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Unilever Finalizes Contract Terms In Blockbuster HRO Deal Estimated to Be Worth over $1B

In one of the largest enterprise, end-to-end HRO contracts ever, Unilever said it has finalized terms with Accenture to provide a broad range of HRO services ranging from recruitment to payroll processing and performance management in 100 countries. The seven-year agreement covering 200,000 global workers—estimated by one industry advisor at $1.04 billion (around €800)—will begin in July, but the companies declined to disclose financial terms.

Unilever has long rumored to have selected Accenture for the engagement, but an announcement about the deal had been delayed for months. Company officials had indicated last fall that the accord could have gone into effect as early as March, but the complexity with the deal may have pushed negotiations and the start date back.

Unilever said the agreement is designed to transform its HR operations and functions through greater efficiency and effectiveness as part of the company’s “One Unilever” program. The consumer product giant in recent months has outsourced a number of domains, including F&A functions to IBM late last year. In October, it awarded an IT outsourcing contract to Accenture for parts of its European operations.

“This global outsourcing deal represents a major strategic choice for Unilever,” said Sandy Ogg, Unilever’s chief human resources officer. “We believe that it is best for our business if we concentrate on our core competencies and transfer what is our back office and make it into someone else’s front office. We can also leverage Accenture’s capabilities and expertise. This deal allows us to create a simpler, more agile global HR function to better support Unilever’s growth agenda.”

The HRO deal covers Unilever’s three geographic regions: Europe, Americas and Asia/AMET (Africa, Middle East and Turkey).  Services in more than 20 languages will be delivered from centers in Bangalore, Manila, Dalian, Bucharest, Prague, and Curitiba.

Services include recruitment, payroll administration, reward administration, performance management, workforce reporting, core HR administration, and third-party provider management services. Accenture will deploy and manage critical HR software applications and provide content sourcing and development, program planning and delivery, learning system hosting, and management and administrative services as part of the training provision.

Of Unilever’s 3,300 global HR staff, fewer than half will be affected by the deal. However, it was not immediately clear whether many will be offered positions with Accenture or be laid off.

“Given its scale and scope, this agreement is truly transformational,” said Kevin Campbell, global managing director of Accenture’s Business Process Outsourcing organization.  “It will change the way human resources services are managed, delivered and received across the company.  In addition to the HR functions that are being outsourced, the functions that remain in-house will be reengineered to ensure that the transformed service delivery model works as effectively as possible.”

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