Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Jeff Silber - BMO Capital Markets.
Jeff Silber - BMO Capital Markets
Mark, I know you guys typically don’t give specific margin guidance by vertical, but if you can just tell us trend-wise what we should be expecting in the third quarter that would be great.
Mark Smith
Jeff, starting out with kind of overall, you heard me talk about the revenue trend into July, so I would expect some margin decline because we’ll have a mix change between the two segments. So that’s a starting comment.
Roy mentioned comments about pricing from customers, and we saw a slight pay bill contraction from the first to the second. I would not expect to see the pay bill change in the third to be any worse than what we saw in the second. So I think if you take that kind of guidance that should help you kind of understand what’ll happen to margins in the third quarter.
We do expect to be down slightly because of the mix and because of the pricing activity.
Jeff Silber - BMO Capital Markets
In terms of that translating down to the operating margin line, just kind of a proportional change from what we see on the gross margin side, just kind of drop that down to the operating margin line?
Mark Smith
Yes, I think with the cost reductions that we’ve done and the consistency, our goal is to be at that 2% level or slightly above like we were in the second quarter. That’s what we’ll work toward achieving in the third quarter.
Jeff Silber - BMO Capital Markets
You mentioned the cost cuts, and maybe this is a longer-term question, but when, and hopefully soon, business starts to pick up again, what kind of investments do you think the company has to make to take that business? Maybe asking it another way, what would be the incremental margins on a new piece of business going forward? Thanks.
Roy Krause
Well this is Roy. We certainly hope they would be positive, very positive, okay? We think we’ve got a lot of capacity. We’ve reduced cost significantly, but we still have the infrastructure to carry the volume.
So we believe that, if we can see some growth and, again, encouraged by F&A being up and industrial staffing being up, we think we can drive some pretty good returns to the margin base. We have the infrastructure. We haven’t destroyed our infrastructure in any stretch of the imagination, so we believe we can move there.
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