What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-02-16 compared with 2022-02-17 · 54 added, 49 removed, 80 unchanged (56% of the section changed)

2 unchanged sentences

Our inception helped usher in and embolden a workforce of women, opening doors and creating completely new opportunities.

Over the next 75 years, as work evolved, Kelly equipped people with skills to master the technologies of the day:

Over the next 76 years, as work evolved, Kelly equipped people with skills to master new technologies as they emerged:

launching the first-of-its-kind online learning center for scientists;

2 unchanged sentences

With each advance, Kelly met the needs of the marketplace;

empowering our people to reach their personal goals and enabling our clients to access skilled talent to move their businesses forward.

As work has evolved so has Kelly's range of solutions, growing over the years to reflect the changing needs of businesses and the desires and lifestyles of talent.

empowering our people to reach their personal goals and enabling our clients to access skilled talent to move their organizations forward.

As work has evolved so has Kelly's range of solutions, growing over the years to reflect the changing needs of employers and the desires and lifestyles of talent.

We have progressed from a traditional office staffing business to a creative, insightful and agile talent company delivering expertise in a portfolio of specialty services.

1 unchanged sentence

We rank as one of the world’s largest scientific and clinical research staffing providers and place talent at various levels in engineering, IT and telecommunications specialties.

We are also a leading education staffing provider in the U.S., as well as providing talent across the full education spectrum from early childhood education to higher education.

We are also a leading education staffing provider in the U.S., placing talent across the full education spectrum from early childhood education to higher education.

These services complement our expertise in professional office services, contact center and light industrial staffing.

As work has evolved and talent management has become more complex, we have also developed innovative solutions to help many of the world’s largest companies plan for and manage their workforce through recruitment outsourcing, payroll processing, talent advisory, career transition and supplier management services.

As work has evolved and talent management has become more complex, we have also developed innovative solutions to help many of the world’s largest employers plan for and manage their workforce through recruitment outsourcing, payroll processing, talent advisory, career transition and supplier management services.

Geographic Breadth of Services

Headquartered in the United States, Kelly provides workforce solutions to a diverse group of local, regional and global clients in the Americas, Europe and the Asia-Pacific regions across a variety of industries.

In 2022, we assigned more than 300,000 temporary employees to a variety of customers around the globe.

Description of Business Segments

Kelly is a specialty talent solutions company organized into five specialty businesses, which are also our reportable segments, serving clients of all sizes across a variety of industries.

Kelly is a talent solutions company organized into five specialty businesses, which are also our reportable segments, serving clients of all sizes across a variety of industries.

This structure enables us to focus on specialties with robust demand, promising growth opportunities and areas in which we excel at attracting and placing talent.

• Professional & Industrial – delivers staffing, outcome-based and direct-hire services focused on office, professional, light industrial and contact center specialties in the U.S.

• Professional & Industrial – delivers staffing, outcome-based and permanent placement services focused on office, professional, light industrial and contact center specialties in the U.S.

and Canada, including our KellyConnect and Skilled Professional Solutions products

• Science, Engineering & Technology – delivers staffing, outcome-based and direct-hire services focused on science and clinical research, engineering, technology and telecommunications specialties predominantly in the U.S.

• Science, Engineering & Technology ("SET") – delivers staffing, outcome-based and permanent placement services focused on science and clinical research, engineering, technology and telecommunications specialties predominantly in the U.S.

and Canada and includes our Softworld, NextGen and Global Technology Associates subsidiaries

• Education – delivers staffing, direct-hire and executive search services across the full education spectrum from early childhood to higher education in the U.S.

and includes Teachers On Call, Insight Workforce Solutions and Greenwood/Asher

• Outsourcing & Consulting – delivers Managed Service Provider ("MSP"), Recruitment Process Outsourcing ("RPO"), Payroll Process Outsourcing ("PPO") and Talent Advisory Services to customers on a global basis

• International – delivers staffing, RPO and direct-hire services in 15 countries in Europe, as well as services in Mexico delivered in accordance with recent changes in labor market regulations

In addition, PersolKelly Pte.

Ltd., our joint venture with Persol Asia Pacific Pte.

Ltd., a wholly owned subsidiary of Persol Holdings Co., Ltd., a leading provider of HR solutions in Japan, provides staffing and direct hire services to customers in the Asia Pacific region.

• Education – delivers staffing, permanent placement and executive search services across the full education spectrum from early childhood to higher education in the U.S.

and includes Teachers On Call, Insight Workforce Solutions, Greenwood/Asher and Pediatric Therapeutic Services ("PTS")

• Outsourcing & Consulting Group ("Outsourcing & Consulting," "OCG") – delivers Managed Service Provider ("MSP"), Recruitment Process Outsourcing ("RPO"), Payroll Process Outsourcing ("PPO") and Talent Advisory Services to customers on a global basis and includes RocketPower

• International – delivers staffing, RPO and permanent placement services in 14 countries in Europe, as well as services in Mexico delivered in accordance with changes in labor market regulations

Financial information regarding our reportable segments is included in the Segment Disclosures footnote in the notes to our consolidated financial statements presented in Part II, Item 8 of this report.

Business Objectives

By connecting our clients with qualified talent in an ever-evolving world of work, Kelly has a positive impact on the people, businesses and communities we serve.

By connecting our clients with qualified talent in an ever-evolving world of work, Kelly has a positive impact on the people, clients and communities we serve.

As a destination for top talent and a strategic business partner for our clients, we continue to adopt innovative business practices and forward-looking technologies that drive success in a dynamic market.

6 unchanged sentences

We own numerous service marks that are registered with the United States Patent and Trademark Office, the European Union Intellectual Property Office and numerous individual country trademark offices.

Our quarterly operating results are affected by the seasonality of our customers’ businesses which impact the demand for our services.

With the exception of our Education operating segment, demand for our services historically has been lower during the first quarter, and typically increases during the remainder of the year.

Our Education operating segment generally has its lowest revenue in the third quarter in line with schools’ summer break.

Seasonality and Economic Cycles

Our operating results have historically been affected by the cyclical response to both economic downturns and upswings.

Customers tend to use our services to supplement their existing workforce and generally hire permanent employees when long-term demand is expected to increase.

As a consequence, our revenue from services tends to increase when the economy grows.

Conversely, our revenue from services decreases when the economy declines and customer demand for our services also declines.

Our business also experiences seasonal fluctuations, particularly in our Education operating segment.

Revenue in Education is generally lowest in the third quarter in line with schools’ summer break.

Working Capital

Our working capital requirements are primarily generated from employee payroll which is generally paid weekly or monthly and customer accounts receivable which is generally outstanding for longer periods, with days sales outstanding ("DSO") of 61 days as of January 1, 2023.

Since receipts from customers lag payroll payments to temporary employees, working capital requirements increase and operating cash flows decrease substantially in periods of growth.

Since receipts from customers lag payroll payments to temporary employees, working capital requirements increase and operating cash flows may decrease substantially in periods of growth.

Conversely, when economic activity slows, working capital requirements may substantially decrease and operating cash flows increase.

Such increases dissipate over time if the economic downturn continues for an extended period.

Kelly’s client portfolio spans companies of all sizes, ranging from local and mid-sized businesses to the Fortune 500.

Kelly’s client portfolio spans employers of all sizes, ranging from local and mid-sized businesses to the Fortune 500.

In 2022, an estimated 54% of total company revenue was attributed to our largest 100 customers.

Our largest single customer accounted for approximately five percent of total revenue in 2021.

Our largest single customer accounted for approximately seven percent of total revenue in 2022.

Government Contracts

3 unchanged sentences

Outside the United States, we face similar competition.

In 2021, our largest competitors were Randstad, Adecco Group, ManpowerGroup Inc., Recruit Holdings and Allegis Group.

In 2022, our largest competitors were Randstad, Adecco Group, ManpowerGroup Inc.

and Allegis Group.

Key factors that influence our success are quality of service, price and breadth of service.

Quality of service is highly dependent on the availability of qualified talent, and our ability to promptly and effectively recruit, screen, train, retain and manage a pool of employees who match the skills required by our customers.

Quality of service is highly dependent on the availability of qualified talent, and our ability to promptly and effectively recruit, screen, retain and manage a pool of employees who match the skills required by our customers.

We must balance competitive pricing pressures, which may intensify during an economic downturn, with the need to attract and retain a qualified workforce.

Price competition in the staffing industry is intense, particularly for education, office clerical and light industrial personnel and pricing pressure from customers and competitors continues to be significant.

Companies increasingly seek a single supplier to manage all of their demand for contingent talent.

Companies may seek a single supplier to manage all of their demand for contingent talent.

To provide the breadth of service required, clients may need us to manage staffing suppliers and independent workers on their behalf.

11 unchanged sentences

We are a talent solutions company dedicated to connecting people to work in ways that enrich their lives, and our employees are critical to achieving this noble purpose.

To succeed in our highly competitive and rapidly evolving market, it is crucial that we attract and retain experienced internal employees, as well as the talent we put to work for our customers.

As part of these efforts, we strive to offer competitive total rewards programs, promote employee development, foster an inclusive and diverse environment and give employees the opportunity to give back to their communities and make a social impact.

To succeed in our highly competitive and rapidly evolving market, we must attract and retain experienced internal employees, as well as talent we put to work for our customers.

As part of these efforts, we strive to offer competitive total rewards programs, promote employee development, foster an inclusive and diverse environment and allow employees to give back to their communities and make a social impact.

We are committed to the health, safety and wellness of our employees and talent.

The success of our business is fundamentally connected to the well-being of our people.

Accordingly, we seek to implement policies and practices that align with applicable laws and regulations and are in the best interest of our employees and talent, and the communities in which we operate.

Accordingly, we seek to implement policies and practices that align with applicable laws and regulations and are in the best interest of our employees, talent and the communities in which we operate.

Internal Employees

As of January 1, 2023, we employed approximately 4,800 staff members in the United States and an additional 2,700 in our international locations.

Kelly retention rates for employees identified as High Performing and High Potential align with our comparable external benchmark.

Kelly retention rates for high performing and high potential employees align with our comparable benchmark.

Compensation and Benefits.

Kelly is committed to providing competitive, equitable and fiscally responsible total rewards programs to our employees.

Our compensation programs are designed to attract, retain and reward talented individuals who possess the skills necessary to achieve our strategic goals and create long-term value for our shareholders.

Our compensation programs are designed to attract, retain and reward talented individuals

with the skills necessary to achieve our strategic goals and create long-term value for our shareholders.

We provide employees with competitive compensation opportunities, with strong pay-for-performance linkages that include a mix of base salary, short-term incentives and, in the case of our more senior employees, long-term equity awards.

We believe that our programs provide fair and competitive opportunities that align employee and stockholder interests.

In addition to cash and equity compensation, we also offer employees competitive benefits such as life and health (medical, dental and vision)

insurance, paid time off, wellness benefits and defined contribution retirement plans.

We review our compensation and benefit programs regularly and respond to changes in market practice.

Recent changes have included enhancements to our U.S.

paid time off for mental health and well-being, voting and family and parental support.

Pay and benefits programs provided to our international employees are in line with competitive local practice.

Our programs provide fair and competitive opportunities that align employee and stockholder interests.

In addition to cash and equity compensation, we offer employees competitive benefits such as life and health (medical, dental and vision) insurance, paid time off, wellness benefits and defined contribution retirement plans.

We review our compensation and benefits programs annually and respond to changes in market practice.

For example, recent enhancements to our U.S.

benefits program include additional time off for significant life events, a financial advisor program, support programs for certain chronic health conditions and introduction of a well-being app globally.

In addition, pay and benefits programs for our international employees align with competitive local practices.

Inclusion and Diversity .

Since 1947, our founder fought to increase access to work for women and we’ve long been an outspoken advocate for the value temporary and independent workers bring to the workplace.

Since 1947, our founder fought to increase women's access to work, and we’ve long been an outspoken advocate for the value temporary and independent workers bring to the workplace.

We are committed to fostering an inclusive and diverse workforce.

For example, a significant majority of Kelly's U.S.

For example, most of Kelly's U.S.

workforce is female, including a majority of director and above roles.

Additionally, for a fifth consecutive year, we’ve achieved a 100% rating from the Human Rights Campaign Foundation’s Corporate Equality Index for LGBTQ+ equality in the workplace.

We believe an inclusive environment with diverse teams creates a workplace that is conducive to producing more creative solutions, results in better, more innovative products and services and presents Kelly as a workplace leader, aiding our ability to attract and retain key talent.

We believe an inclusive environment with diverse teams creates a workplace that is conducive to producing more creative solutions, results in better, more innovative products and services, and presents Kelly as a workplace leader, aiding our ability to attract and retain high-performing talent.

We are focused on fostering a culture of belonging, where everyone feels welcomed and respected and can thrive as we work together.

1 unchanged sentence

Community Involvement .

We consider sustainability to be a guiding principle in strengthening the relationship with our global workforce, suppliers and customers.

Through our programs and initiatives, we seek to contribute to improving the quality of life of our employees, their families, as well as the communities in which they operate.

Designed on the concept of social investment and creating shared values, our approach ensures the creation of future development capacities instead of aiding on isolated occasions.

We consider sustainability a guiding principle in strengthening the relationship with our global workforce, suppliers and customers.

Through our programs and initiatives, we seek to improve the quality of life of our employees, their families and the communities in which they live and serve.

Designed on the concept of social investment and nurturing shared values, our approach ensures the creation of future development capacities instead of aiding on isolated occasions.

We support initiatives where our employees can actively engage in the causes they believe in that are also connected to our sustainability strategy.

Through our Equity@Work initiative, we are living our commitment to ensure equitable access to work and growth for all by creating alliances with like-minded companies, policy groups and institutions to positively impact the way companies hire, advance and help more people thrive.

In 2022, we achieved over 7,800 hours of volunteering (for the U.S.

and Canada), engaging over 1,000 employees.

Through our Equity@Work efforts, we are living our commitment to ensure equitable access to work and growth by creating alliances with like-minded companies, policy groups and institutions to positively impact how companies hire, advance and help more people thrive.

For more information on our diversity and inclusion and community involvement initiatives, please see our Sustainability Report - Growing with Purpose , which is available at kellyservices.com.

In addition to our internal employees, Kelly recruits talent on behalf of our customers on a global basis.

In addition to our internal employees, Kelly recruits talent on behalf of our customers globally.

In 2022, we placed more than 300,000 individuals in positions with our customers.

Kelly remains the employer of record for all employees working at our customer locations.

This means that we retain responsibility for all assignments (including ensuring appropriate health and safety protocols in conjunction with our customers), wages, benefits, workers’ compensation insurance, and the employers’ share of applicable payroll taxes as well as the administration of the employees' share of these taxes.

Kelly remains the employer of record for our employees working at our customer locations.

We also offer our Kelly talent access to competitive health and benefit programs while they are working with us.

4 unchanged sentences

The SEC maintains an Internet website at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically.

We make available, free of charge, through our website, and by responding to requests addressed to our senior vice president of investor relations, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports.

amendments to those reports.

These reports are available as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business