LINCOLNSHIRE, Ill.–(BUSINESS WIRE)–Feb. 14, 2005–Hewitt Associates (NYSE:HEW), a global human resources services firm, announced today it will provide human resources services to Marriott International, Inc. (NYSE:MAR). Under a seven-year agreement, Hewitt will provide human resources business process outsourcing (BPO) services, including workforce administration, benefits, compensation, recruiting, domestic relocation, and learning and development services to Marriott’s 133,000 employees
DALLAS, Feb. 14 /PRNewswire-FirstCall/ — Affiliated Computer Services, Inc., (NYSE: ACS – News), a premier provider of business process and information technology outsourcing solutions, announced today that it has been awarded a human resources (HR) business process outsourcing (BPO) contract with Delta Air Lines, the United States’ second-largest airline. The seven-year agreement is valued at $120 million.
Under the terms of the new HR outsourcing agreement, ACS will provide a broad range of human resource functions for Delta, including compensation and benefits administration, relocation services, recruiting, learning, payroll, HR Information Services, and employee call center services for Delta’s North American employees and retirees
Illinois-based health system sees immediate return on investment after deploying GeoLearning’s ASP-hosted learning platform.
WEST DES MOINES, Iowa, February 8, 2005 — GeoLearning, Inc., the leading provider of Managed Learning Services and hosted learning technologies, announced today that SwedishAmerican Health System, a not-for-profit, locally governed health care system headquartered in Rockford, Illinois, has achieved significant cost-savings and return on investment from deploying its ASP-hosted GeoMaestroT learning management system and accompanying learning services
LINCOLNSHIRE, Ill. –(Business Wire)– Feb. 4, 2005 — Hewitt Associates (NYSE: HEW), a global human resources services firm, announced today it has signed a contract with The Thomson Corporation (NYSE: TOC; TSX: TOC), a global integrated information solutions provider, to provide HR business process outsourcing (BPO) services.
Under a five-year agreement, Hewitt will provide certain HR BPO services in the areas of benefits, compensation, payroll, learning and development and recruiting for Thomson’s 28,000 employees in the United States
Comprehensive Offerings Accelerate Revenue Growth and Offer Clients Flexibility and Choice
METHUEN, Mass. (January 31, 2005 ) – – Genesys, a provider of outsourcing services and software for human resources (HR) management, payroll, benefit administration and payments, self-service, learning, and performance management, and William Gallagher Associates (WGA), a leading provider of insurance brokerage, risk management and employee benefit services, today announced a strategic alliance to deliver best-in-class insurance brokerage and human resources outsourcing (HRO) solutions to customers
Fidelity Investments said Thursday that has won an outsourcing contract with BASF Corp. to handle that company’s human resources operations.
The five-year contract would have Fidelity conduct BASF’s payroll operations, health and welfare benefit programs and retirement plans for BASF’s nearly 20,000 U.S. employees and retirees. Financial terms of the contract were not disclosed.
Boston-based Fidelity touted the agreement reinforcing increased interest by major corporations to outsource their human resources operations to a single provider. The transition of BASF’s programs to Fidelity’s is expected to be complete by fall 2005, with most services being activate in early 2006.
BASF Corp., with headquarters in New Jersey, is the American affiliate of BASF AG, Ludwigshafen, Germany. It had sales of approximately $9 billion in 2003.
LINCOLNSHIRE, Ill.–(BUSINESS WIRE)–Jan. 13, 2005–Hewitt Associates (NYSE:HEW), a global human resources services firm, announced today it has signed a 15-year contract with Rockwell Automation (NYSE:ROK) to provide HR business process outsourcing (BPO) services. Rockwell Automation provides industrial automation power, control and information solutions to global 500 corporations.
Under the agreement, Hewitt will provide workforce administration, payroll, health and welfare and defined benefit services to Rockwell Automation’s 15,000 U
When plans compete for it, can employees win?
When it comes to tax-deferrable income, employees can win if their employer helps them understand the true value of each type of savings or coverage offered to them, depending on their financial situation and where they are in their career.
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The chart below compares seven common plans. That comparison, plus company matching, use it or lose it provisions, investment performance, flexibility of distribution options, and differences in tax law can make one type of salary deferral more appealing than another. However, it is not only possible but also appropriate that the appeal of one plan over others will evolve over time for any given employee.
Choosing a Pre-tax Savings Hierarchy
At most ages and circumstances, paying for medical expenses generally comes first. These can be direct payments premiums for medical coverageor indirecta flexible spending account (FSA) or health savings account (HSA). Next will usually be some form of savings, often in a plan offering a company matchlong-term for retirement or nearer-term for education or home purchases. The challenge for many companies is communicating the right information to help their employees choose how deeply to invest in the plan(s) that make sense for them at the time. Ideally, employers should present this information in a way that facilitates easy and regular re-evaluation by employees of their contribution and premium options.
The Life-cycle View
Employees savings goals change as lives and careers progress. For instance, employees unburdened by homeownership, childcare, or high medical costs might be inclined to save the maximum matchable percentage of their pay in their companys plan. Employees accompanied by children and a mortgage or other debt often find saving for education, home purchase, retirement, and family medical coverage or elder care to be higher priorities. Of course, as employees reach their 50s and 60s, their own age-related increases in medical costs further affect their spending behavior.
Can More Options Affect Nondiscrimination Testing?
The concern about the magnitude of lower-paid employees 401(k) contributions (relative to those of highly paid) remains relevant. Is the plan already suffering from poor nondiscrimination testing results? Or is current publicity about HSAs steering lower-paid employees away from 401(k) contributions and creating new nondiscrimination tension? Conversely, if the lowest-paid employees are living paycheck to paycheck, are they justified in paying pre-tax premiums for current medical coverage but for little else?
As long as employers are able to recognize and respond to these personalized communication challenges with understandable and accessible financial and tax information and guidance, competition among these plans for employees tax-deferrable dollars is a good thing. Then, and only then, will employees be able to properly allocaterather than dilutetheir disposable pre-tax income among employer-sponsored plans
The hottest new trend in HRO Training and Learning
View full Training Outsourcing article (PDF)
FINDING TRAINING OUTSOURCINGS IDENTITY
Outsource training? Are you insane?
Actually, no. Training outsourcing is a burgeoning market. Its watershed moment came in 1986 when General Physics inked its landmark training outsourcing relationship with General Motors. Regardless of its mega-deals, training outsourcing has taken the long road to its own identity. With the increase in training business process outsourcing (BPO) deals since 1998, training now has a distinctive place in BPO alongside other human resources (HR), finance and accounting (F&A), and information technology (IT) business process functions. Moreover, corporate trainings focus now extends beyond employee learning to customer education. This increase in trainings scope has resulted in a steep boost in demand for outsourced training services of several flavors.
The Numbers Behind the Story
The data on trainings value is starting to pour in. And here is the bottom line. The growth in training outsourcing is all based on two facts: Training boosts organizational productivity, and outside training providers increase an organizations ability to train more people faster and more cost-effectively than in-house staff.
According to a 2004 report by Accenture, high-performance organizations, representing approximately 10 percent of the organizations surveyed, exceeded their peers in productivity (as measured by sales per employee) by 27 percent more than their competitors, revenue growth by 40 percent, and net income growth by 50 percent.
The American Society for Training and Development (ASTD) reported that training spending in U.S. corporations was $826 per employee in 2002, an increase from $734 the year prior.
The Exceleration Group estimates that corporate training expenditures of all types, in-house and outsourced, was nearly $120 billion in 2004. Of this, 42 percent was targeted for employee learning, 52 percent for customer training, and 6 percent for training supply chain interests. The ASTD, in 2003, estimated that 28 percent of all training expenditures go to outside vendors. That indicates that the training outsourcing market exceeds $30 billion.
Like many BPO segments, the training market has seen the start of a significant wave of consolidations. In March 2004, the biggest of the mergers happened when Cincinnati-based Convergys picked up San Franciscobased DigitalThink for $2.40 per share, or $120 million, a 30 percent premium to DigitalThinks share price.
At the time, Thomas J. Starr, senior principal of learning services for Convergys Employee Care, said DigitalThinks capabilities would create synergies for the company by beefing up its capabilities in learning while improving its competitive position in HR outsourcing.
The Convergys acquisition also set the stage for back-to-back Thomson Learning deals in August 2004. In the first of the two deals, Thomson Learning added Capstar, a unit of Educational Testing Service. Capstar develops competency assessment, learning and measurement, and testing solutions for private and public sector markets. The second deal, two weeks later in August 2004, featured Thomson acquiring KnowledgeNet, an e-learning provider, which Thomson merged with its own NETg unit. The two buys, while positioning Thomson Learning as a market share leader, contrasted with Convergys stated goal for its training outsourcing acquisition: to position Convergys to better compete for large-scale HRO contracts. The differing M&A philosophies of Thomson and Convergys reflect the training outsourcing markets conflicts about its own identity. Is training outsourcing a market of its own, or does it comprise a subset of the HRO market?
Follow the Money:
Customers Come First
On Wall Street, the trend is your friend. In training outsourcing, the overwhelming trend is toward investing in customer training. In 2004, TrainingOutsourcing.com writer Paul Harris documented software provider Intuits eureka moment, which caused it to invest heavily in customer training.
Sales of the companys QuickBooks software were suddenly spurting, Harris wrote, and a new analysis revealed why: Professional accountants were referring the product to their corporate customers after taking an e-learning course that made them certified users.
We discovered that accountants who received their ProAdvisor Certification were referring QuickBooks to their small business customers at four times the rate of those who simply use the software, says Rich Walker, Intuits director of accountant and advisor relations. It is a causal relationship.
Launched two years ago, Intuits new customer training initiative is outtasked to Convergys Corporation, the business process outsourcing firm that recently acquired e-learning content provider DigitalThink. Convergys Learning Solutions helped create the courseware and now manages the training via its scalable Web-based platform, the L5 Learning Delivery System. It supplements Intuits classroom training program begun seven years ago with Dallas, Texas-based Real World Training. Intuit, as Harris showed, illustrates the fastest-growing trend in learningthe outsourcing of customer training initiatives.
How to make the fastest-growing area of HRO work for your company.
Training and development outsourcing is one of the HRO areas with the greatest potential. But first, those evaluating their T&D programs must educate themselves on how to make them an A-plus strategy.
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Of all the human capital/HR activities that lend themselves to outsourcing, the area with the greatest potential is training and development (T&D). Pre-Internet and before IT demonstrated its potential, the HR professionals T&D initiatives were restricted by location, cost, and availability. They were also restricted by the organizations ultimate resourcethe caliber of the training professional (if, that is, the organization believed strongly enough in T&Ds importance that it budgeted for one).
The potential of T&D as an effective function was limited even further by complications that have existed since its inception. First, candidates frequently targeted for the T&D profession were career-changing teachers from the primary and secondary education ranks. The challenge with this is that not only do children learn differently from adults, but also training is a different skill set than educating.
Second, employees were often made trainers, not due to their ability or potential, but rather because of their temperament, personality, or the needs of the organization. Finally to complicate matters further, training professionals too frequently prefer the excitement of classroom presentations to the aspects of T&D design. This results in many training presentations being given by professionals who are only subject matter experts in how adults learn and not experts in T&D program design (and even subject-matter experts are not always guaranteed).
The whole question of T&D becomes quite strategic when approached in this context. There is a lot at stake for the organization in light of the competencies it is trying to develop for its employees. But dont let a fear of tackling a highly strategic issue prevent you from doing it. Because doing nothing different from the status quo, or even nothing at all, is also a strategic decisionwith its own set of dire consequences.
When the T&D function is considered in its entirety, think of the full range of activities, including administration, evaluation, Website design, and maintenance. In fact, as with all outsourcing considerations, early on in the process, you should consider breaking down each function into core competencies and commoditized (and labor-intensive) activities. The core elements are those that your organization does well and that provide a competitive advantage. Commoditized activities are those that sap energy and resources but are tangential and nonconsequential when done correctly.
Commitment to any T&D effort should be part of an overall organizational development strategy that should really be undertaken internally. To entrust others with this process is to deny key players inside the structure the chance to determine what would really be effective. In fact, as with all strategic planning, the process is as important as the result. Others may be called in to provide advice, but the decision should rest with those responsible for providing leadership for the organization.
Before we discuss where to begin, you need to consider your personal attitude toward T&D. See if you agree with this statement: You have many more resources accessible to you if you agree that you want the best available training for your organization, regardless of where you find it. This is a big step for those organizations that have traditionally prided themselves on homegrown training and believed it was the best available.
Consider a gap-analysis approach. Ask your executive team and C-level players what they feel the organization needs from training to maximize organizational effectiveness. Get granular and obtain all the details that you can, and avoid generalizations.
Then ask each of the key staff members you approach what they would like to see and expect from in-house training efforts. Even ask what they think of the new employee-orientation program as well as any other training programs currently provided internally. Your goal is two-fold. First, to determine the priority level these key executives assign to the training function. Second, to assess their level of sophistication for what they feel training should and should not be expected to do.
Before you begin the next phase of T&D assessment, one more step to take (assuming you have received positive indications from your activities above) is to continue your research by enlisting the support of anyone organizationally who could provide you with additional input. This includes reaching out to contacts locally and elsewhere who will share with you information about what they and their organizations are doing and what resources they are using.
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