What changed in this filing

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Item 1. Business

2025-02-13 compared with 2024-02-20 · 79 added, 48 removed, 82 unchanged (61% of the section changed)

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Over the next 78 years, as work evolved, Kelly continued to equip people with the skills to master new technologies as they emerged and the opportunity to put them to work in ways that enriched their lives.

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

As the world of work has evolved, so have our offerings to reflect the changing needs of employers and talent.

In 1996, Kelly established the industry’s first Managed Service Provider ("MSP") program.

Three years later we launched specialized offerings in engineering, IT and education.

Strategic acquisitions over the years broadened our solution offerings and included the Ayers Group, Teachers on Call, Global Technology Associates (GTA), NextGen, Greenwood/Asher & Associates, Softworld, RocketPower and Pediatric Therapeutic Services (PTS).

Since 2020, we operate in five specialty business units – Kelly Education, Kelly Professional & Industrial, Kelly Science, Engineering & Technology, KellyOCG and Kelly International.

Three years later, the Company launched specialized offerings in engineering, IT and education.

After successfully establishing industry-leading positions in each of these attractive markets, Kelly initiated a strategic plan to drive greater value creation by refocusing its portfolio on specialties.

In 2020, Kelly launched a new operating model comprising five specialty business units:

Kelly Professional & Industrial ("P&I");

Kelly Science, Engineering & Technology ("SET");

Kelly Education;

KellyOCG ("Outsourcing & Consulting" or "OCG");

and Kelly International.

This model optimized Kelly’s structure and capabilities based on market opportunity and the unique needs of employers and talent in each specialty to enable organic growth.

To enhance specialization in higher margin, higher growth specialties, Kelly also pursued an aggressive approach to driving inorganic growth in SET, Education, and OCG.

By monetizing non-core assets and redeploying available capital, Kelly completed several strategic acquisitions over the years, including Teachers On Call;

Global Technology Associates ("GTA");

Greenwood/Asher & Associates;

Pediatric Therapeutic Services ("PTS");

Motion Recruitment Partners ("MRP");

and Children’s Therapy Center ("CTC").

Building on a significant shift in Kelly’s business mix driven by its specialty strategy, the Company took steps to further optimize its operating model and accelerate profitable growth.

Beginning in 2023, Kelly implemented a comprehensive business transformation initiative that delivered structural efficiency improvements across the enterprise and significantly improved profitability.

In 2024, Kelly completed the sale of its European staffing operations within the Company’s International business unit, further sharpening its focus on specialty outcome-based and staffing services in North America, while maintaining global recruitment process outsourcing ("RPO") and MSP capabilities.

Today, Kelly remains one of the largest providers of temporary and permanent staffing services, outcome-based solutions, RPO, MSP, and payroll process outsourcing ("PPO").

The Company delivers these differentiated offerings through four specialty business units, each a leader in the respective markets on which they are focused:

Kelly Education;

Kelly Professional & Industrial;

Kelly Science, Engineering & Technology;

and KellyOCG.

Business Objectives

We strive to empower businesses and talent to access limitless opportunities by enabling companies to recruit and manage skilled workers and help job seekers find great work.

As experts in hiring experts, we ensure companies have the people they need when and where they’re needed most.

We strive to empower organizations and talent to access limitless opportunities by enabling employers to recruit and manage skilled workers and help job seekers find great work.

As experts in hiring experts, we ensure our customers have the people they need when and where they’re needed most.

We’re also using our position in the middle of the talent supply and demand equation to challenge outdated barriers that hold back far too many people from attaining meaningful work, supporting their families and contributing to the economy.

Our Equity@Work initiative seeks to upend systemic barriers to employment and make the labor market more equitable and accessible for more people.

While systemic change takes time, we continue to make progress with additional outreach, new alliances and partnerships and continued executive commitment.

Our Equity@Work initiative seeks to remove barriers to employment and create a labor market that is accessible for more people.

While universal change takes time, we continue to make progress with additional outreach, new alliances and partnerships, and continued executive commitment.

We believe that delivering on these objectives will result in successful outcomes for customers and talent, and drive profitable growth for Kelly.

Description of Business Segments and Services

Kelly is a talent solutions company operating in five specialized business units, which are also our reportable segments.

This structure enables us to serve the specialized needs of both talent and customers while building deep industry connections.

• Professional & Industrial – delivers staffing, outcome-based and permanent placement services providing administrative, accounting and finance, light industrial and contact center staffing and other workforce solutions in the U.S.

and Canada, including our KellyConnect and Skilled Professional Solutions products

• Science, Engineering & Technology ("SET") – provides highly specialized skills to a variety of industries through staffing, outcome-based and permanent placement services.

SET is focused on science and clinical research, engineering, technology and telecommunications specialties predominantly in the U.S.

and Canada and includes Softworld, NextGen and GTA brands

• Education – delivers high quality education and therapy services talent through staffing, permanent placement and executive search services to Pre-K-12 school districts and education organizations across the U.S.

and includes Teachers On Call, Greenwood/Asher and PTS brands

• Outsourcing & Consulting Group ("Outsourcing & Consulting," "OCG") – provides global talent supply chain and workforce solutions, including Managed Service Provider ("MSP"), Recruitment Process Outsourcing ("RPO"), Payroll Process Outsourcing ("PPO") and executive coaching programs to customers on a global basis and includes our RocketPower brand

• International – delivers staffing, RPO and permanent placement services in 14 countries in Europe, as well as services in Mexico.

Our European staffing operations were sold on January 2, 2024

Kelly is a global specialty talent solutions company operating in four specialized business units, which are also our reportable segments.

This structure enables us to serve the specialized needs of both talent and customers while building deep industry expertise and connections.

• Professional & Industrial – delivers temporary staffing, outcome-based and permanent placement services.

P&I is focused on industrial, contact center, and office and clerical specialties in North America.

Its offerings include our KellyConnect and Skilled Professional Solutions offerings.

• Science, Engineering & Technology – provides highly specialized skills to a variety of industries through temporary staffing, outcome-based, and permanent placement services.

SET is focused on science and clinical research, engineering, technology, and telecommunications specialties predominantly in North America.

It includes the MRP, Softworld, NextGen, and GTA brands, as well as our statementworX offering.

• Education – delivers high quality education and therapy services talent through temporary staffing, permanent placement and executive search services to Pre-K-12 school districts and education organizations across the U.S.

It includes the CTC, PTS, Greenwood/Asher, and Teachers On Call brands.

• Outsourcing & Consulting Group – provides global talent supply chain and workforce solutions, including MSP, RPO, and PPO solutions to customers on a global basis.

It includes our RocketPower brand as well as our proprietary technology platform, Kelly Helix.

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.

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Customers 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.

In addition, we generate a portion of our revenue through permanent placement fees, which typically have a higher gross margin than our staffing services.

Consequently, we may see improved demand for our services and generate larger increases in our revenue and gross profit from services when the economy grows.

During periods of increasing demand, we are generally able to improve our profitability and generate operating leverage.

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

When demand drops, our operating profit is typically impacted unfavorably as we experience a deleveraging of our selling and administrative expense base which may not decline at the same pace as revenue.

Conversely, our revenue from services and gross profit may see larger decreases when economic activity declines and customer demand for our services decreases.

When demand decreases, our operating profit is typically impacted unfavorably as we experience a deleveraging of our selling and administrative expense base, which may not decline at the same pace as revenue.

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

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Our working capital requirements are primarily generated from our staffing businesses resulting from employee payroll which is generally paid weekly or monthly and customer accounts receivable which is generally outstanding for longer periods.

When we operate as a managed service provider, our payment terms to suppliers are generally in line with payment terms from customers, which does not result in a significant use of working capital.

we operate as a managed service provider, our payment terms to suppliers are generally in line with payment terms from customers, which does not result in a significant use of working capital.

Based on the nature of our business, accounts receivable is our most significant asset with days sales outstanding ("DSO") of 59 days as of December 29, 2024.

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

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

In 2023, an estimated 55% of total company revenue was attributed to our largest 100 customers.

Kelly’s client portfolio spans employers of all sizes and sectors, including local and mid-sized businesses, to Fortune 500 enterprises, government agencies, and education institutions.

In 2024, an estimated 58% of total company revenue was attributed to our largest 100 customers and 29% was attributed to our largest 10 customers.

Our largest single customer accounted for approximately six percent of total revenue in 2024.

In 2023, an estimated 55% of total company revenue was attributed to our largest 100 customers and 27% was attributed to our largest 10 customers.

Our largest single customer accounted for approximately six percent of total revenue in 2023.

Government Contracts

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The worldwide workforce solutions industry is competitive and highly fragmented.

In the United States, we compete with other firms that operate nationally and offer a breadth of service similar to ours, and with thousands of smaller regional or specialized companies that compete in varying degrees.

Outside the United States, we face similar competition.

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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.

Price competition is greater in certain markets in which we serve clients and talent, including education, office clerical and light industrial.

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

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We continue to advocate on behalf of the global workforce, improve our workplaces, contribute to the communities we serve and ensure our actions are socially, ethically and environmentally responsible.

More information about our corporate sustainability initiatives is available in our C orporate Sustainability and ESG Report - Growing with Purpose report on kellyservices.com

More information about our corporate sustainability initiatives is available in our C orporate Sustainability and ESG Report - Growing with Purpose report on www.kellyservices.com

Our services are subject to a variety of complex federal and state laws and regulations in the countries where we operate.

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Human Capital

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, 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 a talent solutions company and our employees are critical to our success.

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, support a workforce that represents the demographics of communities we serve, 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.

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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.

Kelly’s purpose is to connect people to work in ways that enrich their lives, while creating opportunities for all people to realize their full potential.

We are dedicated to removing barriers to employment, ensuring that anyone who is qualified has access to meaningful employment.

Kelly creates pathways allowing talent to thrive.

We help our clients find the people they need to succeed, while championing fair and all-encompassing hiring practices.

Our commitment is reflected in initiatives like Equity@Work, designed to remove obstacles, open doors, and expand opportunities for all talent.

Kelly’s impact doesn’t stop there.

We are devoted to growing and developing a varied ecosystem of supplier partners, empowering them to make a difference in the industry and the marketplace.

We support the success of our clients and contribute to a more vibrant ecosystem by nurturing relationships.

Through our efforts, Kelly aims to shape a future where work is accessible to everyone, organizations drive innovation with a holistic talent mindset, and our collective progress is fueled by perspectives of people from all backgrounds.

Internal Employees

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Compensation and Benefits.

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

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

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.

Our programs provide fair and

competitive opportunities that align employee and stockholder interests.

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.

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For example, recent enhancements to our U.S.

benefits program include the addition of an advocacy/navigation partner to our medical plans and automatic enrollment in one of our 401(k) Plans.

benefits program include the addition of a virtual physical therapy program to our medical plans and automatic contribution-escalation in one of our 401(k) Plans.

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 women's access to work, and we’ve continued to be 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, most of Kelly's U.S.

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

We believe that 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 committed to promoting exceptional talent from all walks of life.

We believe that our talent pool 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 focus on fostering a culture of belonging, where everyone feels welcomed and respected and can thrive as we work together.

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Community Involvement .

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

Through our programs and initiatives, we are dedicated to enhancing the well-being of our employees, their families and the communities they call home.

Designed on the concept of social investment and nurturing shared values, our approach cultivates sustainable development capabilities for the future rather than aiding on isolated occasions.

We empower our employees to actively participate in causes they are passionate about and are in line with our sustainability strategy.

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 Corporate Sustainability and ESG Report - Growing with Purpose , which is available at www.

kellyservices.com.

Sustainability is at the core of our relationships with our global workforce, suppliers, customers, and other stakeholders.

Our programs and initiatives are dedicated to enhancing the well-being of our employees, their families and the communities they call home.

By focusing on social investment and nurturing shared values, we support sustainable development for the future rather than providing isolated aid.

Utilizing a technology platform to capture corporate volunteering, we empower our employees with volunteering and giving initiatives while increasing collaboration on social impact opportunities.

This allows our employees to actively participate in causes they are passionate about and align with our sustainability strategy.

Through our Equity@Work efforts, we are demonstrating our commitment to ensuring access to meaningful work and growth by creating alliances with like-minded companies, policy groups, and institutions.

These partnerships aim to positively impact how companies hire, advance and help more people thrive.

For more information about our corporate strategy of connecting people to meaningful work while contributing to a better society, please see our Corporate Sustainability and ESG Report - Growing with Purpose , which is available at www.kellyservices.com.

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

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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