Archive for the ‘benefits administration’ category
August 14, 2013

Amy L. Gurchensky, HRO Research Analyst, NelsonHall
Last week, I zeroed in on specific market activity within the payroll, learning and RPO service lines. This week, I’ll take a closer look at H1 2013 activity within benefits administration and MPHRO as well as provide some insights on what to expect in H2 2013 based on NelsonHall’s recent HRO Confidence Index.
Benefits Administration
Contract signings aside, there has been a plethora of activity within benefits administration in H1 2013, including:
- New offerings:
- Mercer launched a private benefits exchange, Mercer Marketplace
- Buck Consultants launched an automatic enrollment offering in the U.K.
- Secova launched a Coordination of Benefits (COB) audit offering to coordinate benefits with insurance carriers
- Acquisitions: Wageworks acquired Crosby Benefit Systems and Benefit Concepts to strengthen its H&W administration offering, including reimbursement account and COBRA administration
- Partnerships:
- Fidelity partnered with Extend Health, a Towers Watson company, to provide retiree healthcare services
- JLT Employee Benefits partnered with Vielife for health and wellbeing services in the U.K.
- New technologies:
- Xerox launched an account-based benefits portal, BenefitWallet, to assist with managing multiple health accounts on one platform, including HSAs, HRAs, FSAs, HIAs (health/wellness incentive accounts) and other specialized services
- Aon Hewitt launched an absence management tool, 360 Absence Solutions, to help clients manage absence-related costs, compliance risks, the administrative burden and lost productivity
- Educational resources:
- Mercer and ADP both launched websites to provide information on healthcare reform
- Ceridian launched an auto-enrollment knowledge center in the U.K.
MPHRO
In recent years, the MPHRO market has been relatively quiet in terms of contract announcements and H1 2013 was no exception. However, my last MPHRO research study, published in February 2013, revealed that the market is very much alive with new wins and contract renewals from all the major vendors, including IBM and Accenture. In fact, IBM recently won a new seven-year, multi-country MPHRO contract, which was bundled with F&A outsourcing services. Other wins include ADP and Marriott Vacations Worldwide for core HR, payroll, time & labor management and talent management covering ~9.2k employees.
Many vendors have been focused on their strategies for expansion, including Aon Hewitt with its acquisition of OmniPoint Workday Services. Although still early, NelsonHall expects ADP to make inroads in LATAM with its MPHRO services since it added RPO capabilities in this region from its acquisition of The RightThing and now expands its payroll footprint from the Payroll S.A. acquisition.
H2 2013
So what does the rest of the year have in store? NelsonHall’s recent HRO Confidence Index survey finds that overall expectations for HRO revenue growth remain at the same level as those reported for the last five quarters; with payroll leading followed by RPO. Top industry sectors for HRO services include healthcare, pharmaceuticals and high-tech. By geography, vendors have reported increased confidence for revenue growth in Central and Eastern Europe and Central and Latin America.
Needless to say, it will be interesting to see how the rest of the year unfolds for HRO.
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Categories: 2013 HRO Predictions, Accenture, Acquisitions, ADP, an ADP Company, Aon Hewitt, Automatic Enrollment, Benefits, benefits administration, Benefits Administration Buyers, benefits administration outsourcing, Buck Consultants, Business Process Outsourcing, Ceridian, COBRA, Contract Extensions, Coordination of Benefits (COB), EMEA, F&A outsourcing, H&W, Health and Wellbeing, healthcare, Healthcare Reform, Healthcare Services, hr outsourcing, hr outsourcing research, hro, HRO acquisitions, HRO Activity, HRO Competition, HRO Confidence Index, HRO contracts, HRO emerging trends, HRO Growth, HRO Innovation, HRO mergers, HRO provider alliances, HRO provider partnerships, HRO providers, hro research, HRO Services, HRO Vendors, HSA, LATAM, M&A, market analysis, Merger & Acquisition, MPHRO, Multi-Process HR Outsourcing, multi-process hro, multi-shore delivery, nelsonhall, New Contract Activity, New technologies, offshore hro, offshore outsourcing providers, offshore providers, outsourcing, outsourcing alliances, outsourcing partnerships, outsourcing research, partnerships, Payroll, recruitment process outsourcing, rpo, RPO 2.0, rpo contracts, RPO Offerings, RPO providers, rpo research, Talent, Talent Management, The RightThing, Towers Watson, U.K.
Tags: 360 Absence Solutions, absence management, Accenture, ADP, Aon Hewitt, automatic enrollment, Benefit Concepts, BenefitWallet, Crosby Benefit Systems, Educational resources, Europe, Extend Health, Fidelity, FSA, HIA, High-tech, HRA, human resources, IBM, JLT Employee Benefits, Marriott Vacations Worldwide, Mercer, Mercer Marketplace, nelsonhall, OmniPoint Workday Services, Payroll S.A., pharmaceuticals, private benefits exchange, recruitment process outsourcing, Secova, time & labor management, Vielife, WageWorks, Xerox
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August 7, 2013

Amy L. Gurchensky, HRO Research Analyst, NelsonHall
It’s hard to believe that H1 2013 is complete, which makes it an ideal time to recap highlights and trends from the HRO world this year.
Overall Activity
There was a healthy number of new contracts awarded across all HRO service lines in H1 2013. In addition, renewals and contract extensions signed were consistent with H1 2012. There was, however, an increase in activity with organizations changing their existing service provider, particularly within benefits administration and RPO.
For the last few years, attention has been on the mid-market (500-10k employees), among other things, as an area for growth within HRO. Quarter-over-quarter, mid-market activity has made strides relative to the large market. In fact, in H1 2013, the majority of activity reported was from the mid-market.
Beyond HRO, the number of HR software contracts signed globally was up substantially compared to H1 2012. For example, in the U.S., ADP was awarded a contract for its Vantage HCM platform, including HR, payroll, benefits and onboarding modules, by The Paradies Shops covering 4k employees. In the U.K., Ceridian gained traction with its automatic enrollment module with Asda for 175k employees and WH Smith for 16k employees.
Payroll
Despite being a mature service line, payroll outsourcing does not disappoint. The biggest news reported in H1 2013 would have to be ADP’s acquisition of Payroll S.A., which will expand its LATAM payroll capabilities to Chile, Argentina and Peru. ADP already had in-country services in Brazil, and had capabilities through GlobalView and Streamline to serve multinationals in other LATAM countries.
Other news within payroll includes Acrede opening an office in Singapore to expand its global payroll reach into Asia-Pacific. Growth opportunities in the region include Japan and South Asia-Pacific.
RPO
The RPO market continues to be a hot one to watch. Contracts were awarded in various countries, including the U.S., U.K. and China, and ~20% of contract activity in H1 2013 was from multi-country deals.
The level of M&A activity was consistent with H1 2012, but the level of RPO partnerships has dwindled. Nevertheless, RPO vendors were busy expanding service offerings and delivery capabilities, and launching new websites. Some examples include:
- Randstad Sourceright launching an RPO integrated assessment program
- Manpower U.S. launching a multi-channel delivery model
- Ochre House launching a COE to drive innovation
- Randstad Sourceright opening a shared services center in Budapest
- Hays launching a new mobile website
- AMN Healthcare launching a redesigned website.
Although technically within H2, it is timely to mention the Pinstripe and Ochre House merger.
Learning
After a rather long lull, the learning BPO market has shown many signs of improvement. New contracts include Raytheon and GM Korea for content development and training administration services, and delivery of sales and non-technical training.
GP continued its acquisition frenzy focused on strengthening and expanding its geographic footprint with Prospero Learning Solutions (Canada) and Lorien Engineering Solutions (U.K. and Poland). Not to mention Capita’s acquisition of KnowledgePool.
Stay tuned next week for more highlights and trends from H1 2013 that are specific to benefits administration and MPHRO. I’ll also share some insights on what to expect in H2 2013 based on NelsonHall’s recent HRO Confidence Index survey.
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Categories: ADP, Asia Pacific, Automatic Enrollment, Benefits, benefits administration, Benefits Administration Buyers, Benefits administration growth, benefits administration outsourcing, Business Process Outsourcing, Contract Extensions, Global payroll, HR, HR Administration, HR analytics, HR BPO, HR Consulting, hr outsourcing, HR outsourcing confidence index, hr outsourcing research, HR software, HR solutions, HR Systems, HR Tech, HR Technology, hr tools, hro, HRO acquisitions, HRO Activity, HRO Competition, HRO contracts, HRO emerging trends, HRO Growth, HRO Innovation, HRO mergers, HRO providers, hro research, HRO Service Provider, HRO Services, HRO Strategy, HRO Vendors, LATAM, lbpo, Learning BPO, M&A, Multi-Process HR Outsourcing, multi-process hro, multi-shore delivery, nelsonhall, New Contract Activity, Ochre House, offshore hro, offshore outsourcing providers, offshore providers, Onboarding, outsourced learning, outsourcing, outsourcing alliances, outsourcing partnerships, outsourcing research, partnerships, Payroll, payroll outsourcing, recruitment process outsourcing, Renewals, rpo, rpo contracts, RPO Offerings, RPO providers, rpo research
Tags: Acrede, ADP, AMN Healthcare, Asda, Capita, Ceridian, GlobalView, GM Korea, GP, Hays, KnowledgePool, Lorien Engineering Solutions, Manpower U.S., Paradies Shops, Payroll S.A., Prospero Learning Solutions, Randstad Sourceright, Raytheon, recruitment process outsourcing, rpo, Streamline, Vantage HCM, WH Smith
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June 20, 2013

Linda Merritt, HRO Research Analyst, NelsonHall
The recent passing of long-term U.S. Senator Frank Lautenberg reminds us of his early role in the formation of what became ADP, a founding member of HR outsourcing. In the early 1950s he was engaged in selling insurance and sold a policy to two young New Jersey businessmen, Henry and Joseph Taub. The Taub’s were pioneering a then new concept; payroll outsourcing. The brothers knew payroll processing and Lautenberg knew sales and marketing. Lautenberg took a risk and joined the Taub brothers and together they created a new industry.
Establish Operating Principles
By the time the company incorporated in 1961 the three leaders established principles that still guide the company some 60 years later. Following are a few of the principles they put in place.
Focus on Business Markets that Offer Significant Growth Opportunities
ADP has always pursued growth through new market opportunities, both by expanding it service lines and by entering new geographies. Much of the early growth was through acquisitions, as well as organic growth. Lautenberg retired as CEO from ADP in 1982 having made over 100 acquisitions!
Over time, ADP became a global player. An early acquisition was GSI, a large payroll and HR services company in Europe. The latest 2013 acquisition is Payroll S.A. to expand LATAM payroll capabilities to Chile, Argentina, and Peru. In the last few years major acquisitions included Workscape (benefits), The RightThing (RPO) and SHPS (benefits).
Embrace Technological Change to Enhance Product and Service Offerings
By the early 1960s ADP had moved from manual operations to the pre-computer punch cards and on to leasing its first computer: an IBM 1401 mainframe. That willingness to continue to embrace the new is seen in ADP’s successful launch of a series of cloud-based SaaS HR technology and BPO service platforms, including Workforce Now (1k-20K employees), Vantage HCM (50-3k employees), and GlobalView for multi-nationals. Together, the three services support more than 40k clients.
The company has also launched extensive mobility options, including RUN powered by ADP for small business mobile payroll and ADP Mobile Solutions for access to a broad range of information and transactions spanning time and attendance to benefits and pay cards.
Attract and Retain Motivated and Talented People
ADP has grown into a $10bn global outsourcing business with one of only four remaining AAA credit ratings in the U.S. With ~570k clients across 125 countries, we know customers support its line-up of services and proprietary developed technologies. What about people? A few recent awards tell the story:
- Ranked second on Fortune’s 2012 list of America’s Most Admired Companies in Financial Data Service
- Ranked in the Top 50 on IDG’s Computerworld 2012 list of the 100 Best Places to Work in Information Technology (IT)
- Named to the 2012 Working Mother 100 Best Companies, for the third time.
We therefore need to ask the question of prospective purchasers: does your prospective or current HRO service provider have long-term guiding principles and can you see evidence of them in action? Because ADP does.
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Categories: Acquisitions, ADP, an ADP Company, benefits administration, Benefits Administration Buyers, Benefits administration growth, benefits administration outsourcing, Business Process Outsourcing, Cloud, Emerging Market, Employee Engagement, Global Targeting, Global Workforce, Hiring, HR, HR Administration, HR BPO, HR Consulting, hr outsourcing, hr outsourcing research, HR SaaS, HR shared Services, HR Systems, HR Tech, HR Technology, hr tools, hro, HRO contracts, HRO dashboards, HRO Governance, HRO Growth, HRO Innovation, HRO Platform, HRO Pricing, HRO Proof Points, HRO providers, hro research, HRO Service Provider, HRO Services, HRO Staffing, HRO Strategy, HRO Vendors, Human Capital Management, IT Recruiting, Keeping Jobs in the U.S., mobile recruiting, Mobility, Mobility Outsourcing, multi-shore delivery, nelsonhall, offshore hro, offshore outsourcing providers, offshore providers, outsourcing, Outsourcing Recruitment, outsourcing research, partnerships, payroll outsourcing, performance improvement, performance management, Platform-based BPO, Professional Employer Organization, public sector HRO, recruiting services, Recruiting Technology, recruitment process outsourcing, RPO Offerings, RPO providers, rpo research, SaaS, skilled labor, Skills Gap, Smarter Workforce, Talent, Talent gaps, Talent Management, Talent Shortage, Targeting Payroll BPO, Targeting Payroll BPO market analysis, The RightThing, work-life balance, Workforce administration, Workforce Investment, Workforce Management, Workforce Productivity, workforce retention, Workforce Software, Workforce Solutions, Workforce Talent
Tags: AAA credit rating, ADP Mobile Solutions, America’s Most Admired Companies in Financial Data Service, benefits, Best Places to Work in Information Technology, Business Markets, Computerworld, Financial Data Service, Fortune, Growth Opportunities, GSI, Henry Taub, HR services, HR technology, IDG, Joseph Taub, LATAM, Operating Principles, organic growth, pay cards, payroll processing, Payroll S.A., principles, rpo, RUN, sales and marketing, SHPS, Technological Change, time and attendance, Vantage HCM, Workforce Now, Working Mother 100 Best Companies, Workscape
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May 9, 2013

Linda Merritt, HRO Research Analyst, NelsonHall
Benefits administration is producing a bountiful crop of new and expanding services. Recent contract award announcements included ADP, Aon Hewitt, Ceridian, Equiniti, Fidelity, Mass Mutual and Merrill Lynch. A wide range of industry segments were represented: banking; food; education; non-profits; hi-tech; pharmaceuticals; and travel. This week, I have taken a look at some of the newer benefit outsourcing “crops” that are starting to grow nicely.
Managed Retirement Accounts
Fidelity’s relatively new managed retirement account offering – Fidelity Portfolio Advisory Service at Work – was designed to address the low rate of adequate preparation for retirement by many employees by combining Fidelity Investments plan sponsor customized portfolio active management services with auto enrollment and available advisory services to help bridge the gap in achieving retirement goals from a defined contribution plan. The service grew in both participants and assets by 50% in 2012. Already in 2013, another 135 new clients have been added, bringing the total to more than 1,800 plan sponsors.
- Fidelity awarded a contract for Portfolio Advisory Service at Work by ADM.
Health and Wellness
ADP’s Vitality wellness solution supports employers with between 50 and 1,000 employees manage rising healthcare costs and also reduce employee absenteeism. Vitality’s incentive-based program includes an interactive wellness portal, health risk assessments, biometric screenings and personalized wellness plans with recommended goals and activities. It integrates with social networking sites, mobile applications and fitness technologies; and when employees achieve planned goals, they earn points towards lowering their health plan contributions. The service is also integrated with ADP’s payroll services.
- ADP awarded a contract by Jackson Companies for ADP Vitality services.
Benefits Bouquet Bundles
HRO buyers want multiple related services from one vendor under one contract; and health and wellness lends itself to packaging separate services into bundles. Ceridian’s LifeWorks.com combines EAP, work-life, and wellness services into one program with its own portal and mobile access. Also available is Health Coaching – a program for high-risk employees that provides access to comprehensive health assessments and personalized guidance programs – and Client Value Dashboard – included for employers to monitor reports usage data and ROI information.
- Ball State University chooses Ceridian’s LifeWorks.com
Private Employer Exchanges
Mercer’s Marketplace allows employers to improve management of their benefits spending and administrative responsibilities for active employees. Employers determine how much to contribute toward the cost of their benefits program and can select from a range of insured and self-funded products and providers. The platform includes full benefits outsourcing and provides employees with call center and online decision support.
- Mercer recently announced names of 10 of its 20 national, regional and state carriers that have joined Mercer Marketplace for providing core medical and voluntary benefits.
A good garden has a variety of plants. Some base crops are evergreen like benefits enrollment and management services, while others are changed out to meet growing market demand. Benefits HRO: how does your garden grow? Very well thank you.
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Categories: ADP, Aon Hewitt, BAO, benefits administration, Benefits Administration Buyers, Benefits administration growth, benefits administration outsourcing, Benefits Package, Ceridian, Customer Service, Decision Support Tools, Employee Administration, Employee Assistance Programs, Employee Benefit, Employee Health Care, Equiniti, Fidelity Investments, health and welfare administration, healthcare, hr outsourcing, hr outsourcing research, HR Systems, hr tools, hro, HRO Activity, HRO dashboards, HRO emerging trends, HRO providers, hro research, HRO Services, HRO Strategy, HRO Vendors, Lifestyle Benefits, Mass Mutual, Merrill Lynch, nelsonhall, offshore hro, outsourcing, outsourcing research, Workforce administration, Workforce Investment, Workforce Productivity, workforce retention, Workforce Software, Workforce Solutions
Tags: Aon Hewitt, Banking, Ceridian, education, Fidelity Investments, food, hi-tech, human resources, Merrill Lynch, nelsonhall, non-profits, pharmaceuticals, travel
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August 23, 2012

Amy L. Gurchensky, HRO Research Analyst, NelsonHall
Part 1 of my mid-year benefits administration update covered several of the largest service providers, typically engaged in TBO services. Part 2 takes a closer look at TRO providers and updates from H&W vendors.
Fidelity Investments: Although it is a private corporation, from time to time Fidelity announces some of its success. H1 2012 was the company’s strongest half sales period in the last five years. It added 838 new DC administration clients, which will add ~522k participants to the ~15.7m it is currently serving. Fidelity has made substantial investments to strengthen its offering that will likely continue to fuel its success.
T. Rowe Price: While not as large as Fidelity, T. Rowe’s Administrative segment continues to report a steady growth rate of 3%. It prides itself on a long tenure rate with its clients and has plans to keep its offering competitive by introducing technological enhancements such as the T. Rowe Price Personal App for individuals and participants in employer-sponsored retirement plans.
JLT: Across the pond, JLT’s Employee Benefits segment, which includes revenues from consulting, outsourcing, and systems / technology, had a 5% growth rate in H1 2012. BenPal, its online integrated platform, is helping the company expand its benefits business internationally, which is likely to continue to have a positive effect on its bottom line.
Benefits providers in the U.K., the second largest benefits administration market behind the U.S. according to the 2012 Targeting Benefits Administration market analysis report, should also enjoy better than average growth due to new opportunities as a result of the automatic enrollment requirement of the Pensions Act of 2008 as well as opportunities in the public sector as budget concerns open doors to outsourcing assistance.
WageWorks: Newly public WageWorks provides a look into the high-technology SaaS H&W specialty services market of consumer-directed accounts including health (i.e., HRA, FSA, and HSA), commuter, and other employee spending accounts. Total revenues increased 29% y-o-y for Q2; its healthcare segment was up 21%. This year, it added US Airways as a client, expanded its contract with GE, and signed a channel partner agreement with Aflac that will add ~5k FSA clients and ~100k participants. It also entered into a reseller agreement with Aflac, which will continue to boost revenues beyond 2012.
Empyrean Benefit Solutions: Another private company touting its success in the H&W market is Empyrean, which has been offering services since 2007. It has set a record with year-to-date new client wins in H1 2012, adding 10 large market clients. The company is expecting 2012 revenues to increase 40% y-o-y.
Service providers who are slightly behind growth targets for 2012 or those who just want to perform better are prepping to make sure 2013 is a success. For some, this means focusing on health insurance exchanges or launching health and wellness offerings, and for others, it’s about enhancing existing offering with technology improvements and educational initiatives.
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Categories: benefits administration, benefits administration outsourcing, H1 2012, hr outsourcing, hr outsourcing research, hro, HRO providers, hro research
Tags: Administrative segment, Aflac, automatic enrollment requirement, benefits administration, BenPal, consumer-directed accounts, DC administration, educational initiatives, Employee Benefits segment, employee spending accounts, Empyrean Benefit Solutions, Fidelity Investments, FSA, GE, H&W, health & welfare, health and wellness offerings, health insurance exchanges, HRA, HSA, JLT, Pensions Act of 2008, public sector, SaaS H&W, T. Rowe Price, T. Rowe Price Personal App, Targeting Benefits Administration, TBO services, technology improvements, total benefits outsourcing, total retirement outsourcing, TRO, US Airways, WageWorks
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August 21, 2012

Amy L. Gurchensky, HRO Research Analyst, NelsonHall
Earlier this year, I wrote a two part blog about how the benefits administration market was poised for a good year. Part 1 highlighted Q1 earnings results and part 2 focused on other signs indicating success such as acquisitions, hiring, and surveys.
Halfway through the year, signs are still indicating that 2012 will be a solid year for many benefits administration service providers.
Aon Hewitt: For Q2, its Outsourcing segment reported organic revenue growth for the third consecutive quarter. In fact, the 6% reported was the company’s highest organic revenue growth rate for Outsourcing in several years. While Outsourcing revenues consist of more than just benefits administration, much of its growth was for benefits-related point services such as dependent eligibility audits. Its active employee exchange is set to be launched in Q4, which will begin to realize revenues in 2013.
Towers Watson: Towers Watson’s Benefits segment has been consist with positive organic revenue growth beyond the last four quarters. It’s Technology and Administrative Solutions segment revenues grew mid-single digits for the period ending June 30th and its pipeline is very healthy. The company’s Exchange Solutions segment, which was created after the acquisition of Extend Health, has had strong sales with a record number of participants enrolling, exceeding the 30% previously forecasted.
Mercer: Organic revenues for Mercer’s Outsourcing segment had another positive quarter, but were lower than reported in Q1. The suite of health care exchanges it launched earlier this year, which includes a retiree medical exchange, is expected to have ~500,000 employees enrolled across all three exchanges in 2013.
Morneau Shepell: Canadian-headquartered Morneau Shepell has reported double-digit revenue growth for the last four consecutive quarters. In Q2, its pension and benefits outsourcing segment, which makes up ~25% of its revenues, had the largest contribution along with its health management business. Its growth is from new client wins, and its acquisition of SBC Systems has led to new business in the U.S.
According to the NelsonHall HR Outsourcing Market Forecast: 2012 – 2016, the projected growth rate for the benefits administration service line is modest compared to areas still experiencing rapid growth like RPO. Since benefits administration is the largest revenue generator in HRO, even moderate single-digit growth will add billions more to its total.
Later this week, look for more benefits administration mid-year updates from TRO and H&W service providers in Part 2.
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Categories: benefits administration, Benefits administration growth, benefits administration outsourcing, financial results, hr outsourcing, hr outsourcing research, hro, HRO Activity
Tags: active employee exchange, Aon Hewitt, benefits administration market, benefits administration service providers, Benefits segment, benefits-related point services, Dependent eligibility audits, earnings results, Exchange Solutions segment, Extend Health, H&W, H1 update, health management business, Mercer, Morneau Shepell, NelsonHall HR Outsourcing Market Forecast: 2012 – 2016, outsourcing segment, pension and benefits outsourcing segment, retiree medical exchange, rpo, SBC Systems, suite of health care exchanges, Technology and Administrative Solutions segment, Towers Watson, TRO
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August 15, 2012

Linda Merritt, HRO Research Analyst, NelsonHall
There was a good amount of announced HRO contract awards of many sizes and services in the first half of 2012, especially in the large market. A nice volume of new work coming online will provide future revenue support for HRO service providers, where earnings have recently been lower than in 2011.
Learning: finally announced some major deals including:
- Capita Workplace Services: awarded a competitive win for a £250m contract by the Cabinet Office to manage civil service training services in the U.K.
- Serco: won awards with the Army in both the U.K. and the U.S.; it won a scope extension valued at $38m by the U.S. Army and a £55m training contract by the British Army
- Genpact: won a learning services contract by Johnson Controls, extending its record of recent learning wins; last year, it won a 7 year MPHRO contract with Nissan that included learning and it also won a 5 year content development contract by JobSkills in India.
MPHRO: activity was spread around nicely with ADP, Aon Hewitt, NorthgateArinso, and Logica all bringing in MPHRO contracts. One notable deal was IBM’s multi-tower BPO and IT deal with Cemex valued at $1bn; it includes finance and accounting BPO, HR BPO, IT infrastructure management, application development, and maintenance.
RPO: continued to see a high volume of new contracts spread across many vendors. There were also two of the largest awards ever in RPO:
- ManpowerGroup: awarded a $400m five year contract extension with the Australian Defense Force, continuing a relationship that started in 2003
- Capita: won a £440m 10 year recruiting partnership contract by the British Army; it will also deliver supporting technology for the Royal Navy and the Royal Air Force, partnering with advertising agency JWT for recruitment marketing and with Kenexa for assessment and recruitment technology.
Benefits administration: contract awards were announced by Aon Hewitt, Empyrean, HP, and Xafinity Paymaster. Fidelity Investments reported the highest volume with DC contracts adding 522k new participants to its base of over 15m participants served. It also made major renewals and brought in new competitive wins. This is Fidelity’s strongest first half sales period in the last five years.
Payroll: deals in the U.K. led the way with awards going to Ceridian, Equiniti ICS, Liberata, and Mouchel. ADP won a multi-country contract from HP and will implement its GlobalView for payroll and Enterprise eTIME system for time and labor management for ~130,000 employees across 40 countries in Asia Pacific (excluding India), Europe, and the Americas (excluding U.S.) over the next five years.
With pipelines still healthy, the second half of 2012 should bring in a year of solid HRO growth and results. Congratulations to all!
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Categories: benefits administration, hr outsourcing, hr outsourcing research, hro, HRO Activity, HRO contracts, HRO providers, hro research, HRO Vendors, lbpo, MPHRO, New Contract Activity, payroll outsourcing, recruitment process outsourcing
Tags: 1H 2012, ADP, Aon Hewitt, assessment and recruitment technology, Australian Defense Force, benefits administration, British Army, Cabinet Office, Capita, Capita Workplace Services, Cemex, Ceridian, DC contracts, Empyrean, Enterprise eTIME, Equiniti ICS, Fidelity Investments, Genpact, GlobalView, HP, HR BPO, HRO contracts, IBM, JobSkills, Johnson Controls, JWT, Kenexa, learning outsourcing, Liberata, Logica, ManpowerGroup, Mouchel, MPHRO, multi-country payroll, multi-tower BPO, Nissan, NorthgateArinso, payroll, payroll outsourcing, recruitment marketing, Royal Air Force, Royal Navy, rpo, Serco, U.S. Army, Xafinity Paymaster
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August 8, 2012

Linda Merritt, HRO Research Analyst, NelsonHall
What HRO clients want falls into several buyer profiles based on familiarity with outsourcing and organization maturity. The NelsonHall Targeting Benefits Administration (BA) market analysis was published earlier this summer by Amy Gurchensky, and I noticed Amy included differences in client decision drivers by whether they were new to outsourcing or were already experienced in outsourcing. The concept crosses all types of HRO services and matches my running conversations with service providers. Let’s take a look at the following three buyer profiles through the lens of BA:
- Standard buyers
- Experienced buyers
- Progressive buyers.
Standard buyers: otherwise known as first time outsourcers are looking for reduced operating costs, better compliance with regulations, a way to transfer or minimize risk, updated technology and best practices, and improved participant communications channels. Employee and manager self-service and reducing HR administrative burdens are also popular drivers in the initial decision to outsource.
Experienced buyers: otherwise known as second generation outsourcers already have the basics in place and may be ready to broaden the scope of services, obtain more flexible technology, or increase participation in process streamlining to enhance efficiency and improve participant engagement. Changes may include adding new BA services or even consolidating vendors, but it can also include the decision to change to another vendor completely. Cost is still the number one concern, so contract renewals will not be a slam dunk. Providers who are on the ball with changing client needs and increased sophistication should be ready for thorough discussions on price, service, and value.
Progressive buyers: or sophisticated buyers may be ready to use the firm foundation they have built with their outsourcer to create the greatest possible business impact. In BA, this may include total benefits outsourcing where either pensions or retirement plan services are combined with health and welfare services under one vendor to:
- Lower total costs
- Simplify vendor management
- Integrate technologies across the services
- Improve the participant experience.
This is the time to bring out the most sophisticated offerings and analytics and focus on business value; leverage the value of benefits in employee attraction and retention; and optimize total program cost. Once again, existing BA vendors will be vulnerable to pricing concerns and client perceptions about the provider’s top-end capabilities and client retention will remain at risk.
As HRO matures and more clients gain experience in managing outsourced services, expect to see client needs change over time. Service providers can and do quickly tell which HRO profile a new prospect falls into by the language used, initial discussions on services, and outsourcing objectives, etc. It can be a bit harder to see when an existing client, even one satisfied with day-to-day services, is moving from one buyer profile to another. For clients new to BA, if you intend or even just hope to move up to the sophisticated buyer level, consider if the vendor who meets your initial needs will also meet your needs as your organization matures.
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Categories: benefits administration, Benefits Administration Buyers, benefits administration outsourcing, hr outsourcing, hr outsourcing research, hro, hro research, nelsonhall
Tags: Analytics, attraction and retention, Communication Channels, compliance, employee self-service, Experienced buyers, first time outsourcers, flexible technology, health and welfare, HR administrative burdens, HRO buyer profiles, manager self-service, Outsourcing, pensions, progressive buyers, reduced operating costs, retirement plan, risk mitigation, second generation buyers, second generation outsourcers, self-service, sophisticated buyers, Standard buyers, Targeting Benefits Administration, total benefits outsourcing, Vendor Consolidation
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June 29, 2012

By Amy L. Gurchensky, HRO Research Analyst, NelsonHall
It was pandemonium after the United States Supreme Court announced its ruling upholding the Patient Protection and Affordable Care Act (PPACA). The outstanding decision left so many in a holding pattern pending the constitutionality of the act.
Now that the decision is more firmly settled for the time being (primarily pending the November presidential election), U.S. states and organizations will have to take more definitive steps in securing exchanges and evaluating whether to offer health insurance plans or pay the tax penalty.
In fact, the state of Florida, via Florida Health Choices, set the wheels in motion earlier this week ahead of the ruling when it awarded a $68m contract to Xerox to administer a health insurance exchange for nine years. Services include:
- A web portal and online plan selection tool
- Eligibility determination and enrollment management services
- Customer contact center services.
Other states that have delayed taking action are still expected to meet the law’s timelines. The same is true for employers that have yet to make employee healthcare decisions that take the PPACA requirements into consideration. Watch for a spate of webinars by benefits service providers to remind all of us of the changes still to come in 2014 through 2018.
Regardless of today’s decision, HRO and particularly benefits administration service providers have been sitting in a sweet spot. Vendor interviews for NelsonHall’s recently published “Targeting Benefits Administration” market analysis revealed that business has been going on as usual with many employers turning to benefits administration vendors to implement services that are focused on controlling the cost of rising health care such as:
- Dependent eligibility audits to remove ineligible dependents from plans
- Wellness programs
- Improving absence management
- Switching to high-deductible health plans with associated health savings accounts.
The published report explores the current state of benefits administration as well as the future market and its growth over the next five years by geography and service line including:
- H&W administration
- Reimbursement administration
- Leave of absence administration
- COBRA administration
- Flexible benefits administration
- DC administration
- DB administration.
The analysis also looks beyond legislative implications in the U.S. and new offerings that have emerged such as health insurance exchanges to explore the automatic enrollment requirement in the U.K.
The greater unresolved issue at hand, however, is how to control the rising cost of health care that is already arguably unsustainable as evidenced by the more than 30m Americans currently without insurance.
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Categories: BAO, benefits administration, benefits administration outsourcing, health and welfare administration, Health Care Exchange, Healthcare Reform, hr outsourcing, Patient Protection and Affordable Care Act, PPACA
Tags: absence management, automatic enrollment requirement, benefits administration, benefits administration market analysis, benefits webinars, COBRA administration, cost of rising health care, DB administration, DC administration, Dependent eligibility audits, employee healthcare decisions, exchanges, flexible benefits administration, Florida Health Choices, H&W administration, health insurance exchanges, Health Savings Accounts (HSAs) CDHCs, high-deductible health plans, hro, leave of absence administration, nelsonhall, PPACA, reimbursement administration, State of Florida, tax penalty, United States Supreme Court, wellness programs, Xerox
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May 31, 2012
As we near the halfway point, 2012 is going well for HRO. As support, here are choice tidbits from our HRO news coverage and analysis.
First quarter revenues were solid for most vendors. RPO and PEO led the way with continued strong growth in the mid-to-high teens even as new job growth has stalled. Clients are increasingly using HRO services to help manage and balance workforce talent needs. Lower but steady mid-single digit growth is rolling along for benefits and payroll in the traditional HRO service areas.
There was plenty of new business to go around by service line, vendor, geography, and in both the private and public sectors. There was even a very nice smattering of large deals with TCVs in the hundreds of millions!
Logica was awarded a 6-year multi-process HRO contract by BAE Systems to support its 33,000 U.K. employees. Included is implementation and management of a single-tenant, hosted Oracle HR platform, along with payroll, and adminsitrative services in support of talent management functions including recruiting and learning. This is Logica’s second significant sized multi-process HRO win in six months. This is a good indicator of its success as a major preferred partner of Oracle for HRO in Europe.
Speaking of Europe, HP has been awarded a major 15-year multi-process HRO contract by Italian financial services firm UniCredit Business Integrated Solutions SCpA. A major driver for this deal was the need for a platform to support globally standardized HR and payroll processes across the countries in scope (Italy, Austria, plus a third country), serving ~98,000 employees. The HRO services in scope include payroll, time and attendance, workforce administration, learning and development administration, mobility, and ex-pat services.
The U.K. was the hottest area for the public sector. These deals are long wave sales with lots of competition, and there were even incumbent upsets. The services are naturally very important, but the promised cost advantages must be delivered. Lots of hard work and strong partnerships will be needed by the client organizations and the vendors to ensure success.
- Capita was awarded a £250m contract by the Cabinet Office to exclusively manage the Civil Service’s training services. It will both directly deliver training and manage a competitive network of other training suppliers.
- Capita was awarded a £440m contract by the British Army for recruiting services. The Recruitment Partnering Project contract is for 10 years and Capita will also deliver supporting technology for the Royal Navy and the Royal Air Force. It will partner with Kenexa for assessment and recruiting technology.
- Almost at the finish line is CSC as it has been selected as preferred bidder for a £400m, 7-year contract by the MoD to provide pay and pensions administration services to the Service Personnel and Veterans Agency (SPVA) for the U.K. Armed Forces.
Let’s all hope the rest of the year keeps HRO growing and rolling along!
Linda Merritt, HRO Research Analyst, NelsonHall
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Categories: benefits administration, financial results, hr outsourcing, hr outsourcing research, hro, HRO providers, HRO Services, learning outsourcing, Mobility, multi-process hro, nelsonhall, payroll outsourcing, PEO, recruitment process outsourcing, Total Contract Value, Workforce administration, Workforce Talent
Tags: benefits administration, British Army, CabinetOffice, Capita, CSC, HP, HR, hr outsourcing, hr outsourcing research, hro, HRO News, HRO providers, hro research, HRO services, Kenexa, learning outsourcing, mobility, MoD, MPHRO, nelsonhall, payroll outsourcing, pension administration, PEO, Q1 2012 Results, Royal Air Force, Royal Navy, rpo, TCV, UniCredit Business Integrated Solutions, workforce administration
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