Managing Your Footprint – Welcome to the New Summer Time HRO Dance

Many HR outsourcing providers today are looking for ways to carefully manage their service footprint.  Under economic pressure, and with limited tolerance for capital investments, they are seeking cost-effective and risk-managed ways to leverage their service strengths and geographic coverage. As a result, we are seeing a new round of provider dance partners making selective divestitures, partnerships and acquisitions.

The Back Step: In a few cases, providers are back-stepping from some services and countries to focus on core strengths and growth geographies.

•  For example, in Europe, Randstad continues to sell parts of its salary administration and payroll services in the Netherlands while planning to carry on delivering these services in other countries where it has better growth prospects.

Two to Tango: In more cases we are seeing partnerships and alliances to leverage complementary service delivery strengths with an overall expanded geographic footprint.

•  In May, General Physics and Baker Communications entered into an agreement to increase their partnering in offering global corporate training and learning services.

•  Alexander Mann Solutions (AMS) has been leading the alliance dance this summer. It and Xchanging just announced their strategic alliance to deliver end-to-end HR services. And just two week ago, AMS and The RightThing announced their partnership to cover and expand multinational RPO services.

Take the Lead: Swinging across the dance floor from alliances and strategic partnerships and moving on to joint ventures can culminate in acquisitions.

•  Hewitt Associates has acquired the remaining interest in BodeHewitt AG & Co KG – a German pensions and benefits specialist – from its joint venture partner Bayerische Hypo- und Vereinsbank AG (HVB), with the business becoming Hewitt’s German Retirement and Financial Management (RFM) consulting practice.

•  Trinet just completed its acquisition of Gevity, further expanding its PEO geographic footprint and ability cover both the small business and midmarket.

Thank Your Partner: A good turn around the dance floor can lead to more business opportunity.

•  Adding to its dance card, Alexander Mann Solutions has signed a five year agreement to use new HRO partner Xchanging’s procurement outsourcing services.

The HR service provider partnering activity we are seeing looks like positive strategic moves for providers and buyers alike. But actually making partnerships of any nature work requires a lot of nurturing over a long period of time. We’ll see which of the summer time dance partnerships lead to long-term relationships.

Linda Merritt, Research Director, HRO, NelsonHall

Explore posts in the same categories: hr outsourcing, hr outsourcing research, hro, HRO providers, hro research, nelsonhall, outsourcing alliances, outsourcing partnerships, outsourcing research

Tags: Alexander Mann Solutions, Baker Communications, General Physics, Gevity, Hewitt, hro acquisitions, hro alliances, HRO divestitures, hro partnerships, HRO providers, hro research, HRO service providers, Randstad, The RightThing, Trinet, Xchanging

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