Kelly Services (KELYA) risk factors, FY2025 10-K

Kelly Services's FY2025 10-K, filed Feb 12, 2026, lists 33 risk factors in 7 groups. Against the prior year's 32: 2 new, 1 dropped, 11 substantially reworded.

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Risk factors listed
337 groups
New this year
2vs 32 last year
Dropped
1since the prior 10-K
Substantially reworded
11of those kept
Section length
9k wordsItem 1A

What the changes say

  • Kelly Services faces new operational risks from adopting internal AI recruiting tools and managing AI-generated candidate fraud.
  • The company is executing a complex, multi-year migration to a unified enterprise resource planning system.
  • Governance risks shifted following a January 2026 agreement with controlling shareholder Hunt Equity Opportunities regarding Class A voting rights.

What changed since the prior 10-K

New

  • NewRisks Related to Strategy and Execution

    adequately resolve the issues presented by operating multiple disparate systems, or that we will successfully integrate technology across the Company

    The company is pursuing internal AI tools for recruiting and workforce analytics that require ongoing maintenance, data quality, and investment, risking market position if they fail or face regulatory curbs.

  • NewRisks Related to Human Capital

    The proliferation of artificial intelligence-enhanced application materials and fraudulent candidates, including those potentially sponsored by hostile actors, creates operational challenges and exposes us to legal, reputational, and security risks

    Widespread use of AI by job seekers to fabricate resumes and credentials creates screening challenges and exposes the company to client harm if unqualified candidates are placed.

Dropped

  • DroppedRisks Related to Our Capital Structure

    or stockholder approval requirements are satisfied. These provisions and other similar provisions make it more difficult for a third party to acquire us without negotiation

Reworded

  • 89% rewrittenRisks Related to Strategy and Execution

    Our information technology strategy may not yield its intended results

    Updated to highlight specific risks of completing remaining phases of a multi-year ERP integration project, including potential delays, cost overruns, and technical challenges.

  • 72% rewrittenRisks Related to Our Capital Structure

    The holders of shares of our Class A common stock are not entitled to voting rights

    Added details of a January 30, 2026 letter agreement with Hunt Equity Opportunities giving Class A shareholders limited voting rights on certain controlling transactions.

  • 68% rewrittenRisks Related to Our Capital Structure

    Our controlling stockholder exercises voting control over our company and has the ability to elect or remove from office all of our directors

    Updated ownership figure to state that the controlling stockholder beneficially owns 92.2% of outstanding Class B shares, down from prior trust disclosures.

  • 55% rewrittenRisks Related to Our Capital Structure

    We are not subject to certain of the listing standards that normally apply to companies whose shares are quoted on the Nasdaq Global Select Market

    Updated stock exchange reference from Nasdaq Global Market to Nasdaq Global Select Market regarding controlled company exemptions.

    Was: We are not subject to certain of the listing standards that normally apply to companies whose shares are quoted on the Nasdaq Global Market

  • 51% rewrittenRisks Related to Our Capital Structure

    Provisions in our certificate of incorporation and bylaws and Delaware law may delay or prevent an acquisition of our Company

    Minor phrasing updates regarding anti-takeover provisions, special meeting restrictions, and common stock dilution capabilities.

  • 50% rewrittenRisks Related to Cyber Security and Data Privacy

    Damage to our data facilities could affect our ability to sustain critical business applications

    Added specific mention of reliance on key cloud and SaaS providers, noting that outages, security incidents, or misconfigurations could disrupt payroll and customer reporting.

  • 49% rewrittenRisks Related to our Industry Segment

    Technological advances, including advances in automation and artificial intelligence, may significantly disrupt the labor market and weaken demand for human capital

    Expanded to specify that AI is beginning to perform knowledge worker tasks such as data entry, basic coding, document review, and financial analysis.

    Was: Technological advances, including advances in artificial intelligence, may significantly disrupt the labor market and weaken demand for human capital

  • 49% rewrittenRisks Related to our Industry Segment

    Unexpected changes in claim trends on our workers’ compensation, unemployment, disability, medical benefit plans, and other expenses may negatively impact our financial condition

    Minor formatting and text retention regarding self-insured workers' compensation, disability, medical benefits, and unemployment insurance claims.

    Was: Unexpected changes in claim trends on our workers’ compensation, unemployment, disability and medical benefit plans may negatively impact our financial condition

  • 34% rewrittenRisks Related to Operating a Global Enterprise

    We are subject to substantial pressure to meet external stakeholder’s sustainability requirements

    Was: We are subject to substantial pressure to meet external stakeholder’s sustainability and ESG requirements

  • 33% rewrittenRisks Related to Strategy and Execution

    We are at risk of damage to our brands, which are important to our success

  • 29% rewrittenRisks Related to Human Capital

    We depend on the ability of Kelly and third-party talent suppliers to attract and retain qualified personnel to provide our services

All 33 risk factors

Headings as the filing states them, in filing order.

Risks Related to Macroeconomic Conditions

  1. 01Our business is significantly affected by fluctuations in general economic conditions
  2. 02Our stock price may be subject to significant volatility and could suffer a decline in value

Risks Related to our Industry Segment

  1. 03We operate in a highly competitive industry with low barriers to entry and may be unable to compete successfully against existing or new competitors
  2. 04Technological advances, including advances in automation and artificial intelligence, may significantly disrupt the labor market and weaken demand for human capital49% rewritten
  3. 05Competition rules arising from government legislation, litigation or regulatory activity may limit how we structure and market our services
  4. 06Our business is subject to extensive government regulation, which may restrict the types of services we are permitted to offer or result in additional tax or licensing requirements, or other costs that reduce our revenues and earnings
  5. 07Unexpected changes in claim trends on our workers’ compensation, unemployment, disability, medical benefit plans, and other expenses may negatively impact our financial condition49% rewritten
  6. 08We may have additional tax liabilities that exceed our estimates

Risks Related to Strategy and Execution

  1. 09Our future performance depends on the Company’s effective execution of our business strategy
  2. 10If we fail to successfully improve or develop new service offerings, we may be unable to retain and acquire customers, resulting in a decline in revenues
  3. 11A loss of major customers or a change in such customers’ buying behavior or economic strength could have a material adverse effect on our business
  4. 12We are at risk of damage to our brands, which are important to our success33% rewritten
  5. 13We are increasingly dependent on third parties for the execution of critical functions and could be liable for their inability to perform or adhere to global compliance standards
  6. 14Our information technology strategy may not yield its intended results89% rewritten
  7. 15adequately resolve the issues presented by operating multiple disparate systems, or that we will successfully integrate technology across the CompanyNew
  8. 16Past and future acquisitions may not be successful

Risks Related to Operating a Global Enterprise

  1. 17We conduct a portion of our operations outside of the United States and we are subject to risks relating to our international business activities, including fluctuations in currency exchange rates and numerous legal and regulatory requirements
  2. 18Our international operations subject us to potential liability under anti-bribery, anti-corruption, anti-trafficking, supply chain, trade protection and other laws and regulations
  3. 19Events such as natural disasters, severe weather, terrorist attacks, war, pandemics and other catastrophic events could decrease demand for our services in impacted areas
  4. 20We are subject to substantial pressure to meet external stakeholder’s sustainability requirements34% rewritten

Risks Related to Human Capital

  1. 21We depend on our ability to attract, develop and retain qualified permanent full-time employees
  2. 22We depend on the ability of Kelly and third-party talent suppliers to attract and retain qualified personnel to provide our services29% rewritten
  3. 23The proliferation of artificial intelligence-enhanced application materials and fraudulent candidates, including those potentially sponsored by hostile actors, creates operational challenges and exposes us to legal, reputational, and security risksNew
  4. 24We may be exposed to employment-related claims and losses, including class action lawsuits and collective actions, which could have a material adverse effect on our business

Risks Related to Cyber Security and Data Privacy

  1. 25Damage to our data facilities could affect our ability to sustain critical business applications50% rewritten
  2. 26A failure to maintain the privacy of personal data entrusted to us could have significant adverse consequences
  3. 27Cyberattacks, damage or disruption to our technology systems and services, breaches of network or information technology security, or other serious security incidents could have an adverse effect on our systems, services, reputation and financial results

Risks Related to Our Capital Structure

  1. 28Our controlling stockholder exercises voting control over our company and has the ability to elect or remove from office all of our directors68% rewritten
  2. 29We are not subject to certain of the listing standards that normally apply to companies whose shares are quoted on the Nasdaq Global Select Market55% rewritten
  3. 30The holders of shares of our Class A common stock are not entitled to voting rights72% rewritten
  4. 31Provisions in our certificate of incorporation and bylaws and Delaware law may delay or prevent an acquisition of our Company51% rewritten
  5. 32We may not be able to realize value from, or otherwise preserve and utilize, our tax credit and net operating loss carryforwards
  6. 33Failure to maintain specified financial covenants in our bank credit facilities, or credit market events beyond our control, could adversely restrict our financial and operating flexibility and subject us to other risks, including risk of loss of access to capital markets

Other Kelly Services 10-Ks

  • FY2024 10-K risk factors
    32 risks

    Kelly Services faces dominant risks from macroeconomic staffing demand cycles, severe competition in a low-barrier industry, and disruptive technological advances in artificial intelligence. Operations are heavily exposed to regulatory, tax, and self-insured worker claim liabilities, alongside reliance on key customers and third-party technology vendors. Corporate governance is heavily centralized via a controlling stockholder trust and dual-class non-voting stock structures.

    Filed Feb 13, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.