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Top End-To-End Large-Market HR Outsourcing Providers

May 15, 2007
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TOP END-TO-END LARGE-MARKET HR OUTSOURCING PROVIDERS

Accenture’s seven-year HR outsourcing contract with Unilever, estimated to be worth more than $1 billion and covering 200,000 Unilever employees, set a new industry standard when it was signed in June 2006. The megadeal covers a full range of HR services for Unilever, including recruitment, payroll processing and performance management globally. It helped offset the fact that the industry fell short of many analysts’ glowing predictions for 2006. Whereas 2005 saw a dramatic 37 percent increase in deals signed, with 39 multiprocess HRO contracts, there was a drop in 2006, with 34 deals being closed, according to Everest Research Institute.

Still, the multiprocess HRO market is growing, with annualized contract values increasing another 18 percent to reach $2.6 billion. According to HRO specialist Phil Fersht, "The fact that more focus is now on buyers adopting transformational approaches to HRO, as opposed to the classic ‘lift and shift’ model, has slowed the HRO market. The change in delivery model has signified a rapid maturing of the HRO industry, which is necessary for workable HRO solutions to exist in the future, and [for] today’s suppliers to invest in the global resources and infrastructure necessary to delivery HRO in an operationally successful and economically feasible fashion." Workforce Management’s definition of end-to-end HRO requires that vendors provide a minimum of four HR services for their client companies. To qualify as large-market providers, vendors must cover a minimum of 15,000 employees within their client companies.

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