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#<UNK>, this is <UNK>.
I think if you go in and look at the growth, we're getting really good growth from both the markets piece, which I refer to as a single search site, as well as the RPO.
Even if you go back to last year, the business grew over 20%, and both of those categories contributed to that growth, and that's continuing in Q1.
I think in the single search side, a good portion of the success, Burn has made some real good hiring decisions into that business as well as our strategy of cross line business referrals with executive search are able to refer quite a bit into Futurestep single search.
And we're seeing some of that on the RPO side as well as the fact that in this business, I will say success begets success.
So the more success we have, the more advanced we get, the more demonstrated ability that we put forth, the more success we have.
So I think Burn has this business on a really good in cadence right now.
When you look at some of the hiring he's done on the RPO side as well as some of the intellectual property development that we've had over the course of the past year with our KF4D that he's putting into that line of business, I think those are the attributes that you're seeing result in the outsized growth.
Well, I think our return on capital this quarter, what was it <UNK>, 11%, 12%.
So this quarter was about 12%, and our cost of capital was probably 11% or so.
So we are pretty mindful of that as you indicated.
Our playbook continues to be the same, to number one, invest in the business.
I really believe that this is a multi billion-dollar opportunity.
You talk about Futurestep market share gains, that, I don't know if that is market share gain.
That is ---+ that market is 10 times the size of the executive search market, so I would hope there's runway there.
Listen, we are pretty mindful of that, and if we're not returning the cost of capital, then we're going to do something about it.
So I'm not going to go beyond that except that as you said, the balance sheet is pristine.
It's probably under levered, and we are very aware of that.
Feels from what perspective.
Well, I think we are all trying to be very urgently patient.
I think that we have this insatiable appetite use this brand to become the people advisor.
I think that people are engaged.
I think that we've demonstrated that we can take this flagship search business and add adjacent solutions and it would fuel a deeper relationship with clients.
So I think it's urgently patient, fired up, and insatiable appetite to learn and grow.
It feels pretty good to me.
It's ---+ the China business is about 2.5% of the firm, so it's a relatively small percentage, but we do have pretty good line of sight.
I think it's really too soon to tell.
In terms of my channel checks, there is nothing that would thing an alarm bell here per se.
We haven't seen a deterioration in their appetite for talent.
Our China search business is essentially, if you look year over year, it's going to be flat to up a little bit.
The Futurestep business in China year over year is going to be up about 16%.
So we haven't really seen it.
I would also say, <UNK>, it's probably too soon to tell given the holidays.
Yes, our Australian business is actually up quite considerably year over year.
All of the data points, they point at each other.
Now, we haven't really seen anything that would say we should be ringing an alarm bell.
The engagements range from culture shaping kinds of assignments to leadership development to creating more engaged and inspired teams.
That would be three examples.
I think of a major organization, we're very prominent, you would know it.
We are being asked to help shape the culture and align the culture to the business strategy of this organization.
It ranges from the very high end search to the RPO activity now that is really around professional workers.
And on the leadership development side it's from succession to teambuilding to culture shaping, obviously assessment is a pretty big piece of it as well.
Yes, it does.
And I would say that the RPO in the Futurestep work has been particularly strong in North America.
It's been, again, it's been good in Europe and Asia, but real strength in North America.
And it layers in over 4 to 12 quarters, so it's not necessarily overnight.
I will think of ---+one of the things we have seen is a nice uptick in financial services now, admittedly off a low base.
When you look at it, it really is around commercial consumer banking insurance.
But one of the RPO projects that came to mind when you asked the question was a large commercial bank that asks us to put in many bankers in a relatively short amount of time.
And that was done over the last quarter or so.
So it's generally, I would say North America has been a big tail wind, and it's really been professional knowledge workers.
Yes, L&TC target range is somewhere between 15% and 18%.
This quarter was 15.6%, there was a little bit of downward pressure from the hires that <UNK> referred to that we made, but we expect that back over 16% by year's end.
Well, listen, it is definitely, and I think this is very consistent with what we have said, it is a much slower ramp for those types of individuals.
I think that what you have to believe, well, number one, the market opportunity is there, and I think that anybody would look at that space ---+ how does the CEO create the motivated, inspired, engaged and developed and compensated workforce, and you would say that is $50 billion to $100 billion, that there is a market there.
You would also say that it is extraordinarily fragmented.
In terms of our success, you would have to believe that we could bring these people in, that we can have them learn our IP and the different kinds of solutions that we have, and that you'd also have to believe that the search channel would be very advantageous to those people.
And I think that our past history demonstrates that yes, we can onboard them, we can train them in new solutions and that the search channel is extremely effective.
When we look at it, you will find that quarter on quarter, 60%, 70% of whether it's the Futurestep for the LTC business, it comes from the access that the brand provides.
So I think that we've demonstrated that they can do all the things you'd have to believe to say, could this be a billion-dollar business on its own.
I think it can.
But again, it's not a question of just a quarterly snapshot of this.
I think it's probably not an industry that grows at 15% or 20%.
That's probably not what the characteristics of the leadership business are in the marketplace.
I'd just add a couple of points.
<UNK> mentioned the on boarding.
We have significantly stepped up our ongoing efforts in that business to help the individuals with the ramp and with the view that by investing in the onboarding process, we can shorten the time frame to improve productivity.
And the other thing we do too, is quite honestly, we very closely monitor and manage by person what they are doing, what the new business levels are.
So I think with the assistance we give them on the way in and the close monitoring and management throughout their time here, I think we accomplish everything that <UNK> talked about.
Well, I think that we have been much more aggressive.
You go back a year ago, and I had it as a personal goal that I wanted to add 100 more LTC partners.
I go back to last August, and we only got 40% of that.
But we've certainly for quite some time have turned up the heat in terms of bringing people in.
We haven't necessarily changed the places we are looking for.
But I think this is a business that is very fragmented, and frankly, I think there needs to be somebody who defines a category here.
And just like when CEOs turn to MacKenzie or Bain for strategic advice, they don't have a firm to turn to when it comes to people advisory.
And I think that is the opportunity to define the category to be that firm, and that is a multi billion-dollar opportunity for us.
No, again it's a little bit hard because we are only eight days into September, right, and people are just literally back from holiday, so it's hard to get a clean read on that.
But I would say, no, it doesn't.
Obviously, the next 30 to 60 days we will have much better visibility on that question, but, no, I don't think that the feeling is significantly different.
Okay.
Well thank you everybody for joining us.
Again, I'm very proud of the quarter and I really do believe there is an opportunity here to define a category, and that is how we are looking at it.
And this organization is absolutely committed to make a powerful impact on people and organizations and at the same time producing positive returns for our shareholders.
So with that, thank you very much, and we will talk to you next time.
