Maximizing Growth: Analyzing Internal & External Environments at Kelly Services

Introduction

The success of any enterprise depends on its proper analysis of both the internal and external environments that affect the organizational outcomes. Kelly Services, as an organization that provides financial and information technology services, it would be essential to understand its external environment. The information gathered from such analysis will help establish if any opportunities exist for the expansion and growth of the business. It will also enhance the identification of threats that affect the company and how to deal with such threats.

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A Brief Explanation of the Industry in which Kelly Services Operates, as well as Context for its Current Positioning

Kelly Services operates in the staffing industry. The company provides office staffing solutions in different sectors, such as information technology, management consulting, financial services, and outsourcing. Concisely, the staffing industry is seen as one, which is still evolving. Over the past, companies that provide staffing solutions have suffered similar woes of recession just as their customers since the business is hyper-cyclical (Terpend & Krause, 2015). However, successful staffing companies have begun to invest gains to enhance their productivity and focus on high margins. One of the strategies used includes the reduction of the extreme cyclicality of the organizations, as well as diversify into related offerings like vendor management systems.

In situations where the staffing customers understand the processes of automating recruitment, they can be sold on the systems. As such, the firms cut costs and demand top value from the staffing vendors. An example of a staffing company that has enacted the strategy is Superior Group, Inc., the organization has a well-diversified client base and provides various services such as outsourcing, payroll processing, and human resource services. The company ensures that some of its processes are automated and paperless. Despite the industry having bounced off the bottom, firms still tend to bring on many customers. The executives of staffing industry should be cheered by the demand for qualified staff. Some personnel have multiple offers hence, can provide a range of services to the clients. The firms need to identify additional opportunities in new locations and markets to boost their sales volumes (Koumparoulis, 2013). Kelly Services is one of the top firms in the staffing industry. Based on the 2015 report, the company had 8,100 employees and a revenue of $5.5 billion. Five hundred fifty thousand workers were also positioned to work in different sectors of the organization.

The Current Conditions in Staffing Industry and Its Relevant General Environment and Their Likely Implications for Successful Implementation of Kelly Services Strategic Goals and Related Actions

In 2018, the staffing industry reported an increase in revenues by four percent. As such, the level of confidence was high, and there was significant growth in the economy since more jobs were created in the industry. Due to the ever-shrinking pool of talent, the demand for staffing professionals increases as organizations require qualified individuals to fill different positions in the sector (Sheehan & Bruni-Bossio, 2015). However, in 2019, some implications exist for the staffing industry, and these include the volatility of the stock market, as well as friction over trade and tariffs.

Notwithstanding the booming growth of the industry, most companies still face qualified personnel shortages and the inability to navigate new technologies (Baguzova et al. 2017). For Kelly Services to meet its strategic goals, it has to hire qualified staff with adequate knowledge on how to incorporate the advancing technologies into the business practice. The company also needs to identify creative ways of hiring its personnel regardless of the economic constraints.

Additionally, most staffing clients tend to deviate from the shift schedules that were used traditionally. For such firms to enhance flexibility, they reach out to new pools of labor. The firms use talent recruitment strategies to map out various details regarding work hours and how to align the hours with the work to be accomplished. In most cases, irrelevant screening of the candidates makes staffing clients to lose personnel; hence the organizations consider moving from over-screening to selective strategies for the recruitment process. However, this would be quickly realized when the staffing firms audit the screening processes for every position (Gans & Ryall, 2017). Due to the uncertainty of the economic environment, some employers may think twice before they can increase headcount. Instead, they can bring on temporary personnel to fill in different positions. Therefore, as the work environment is volatile, Kelly Services should be flexible and strengthen its contingent workforce. Through this, the organization will find it easy to ride the wave of the economy despite the storm encountered in the operational platform.

Porter's Five-Forces Model to Enrich Understanding of Kelly Services' Work Environment

Porter's Five Forces is a strategic model used to analyze an industry and understand any underlying profitability levers in the industry. In the staffing industry, the model can be used to establish how the competitive forces can impact profitability and come up with a strategy to enhance the competitive advantage of companies within the industry, precisely the Kelly Services, Inc. One of these forces is the threats of new entrants in the Staffing Industry (Sheehan & Bruni-Bossio, 2015). Ideally, new entrants in this industry tend to bring innovation and new ways of doing business. As such, they will put pressure on Kelly Services, Inc. Such new entrants always provide their services at lower prices, ensure reduced costs, as well as provide a new value proposition to their customers. The second force is the supplier bargaining power (Dobbs, 2014). Many companies in the Staffing Industry purchase their raw materials from different suppliers. The dominant suppliers may decrease the margins that particular firms would earn in the market. In essence, powerful suppliers in the service sector tend to extract higher prices from the staffing firms through their negotiating power. Therefore, the higher bargaining power of suppliers will lower the profitability of companies in this industry.

Moreover, buyers influence the profitability of staffing firms through their buying power. The buyers always want to purchase the best offerings at minimum possible prices. When the customer base is small and powerful, it would mean that the bargaining power of customers will be high hence most clients seek huge discounts, which negatively affect the profitability of Kelly Services, Inc. and other companies in the Staffing Industry. Substitute services also bring forth some threats. For instance, the availability of a new service that meets similar needs of customers in different ways makes the profitability of the Staffing Industry to suffer. However, the threat will be high when the substitute service offers a unique value proposition (Bull et al. 2016).

Conversely, due to the intense rivalry among the competitors in the Staffing Industry, the prices of services offered are brought down thereby decreasing profitability. The fierce competition in this industry takes a toll on the operations of companies like Kelly Services, Inc. For this company to gain a sustainable competitive advantage in the Staffing Industry, it can incorporate a range of strategies. For instance, it can deal with will the threats caused by new entrants through investment in research and development and capacity building.

Proper research will enable Kelly Services, Inc. to come up with innovative services, which bring its clients to the fold hence they will consider acquiring the company's services as opposed to those offered by the competitors. The company can tackle the issue of supplier bargaining power by developing third-party manufacturers whose activities depend upon the organization. Such kinds of suppliers will have less bargaining power. Kelly Services, Inc. can deal with the buyer purchasing power by building a broad customer base, which will enable the company to streamline its production process and the sales. The company can also introduce new services that will reduce the defection of existing clients to the competitors. When Kelly Services, Inc. understands the core consumer needs, it will be easy to deal with the threats of substitute services. The company would need to be service-oriented and increase the switching costs for customers (Shabanova et al. 2015). Concisely, rivalry among competing firms leads to a significant decline in the profitability of an organization. Therefore, Kelly Services, Inc. will need to collaborate with the competitors so that the market size is increased.

Kelly Services Strategic Group and Construct A Map to Show Its Relative Market Position

Kelly Services has generated $10 million in funding with each employee generating $774.1K in revenue. The most recent acquisition of the company was the NextGen Global Resources, LLC. The number of followers that the company has on Owler is 8,161. Based on the company's data, Kelly Services, Inc. has an annual revenue of $5.6 billion. One of the top rivals of the firm is Robert Half, which provides management consulting services. Robert Half generates $219.3 million more revenue compared to Kelly Services (Terpend & Krause, 2015). Another competitor is the KForce that provides business support services. Aquent is also a major competitor that provides services in employment agencies. The company generates 11% of the revenue generated by Kelly Services, which translates to $633.3 million.