Joe Fuller: Contingent and flexible work was on the rise before Covid-19 emerged. For many, the pandemic has increased the appeal of temporary and part-time jobs. The model helps businesses deal with economic uncertainty, and individuals handle non-work obligations. Kelly Services, the 75-year-old firm that is synonymous with temporary work, has filled many essential positions. It supplies epidemiologists to the National Institutes of Health and substitute teachers to school districts nationwide. The company finds itself at the center of ongoing debates about the nature of work—from hybrid staffing to automation, the skills gap, and diversity, equity, and inclusion (DEI). As more of the workforce operates outside the traditional nine-to-five full-time scheme, how can organizations and workers meet their respective needs?

Welcome to the Managing the Future of Work podcast from Harvard Business School. I’m your host, Harvard Business School professor and visiting fellow at the American Enterprise Institute, Joe Fuller. My guest today is Kelly Services CEO, Peter Quigley, who’s been with the company almost two decades. We’ll talk about changes in the industry over time, how companies are navigating the tight labor market, and how workers are finding new opportunities. We’ll also discuss “hidden workers”—including veterans, the formerly incarcerated, and caregivers—and how contingent work can foster career paths. Welcome to the podcast, Peter.

Peter Quigley: Thanks, Joe. It’s good to be here.

Fuller: Peter, Kelly is synonymous with contingent work. People would often describe it historically as temporary work. Can you give us the overview of the business today?

Quigley: When Russ Kelly founded the company 75 years ago, he was actually taking advantage of the fact that, in Detroit, where we were founded, there was a huge contingent of women who were working in armament production during the Second World War. When the war ended, all of the GIs came back, and the women were summarily displaced. Russ Kelly saw that as a huge opportunity, particularly given there was so much demand for workers in the postwar boom. So we were essentially born of a mismatch between demand for labor and a supply of labor, which sounds very familiar.

Fuller: Yes, it does.

Quigley: We are still a large provider of temporary staffing, but we’ve branched into science and engineering. We put thousands of technology professionals to work every day—call-center agents, assembly workers, to many, many other varieties of employees with great companies. But we also provide a number of other kinds of services than contingent labor. We manage more than $10 billion of our customers’ contingent labor spend. We provide recruitment process outsourcing, business process outsourcing, where we’re actually responsible for the outcome as well as a remote call center, as an example. After 75 years, we operate in more than 25 countries. We employ 7,000 full-time employees. We place 375,000 workers with our clients every year. We are the largest provider of education talent in the United States. And we provide the Fortune 100 with a large contingent of science, engineering, and technology professionals.

Fuller: Well, of those 7,000, Peter, how did you find yourself at the head of Kelly?

Quigley: Well, I actually started my career as a lawyer, Joe. I was in private practice for a number of years before going in-house at AT&T and then Lucent Technologies. I was recruited to Kelly 19 years ago before becoming CEO two years ago. I ran our global staffing operation, and I’ve held a host of other either operational or functional leads, including being the company’s general counsel. But I was drawn to the workforce solutions industry, and Kelly, in particular, because of my passion around the dignity of work. I think that comes from my upbringing, where I saw in very stark terms the life-changing value of work. My father left my mother and four small children—I was the youngest of four—when I was six, and he left my mother with a mountain of debt and not a lot of money. And she’d never worked outside the home. So she was forced to cobble together a number of part-time jobs—grading papers, working for a music company—to keep us afloat. Over the years, she found more and more stable work and got a real estate license and, ultimately, ended up working in New York City for a marketing firm. It really taught me the life-altering way in which work can impact lives. So that’s why I’ve been drawn to Kelly and our noble purpose, which is connecting people to work in ways that enriches their lives.

Fuller: That’s a very touching story and makes your role here all the more special and interesting to learn more about. Peter, we’re talking here toward the end of the year in 2021. Just perhaps when we thought we were about to turn the corner, we’ve got Omicron breathing down our necks. How has the pandemic affected Kelly’s mix of business, what clients were expecting of you, and also the supply of talent that you can bring to bear?

Quigley: We have seen a significant spike in demand. We’re well above pre-pandemic levels, particularly in areas that you might expect, like life sciences, but also education, where there’s great demand. But it’s pretty much across all of the industries that we support. Our biggest challenge right now is finding workers to meet that increased demand. That is a result, I think, largely of a number of factors, but including the pandemic and concerns about Covid and childcare responsibilities and the like. Just to give you one example of how the landscape has changed, we were working with a Fortune 10 company when the pandemic broke out, and they were trying to figure out how to staff temperature screeners—not a job that we’d ever filled before. We were able to put together a national program for them that took advantage of some existing competencies that we had, but also online recruiting, online screening, which were tools and techniques that they had never used before, nor had we.

Fuller: It’ll be interesting to see what types of innovations like that survive the Covid period, certainly in the Great Recession of ’08–’09 and even in the early wave of the adoption of the Internet before the World Wide Web at the turn of the millennium. A lot of companies had to innovate quickly, and many of those [innovations] became a permanent part of their playbooks. Let’s take a couple of sectors you’ve mentioned a couple of times, Peter: education and life sciences. What are some of the most common positions you are helping employers in those two fields to fill?

Quigley: So in education, we’re the largest provider of substitute teachers in K–12. We also have a very significant presence in early childhood, so pre-K. We have a higher-education practice, where we source superintendents or deans, chancellors, for higher-ed universities and colleges, as well as providing custodial or maintenance staff, IT professionals. In sciences, it pretty much runs a gamut from a PhD all the way to a lab technician. We have contracts with the United States government. We’re working on the vaccine response and tracking. We also provide lab technicians that are working with major pharmaceutical and biotech companies on breakthrough drugs.

Fuller: And you’ll do anything—from provide somebody with that temporary substitute teacher for a week, right down to filling a position full time?

Quigley: Absolutely. We do both permanent and temporary, and we do temporary-to-permanent, which is a way a lot of companies like to acquire talent. It’s good for them, because they get to see the talent before they hire them on a permanent basis. It’s also good for the worker because they get to experience the environment they’re going to be asked to work in.

Fuller: Well, that brings us to a topic that’s been very much on people’s minds. It’s often referred to as the “Great Resignation,” but it seems have to be really a multivariate phenomenon with all sorts of different cross currents here. How do you see it, and how is it affecting the labor market in ways that affects Kelly’s operations?

Quigley: I think it’s really about a great reset as opposed to a Great Resignation. I do think we’re in the middle of, not necessarily a labor shortage, but a good-job shortage, where, in the pandemic, workers have become more discriminating about the jobs that they seek. It’s forcing employers to spend more time on their employee value proposition. What does their workplace look like? What does their workforce look like? What does their work style and work time look like? Our research indicates that the best employers and the ones that are able to attract and retain the best talent are the ones that spend as much time on the employee experience as they do on their customer experience. The employees today, they want flexible work. Of course, they want competitive wages and benefits, but that’s table stakes. They’re looking for an inclusive environment. They’re looking for career training. They’re looking for job stability. They’re looking for well-being programs. So today’s employer needs to understand that this Great Resignation is less about people leaving as much as it is people recalibrating what their work-life integration should be.

Fuller: How does hybrid work, do you think, play into all this, and what sort of long-term effect is it going to have in terms of addressing this good-job shortage that you refer to?

Quigley: Well, I think the hybrid model is one that supports a lot of what I just talked about. Flexibility, creating opportunities for mobility. I think we had customers, many customers, pre-pandemic, that insisted that all work was done in their brick-and-mortar [space]. It caused us challenges to recruit for them, because recruiting somebody to a small town in the Midwest, where they were headquartered, is a lot more difficult. But because of the pandemic, a lot of eyes have been open that jobs can be done remotely. And it’s less about the job location than it is about the job outcome. I think companies that embrace that level of flexibility will likely acquire more than their fair share of the best talent.

Fuller: A lot of companies have been, I think, rather quick on the draw to announce they’re going to do X or Y or Z, and then many of them seem to have found that, well, maybe it wasn’t as simple as a 0-1, “We’re going to be all remote,” or “We’re going to be all back to work” answer. What are you seeing across your account base? And how are you approaching it yourself as a CEO?

Quigley: Well, we’re seeing every flavor across our tens of thousands of customers, but I think the best companies are looking at this as an opportunity to reset their workplace and the work style that they create for their employees. The CEOs that I talk to about this, what I tell them is our legacy as CEOs is not going to be defined by the first 18 months of this pandemic or the first even two years of the pandemic. It’s going to be the next two years that the legacy’s going to be defined. What did we learn about the workforce and the workplace that we can now put to use to create a better environment for employees—and particularly with employees who, in this generation of millennials, have brought their consumer expectations to the workplace. So they expect that their experience, whether it’s on Amazon or Netflix, it should be similarly personalized at work. And that’s their expectation. I think the companies that we work with and talk to, we’re trying to create strategies and workforce plans that take that into account.

Fuller: So when you think about what the long-term impacts of all this are going to be, what do you think we know about the future of work, and what still remains to be understood? Can we start drawing out some truths you think that are going to survive Covid and become integral to the way we think about personnel?

Quigley: People looking at just the numbers are puzzled by the fact that we have so many job openings, and yet we still have 5 million, 7 million less people employed than we did pre-pandemic. One of the most significant reasons is that the education and skills and capabilities necessary for one job doesn’t immediately translate into another job. So the lack of attention that we’ve applied as an overall economy—and you can include in their government education, employers—to upskilling and re-skilling, and right-skilling has really come home to roost and will have to be dealt with in the post pandemic environment. I often ask clients who are struggling with talent shortages, just as a hypothetical, “Where do you think the workers are that are ... where are we going to find the workers to work on all these infrastructure projects that are coming down the pike? Finding people who are skilled trades people and creating and working on bridges and pipe fitters? People who are deploying broadband towers and equipment?” These are skilled positions, and somebody that was displaced in the leisure and hospitality environment aren’t immediately suited to fill one of those roles.

Fuller: Yep.

Quigley: It’s that mismatch that I think we have considerable work to do. I think it’s going to require not only private employers, but educational institutions and government agencies to collectively approach that. So that to me is one of the most significant outcomes or consequences of the pandemic.

Fuller: So what’s the role of Kelly in meeting that emerging demand you just described to us?

Quigley: Well, I think staffing providers, generally, including Kelly, but also employers and educational institutions can play a significant role in connecting the dots between what skills and capabilities are necessary and what today’s employers need. We have evidence all over the place that our educational institutions are producing students and graduates who are not skilled in the areas that our employers need, and we need to get together to connect those dots. At Kelly, by way of example, we’ve started something called the Kelly Certifications Institute, which is designed to work with employers, identify the skills they need, reverse-engineer the curriculum that is required, create some apprenticeships and some other paths to employment that then create an equation that will close the gap in a meaningful way. But it has to happen at scale, and it has to include not only staffing providers. The other thing, Joe, that a staffing provider can do is, in very short bursts, we can provide employees with new skills, new capabilities, new experiences. We do that very well. One of the challenges that Kelly and our customers—as well as, I think, the economy or labor markets in general—there is no uniform way of credentialing and creating basically a digital resume that a worker could carry with them to articulate what skills they have. Of course, they have a resume, but it’s still not as versatile as, I think, an electronic, potentially blockchain-supported digital resume that would afford and would allow workers to move from jobs to jobs—which would allow Kelly, as an example, to provide opportunities for more individuals to gain important skills in short bursts.

Fuller: Well, one of the true impediments to both upward mobility and labor-market fluidity in the U.S. has been the lack of a shared-skills ontology. It would be a steep price to have paid, but it would be a great after effect of Covid, if we were able to finally break the back of that problem and create these types of portable credentials that are acknowledged across employers, particularly if they’re endorsed by a company that sees lots of workers, sees where their skills deficits are, and can backfill those deficits at scale as a company like Kelly might be in a position to do. Let’s talk about automation for a second, both in terms of vetting candidates, bring them on board, measuring their productivity, but also automation in the sense of how it affects jobs in the future. Of course, there’s an awful lot of popular literature that says we’re heading for a future where automation, computing, and sensors and robots do more and more of all the work, and people are going to have to find something else to do. How are you thinking about that? Also, how does it affect the way you’re thinking about technology in Kelly’s future?

Quigley: Well, we see application for technology in our business, in the full stream of our operations. So whether it’s at the front end of how we face off against talent that we recruit, whether it’s how we match the talent with the requirements of a job, whether it’s how we accelerate the review of candidates for a particular job using advanced AI [artificial intelligence] algorithms to even predict which individuals are going to succeed in a job, to actually deploying technology with talent at our customers. I’ll give you an example. We have a pilot underway in which we would ordinarily provide seven production workers to a customer that would work on a particular product launch. The pilot actually has us bringing in a robot and two people to perform the same functions. One of the employees basically runs the production line. The robot is programmed by the other employee and is maintained by the other employee. That’s an example of the future, I believe, where we’re going to find the combination of talent and technology being a very potent combination for companies to become more efficient and to accelerate their production. We’re seeing the adoption of technology during the pandemic in our customers increase significantly. There is very high interest in understanding how Kelly has deployed robotic process automation in our back office in ways that allow us to not necessarily replace workers, but repurpose workers to work on higher-value work that they enjoy more. Our research indicates that, particularly among a group of workers that we call “momentum seekers,” it’s that connection of purpose with work that’s so critical. Technology will, of course, destroy a number of jobs, but it also will create a number of jobs. I’m an optimist when it comes to that, because I’m also a history major and a buff—that all of the sort of pessimistic prognostications from the past about how automation is going to replace employment as we know it, I think, is overstated it. I think we’re going to find more jobs, better jobs, more-fulfilling jobs created as a result of our thoughtful use of technology in the labor markets.

Fuller: Well, certainly the opportunity to create upward mobility for incumbent workers and decide to invest in their skillset on the basis of a personnel file, as opposed to playing the spot market for labor and going out there and trying to hire on a just-in-time basis, seems to be a response that companies are going to have to get more adept at implementing.

Quigley: Yeah, absolutely. I think that is likely to be an outcome, because companies have now come to appreciate that investing in existing talent is a less-costly proposition than having to rehire, rehire, rehire.

Fuller: Peter, I think you’re familiar, in passing at least, with some research we’ve published recently about hidden workers. They’re effectively screened out of the consideration set for employers because of attributes on their resume. It could be as simple as a lack of relevant skills, but it could be a continuity of employment gap. Our research shows about half of companies will automatically exclude a candidate who have that attribute from consideration for a middle-skills job. Do you see the aperture opening for those populations that have been on the fringes of the labor force—either stuck in part-time work and unable to get more hours or regularly unemployed? If so, what is it going to take to tear down some of those barriers, as employers do need to improve the quantity of talent they have, at least available for consideration, if not ultimately for hiring?

Quigley: I think the aperture is opening, Joe. This is something I’m very passionate about. I don’t think it’s opening as quickly as it needs to, particularly given the talent shortage. But apart from the fact that we don’t have enough workers, I believe that too many employment barriers exist that prevent people from finding access to meaningful work. You’ve mentioned a couple. I would add to that list background screens that automatically disqualified the 75 million Americans that have a blemish on their criminal record. Ninety-five percent of them, by the way, are nonviolent and likely non-relevant to a job. Outdated drug screening policies, four-year degree requirements, which may have made sense in 1980 and 1990, but in 2021, 2022 aren’t as relevant anymore. How a veteran who has served two tours of duty in Iraq and Afghanistan is not qualified when compared to a newly minted poly sci major. You mentioned the resume gap. Can you imagine how many people, particularly women, who are going to have a gap on their job record as a result of the pandemic. It’s extraordinary, and companies who are excluding those workers automatically are doing themselves a disservice. In my view, we have launched an initiative that is called “Equity at Work” that is intended to put a spotlight on these barriers and work with like-minded organizations to tear them down. “Kelly Discover” is a program that’s specifically intended to support finding employment for the 85 percent of college-age educated adults on the autism scale who are unemployed. We also have that program using and working with opportunity youth. These are individuals highly motivated, from the ages of 18 to 24, 25, who have never had a work experience. So assimilating into a work environment is not just show up and all of a sudden, you know how to do it. It requires some support and mentoring. It’s not just the right thing to do. It’s good business. Toyota, with Kelly’s help, put in place a second-chance hiring program, where we vetted more than a thousand applicants, 92 percent of which we found to be qualified to work at Toyota’s Georgetown production facility. Of those employees, hundreds were put on the job. And none of them have been terminated because of behavior related to their criminal record. And Toyota in the process has increased their labor pool by 20 percent, they’ve increased their diversity by almost 10 percent, and they’ve reduced their turnover by 70 percent, Joe, because second-chance workers are reliable, they’re thankful, and dependable. There are other companies that are now engaged in conversations with us that are taking a look at some of these barriers and trying to figure out a way to break them down.

Fuller: Well, that’s encouraging. Our research has consistently indicated, Peter, that companies strangely often don’t have a very accurate view of the entirety of the systems effects of choices they make like that. Our research, for example, indicated that workers without college degrees, but who worked in positions that had blended workforces of non–college-degree holders and college-degree holders, the significant majority of the time were viewed by employers as equally or more productive than the college-degree-holding peers, but also were more engaged in their work, turned over less often, and had more realistic income expectations.

Quigley: We have a manufacturing client in the Southeast that we went to visit, and they made a point of wanting to introduce us to their two most-productive employees in the entire plant—both deaf. With some skills training and some management training, we were able to secure work for these two individuals. To your point, they delivered day-in, day-out, highly reliable, and also productive. There are thousands of workers who want to come to work, who want to find a meaningful job. For many reasons, some of which companies can’t explain, we throw up these barriers to them.

Fuller: Well, I think it’s cause for hope that there’s going to be such a big supply-demand mismatch going forward. As you referred to earlier, Peter, the more innovative companies that get ahead of this curve and start thinking more creatively about it, and understanding the all-in economics, some of these trade-offs, are going to get a real competitive advantage.

Quigley: Our research indicates, Joe, that consumers are much more willing to buy from companies that have practices that support … whether it’s non-discriminatory hiring or reducing barriers to work. So it’s good business from many different perspectives, not only finding talent, but supporting a consumer base that’s more and more focused on what are you doing for all your stakeholders.

Fuller: For the community. Yeah, well I think that’s right. Also, there’s plenty of data that suggest incumbent workers feel motivated that the company is making such efforts. But to me, the ultimate litmus test is if you can demonstrate that there’s that hard-nosed business case, where you get those highly productive workers with great attendance records, with great engagement, and, by building, not an elaborate program, but engaging people who understand these hidden-workers populations and developing the type of customized approach to bring them into your workplace, in second chance, you can create a virtuous cycle, and good economics, good employment practice, good workforce.

Quigley: Yeah. I’m really encouraged, Joe, by the number of people that have joined the Second Chance Business Coalition. I do think it’s going to take leaders of corporations who are going to have to step up to make this happen.

Fuller: Peter, diversity was an objective on most companies’ minds prior to Covid. Then of course you had everything from the tragedy in Minneapolis, with the murder of George Floyd and the emergence of Black Lives Matter. What has to happen to get to a new level of performance in terms of diversity, inclusion, and what are you seeing people do that causes you to think that we might be making some progress?

Quigley: It is top of mind for all of our customers, and that’s really encouraging, because it potentially means that companies are going to not just talk about it, but actually do something about it. Our research found that a majority of companies recognize that the pandemic has disproportionately affected underrepresented groups. Unfortunately, our research also indicates that less than half have strategies for diversity, equity, inclusion beyond representation—perhaps a recruiting effort—and fewer than 20 percent have a strategy for their contingent workforce. But the good news is the survey also suggests that the best companies—those that are producing the greatest growth over a three-year period—are twice as likely to have a developed DE&I strategy. I think that will compel companies and leadership to engage and actually create executable DE&I plans that have some teeth.

Fuller: Well, Peter Quigley, president and CEO of Kelly Services, thanks for sharing all your insights about how work’s evolving during Covid and beyond. You sit in a seat that gives you a tremendous breadth of perspective on many of these issues.

Quigley: Thank you, Joe. It’s been fun talking to you, and I look forward to further conversations about the future of work.

Fuller: We hope you enjoy the Managing the Future of Work podcast. If you haven’t already, please subscribe and rate the show wherever you get your podcasts. You can find out more about the Managing the Future of Work Project at our website hbs.edu/managingthefutureofwork. While you’re there, sign up for our newsletter.