Heidrick & Struggles International Inc. (NASDAQ:HSII) Q3 2020 Earnings Conference Call - Final Transcript

Oct 26, 2020 • 05:00 pm ET

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Heidrick & Struggles International Inc. (NASDAQ:HSII) Q3 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. [Operator Instructions] Your first question comes from the line of Josh Vogel with Sidoti & Company. Your line is open.

Analyst
Josh Vogel

Thank you. Good afternoon, guys. Thanks for taking my questions.

Executive
Krishnan Rajagopalan

Hi, Josh.

Analyst
Josh Vogel

First [Phonetic] question, Krishnan, you mentioned that all the offerings at Heidrick Consulting are being delivered digitally today. I'm curious if you have any thoughts about what percent of the business could be delivered that way longer term.

Executive
Krishnan Rajagopalan

Yeah. Look, it's not going to be 100%. I think there is still some gatherings and things that we do convening that's required and will continue to be required. But I fully expect that well in excess of, if we really started off with pre-COVID at almost zero for consulting, I suspect that we will be somewhere between 50% and 60% and the rest of it is still going to be delivered in person so that I think some -- a number like that sounds reasonable to me.

Analyst
Josh Vogel

Okay. Great. And the number of Executive Search consultants were down about 30 plus sequentially. And I was curious if that was a function of the restructuring activities or natural attrition.

Executive
Mark Harris

Yeah, that was the restructuring activities, I believe.

Analyst
Josh Vogel

Okay. And can you maybe remind me what consultant attrition look like in the prior two cycles or downturns and maybe how that compares to today and what you're specifically doing in recent months to retain your top talent?

Executive
Krishnan Rajagopalan

Yeah, I'm not -- I mean, if I go back to the previous cycles, I mean -- and when you think about attrition, I mean, I think you're talking about it outside of restructuring. Is that kind of what you mean by that and outside of the economic impact?

Analyst
Josh Vogel

Yeah.

Executive
Krishnan Rajagopalan

Yeah. So --

Analyst
Josh Vogel

Yes.

Executive
Krishnan Rajagopalan

Look, I think that in general it's really quite low for us right now. It's going to be in the low single digits for us at this point in time.

And what we're doing to maintain that is, I mean it's all the connectivity inside the firm, okay. It's everything that we do with how we treat each other, how we deal with each other, all the Zoom calls, all the practice calls. We continue to provide development programs for everybody and we're doing it virtually. We're committed to promoting. So we've got promotion cycles going. So we're doing all of those things, which I think help us create a very strong culture.

We collaborate on so many projects across not only search but across search and consulting. So I think there is a very strong culture and fabric that we've built here.

Analyst
Josh Vogel

Great. And just two quick ones for Mark, maybe. The restructuring charges that you mentioned of $10 million to $15 million tied to real estate, is that all expected to be taken in Q4?

Executive
Mark Harris

No, I think, the goal there is probably really Q4 and potentially very early part of next year. A lot of it is really more about when we can strike agreements, either