The race for HR supremacy
Hewitt Associates and Exult, two prominent names in HR outsourcing have
recently announced a merger in an apparent attempt to get ahead in the
rapidly growing sector.
Hewitt will buy Exult shares reportedly worth $691 million. But more
importantly, the merger will boost Hewitt's services with Exult's strength
in HR consulting.
According to a report, Hewitt will be the only organization capable of
offering total HR BPO services, which includes benefits, payroll, HR
information systems, recruiting, training and of course, consulting
services.
The merger will have a combined client base of at least 300 companies in
benefits management alone plus another 21 large clients with a total of
600,00 employees that avail of various HR services.
There are no acknowledged marketshares yet in the rapidly growing HR
services but Hewitt and Exult have gained some recall in the last few
months.
Analysts see the merger as strategically positive for both companies
which puts them ahead of traditional IT services giants such as Accenture
and IBM which have been aggressively going into HR outsourcing.
IBM has landed a major deal with manufacturing giant Procter and Gamble
worth $400 million to provide employee services such as payroll
processing, benefits administration, and human resources data management.
IBM and Accenture are strong technology-wise and niche companies like
Hewitt are looking for ways to counter that with combined expertise.
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