Question-and-Answer Session
Operator
Thank you. (Operator Instructions) Your first question comes from Ashwin Shirvaikar - Citigroup Investment.
Ashwin Shirvaikar - Citigroup Investment
My first question is can you talk about what portion of your revenues in each segment comes from what you would consider discretionary client spending and also what one-time items we should be aware of for year-over-year comparisons in the March quarter?
Russell P. Fradin
I guess I'll start with a more general answer to the first quarter. If you look at the outsourcing businesses, both the BPO business and the Benefit Outsourcing business, by far the bulk of our revenue is based on participant count. And so you can see that what's happened in this quarter is that the sales and the new installations that we've had have more than offset the weakness in the labor market.
And it's also clear, by the way, just looking at individual client participant counts, that the announced layoffs that you read about in the press every day for the most part have not hit the unemployment lines yet, at least according to our participant counts. And as you know, there are various reasons, like where we do defined benefit recordkeeping, where we don't expect them to ever leave the participant count. So we feel that there's a lag there and that in addition the participant counts just seem to be remaining more robust.
But when we look at our outlook, Ashwin, we have factored into the outlook as if all those layoffs will fully occur and will be reflected in our participant counts. So we're not starry optimized optimists.
I'd say in each of those businesses, if you were looking at a number of project revenue, which is the more discretionary item, again, it's the minority but it is a good 15% of the revenue in those businesses, so that's what's - and it came under pressure in benefit outsourcing. It didn't come under pressure in HR BPO, but we are anticipating that it will.
In terms of Consulting, again, the bulk of the revenue from Consulting comes from services that you would expect to be repeated, so to speak, or even intensified in this environment, so it results from the valuation work and the work of our actuaries and the work of our investment management practice as well as things like executive compensation where, again, clients and Boards are going to ask the same questions every year about whether their compensation's competitive and, particularly in this environment, what changes they need to make. And I think the President is helping us, in a sense, in talking about all of the changes there.
- To read the full transcript on Seeking Alpha, click here »
