you think that there's given the mix of business that you have now versus in the past.
And do you think there is different flows of information that youre getting now that's more beneficial than maybe it might have been.
And historical Pullbacks.
That's definitely true marked because.
The size of accounts that we work with is much larger than its been at any other time.
Not only because people scout has grown and people management continues to grow even in this tough market and those serve larger accounts than our average account of people already.
So those two things those two facts drive the type and size of client that App people ready in general sells our national account business.
It has grown more than our small account business really over the last 10 years 10 or 12 years.
So the larger the account the more sophisticated account manager we have on site and the more information we get out of those clients and it's easier for us to align and B.
Prepared and with those accounts.
So yes, very insightful question Mark that you've asked.
I appreciate it thank you and it seems it seems to make a lot of sense that you would have sort of a <unk>.
Better seat at the table today than maybe in the past as far as it may be improving visibility and then finally I guess, maybe you could talk a little bit about the pricing dynamic I think this was touched on a little bit earlier, but maybe you could expand on that a little bit.
If you could talk a bit about the.
The opportunities that may still continue to be out there because yes, we've got Mac.
Macro economic challenges, but there is still sort of this pricing balance that's still taking place and maybe you could talk a little bit more about that.
Sure I'll take the front part of that and Steve can jump in if he has any additional color he'd like to add so we're at an interesting part here in the economy. You know we've had a couple of quarters of negative GDP, we could be in for some more of that next year, yet here, we sit with $10 million open jobs and.
And many of which are lower paid jobs and they are in blue collar fields in which we serve.
People ready, that's where the pricing is coming from.
On top of that you've got an increasing preference amongst employees to work from home.
But the types of positions that we're replacing can be done from home, which is putting an even even more pressure on an already tight labor pool. So when we look ahead.
To the future, we just don't see anything changing that dynamic sure there could be a blip next.
Next year, if we get into bad recession, but I'm talking longer term with what would change that we don't see anything fundamentally changing that so that scarcity of talent. It gives us some more pricing power in these discussions.
And we've got a very disciplined team with a very disciplined plan to make sure of that.
We are appropriately pricing our business on the on the people ready side and scale with the.
The availability of talent in the marketplace.
It's very encouraging I appreciate it. Thank you very much for all the commentary.
There are no further questions at this time, Mr. Steve Cooper I turn the call back over to you.
Okay.
Well, thank you Emma and thank you everyone for joining us today as you can tell we are excited about the opportunities ahead to drive growth even in a difficult market, but as Derek was just visiting with you about the continued tight labor market, we feel well positioned now we've got to work through the current situation and when that growth.
Will come but with a client first mentality differentiated technology.
Really believe we've got the opportunity to grow our market share.
Through the recession that definitely coming out of the recession with the strategies that we are creating.
We appreciate your interest in true below don't don't hesitate to reach out.
If you have any additional questions.
Thanks again.
This concludes today's conference call. Thank you for attending you may now disconnect.
Yeah.