How is business for Kelly Services (kellyservices.com) these days? What are their strengths, weaknesses, threats and opportunities?

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How is business for Kelly Services (kellyservices.com) these days? What are their strengths, weaknesses, threats and opportunities?

Overview

Kelly Services is an overall successful company, whose lengthy history of operation and expansion is bolstered by their positively trending revenue and Gross Margin Score. Additionally, Kelly Services is the recipient of dozens of awards for many facets of their business model. Kelly Services also has many opportunities on the horizon, including branches of their company being acquired by long-time business partners as well as acquiring other businesses themselves. While Kelly Services is a strong company, they do have notable weaknesses and threats to their business, including a low stock score, negative to average overall ratings on websites like Better Business Bureau and Indeed, and two recent lawsuits alleging unfair treatment of employees.

Strengths

Perhaps one of the biggest indicators of the success of Kelly Services is their longevity — they have been operating consistently for 72 years, since William Russell Kelly founded the company in 1946 as the Russell Kelly Office Service. Today, after seven decades of operation and expansion, Kelly Services is ranked on the Fortune 500 list at 490, and reported a total revenue of $5.4 billion in 2017. Solid figures from the fourth quarter of 2017 back up the Forbes positioning and revenue report; the company's revenue for the fourth quarter was up 9%, and its operating earnings were reported at up to $83 million. Additionally, in the fourth quarter of 2017, Kelly Services was able to boast a 57% increase in their earnings per share. Notably, Kelly Services has a Gross Margin Score of 17 on that 1 to 100 scale, where the lower the score means the more stable a company is.

The mission statement of Kelly Services is "to provide the world's best workforce solutions." The company appears to have a strong interest in maintaining an authentic and meaningful approach to their business, emphasizing "relationships, not transactions." Much of Kelly Services' character is centered in operating as a community. They place value on responsibility, innovation, and teamwork, as well as keeping a firm focus on the quality of their work rather than the size of their business.

This commitment to quality and meaningful business relationships has led to Kelly Services being frequently recognized with awards and honors. Within just the past five years, Kelly Services has racked up dozens of honors for various aspects of their business. FlexJobs placed Kelly Services in the twelfth spot on their 2018 list of Top 100 Companies for Remote Work (the company previously made this list in from 2014-2016). Additionally, in 2017 Kelly Services received two awards for diversity in the workplace from the Great Lakes Women's Business Council, as well as Corp! Magazine.

Weaknesses

A notable weakness of Kelly Services is its standing with the Better Business Bureau (BBB). Unfortunately, Kelly Services is not BBB Accredited, and the only reviews of the company on the BBB website are negative. While there are only three reviews, they are detailed and emphasize each writer's dissatisfaction with the company's perceived lack of professionalism, as well as issues stemming from their reliance on outsourcing.

Additionally, Kelly Services' rankings on popular job website Indeed.com are not as strong as they could be. While the company does have many five star reviews from Indeed users and pulls an overall 3.9 star rating, the breakdown of these ratings by category is where the need for improvement becomes clear. Raters on Indeed.com give Kelly Services an average score of 3.1 out of 5 stars relating to job security and advancement, with similar middle of the road ratings for other important aspects of a workplace. These aspects include Compensation and Benefits (3.3/5 stars), and Workplace Management and Culture (both earning 3.6/5 stars respectively).

Another weakness of Kelly Services, and perhaps the most important, is their low stock value. Kelly Services currently holds a score of 3 on the Pitroski F-Score scale, which helps determine how valuable and strong a company's stock is. The scale ranges from 1 to 9, with one being the weakest and nine being the strongest. Kelly Services earning a 3 out of 9 indicates that the stock is of a low value, which may drive away potential investors.

Opportunities

In January 2018, it was reported that InGenesis Inc., another workforce solutions company, acquired Kelly Services' healthcare specialty business. According to Kelly Services' Vice President and Managing Director John Drew, this acquisition provides benefits for both InGenesis Inc. and Kelly Services. Drew asserts that InGenesis Inc.'s "expertise in the field of healthcare" will mean that the purchased portions of Kelly Services will become even more successful, and will be able to provide even better services to clients. This acquisition is expected to be completed by February 2018, without interrupting service to customers or terminating any employee positions.

In late 2017, Kelly Services acquired Teachers On Call, a service which provides substitute teachers to schools. While the terms of this deal are unknown to the public, this acquisition serves as an expansion to the Kelly Education Staffing branch of Kelly Services. This expansion will allow Kelly Education Staffing to broaden its already large service area, which consists of over 7,000 schools in 35 states.

Threats

The biggest threat to Kelly Services in recent years has been negative press. Kelly Services first earned negative press for a class action lawsuit in which the company was accused of violating the Fair Credit Reporting Act by conducting undisclosed background checks on both potential employees and hired workers. In spite of Kelly Services denying the allegations made in the lawsuit, they agreed to settle out of court with the 200,000+ members of the class.

Additionally, Kelly Services received negative press in early 2016 for "allegedly withholding overtime pay" from remotely working employees in their customer service division. The withheld overtime pay stems from time that these remote employees used to set themselves up and shut themselves down before and after a shift, as well as encountering and handling any technical issues they may be facing that require placing a call to Kelly Services' tech support line. A class action lawsuit was filed on behalf of these workers in order to obtain payment that was allegedly withheld from them. Although this particular story is nearly two years old, there is no further information available on movement or resolution regarding this conflict.

Conclusion

Kelly Services is overall a successful company, with seven decades of operation and expansion under its belt, increasing revenue, and opportunities for collaboration and expansion. The company has earned various awards over the years, and overall has more strong attributes than weak ones. However, notable weaknesses and threats to Kelly Services include a low stock score, less than impressive ratings on the Better Business Bureau and Indeed, and poor press from two class action lawsuits alleging unfair treatment of employees and job seekers.
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