Just ask Zachary Misko, head of recruitment process outsourcing in Kelly Services’ HR outsourcing division.
What’s that? You didn’t realize the company once known best for its Kelly Girl ads had an RPO business?
That’s exactly the problem Misko and his staff faced at recruiting industry trade shows. Conference-goers would stroll through the exhibit hall, see the Kelly Services booth, assume it represented the company’s temporary staffing business and walk right by.
“They weren’t even stopping to ask why Kelly was there. They didn’t realize we had additional capacities,” Misko says.
Even though it ranked among the top 10 RPO providers worldwide, Kelly had an identity crisis.
There was too much at stake for things to stay that way. Kelly jumped into the U.S. RPO business by buying HRfirst in 2002, snapped up German-based Access AG in 2007 to get into Europe, and intended to keep growing. The division’s 500 recruiters worked in 27 countries, placing anywhere from 75 to 7,000 new hires annually for individual customers such as J&J, SAP, Hugo Boss and CNH, the agricultural equipment manufacturer, as well as providing related RPO management services.
But its U.S. and European operations still went by different names, which didn’t coordinate with the picture of a global company they wanted to paint for prospective Fortune 500 customers. Also in recent years, Kelly had bought or started contingent workforce, executive search and three other HR outsourcing and services businesses, each of which continued operating under their original name. While the 63-year-old Troy, Michigan, company’s combined HR outsourcing and services operation accounted for less than $200 million in 2007, a fraction of its $5 billion annual revenue, it was poised to play a bigger role and needed a name to match.
Against that backdrop, Kelly embarked on a rebranding campaign in early 2008. The challenge: playing up its established name while showing prospective customers the Kelly brand meant more than temporary staffing.
These days, it’s a situation faced by lots of HR outsourcing companies. In a field crowded with competitors that potential customers can’t always tell apart, differentiation is critical and a strong brand is a big part of that, says Brenna L. Garratt, CEO of the Delve Group, a New York branding and marketing boutique that has worked with HR outsourcing companies for more than a decade, including HRfirst before Kelly bought it.
“When we do this, we find something about the organization, a nuance, that’s less about their product or service and more about their heritage or the ethos of how they interact with clients that makes them special, and bring it to the forefront,” Garratt says.
For Kelly’s RPO and HR outsourcing operations, it meant building on the Kelly legacy. The company started by grouping its six HR outsourcing entities under one umbrella organization and renamed them all Kelly Outsourcing and Consulting Group, or KellyOCG. Without a lot of public fanfare, a team of internal marketers and outside consultants led by Todd Wheatland, KellyOCG’s Europe-based global marketing lead, spent most of 2008 putting KellyOCG’s new green logo on business cards, letterhead, advertisements, Web sites, corporate signage and trade show booths. The entire overhaul will take until September to complete.
The rebranding effort didn’t end with signs and stationery. To establish KellyOCG as an RPO industry leader, the company got more aggressive in arranging for Misko, the RPO global director, and other RPO executives to conduct webinars and speak at industry events.
“That’s an effort we didn’t put as much emphasis on previously,” Misko says.
Today, smart brand builders use webinars, conference talks and other narrow communications channels as well as broad ones like advertising to establish themselves as thought leaders, says Garratt. In Kelly’s case, they want audiences to conclude they are the nobody-ever-got-fired-for-choosing-IBM option, “so when companies that didn’t embrace outsourcing before are thinking about a safe pick, they’ll feel better going with Kelly,” she says.
Companies have to weigh the benefits of undertaking an extensive makeover against the costs, including the expense of telling the marketplace what they’re doing. In that light, it makes sense to draft off whatever name-brand recognition a company has in the marketplace because “there’s a societal memory about products, and it’s hard to establish mindshare,” Garratt says. And when it comes to Kelly, “They have a behemoth of a name to leverage,” she says.
As important as it was to attract new customers, the rebranding campaign is less an issue with existing ones, such as GE Healthcare, a GE division in Waukesha, Wisconsin, comprising eight health-related companies that Kelly’s RPO division has worked with for a decade. Kelly provides recruiting, sourcing and hiring services for GE Healthcare’s U.S. employees, approximately half its 46,000-person workforce.
Ultimately, a vendor’s name doesn’t matter as much as the results they deliver, says Steven Brown, head of GE Healthcare’s U.S. talent acquisition. “They could be called ABC Company and it wouldn’t make a difference.”
At the same time, Brown sympathizes with the confusion a famous brand can create for a company’s lesser-known enterprises. “It’s one thing we struggle with because people know GE but they don’t know GE Healthcare,” he says.
Kelly officials wouldn’t estimate how much the rebranding efforts cost, and with sales cycles that Misko says typically take three to 12 months to complete, it’s too soon to tell how successful the campaign will be.
But one early result shows promise. In October 2008, KellyOCG announced a partnership with IBM’s HR outsourcing business to jointly pursue global RPO deals. In their Advanced RPO joint venture, KellyOCG will provide in-country, client-side services and IBM back-end administration and transaction processing for stand-alone RPO contracts and the RPO portion of international multi-tower HRO contracts.
Being able to show IBM they were operating as a single global practice and not separate regional ones was important “because we’re going after global, multinational clients,” says Candy Lewandowski, the KellyOCG vice president overseeing the IBM partnership. “That’s a strategy none of the other staffing companies have. We’ve carved that out.”
Although the partners haven’t signed any deals yet, “We have a healthy sales pipeline,” Lewandowski says. “The sales cycles aren’t short. We’re actively hoping to close that first deal soon.”
New deals that result from the rebranding campaign would help bolster KellyOCG’s financial picture, which was considerably brighter before the limping economy sunk revenue and earnings over the past two quarters. In the 90 days ended March 29, KellyOCG lost $1.2 million on revenue of $48.7 million, compared with a $1.9 million profit on revenue of $51.8 million the prior year.
In 2008, revenue for the division grew 29 percent to $247 million, about 4.5 percent of Kelly Services’ overall revenue, up from 3.4 percent in 2007. According to company financial statements, 2008 profit margins in the RPO group were good, despite the economy’s negative effect on overall OCG profits, which were cut in half.
Back on the trade-show circuit, the rebranding campaign has had a visible effect. Now when convention-goers stroll past the new booth, “they’ll stop and say, ‘KellyOCG, what’s that? What do you do?’ ” Misko says. “It’s taken us a while to feel good about the place we’re in today. We’re satisfied that we’re getting people’s attention.”