Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Justin B. Yagerman – Wachovia Capital Markets.
Justin B. Yagerman – Wachovia Capital Markets
I guess digging in, you were talking about headcount for a bit and it’s down slightly sequentially and obviously still up year-over-year. Obviously margin expansion, variable comp are ways that you can have stock gap measures to offset some of the deterioration in the environment if it continues, but how do you manage headcount versus what you’re seeing in the economy and leave yourself room?
How fast do you move on that if you continue to see an environment like you were seeing in December and now in January?
John P. Wiehoff
I guess it starts with two premises, one that with our 220 locations we do manage the headcount and the personnel relationships in a fairly decentralized manner because we at all times do have variances across modes and services and in each of the different regions where growth may be occurring. In any environment, we’re typically adding people in some areas and subtracting in others.
We’ll continue to manage it and oversee it on a decentralized basis and make sure that the network is adjusting in all locations to whatever the demand would be. As with I think we’ve talked before, we think of it as from a supervisory standpoint to make sure that we’re adjusting and adhering to the metrics in all of the different markets and that the overall outcome becomes the combination of what happens in each of those locations.
We also believe that we have a higher degree of variable compensation components in our model than most companies so we know that we have a fair amount of flexibility as to how compensation and incentives will adjust automatically based upon the level of activity.
If in a normal year, in normal circumstances or really in all years we have a certain amount of voluntary attrition or performance based attrition and typically what we’ll do is just not replace turnover from those two sources. Historically that has always been adequate to allow us to contract where we need to and that’s the mode we’re in today is very reluctant and not really replacing any voluntary or performance based turnover attrition.
We’ll just monitor it as we go and make sure that that stays adequate to adjust.
Justin B. Yagerman – Wachovia Capital Markets
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