Our annual list of the top provider’s of the year: Who made it on and who dropped out of sight?
Growing, growing, grown: Last years list of 23 became this years 21. All the incumbents got bigger, mostly by acquisition. And the newcomersCGI, Adecco, and Manpowerare huge companies in their own right. The Tier 1 large-account game is becoming the Land of the Big. And those mid-market players are not doing too badly either.
Each year, we publish our annual list of the top enterprise HRO providersthose providers who offer end-to-end HRO services. And each year, the names are very familiar to those in the industry. But this years list marks a number of interesting changes.
Due to the flurry of M&A activity that took place in the market starting in mid 2004, youll see a number of changes on the list. Starting with Hewitt Associates acquisition of HRO pioneer Exult, followed not soon after by EDS and Towers Perrins joint venture to form ExcellerateHRO, and the most recently announced acquisition of Mellon HR&IS by ACS, youll note that the number of providers on the 2005 list has shrunk, although the range of services offered has actually expanded, and the total contract volume has ballooned.
We predict this M&A activity will continue in 2004. While there will be some dislocation, we consider this a marvelous example of a favorite private equity investor termcreative destruction. Sure, partnering among the larger enterprise-level (Tier 1) HRO providers is winnowing down the list of names. But we are also seeing European players such as ARINSO ramping up their North American operations. And there is some new blood as well. Witness CGI Groups entry into the market with its City of
making the migration from IT to HRO). And check out the global staffing players Manpower and Adecco, who are now both offering new services and expanding their reach into the North American market.
So on to the list of the new and improved top enterprise providers of 2005.
Criteria for the list: Providers must have at least one documented end-to-end HRO client,1,000 employees or larger, and be able to provide national service. Providers are listed in alphabetical order.
Accenture HR Services accenture.com/hrservices
Examples of End-to-end Clients: Best Buy, TSA, BT (second-generation), Sandvik, City of
HRO Services: Customer Contact Services, Exit Services, Information Services, Learning Services, HR Advisory Services, Pay & Benefits Services, Performance Services, Resourcing Services
Description: This provider offers customized, integrated HR solutions that span the entire employee lifecyclefrom recruitment to retirementfor larger enterprises. They also have a more standardized, integrated offering for medium-sized companies and individual services available a la carte. 2005 marked the signing of one of the biggest second-generation HRO contracts, as Accenture client BT re-signed a 10 year HRO contract with expanded global services.
ACS (Global HR Solutions) acs-inc.com/hro
Examples of End-to-end Clients: Chubb, Delta Airlines, Motorola, Goodyear, General Motors Europe
HRO Services: Benefits Administration, Compensation, Core Process Redesign, Employee Assistance Program, Employee Service Center, HR Information Systems and Employee Portal, Learning Services, Payroll, Performance Management, Relocation, Selection and Assessment, Staffing (contd on next page)
Description: One of the many M&A players in the HRO market this year, ACS recently acquired Mellon HR&IS to expand upon its benefits and consulting capabilities. Providing end-to-end BPO solutions to commercial and government clients worldwide, ACS offers a suite of transactional, professional, and
advisory HRO services.
Adecco (Global HR Solutions) adecco.com
Examples of End-to-end Clients: confidential
HRO Services: Payroll, Recruiting, Staffing, Training, HRIS,
Description: With 125,000 clients for its global staffing business, Adecco also operates under additional brands such as Lee Hecht Harrison (outplacement) and Ajilon (specialized professional staffing).
Examples of End-to-end Clients: Access Worldwide, Fresh Success
HRO Services: Employment Administration (payroll, payroll taxes), Benefits Administration, Recruiting and Selection, Performance Management, Training and Development, Government Compliance, Employer Liability Management, Owner Support
Description: This national PEO has expanded beyond the small enterprise market to providing full-service HR support to medium-sized enterprises. With
multiple regional service centers and sales offices nationwide, Administaff was listed among
ADP (Employer Services) adp.com
Examples of End-to-end Clients: Tyco, IHG
HRO Services: Payroll, Benefits Administration, HR Information Management, 401(k)/Retirement Services, Screening and Selection Services, Expense Management, Time and Labor Management, Tax and Compliance Management
Description: Known for their data processing and payroll services, ADP also provides full-service, comprehensive HR services including traditional and Internet-based outsourcing solutions to employers in more than 26 countries. In addition to payroll solutions and tax returns, ADP also offers complete outsourcing services through ADP TotalSource, a PEO.
Examples of End-to-end Clients: Coral Beach Hotels & Clubs, Crown Auto
HRO Services: Benefits, Payroll, Recruitment, Risk Management, Human Capital Management Consulting
Description: Another PEO that is reaching into the mid market, this company provides a range of HR services to clients nationwide. Services include a strong focus on HR consulting and ongoing training as well as innovative technology.
Aon Consulting aon.com
Examples of End-to-end Clients: AT&T
HRO Services: Benefits, Communication, Compensation, Expatriate, Investment and Management Consulting, Retirement
Description: Aon Consultings global network of resources delivers solutions in the areas of employee benefits, compensation and rewards, communication, HRO, process redesign, and talent selection and development. With a recent reorganization of its HR outsourcing group, Aon hopes to better integrate its IT and consulting experience and leverage its experience in human capital throughout the upcoming quarters.
ARINSO International arinso.com
Examples of End-to-end Clients: GM Europe (partner with ACS), Kone, Schindler, Finnair, Elia
HRO Services: Consulting (business analysis, process improvement, transformation management, service-center design); Integration (HRMS, e-HR, enterprise portals); Operations (BPO, application maintenance, infrastructure management, payroll services); Health and Wealth Benefits
Description: This European IT giant has expanded to offer HRO services to more than 100 companies in more than 20 countries. Its recent signing of several U.S. HRO contracts has made it an up-and-coming player in the North American Market.
Examples of End-to-end Clients: Comerica Inc, Johns Manville, FMC Corporation, Symetra Financial, Sony Ericsson, Unisource
HRO Services: Staffing, HR Administration, Payroll and Compensation, Compliance, Employee Effectiveness, Benefits Administration, HRMS
Description: Providing HR solutions for employers in the
CGI Group cgi.com
Example of End-to-end Clients: City of
HRO Services: HR Administration, Payroll, Time Management, Training & Development
Description: One of the newest players in the end-to-end HRO field, when CGI Group signed on the
services to more than 25,000 employees.
CheckPoint HR checkpointhr.com
Examples of End-to-end Clients: American Stock Exchange
HRO Services: Payroll, Benefits, HRMS, Recruiting and Staffing, Training, Compliance
Description: Targeting small and mid-sized companies, CheckPoint HR provides HR and payroll outsourcing through both Web-based HRMS and personalized
Convergys (Employee Care) convergys.com
Examples of End-to-end Clients: State of
HRO Services: Benefits, Payroll, Administration, Recruiting and Staffing, Learning and Development
Description: With two decades of outsourcing experience, this company offers full-service HRO to almost 600 clients in more than 60 different countries. Through their 50 service centers worldwide, they serve more than 2.5 million employees and 7 million retirees.
Examples of End-to-end Clients: Airbus
HRO Services: Business Transformation Outsourcing (payroll, training, time management, insurance and pension plans, recruitment and administration) and Application Management (applications maintenance and management of HRIS)
Description: In 2004, The European Aeronautic Defence and Space Company (EADS), a global leader in aerospace, defense, and related services, announced a joint venture with IBM to provide HR services. The venture, called HR Technologies and Management, or HRTM, launched with 100 employees and 35 business customers, including Airbus.
ExcellerateHRO (formerly EDS and Towers Perrin) excelleratehro.com
Examples of End-to-end Clients: CIBC, Infineon
HRO Services: Payroll, Training, Recruitment, Employee Relationship Management, Relocation and Expatriation, Knowledge Management and Reporting, Benefits Administration, HR Consulting
Description: One of the movers and shakers of 2004, ExcellerateHRO is a joint venture between EDS (which owns 85 percent) and Towers Perrin (which owns 15 percent). The new company expands upon EDS broad portfolio of business and technology solutions with Towers Perrins additional benefits and consulting experience.
Fidelity Employer Services Company (FESCo) fidelity.com
Examples of End-to-end Clients: Bank of America, ABB
HRO Services: HR Administration, Payroll, Defined Benefit/Contribution, Health and Welfare, Compensation, Consulting
Description: Offers a comprehensive suite of HR and benefits outsourcing to corporations around the world with more than 9,000 employees in six regional locations across the country.
Examples of End-to-end Clients: ComUnity Lending
HRO Services: HRIS, HR Administration, Recruiting and Staffing, Compensation and Pay
Description: Continuing their growth with the acquisition of other PEOs such as Epix, Gevity offers integrated HRO solutions to small and medium-sized businesses in the
Hewitt Associates hewitt.com
Examples of End-to-end Clients: PepsiCo, Duke Energy, Capgemini, Sun Microsystems, Sony, BP, Prudential
HRO Services: HR Administration, Payroll, Benefits, Retirement and Financial Management, Recruiting, Training and Development
Description: Leaders of the flurry of M&A activity in 2004, when Hewitt Associates acquired HRO service provider Exult this year, they not only added a number of brand name clients to their roster, they also gave their traditionally consulting-focused services a strong dose of pure-play BPO power. Since the announcement, Hewitt has signed on a number of brand-name clients to a list that already included more than half of the Fortune 500 companies.
IBM Global Business Services ibm.com
Examples of End-to-end Clients: Procter & Gamble
HRO Services: Payroll, Benefits Administration, Compensation, Expatriate and Relocation, HRIT
Description: Although the HRO industry is still awaiting IBMs announcement of an additional end-to-end HRO deal since their signing of Procter & Gamble, Big Blue has been making big strides in defining themselves as a leader in the BPO (or BTO, Business Transformation Outsourcing as IBM defines it) market. Another company participating in the M&A mating game, this year marked IBMs acquisition of other BPO providers, such as FAO provider Equitant.
Examples of End-to-end Clients: Toyota Motor Manufacturing Kentucky, Suntrust Online
HRO Services: Staffing, Assessment and Training, On-site Workforce Management, Outplacement, BPO
Description: A global leader in employment services with offices in more than 65 countries, although best known as a staffing services provider, Manpower also offers full-service HRO to a number of clients. The company operates under additional brand names of Right Management Consultants, Jefferson Wells, Elan,
RSM McGladrey Employer Services rsmmcgladrey.com
Examples of End-to-end Clients: BBB Services Corp
HRO Services: Benefits Brokerage and Administration, Payroll, HR Administration
Description: Although known for their strong focus on benefits services (due in part to the 2004 acquisiton of MyBenefitSource), RSM McGladrey also offers
end-to-end HRO services to hundreds of clients nationwide.
Examples of End-to-end Clients: BAE Systems
HRO Services: Recruitment, Payroll, Training and Development, Outplacement, Benefits, Compensation, Incentives
Description: Created through the spin off of BAE Systems in 1998, this U.K. company offers BPO, FAO, ITO, and HRO. Although BAE remains its only end-to-end HRO client, it offers a number of other BPO services to clients as renowned as the London Stock Exchange, Lloyds, and Boots.