Highlights and Trends in the HRO Market for H1 2013: Part 2

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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Highlights and Trends in the HRO Market for H1 2013: Part 1

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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Mercer on the Move

Linda Merritt, HRO Research Analyst, NelsonHall

This week I attended Mercer’s always well managed and informative analyst forum in Boston, MA. The meeting was focused on the talent consulting line of business.

Talent Management on the Rise

Mercer research indicates that human capital issues are a top CEO concern and managing talent is becoming a board of directors’ issue, moving beyond the traditional CEO succession planning and compensation to overall talent and workforce planning. The new Mercer Talent Barometer Survey, which was introduced at the 2013 World Economic Forum, reports that 60% of the 1,200 global companies surveyed are investing more in talent, but only 30% feel that their workforce plans are highly effective.

The business of talent has become both exciting and disruptive, with possible new entrants, globalization, media, innovations, and opportunities. (Talk about new entrants, eHarmony is considering getting into the talent matching game!)

With a possibility of double-digit growth, the talent group looked at how to grow across the talent value chain by expanding its services, tools and technology offerings for talent, rewards, and communications to increase growth and leverage Mercer’s depth of experience and capabilities.

The answer will become apparent over the next few months as more packaged solutions are launched that combine consulting, information, and technology to meet the needs of clients that want a less-customized consulting approach with “off-the-shelf” packaged and reusable services and tools.

Workforce Planning Versus HR Analytics

Some elements that will be leveraged are already mature and solid revenue producers. Surveys, benchmarks, and analytics for compensation/total rewards and job structures are a more than $200m line of business. Globalization of the revenues is already well on its way, with about equal distribution from North America, Europe, and emerging markets across 57 countries.

Instead of focusing on HR analytics, Mercer is emphasizing data acquisition and integration, data modeling, as well as data visualization as it applies to a wide range of workforce and data that drives business results. This may mean a consulting and outsourcing services engagement, it may mean workshops and training, or self-service use of integrated SaaS technology platforms with one or more Mercer products.

Think Big, Start Small, Move Fast

There are a lot of moving parts in Mercer’s strategy to create an integrated talent solutions portfolio.

It is brought together under the go-to-market Talent Impact label that includes new and existing products and services to forecast, engage, mobilize, reward and assess talent. Behind the scenes Mercer will be streamlining its own architecture into fewer and more integrated technology platforms to support the new offerings.

There is a lot to be done in a short time, but that is in alignment with the “think big, start small, and move fast” philosophy of Orlando Ashford, senior partner and president of Mercer’s talent business. Mercer is on the move!

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Benefits Administration Poised for a Good Year: Part 2

Earlier this week, I highlighted revenue growth reported by benefits administration service providers. In addition to the positive earnings reported, there are other signs indicating that 2012 will be good to benefits administration including acquisitions, hiring, and surveys.

There have been a few strategic acquisitions that will boost benefits administration revenues for vendors this year. For example, ADP’s benefits administration business will see a nice increase from SHPS, which had annualized revenues of ~$80m. Morneau Shepell’s acquisition of SBC Systems Company will modestly increase its revenues, and more importantly will strengthen the company’s presence in the U.S. Finally and most recently announced is Towers Watson’s acquisition of Extend Health, which will enhance its benefits administration offering by adding exchange services for retirees.

Another positive sign of expected future growth is the hiring of personnel. Towers Watson announced that it will be hiring employees within all of its segments. The benefits segment, specifically, will get an additional 172 employees, 60 of which will be for technology & administration solutions (TAS).

Finally, regardless of the constitutionality of the PPACA, benefits administration will likely flourish as compliance becomes increasingly complex as new regulations are issued or as older ones are amended for other federal laws such as COBRA, HIPAA, FMLA, etc.

A recent study by ADP cites that health care reform and compliance complexity are expected to lead to more benefits administration outsourcing. The survey, which included input from 504 HR and benefits decision makers in the U.S., found that ensuring compliance is one of the top reasons cited for outsourcing benefits administration.

In a recent article, Mercer is also advising employers to act to ensure compliance and to implement cost-control strategies now regardless of health care reform. It recommends the following, which are all dollar signs for benefits administration service providers:

• Managing the cost of dependent coverage, which will strengthen demand for dependent eligibility audits and verifications
• Shifting to CDHPs, which will lead to an increase for reimbursement account administration services including FSAs, HSAs, and HRAs
• Offering cost-competitive health coverage, which will boost demand for private health care exchanges for both active and retired employees
• Encouraging a healthier workforce, which will lead to the implementation of wellness programs (i.e., health assessments, biometric screenings, etc.).

Benefits administration is one of the oldest foundations of HR business process outsourcing and it is also one of the largest segments in revenues and yet it remains vital, adaptive, competitive, and ready for continued growth!

Amy L. Gurchensky, Research Analyst, HRO, NelsonHall

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SAP and SuccessFactors, Let’s Not Forget About the Basics of What Makes Talent Management Effective

Much has been written and tweeted about SAP’s announcement last December 3 that it will acquire SuccessFactors for $3.4 billion. Granted that SuccessFactors is a provider of talent management software, but software alone does not get at the core of what makes for effective talent management. That is why it is very intriguing to me – now that Twitter and blogging are “in vogue” – that all the excitement has been centered on the SaaS over the Internet buzzword “cloud.”

Don’t get me wrong, SaaS talent management is a great enabler, and terrific for SAP to have, providing employers with the tools to do performance management. But talent management is about attracting, developing, and retaining the best talent. Good recruitment technology helps attract candidates and software can help in doing performance management, but it is not going to develop and retain talent for you — now that would be a breakthrough if it did! As most of us are keenly aware, thanks to data provided by the likes of Randstad and Manpower (http://bit.ly/ujuMhC), there is a talent shortage and employers can help themselves by engaging and retaining the talent that they have. To do so requires the good old fashioned basics that the cloud cannot replace.

Organizational change is not going to happen if continual investment is not made in people as well as technology. Having conducted retention studies and managed employee programs, I can tell you first hand that the top reasons why talent leaves typically include:

• Dissatisfaction with supervision and/or leadership
• Lack of recognition
• Lack of developmental opportunities
• Lack of a career path
• The desire for more challenging and engaging work
• Work/life balance.

Money by itself is not a motivator!

Call me old school, but I’m much more excited when I see things like:

• Cornerstone sponsoring a Ken Blanchard webinar on the 14th of December: Helping People Win at Work, including the use of performance reviews to develop people, how to set clear goals, provide year-round coaching, and build an engaging performance-based culture
• PageUp’s webinar last week showing  global employers how to retain critical talent with career planning
• Contracts awarded to Kenexa for employee engagement surveys, including with Unilever for 140,000 employees globally, to not just conduct surveys, but help with action planning to act on any issues identified to improve employee engagement
• Many of Ochre House’s RPO contracts also include: KPIs to reduce attrition, accomplished by conducting exit interviews, providing a dashboard with reasons why people leave, exploring problem areas in depth, and making recommendations to client leadership. In addition, OchreHouse often conducts employee satisfaction surveys and has a “Keep In Touch” program for recruiters to keep in touch with new hires to ensure successful transition and retention.

I’m just beginning to conduct my next global learning BPO market analysis. My Q4 2010 study found that companies are just beginning to invest again in leadership and performance management to increase employee engagement and retention. I’ll be looking for evidence that this is happening.

Employers, are you making the investments needed in your employees?

Gary Bragar, HRO Research Director, NelsonHall

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Learning BPO Market Morphing by M&As, Partnerships and Organics to Meet Evolving Client Needs

Per the findings from NelsonHall’s recently published “Targeting Learning BPO” report, we saw only a modest growth rate of 2.5 percent in this HRO segment in 2009 – 2010, but predict a global compound average annual growth rate of 8.4 percent through our 2014 forecast period. So what’s driving this growth from the buy-side, and how are providers responding?

Buyers’ top driver for learning BPO (LBPO) remains reducing the cost of the learning function, followed by increasing the effectiveness and improving the quality of learning for employees. Other drivers include gaining a better return on the learning investment, right-time/right-level access to specialist trainers, obtaining a well-defined process from a provider with the ability to deliver higher quality, aligning learning with strategic objectives, contract flexibility and utilizing cutting-edge technologies for learning services delivery.

To meet these buyer needs, providers must step up their game in a range of areas including the ability to manage a global network of delivery suppliers, and providing access to the technologies required to effectively deliver and manage all aspects of the learning function via learning management systems, Web 2.0., virtual instructor-led training, e-learning, m-learning, virtual world technologies, gaming and learning analytics. Providers also need to have global learning capabilities across all four learning towers: Learning Administration, Content Development, Learning Delivery and Technology.

LBPO providers are taking a variety of paths to address these evolving, and in cases daunting, buyer requirements. Some, including Raytheon Professional Services, Expertus, Edvantage Group and RWD, are growing organically, with new service offerings including new technology, content and geographic delivery capabilities. Acquisitions and partnerships are also occurring.

2010 acquisitions in the LBPO space include:

• Kenexa’s acquisition of The Centre for High Performance Development to strengthen leadership develop and management training
• Talent2’s purchase of Origin HR and Sugar International to expand vocational training capabilities
• General Physics’ acquisition of Marton House to strengthen e-learning content development in the U.K., and its purchase of PerformTech to strengthen learning services for the U.S. government

 And 2010 LBPO partnerships include:

• NIIT and SENA to provide learning services in Colombia
• Edvantage Group and Mediapharm to offer a pharma online portal

Bottom line is, for the LBPO market to grow and prosper, it is all about meeting client’s learning needs: delivering what they need, where they need it, when they need it and how they need it. Organic is great, but not always feasible, and not necessarily always the best option for the involved parties. Thus, I beleive we will continue to see more acquisitions, and even more partnerships, in the LBPO space in the next 12 months.

Gary Bragar, Lead HRO Analyst, NelsonHall

HRO is Never Static or Still

During every stage of the economic lifecycle, HRO service providers are doing something to either anticipate or react to changes in the marketplace and client needs while simultaneously striving to achieve strategic goals. This week I wrap-up NelsonHall’s review of 3Q 2010 HRO activity with a look at what’s new in offerings, partnerships and acquisitions.

One way to quickly expand a service line or fill-in gaps is to partner with a provider that is already offering the service or operating in the target geography. Last quarter was most active for RPO. Those announcing new RPO-related partnerships included Alexander Mann Solutions (AMS), Kelly Services, Kenexa, Pinstripe and The RightThing. Notably, two of the partnerships were to continue to expand RPO services internationally in the Asia Pacific region, with AMS adding reach into India and Kelly in Vietnam.

A more committed path to rounding out or adding new services is to buy it. Making small to large acquisitions is another constant in the world of HRO as players define and redefine their portfolios. In addition to the close of the three game changing major acquisitions in the benefits community (ADP/Workscape, ACS/ExcellerateHRO, and Aon/Hewitt), other folks were also making deals. For example, Mercer acquired IPA and ORC, and Xafinity bought PwC’s pension consulting and administration business in the U.K. Further, Randstad continued its acquisitive ways, this time outside of Europe, with its planned acquisition of FujiStaff in Japan.

Health and welfare (H&W) outsourcing used to be limited to the U.S., and that will remain the major market. But no matter how health insurance and care is funded, H&W concerns are growing globally. In the U.S., Fidelity is partnering with RedBrick Health to offer its clients wellness services, and in the U.K., Capita is acquiring FirstAssist Services to add to its health service offerings.

Finally, if you cannot find what you want in the marketplace, you can build or expand it yourself. Ceridian wants to truly offer a new line of BPO services and has announced it is ready to consult, build and manage the health insurance exchanges that some states will need in a couple of years as part of the U.S. health care reform program. 

Most announcements of “new offerings” are incremental additions. For example, Hewitt is adding Micromedex medical reference information to its advocacy service offering. You can also simply package what you have and call it new. Aditro has done that with a standardized set of payroll services that include preset services levels and implementation process to make a lower cost bundled option.

Yet another variation blends supply chain partnerships with building it yourself to make a new service offering. Take a SaaS HR service from Oracle or Sap and wrap in value added enhancements and services additions and, voila, you have a new HRO service platform. Mercer introduced its Human Capital Direct that uses PeopleClick Authoria’s talent management suite as the core, surrounded by Mercer’s consulting, tools and methodologies such as decision support, competency models and analytics.

In HRO, somebody is always doing something. What have you done lately?

Linda Merritt, Research Director, HRO, NelsonHall

Recapping the Not-so-Dog-Days of HRO’s 2010 Summer

One of the biggest HRO stories of 2010 will be the flurry of big and small acquisitions in the benefits administration space. The three big acquisitions – ACS and ExcellerateHRO, ADP and Workscape, and Aon and Hewitt – have recently closed.

As acquisition mania played out, many HRO deals were getting done, and this week, as the weather has finally, thankfully, started to cool, I’m taking a look at some of the deal activity over the long hot summer.

There were not a lot of announced deals in benefits administration, but a Hewitt summary indicates plenty of activity was still quietly going on. Hewitt won new awards across the span of benefits administration in the large and mid-market, including several in defined benefits and defined contributions. But the greatest activity was in health and welfare, and for point solutions like dependant audits and flex spend accounts.

While not necessarily matching North America in total contract value, the U.K. and Europe were also quite active in HRO. Logica was awarded a £10m payroll and pensions HRO contract extention by U.K’s Metropolitan Police, with new scope this time around including increases in employee and manager self services and electronic pay slips. And Midland HR won a deal for its iTrent HR platform including HR administration, employee and manager self-service, payroll, talent management and workforce planning.

In RPO, CPH won a contract with Opal Telephone, and Alexander Mann was awarded  a contract for recruitment and contingent labor by Cobhan. On the continent, HRO activity included HR administration and payroll deals by Reat and HR Access in the mid-market.

ADP parlayed existing payroll services for KAO, a Japan-based consumer products manafacturer, into extended HR administration and payroll services across Asia Pacific including China, Hong Kong, Indonesia, Malaysia, Philippines, Singapore, Taiwan, Thailand, Vietnam and Japan. In addition, ADP won a global managed payroll services contract with BT that will cover more than 40 countries in North America, Europe and Asia Pacific when fully implemented.

It was refreshing to see a spate of learning contract awards won by Expertus, General Physics, Intrepid and The Learning Associates. However, as most of the learning outsourcing activity was in the public sector, we still need to see more of an uptick in the private sector before we can say learning is fully on the road to recovery.

RPO maintained its lead position as the most active single service area, with the greatest increase in revenues and new contracts. RPO activity was highest in the U.S., followed by the U.K., and was spread nicely across providers including Alexander Mann, CPH, Kelly Services, Manpower, PeopleScout and SourceRight. Several of the awards were for contingent labor or combined RPO, with the contingent labor focuses indicating that employers are still cautious about a full return to permanent hires.

There were no announcements of the HRO mega-deals of yore, but it was very nice to see the increased activity levels across many HRO service lines and service providers. Now that the cooler weather of fall is here, we’ll  hopefully see an even more serious return to getting business done before the end of the year!

Linda Merritt, Research Director, HRO, NelsonHall

Compensation – a Critical Component of Performance Management (and a Process Ripe for HRO)

Let’s cut to the chase here. While compensation is not always the primary reason people change jobs, I think we’ll all agree we should be appropriately compensated for the work we do. And while it can be challenging and time-consuming for companies to find the data they need to determine market- and role-appropriate salaries, not doing so can lead to loss of top talent. This issue came top of mind to me because of two occurrences this week.

First, Kenexa on September 1 acquired Salary.com for approximately $80 million. Kenexa provides talent management services including RPO and performance management – both software and advisory services – and additional talent management services that help improve employee engagement and retention. In addition, Kenexa’s 2X Perform Platform (which will be available H2 2010) will contain performance managment components including goal setting, appraisals, succession planning and compensation management. Salary.com provides compensation software and content. In addition, it has a database of compensation information across thousands of job positions. The acquisition of Salary.com not only enhances Kenexa’s ability to provide compensation management; having Salary.com’s benchmark database will enable Kenexa to help its clients ensure they are paying their employees market-competitive salaries to aid in talent retention. 

Second, on its September 1 analyst briefing upon completion of its acquisition of Workscape, ADP not only spoke about the merits of Workscape’s benefits administration capability, including health and welfare, but also about the importance of Workscape’s talent management capability, notably its compensation planner. ADP today provides performance management services including succession management and learning management, in part via its partnership with Cornerstone OnDemand, With its acquisition of Workscape, ADP has added compensation management to its performance management offerings portfolio.

The importance and impact of compensation as an integral component of performance management cannot be underestimated. While supervisors are, and will continue to be, ultimately responsible for performance management, including compensation, they need the right tools, technology and insights to effectively do the job. HRO providers that offer the full mix of performance management capabilities – robust tools and technologies, as well as advisory services – are best positioned to support their clients performance management needs. And there is definitely opportunity for growth in this space. According to NelsonHall’s June 2010, “HRO Issues and Opportunities” report, only one-third of buy-side executives have outsourced compensation administration, and it is the second least outsourced service/component of multi-process HRO deals.

My advice? Providers, beef up your compensation management offerings, either organically or via partnerships or acquisitions. And buyers, evaluate your current compensation management capabilities. If they fall short, either due to lack of insights or resources, consider engaging the services of an HRO provider with expertise in this process. You have everything to gain by ensuring talent retention through the right compensation plans.

Gary Bragar, Senior HR Outsourcing Analyst, NelsonHall

HRO Total Contract Value Jumps 38 Percent in 1H10 – Where are the Gains Coming From?

During our Quarterly BPO Index webinar last week, NelsonHall CEO John Willmott reported that HRO total contract value (TCV) revenue increased 38 percent in 1H10 in a year-over-year comparison to 1H09. While HRO’s gains weren’t as great billions of dollars-wise as other BPO segments such as multi-process or industry-specific BPO, it is good to see the start of an upturn.

So where are these gains coming from? Forty-five percent of the contracts were signed with North American organizations, 43 percent were awarded to European enterprises (of which two-thirds were based in U.K.), and organizations in Asia Pacific accounted for the remaining 10 percent. And by service type:

• Recruiting – 32 percent of deals – including contract wins by Hays, Manpower, Kenexa, OchreHouse, Pinstripe, CPH Consulting, Alexander Mann Solutions, The RightThing, KellyOCG and PeopleScout

• Payroll – 22 percent of deals – including contract wins by Capita, MidlandHR, Raet, NorthgateArinso, ADP, TDS and Ceridian

• Benefits Administration – 20 percent of deals – including contract wins by Workscape, Aon, Secova, Mercer, Convergys and Xafinity

• Multi-process HRO (MPHRO) – 14 percent of deals – including contract wins by Accenture, Ceridian, ADP, Xchanging and Hewitt

• Learning – Eight percent of deals – including contract wins by Edvantage Group and General Physics

• Other HR – Four percent of deals – including talent management-related contract wins by Kenexa

Overall, I was not surpised with the above breakdowns as they were very consistent with the predictions in our June 2010 quarterly HRO Confidence Index.

Digressing a bit here to add to the buzz about Aon’s acquisition of Hewitt…while much written and water-cooler discussed has been about benefits administration, a sizeable amount of Hewitt’s revenue comes from MPHRO. A good example of this is Hewitt’s five-year contract renewal with International Paper, announced in April 2010.The renewal will support 40,000 International Paper employees with payroll, workforce administration, health and welfare administration, recruiting support, SAP application support and help desk, call center and HR manager support, learning administration and flex staffing management services. Given the amount of revenue coming from Hewitt’s MPHRO client base, I believe Aon will not only happily want to continue to support these existing clients, but also want to continue to grow the MPHRO business.

Although most new MPHRO contacts will likely not be the mega deals of yesteryear, reducing the number of suppliers in the outsourcing portfolio continues to grow in appeal among buyers. If buyers are satisfied with their MPHRO deals, they will continue, albeit in smaller fashion, to benefit both buyers and providers.

Gary Bragar, Senior HR Outsourcing Analyst, NelsonHall