46730 Si Review The Kelly Story Mar11[1]


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46730 Si Review The Kelly Story Mar11[1]

  1. 1. M ARC H 2 0 1 1 • V O L . X V 1 • NO. 3 www.st af f i n gi ndustr y.c o m ® S T A F F I N G I N D U S T R Y R E V I E WTools & Techniques for Staffing & RecruitingTheKellySTORy The staffing giant focuses on talent supply chain management Cover P.18 story 8 Tips on Keeping Buyers Happy 26 The Right Recruiter JUNE 2010 1
  2. 2. [ paSt ] # The Kelly)()()()()()()()() )()()()()()()()() STORy[ paSt & preSent ] The sTaffing gianT focuses on TalenT supply chain managemenT By Subadhra r. Sriram Used with permission from Staffing Industry Analysts. Copyright Crain Communications 2011. MARCH 2011
  3. 3. [ preSent ]MARCH 2011 19
  4. 4. the Kelly Story S he was called the Kelly Girl. She was efficient but unthreatening. After all, she was just a female temporary office worker! Little did William Russell Kelly know that 65 years later, she would be the predecessor of the present $5 bil- lion Kelly Services headquartered in Troy, Mich. In fact, even 15 years ago, Kelly was primarily a commercial staffing operation. “It was 90 percent of our business,” says Camden, but the company has been steadily repositioning its edge to be more professionally and technically focused. “During the recession, we exited commercial staffing in several markets. But we More important, the Kelly girl is considered as one didn’t exit professional and technical,” Camden says. of the ancestors of today’s $95.7 billion temporary At the same time, the recession also revealed that help industry. companies — the end users of contingent labor William Russell Kelly arrived at this business — recognized the importance of contingent work. by chance. He originally started a business service Moreover, it was the C-suite that has shifted to view- bureau to help companies process their paperwork, ing this workforce more as a strategic tool as opposed which evolved into providing temporary help instead. to a necessary evil. Accordingly, these executives Similarly, the evolution of temporary staffing and eco- demanded from their staffing partners solutions that nomic forces has pushed Kelly to a point where it is would help their companies manage the whole talent selling complete workforce solutions including talent supply chain. It was no longer just about finding and supply chain management. placing a temporary worker. “We have to Stand for the higheSt level of integrity if We are going to oWn the talent and not be Seen aS exploiting them.” — Carl Camden, Kelly’s president and CeO Kelly has risen from being a besieged staffing Kelly’s customers, especially the Fortune 500 business cutting costs to preserve market share. In and 100, wanted Kelly to compete for all or part the last decade it has streamlined operations: It has of the account relationship — globally and locally. cut costs, downsized, exited unprofitable areas and Currently, Kelly provides services to more than 90 increased operations in growth markets like Asia. percent of the Fortune 500 and 99 percent of Fortune But to Kelly, it’s not just about providing the 100 corporations. These corporations demanded world’s leading companies with the right talent at greater flexibility in hiring. “Once you get into an the right price. The company also wants to act as an account, these companies ask you to do more and “agent” of the talent themselves, representing their more around talent,” Carroll says. best interests. “We have to stand for the highest level of In fact, Kelly’s largest 25 global accounts represent integrity if we are going to own the talent and not be approximately 30 percent of its total revenue. These seen as exploiting them,” says Carl Camden, Kelly’s corporations demanded greater flexibility in hiring. president and CEO. As a result, Kelly streamlined its operations (see box, page 24) to offer workforce solutions through a shared The Backdrop services model. “This often meant that we are able There are those staffing experts who see Kelly tra- to deliver globally for our customer without being in ditionally as a commercial staffing company. “Our their backdoor,” Carroll says. history and our legacy have labeled us that, but all Here’s how the shared services model operates. For along we have been showing customers that we can example, Kelly has to provide a global customer with do professional technical staffing and we do it quite a contingent workforce outsourcing model in 10 loca- well,” says Teresa Carroll, senior vice president and tions. With an extensive staffing footprint in six of global CWO practice leader, Kelly Outsourcing and those locations, it is easy for the company to provide Consulting Group. workers. However, in the other four locales, it teams Used with permission from Staffing Industry Analysts. Copyright Crain Communications 2011. MARCH 2011
  5. 5. the Kelly Story “We are able to deliver globally for a cuStomer Without being in their bacK door.” — Teresa Carroll, seniOr viCe president and glObal CWO praCtiCe leader, Kelly OutsOurCing and COnsulting grOup up with subcontractors to supply talent. The entire specific to what the customer is looking for. “It’s about process is managed by Kelly. optimizing all of the sources of talent to achieve the “We are working really hard to build up our customers’ business objective,” says Peter Quigley, Kelly staffing supplier network. Our goal is to do more senior vice president of global client relationships. “We of supply chain management through that network try to get to a very fundamental understanding of what rather than just providing talent,” Carroll says. their drivers are, and then put together a program that Another advantage of working with many global addresses their business needs.” customers is that it enabled Kelly to see where these firms — and the market — were heading. Customer Is King Kelly wants to mimic the Starbucks and Enterprise Kelly as MSP Rent-A-Car experiences. These are companies that And that has translated into Kelly Outsourcing have made a business — aside from selling coffee and Consulting Group (OCG) taking a lead role. and cars — out of human connections and com- “Customers are turning over their processes — be it munity involvement. “I think we do differentiate RPO or CW outsourcing — to us. They are asking ourselves in our customer experience. We are get- OCG managers to manage the acquisition of talent ting feedback continuously from our customers for them,” Carroll says. Kelly is acting as a managed and improving our processes [accordingly],” Carroll service provider, guaranteeing that companies will get says. The company’s aim is to provide companies an high-quality temporary workers on board in a timely exceptional experience by supplying manner at a competitive price. talent that is a cultural and technical The role of the managed service provider (MSP), fit at a competitive price. however, is not new to the staffing veteran. Kelly The company has also streamlined internal oper- actually was among the early pioneers of the role in ations by removing a layer of regional leadership the mid-’90s when one of its big customers, Kraft positions from the U.S. business. It has created Foods, asked Kelly to act as its MSP. Today, the geographic sectors that cover the commercial, profes- staffing giant is literally dealing with thousands sional and technical branches in each geography and of suppliers. As Kelly takes on new customers, it assembled a team of product experts with responsibili- takes over management of its existing suppliers. ties across the Americas. The staffing giant assesses what its new customer This structure has resulted in a leaner, meaner orga- needs and addresses gaps in the supply chain, such as nization where internal teams move quickly to respond time to fill or providing niche skill sets. If the customer’s to customer demands. Kelly also ensures that the pro- requirements involve esoteric skill sets, then “we go out cesses around supply chain management are efficient and find suppliers to fill those orders,” Carroll says. The and repeatable. Consequently, the customer has eas- existing suppliers are audited, assessed and then trimmed ier access to Kelly’s entire suite of staffing services. But or on-boarded to become part of Kelly’s network. it’s not just about the end user. To keep the customer Where it makes sense to use Kelly as a supplier, happy, Kelly has to make sure that both its sub-suppli- OCG does. But Kelly would have to compete with ers and talent have good experiences, too. other vendors on price and other metrics. Moreover, Toward that end, Kelly hosts internal staff func- there are customers that do request that Kelly OCG tions that allow regional groups to share best not use its own suppliers, promoting what many in practices. The company has a Facebook-like social net- the industry call the vendor-neutral model. working tool that enables people to communicate Consequently, Kelly is working with a variety of quickly and easily. The company intranet is another hybrid CW solutions ranging from being MSP to mas- valuable resource that keeps employees, suppliers and ter vendor to even designing a new supply chain model customers informed. Used with permission from Staffing Industry Analysts. Copyright Crain Communications 2011. MARCH 2011
  6. 6. “in recent implementationS, We’ve begun to See the benefitS of our reorganization.” — peTer quigley, Kelly seniOr viCe president Of glObal Client relatiOnships Moreover, Kelly’s implementation group is cen- The New Kellytralized, so when a new customer comes on board, its Kelly’s commercial, professional and technical units arerequirements are made known to the rest of the com- organized geographically into three distinct regions,pany immediately. Recently, specific skill sets, such each of which reports into its COO.as engineering, have had their section on the intranet,which has made building a community and keeping in Americas — operations across North, Centraltouch with the right people that much easier. and South American countries. Regular communications has helped Kelly keep its EMEA — operations across the nationsbig clients happy. “I think our niche is to be able to of Europe, the Middle East and Africa.deliver to our largest customers across a far breadth. APAC — operations in the countries of Asia and the Pacific Rim.And we have an edge when it comes to specific laborcategories as well,” Carroll asserts. OPErATINg UNITS John Healy, research analyst with Northcoast Commercial Staffing. Kelly has been known as a provider of cleri-Research, agrees. He, for one, is bullish on the cal staff, and it is continuing to add new options to its commercialstaffing giant’s future. “Kelly has redefined its division. This segment currently covers staffing for office services,approach,” Healy says. “They have done the most contact centers, substitute teachers, marketing, electronic assemblyto change their business and strategy of any staffing and light industrial. It accounts for 73 percent of Kelly’s revenue.company I know,” he adds. Restructuring notwithstanding, being a firm that Professional Staffing. This division is comprised of niche businessis 95 percent family owned is an issue for some ana- units that provide qualified candidates in the fields of accounting,lysts. They feel that such voting control could slow finance and law.down Kelly’s C-suite. Others, including Wall Street,are adopting a wait-and-see approach. Downsizing has Technical Staffing. Units include business lines that specialize inbeen done and cost controls are in place. Will Kelly be staffing for IT, healthcare, engineering, scientific and automotiveable to keep costs down during the upturn? disciplines. The professional and technical staffing units together To address this, the company offers as evidence its account for 22 percent of the company’s revenue.recent customer wins — BP and Rio Tinto amongthem. “In recent implementations we’ve begun to Kelly Outsourcing and Consulting Group (OCG). Although thissee the benefits of our reorganization — the cost that unit brings in only 5 percent of revenue, it is the one to watch as it iswe took out and being able to scale in a way that expected to grow by leaps and bounds. Kelly offers a variety of out-supports our programs without bringing back unre- sourcing alternatives to the conventional staffing business lines.lated expense,” Quigley says. The focus on managing Solutions include recruitment and business process outsourcing,the talent supply chain has allowed the scaling to be contingent workforce outsourcing, independent contractor services,quick, cost-effective and worldwide, Quigley claims. contact center outsourcing, executive placement, career transition Wall Street is still out on this. Stock price aside, at and outplacement and vendor management services.the end of the day it’s all about finding out what yourvalue proposition is. Regardless of size, staffing firms BrANCh STrUCTUrEneed to figure out their offering, sharpen it and then Every branch office in each division is owned and operated by Kellysell the service. After all, that is a modus operandi that Services, and has full access to its corporate resources. Some industryworks. Just take a look at Kelly. experts believe that this model serves customers better than many fran- chise models used by other large staffing giants, as it ensures consistentSubadhra R. Sriram is editorial director at Staffing Industry standards of quality and service.Analysts. She can be reached at ssriram@staffingindustry.com.You can also follow her on twitter.com/subadhra_cws. Used with permission from Staffing Industry Analysts. Copyright Crain Communications 2011. 23
  7. 7. A Q&A featuring Carl Camden Q&A “Own the Talent & opportunities will follow” Kelly’s Carl Camden discusses the staffing industry with Subadhra R. Sriram C arl Camden has had an unusual career path. Before he joined Kelly Services in 1995, he explored various occupations — teaching and marketing just to name a few. Varied experiences have shaped the man you see at the helm of the Fortune 500 staffing giant. Then a stranger to staffing, he found the job exciting. Now as the president and CEO of Kelly, he feels he gets to help other people discover their dream both at a personal level and on the job. Read what Camden has to say on the future of staffing and mandated healthcare for workers. Used with permission from Staffing Industry Analysts. Copyright Crain Communications 2011. MARCH 2011
  8. 8. Q: You are a big Q: Describe Kelly’s reorganization. they are for other types of firms. We need to work on getting rid of thatsupporter of When I joined Kelly 15 years ago, barrier to our industry. The rules on we were primarily a commercial staffing independent contractors are incredi-mandated heath operation — that was probably 90 per- bly messy with the IRS. We need to be cent of our business. We’ve been steadily supportive in cleaning that up. So atbenefits for temps. repositioning since then to have more a macro level, our staffing association and more of a professional and technical and staffing firms need to understandExplain your view focus. That positioning effort continues. what the barriers are to the overall In the last couple of years, the repo- growth of our industry, and whatand why is it so dif- sitioning has been to refocus supply we can do to reduce those. chain management more into talent supply chain management — more intoferent from others the forefront of what we do. That’s the primary driver of most of our OCG Q: And at a micro level?in the industry. offerings. And we’ve seen that pay off in terms of customers with several con- Ultimately, the success is going to be had not by those that try to arbitrage tracts. And I suspect that 2011 and differences in things like benefit cost In most countries, healthcare 2012 will see us significantly reposi- and so on. The real success in our indus- tioned as a very major player in the try is going to come from our links tobenefits are a right. The U.S. is talent supply chain space. talent and our ability to provide thatan exception. Here, it is tagged to talent to customers. The skilled laboremployment. Terry Adderley [chair- shortage is going to roll through ourman of the board of directors of Q: Where do you see the future of country with great intensity over theKelly Services] was a supporter of the contingent labor going? next few years and the staffing firms that will win will be those that haveKennedy bill way back, and we con- Free-agent employment — and I strong relationships with their talent.tinue that support. We believe that prefer that term because it encompassesthe way healthcare is dealt with in the everybody from independent contractor,United States discriminates against self-employed professionals and temporary Q: Comment briefly on the growthtemporary workers. employees — stands at between 20 percent of the VMS/MSP. to 25 percent of the workforce in most Just like in the rest of the world, of the industrialized world. I think over Both of those are aspects of supply[U.S. temporary workers] should have the next decade that will drift up to about chain management. As they get moreaccess to healthcare coverage. And the a third of the workforce. In the United integrated and encompass more catego- States, if we take care of the healthcare ries, they become more of a supply chainunderlying concept that should drive problem, you’ll see temporary employment issue. But, if you look at shifts in atti-the use of temporary employment rise. Its proportion will probably be closer tudes, people used to believe that oneshould be the desire to gain the flex- to European levels. staffing company could provide everyibility that comes from accessing the worker that any company could need. Q: And what would your advice be And customers and staffing firms havetalent — not because companies are to staffing firms? realized that’s not really a reality.trying to arbitrage benefits cost. And so what happens then is it And in the case of a mandated plan, On one level, we should be sup- becomes networks of suppliers, networkshealthcare coverage is a social cost porting the dynamics of what it will of companies. It becomes management take to grow our industry. We need to systems to deliver talent. And from there,and should be treated as such — as remove the barriers to current forms of the next step up is to move it into theit is, again, in the rest of the world. It employment. That’s part of what Kelly supply chain side.hasn’t killed temporary employment was trying to do with healthcare legis- So you’re going to see MSP andin Europe. In fact, the average penetra- lation. Ditto on the retirement front. VMS continue to grow. Right nowtion rate for temporary employment is Retirement benefits in terms of 401(k) large global and regional companies, participation, the ability to deal with national companies, are taking thestill higher in Europe than it is in the retirement accounts, are more difficult lead. But I’m already seeing a pickupUnited States. for temporary employment firms than in activity from more large, local or Used with permission from Staffing Industry Analysts. Copyright Crain Communications 2011. MARCH 2011
  9. 9. A Q&A featuring Carl Camden large sub-regional companies. And it’s making certain we behave the right way. going to become a dominant way for Go back through your own publications. Our industry has companies of size to access free agent labor. Industry has to embrace it; it’s It seems like every other week you pub- lish a story of some staffing person being to step up and going to continue to grow rapidly. indicted or going to jail. We have to stand for the highest honor its own code level of integrity, especially if we’re Q: If I ask you for one piece of advice going to own the talent and not be seen that you would give smaller staffing as exploiting them. If we’re going to of conduct and I agencies, what would you say? be their agents representing them, the industry has to be known for excep- think that’s also Own their talent. I think that an advantage that a smaller firm has is an tional integrity in defense of our talent. That does not include ripping off the going to be critical intense local presence. It has a small number of highly talented people. system for unemployment tax fraud, workers’ comp fraud, withholding Own the talent and opportunities will fraud. Our industry has to step up and to our success. follow. I also would just say one last honor its own code of conduct and I thing: Our industry still needs to police think that’s also going to be critical to itself and become more aggressive at our success. Used with permission from Staffing Industry Analysts. Copyright Crain Communications 2011. MARCH 2011