What changed in this filing

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Item 1A. Risk Factors

2024-02-21 compared with 2023-02-15 · 64 added, 40 removed, 236 unchanged (31% of the section changed)

8 unchanged sentences

Our profitability is sensitive to decreases in demand.

National and global economic activity is slowed by many factors, including rising interest rates, recessionary periods, inflation, political and legislative changes, international conflict or instability, epidemics, other significant health concerns, and global trade uncertainties.

National and global economic activity is slowed by many factors, including rising interest rates, recessionary periods, inflation, declining consumer confidence, political and legislative changes, international conflict or instability, epidemics, other significant health concerns, and global trade uncertainties.

As economic activity slows, companies tend to reduce their use of associates and recruitment of new employees.

3 unchanged sentences

The extent to which global pandemics impact our financial condition or results of operations will depend on factors such as the duration and scope of the pandemic, as well as whether there is a material impact on the businesses or productivity of our clients, employees, associates and other partners.

Further deterioration in economic conditions, as a result of COVID-19, global supply chain issues, political instability, rising energy prices, a recession or fear of a recession, and the related governmental responses to these concerns, or otherwise, could lead to a prolonged decline in demand for our services and negatively impact our business.

A deterioration in economic conditions, global supply chain issues, political instability, rising energy prices, a recession or fear of a recession, and the related governmental responses to these concerns, or otherwise, could lead to a prolonged decline in demand for our services and negatively impact our business.

Deterioration in economic conditions or the financial or credit markets could also have an adverse impact on our clients’ financial health or their ability to pay for services we have already provided.

5 unchanged sentences

Failure to constantly improve our technology to meet the expectations of clients, associates, candidates and employees could have a negative impact on our financial position and results of operations.

The increased use of internet-based and mobile technology is attracting additional technology-oriented companies and resources to our industry.

The increased use of internet-based and mobile technology is attracting additional online and app-based companies and resources to our industry.

Our associates, candidates and clients increasingly demand technological innovation to improve the access to and delivery of our services.

Our clients increasingly rely on automation, artificial intelligence, machine learning and other new technologies to reduce their dependence on labor needs, which may reduce demand for our services and impact our operations.

Our clients increasingly rely on automation, artificial intelligence, generative artificial intelligence, machine learning and other new technologies to reduce their dependence on labor needs, which may reduce demand for our services and impact our operations.

We face extensive pressure for lower prices and new service offerings and must continue to invest in and implement new technology and industry developments in order to remain relevant to our associates, candidates and clients.

3 unchanged sentences

Acquiring technological resources and expertise to develop new technologies for our business may require us to incur significant expenses and capital costs.

For some solutions, we depend on key vendors and partners to provide technology and support.

solutions, we depend on key vendors and partners to provide technology and support.

If these third parties fail to perform their obligations or cease to work with us, our business operations could be negatively affected.

The development, adoption, and use of generative artificial intelligence are still in their early stages and ineffective, insufficient, or inadequate development or deployment practices by us or third-party vendors could result in harm to our business, financial condition and results of operations.

For example, algorithms and models utilized by generative artificial intelligence that we use may have limitations, including bias, errors, and the inability to handle certain data sets.

Furthermore, there is risk of system failures, disruptions, or vulnerabilities that could compromise the integrity, security, or privacy of generated content.

These limitations or failures could result in reputational damage, legal liabilities, or loss of user confidence.

Developing, testing, and deploying these systems may require additional investment and increase our costs.

We are dependent on obtaining workers’ compensation and other insurance coverage at commercially reasonable terms.

21 unchanged sentences

The loss of, continued reduction in or substantial decline in revenue from larger clients or certain industries could have a material adverse effect on our revenues, profitability and liquidity.

We experience revenue concentration with large clients and in certain industries.

We experience a degree of revenue concentration with large clients and in certain industries.

Generally, our contracts do not contain guarantees of minimum duration, revenue levels, or profitability.

7 unchanged sentences

Our business and operations have undergone, and will continue to undergo, significant change as we seek to improve our operational and support effectiveness, which if not managed effectively could have an adverse outcome on our business and results of operations.

We have significantly changed our operations and internal processes in recent periods, such as our continued development of technology to leverage our operational effectiveness, and we will continue making similar changes to improve our operational effectiveness.

These efforts strain our systems, management, administrative, operations and financial infrastructure.

We have significantly changed our operations, support center structure and internal processes in recent periods, such as our continued development of technology to leverage our operational effectiveness, and we will continue making similar changes to improve our operational effectiveness.

These efforts could strain our systems, management, administrative, operations and financial infrastructure.

We believe these efforts are important to our long-term success.

5 unchanged sentences

New business initiatives, strategic business partners, or changes in the composition of our business mix can be distracting to our management and disruptive to our operations, causing our business and results of operations to suffer materially.

New business initiatives, including initiatives outside of our workforce solutions business, in new markets, or new geographies, could involve significant unanticipated challenges and risks including not advancing our business strategy, not realizing our anticipated return on investment, experiencing difficulty in implementing initiatives, or diverting management’s attention from our other businesses.

New business initiatives, including initiatives outside of our workforce solutions business, in new end markets, or new geographies, could involve significant unanticipated challenges and risks including not advancing our business strategy, not realizing our anticipated return on investment, experiencing difficulty in implementing initiatives, or diverting management’s attention from our other businesses.

In particular, we are making significant investments to advance our technology, and we cannot be sure that those initiatives will be successful, will not interrupt our operations, or that we will achieve a return on our investment.

5 unchanged sentences

We may not be successful in detecting, preventing, or negating all changes in or impacts on our reputation, including reputational effects of negative social media use by our clients, employees, or associates.

Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social and governance (“ESG”) practices and disclosures.

Our reputation could be associated with our position, or silence, regarding various corporate ESG initiatives, including goals for sustainability, diversity, equity and inclusion.

Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, and harm our business.

If any factor, including unethical behavior, illegal conduct, poor performance or negative publicity, whether or not true, hurts our reputation, we may experience negative repercussions which could harm our business.

We may not achieve the intended effects of our business strategy which could negatively impact our results.

Our business strategy focuses on driving growth in our PeopleReady, PeopleScout and PeopleManagement business segments by investing in innovative technology and initiatives which drive organic growth.

These investments may not achieve our desired results or may be impacted by matters outside of our control.

Our business strategy focuses on driving growth in our business segments by investing in innovative technology and initiatives which drive organic growth.

These investments may not achieve our desired results, may be distracting to management or may be impacted by matters outside of our control.

If we are unsuccessful in executing any of these strategies, or if these strategies fail to address the changing demands of the market, we may not achieve our goal of revenue and profit growth, which could negatively impact financial results.

6 unchanged sentences

In addition, we have engaged third parties to host and manage certain aspects of our data center, information and technology infrastructure, mobile apps, and electronic pay solutions, to provide certain back office support activities, and to support business process outsourcing for our clients.

We are subject to the risks associated with the vendors’ inability to provide these services in a manner that meets our needs and the risks associated with changing vendors or in sourcing these aspects of our business.

If the cost of these services is more than expected, if the vendors suddenly cease providing their services, if we or the vendors fail to adequately protect our data and information is lost or compromised, or if our ability to deliver our services is interrupted, then our business and results of operations may be negatively impacted.

3 unchanged sentences

Under the program, we are authorized to repurchase shares of common stock for a set aggregate purchase price, or we may choose to purchase shares in the open market, from individual holders, through an accelerated share repurchase agreement or otherwise.

Although the Board has authorized a share repurchase program, the share repurchase program does not obligate the company to repurchase any specific dollar amount or to acquire any specific number of shares.

Although the Board has authorized a share repurchase program, the share repurchase program does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares.

The timing and amount of the repurchases, if any, will be determined at management’s discretion and depend upon several factors, including market and business conditions, the trading price of our common stock and the nature of other investment opportunities.

28 unchanged sentences

The results of an audit or litigation with tax authorities could materially harm our business.

Failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting.

The Organization for Economic Co-operation and Development (“OECD”) has introduced a framework to implement a global minimum corporate tax of 15%, referred to as “Pillar Two” or “the minimum tax directive.” Many aspects of the minimum tax directive will be effective beginning in fiscal years 2025 and 2026.

While it is uncertain whether the United States will enact legislation responding to Pillar Two, certain countries in which we operate have or are in the process of adopting minimum tax legislation.

While we do not currently expect the minimum tax directive to have a material impact on our effective tax rate, our analysis is ongoing as additional guidance is released.

It is possible that these legislative changes could have an adverse impact on our effective tax rates or operations.

Failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting or fail to prevent fraud.

If our management is unable to certify the effectiveness of our internal controls, including those over our third-party vendors, our independent registered public accounting firm cannot render an opinion on the effectiveness of our internal controls over financial reporting, or if material weaknesses in our internal controls are identified, we could be subject to regulatory scrutiny, a loss of public confidence and litigation.

In addition, if we do not maintain adequate financial, technology, and management personnel, processes and controls, we may not be able to accurately report our financial performance on a timely basis, which could cause our stock price to decline.

LEGAL AND COMPLIANCE RELATED RISKS

14 unchanged sentences

We have invested in developing specialized technology and intellectual property, proprietary systems, processes and methodologies that we believe provide us a competitive advantage in serving clients.

We cannot guarantee that trade secret, trademark, and copyright law protections are adequate to deter misappropriation of our intellectual property, which is an important part of our business.

We cannot guarantee that trade secret, trademark, patent, and copyright law protections are adequate to deter misappropriation of our intellectual property, which is an important part of our business.

We may be unable to detect the unauthorized use of our intellectual property and take the necessary steps to enforce our rights.

We cannot be sure that our services and products, or the products of others that we offer to our clients, do not infringe on the intellectual property rights of third parties, and we may have infringement claims asserted against us or our clients.

These claims may harm our reputation, result in financial liability and prevent us from offering some services or products to clients.

These claims may harm our reputation, result in financial liability or prevent us from offering some services or products to clients.

Our efforts to maintain adequate compliance policies and controls may not prevent violations that could result in significant fines and penalties.

1 unchanged sentence

Failure to comply with laws in a particular market may result in substantial liability and could have a significant and negative effect not only on our business in that market, but also on our reputation generally.

Although we have implemented policies and procedures designed to monitor and ensure compliance with these various regulations, we cannot be sure that our employees, contractors, vendors, or agents will not violate such policies.

Although we have implemented policies, procedures and training programs designed to monitor, ensure compliance with and build awareness of these various regulations, we cannot be sure that our employees, contractors, vendors, or agents will not violate such policies.

Any such violations could materially damage our reputation, brand, business and operating results.

4 unchanged sentences

Increases or changes in government regulation of the workplace, contingent staffing, the employer-employee relationship, or judicial or administrative proceedings related to such regulation, could materially harm our business.

From time to time, the contingent staffing industry, in which we operate, has come under criticism from organizations and regulatory agencies which maintain that employment protections, such as wages and benefits, are subverted when clients use our services.

For example, some states have addressed these concerns by making it more challenging for clients to use our services, or adding additional administrative burden to our industry.

Our business is dependent on contingent staffing arrangements continuing to be a viable source of flexible labor for our clients and flexible employment opportunities for our associates.

If additional jurisdictions adopt regulations to our industry due to pressure from organized labor, political groups, or regulatory agencies, it could have a material adverse impact on our business, results of operations and financial conditions.

The wage rates we pay to associates are based on many factors including government-mandated increases to minimum wage requirements, payroll-related taxes and benefits.

10 unchanged sentences

We have experienced shortages of qualified associates and candidates and may experience such shortages in the future.

Such a shortage of associates and candidates can increase the cost to employ or recruit these individuals, cause us to be unable to fulfill our clients’ needs, and otherwise negatively impact our business.

If general market conditions or wage inflation increase the wage rates required to attract and retain associates, and we are unable to pass those costs through to our clients, it could materially and adversely affect our business.

Such a shortage of associates and candidates can increase the cost to employ or recruit these individuals, cause us to be unable to fulfill our clients’ needs, or otherwise negatively impact our business.

If general market conditions or wage inflation increases the wage rates required to attract and retain associates, and we are unable to pass those costs through to our clients, it could materially and adversely affect our business.

Organized labor is increasing its unionization efforts in many of the industries we serve and periodically engages in efforts to represent various groups of our associates.

3 unchanged sentences

We compete in global, national, regional and local markets with full-service and specialized companies offering contingent staffing as well as business process outsourcing.

New entrants to the market include online and app-based staffing providers.

Our competitors offer a variety of flexible workforce solutions.

Therefore, there is no assurance that we will be able to retain clients or market share in the future, nor can there be any assurance that we will, in light of competitive pressures, be able to remain profitable or maintain our current profit margins.

Our business is subject to evolving regulations and stakeholders’ expectations, including environmental, social and governance (“ESG”) matters, that could expose us to numerous risks.

Institutional, individual and other investors, proxy advisor services, regulatory authorities, clients, employees and other stakeholders are increasingly focused on the ESG practices of companies, including sustainability, diversity, equity and inclusion, human capital management, data privacy and security, supply chains (including human rights issues) and climate change, among other topics.

Our reputation could be affected by our position, or silence, regarding one or more of these ESG initiatives.

These evolving stakeholder expectations and our efforts and ability to respond to and manage these issues, provide updates on them, and establish and meet appropriate goals, commitments and targets related to ESG initiatives present numerous operational, regulatory, reputational, financial, legal, and other risks and impacts.

Our efforts in this area may result in a significant increase in costs and may nevertheless not meet, or conflict with, investor, client or other stakeholder expectations and evolving standards or regulatory requirements.

Such costs or conflicts may negatively impact our financial results, our reputation, our ability to attract and retain employees, our attractiveness as a service provider, investment or business partner, or may expose us to government enforcement actions, litigation, and actions by shareholders or stakeholders.

RISKS RELATED TO CYBERSECURITY, DATA PRIVACY AND INFORMATION SECURITY

2 unchanged sentences

We use information technology and other computer resources to carry out operational and support activities and maintain our business records.

We rely on information technology systems to process, transmit, and store electronic information and to communicate among our locations around the world and with our clients, partners, associates, and employees.

We rely on information technology systems to process, transmit, and store electronic information and to communicate among our locations around the world and with our clients, vendors, associates, and employees.

The breadth and complexity of this infrastructure increases the potential risk of security breaches which could lead to potential unauthorized disclosure of confidential information.

Our systems and networks, and the systems and networks of our vendors and clients, are vulnerable to computer viruses, malware, hackers and other security issues, including physical and electronic break-ins, disruptions from unauthorized access and tampering, social engineering attacks, impersonation of authorized users and coordinated denial-of-services attacks.

An increasing remote workforce and flexible workplace practices may increase these risks, for example with the use of home networks that may lack encryption or secure password protection.

A material incident involving system failure, data loss or security breach and the resulting could harm our reputation and subject us to significant monetary damages or losses, litigation, negative publicity, regularity enforcement actions, fines, criminal prosecution, as well as liability under our contracts and laws that protect personal and/or confidential data.

Our systems and networks, and the systems and networks of our vendors and clients, are vulnerable to computer viruses, malware, ransomware, hackers and other malicious activity, including physical and electronic break-ins, disruptions from unauthorized access and tampering, social engineering attacks, impersonation of authorized users and coordinated denial-of-services attacks.

Even with increased security training, an increasingly remote workforce and flexible workplace practices may increase these risks, for example with the use of home networks that may lack encryption or secure password protection.

A material incident involving system failure, data loss or security breach could harm our reputation and subject us to significant monetary damages or losses, litigation, negative publicity, regulatory enforcement actions, fines, criminal prosecution, as well as liability under our contracts and laws that protect personal and/or confidential data.

We and our vendors have experienced cybersecurity incidents and attacks that have not had a material impact on our business or results of operations;

3 unchanged sentences

Perceptions that we or our vendors do not adequately protect the privacy of information could harm our relationship with clients and employees.

Data security, data privacy and data protection laws and other technology regulations increase our costs.

Laws and regulations related to privacy and data protection are evolving and generally becoming more stringent.

We may fail to implement practices and procedures that comply with increasing foreign and domestic privacy regulations, such as the General Data Protection Regulations or the California Consumer Privacy Act.

Data security, data privacy, data protection and artificial intelligence usage laws and other technology regulations increase our costs.

Laws and regulations related to privacy, data protection and artificial intelligence usage are evolving and generally becoming more stringent and complex.

We may fail to implement practices and procedures that comply with increasing foreign and domestic privacy regulations, such as the General Data Protection Regulations, the European Union Artificial Intelligence Act or the California Consumer Privacy Act.

Several additional U.S.

states and foreign countries where we operate have issued cybersecurity regulations that outline a variety of required security measures for protection of data.

states and foreign countries where we operate have issued cybersecurity and data security regulations that outline a variety of required security measures for protection of data.

These regulations are designed to protect client, candidate, associate, and employee data and require that we meet stringent requirements regarding the handling of personal data, including the use, protection and transfer of personal data.

13 unchanged sentences

Our facilities and operations are vulnerable to damage and interruption.

Our primary computer systems, headquarters, support facilities and operations are vulnerable to damage or interruption from power outages, employee errors, security breaches, natural disasters, extreme weather conditions, civil unrest and catastrophic events.

Our primary technology systems, headquarters, support facilities and operations are vulnerable to damage or interruption from power outages, employee errors, security breaches, natural disasters, extreme weather conditions, civil unrest and catastrophic events.

Failure of our systems, or damage to our facilities, may cause significant interruption to our business and require significant additional capital and management resources to resolve, causing material harm to our business.

3 unchanged sentences

We believe our competitive advantage is providing unique solutions for each client, which requires us to have trained and engaged employees.

Our success depends upon our ability to attract, develop and retain a sufficient number of qualified employees, including management, sales, recruiting, service, technology and administrative personnel.

Our success depends upon our ability to attract, onboard, develop and retain a sufficient number of qualified employees, including management, sales, recruiting, service, technology and administrative personnel.

The turnover rate in the employment services industry is high, and qualified individuals may be difficult to attract and hire.

Our inability to recruit, train, motivate, retain, integrate and provide a safe working environment to a sufficient number of qualified individuals may delay or affect the speed and quality of our strategy execution and planned growth.

Delayed expansion, significant increases in employee turnover rates, failure to keep our staff healthy or significant increases in labor costs could have a material adverse effect on our business, financial condition and results of operations.

Significant increases in employee turnover rates, failure to keep our staff healthy or significant increases in labor costs could have a material adverse effect on our business, financial condition and results of operations.

Loss of our executive officers or other key personnel or other changes to our management team could disrupt our operations or harm our business.

2 unchanged sentences

The loss or limited availability of the services of one or more of our executive officers or other key personnel, or our inability to recruit and retain qualified executive officers or other key personnel in the future, could, at least temporarily, have a material adverse effect on our operating results and financial condition.

We have recently experienced a CEO transition, and could have additional executive leadership changes as part of our overall succession plans.

Such leadership transitions can be inherently difficult to manage, and an inadequate transition could cause disruption to our business, including our relationships with our clients and employees.

We have recently experienced a CEO and CFO transition, and could have additional executive leadership changes as part of our overall succession plans.

Such leadership transitions can be inherently difficult to manage, and an inadequate transition could cause disruption to our business, including our relationships with our clients and employees and fluctuations in the price of our stock.

Acquisitions may have an adverse effect on our business.

We may continue making acquisitions as part of our business strategy.

We may make acquisitions as part of our business strategy.

However, this strategy may be impeded and we may not achieve our long-term growth goals if we cannot identify suitable acquisition candidates or if acquisition candidates are not available under acceptable terms.

7 unchanged sentences

These events could cause material harm to our business, operating results or financial condition.

We may be subject to actions of activist shareholders, which could disrupt our business and impact the trading value of our securities.

We value constructive input from investors and regularly engage in dialogue with our shareholders regarding strategy and performance.

Activist shareholders who disagree with the composition of the Board, our strategy or the way the Company is managed may seek to effect change through various strategies and channels, such as through commencing a proxy contest, making public statements critical of our performance or business, or engaging in other similar activities.

Responding to shareholder activism can be costly and time-consuming, disrupt our operations, and divert the attention of management and our employees from strategic initiatives.

Activist campaigns can create perceived uncertainties as to our future direction, strategy or leadership and may result in the loss of potential business opportunities, harm our ability to attract new employees, investors and clients, and cause our stock price to experience periods of volatility or stagnation.

We face risks in operating internationally.

4 unchanged sentences

We could also be exposed to fines and penalties under U.S.

or foreign laws, such as the Foreign Corrupt Practices Act and/or the UK Anti-Bribery Act, which prohibits improper payments to governmental officials and others for the purpose of obtaining or retaining business.

or foreign laws, such as the Foreign Corrupt Practices Act and/or the UK Anti-Bribery Act, which prohibit improper payments to governmental officials and others for the purpose of obtaining or retaining business.

Although we have implemented policies and procedures designed to ensure compliance with these laws, we cannot be sure that our employees, vendors, contractors or agents will not violate such policies.

15 unchanged sentences

These broad market and industry factors may impact the price of our common stock, regardless of our operating performance.

UNRESOLVED STAFF COMMENTS

Not applicable.

Natural disasters and unusual weather conditions, pandemic outbreaks, terrorist acts, global political events and other serious catastrophic events could disrupt business and otherwise materially adversely affect our business and financial condition.

With operations in every state and multiple foreign countries, we are subject to numerous risks outside of our control, including risks arising from natural disasters, such as fires, earthquakes, hurricanes, floods, tornadoes, unusual weather conditions, pandemic outbreaks such as the COVID-19 pandemic and other global health emergencies, unplanned utility outages, terrorist acts or disruptive global political events including war, or similar disruptions that could materially adversely affect our business and financial performance.

Any public health emergencies, including a real or potential global pandemic such as those caused by COVID-19 or even a particularly virulent flu or respiratory virus could decrease demand for our services or our ability to provide such services.

Uncharacteristic or significant weather conditions may increase in frequency or severity due to climate change, which may increase our expenses, exacerbate other risks to the Company, and affect travel and the ability of businesses to remain open, which could lead to a decreased ability to offer our services and materially adversely affect our results of operations.

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 1A. Risk Factors