How is Aon Hewitt different as a consultant compared to the old Aon Consulting and Hewitt Associates?
Dail: Collectively, we are incredibly excited by the combination. We have real capability in advice and delivery on a global basis. We believe we have industry-leading capabilities to serve our clients. Before, the two firms were somewhat global in nature, but now we are truly global and we are globally consistent.
When you think of the two firms, they were very complementary in nature. When you think of Hewitt Associates, you think of it as being very strong in outsourcing, with immense consulting capability. Legacy Aon was very strong in brokerage and health and benefits business. When you think of the clients they served, Hewitt was more large-market, legacy Aon was more middle-market. When you pull this all together from a client perspective, it is an enormous win, a huge win. I think that is why we are so bullish.
Savacool: Our clients are getting much more comprehensive solutions that in some cases neither company conceived of—or didn't have all the components to build the solution.
Since the merger, has the client base changed?
Dail: We are able to serve very, very large global clients who have incredibly diverse and complex and global needs. We also have large regional or national players and middle-market clients. We can serve all those clients equally well. It's a testimony to the combination, that in each of those categories, we have new clients.
How has the merger benefited clients?
Dail: We believe we are uniquely positioned to help clients. We now are the biggest (benefit consultant). Being the biggest is not the be all and end all. But being the biggest allows us to invest back into the firm to drive innovation. We are investing heavily in the firm to develop new solutions to address our clients' needs. Think about some of the areas we work in: retirement, health and talent. I would argue that those are three of the top seven issues in the world. We work on three of the biggest issues in the world. The issues are getting more complex and we think we are uniquely posited to provide advice and delivery of solutions.
Savacool: We have a large company with over 200,000 employees, which previously was a risk client of Aon and a Hewitt outsourcing client. The client is expanding strategically outside the Unites States in a big way. They expect to double the size of the company in short order. We sat down with them for three hours to help them craft how they could expand the business with manageable risk and cover that risk. We helped them with their talent strategy, how to attract and retain people for that business expansion. We helped them with their pension and health care plan design. We also looked at how they could scale up their HR operations including their benefits operations and delivery, of which we are a piece. That would not have been possible with either company before the merger.
How have the total number of clients changed? Have you lost clients?
Savacool: The two firms have more clients than the two firms had individually. At the time same time, client satisfaction went up significantly. Not only did we retain clients, but the level of satisfaction grew materially.
Dail: Because of the combined capabilities that we have, we are able to develop solutions to meet a broader range of our clients' needs. It is not that we just have more clients than the two separate firms had, but it means we are consulting on a broader range of topics for clients. We have a client where are going to serve them on a topic in 100 countries around the world. Previously, each firm might have gotten part of the work, but they would not have gotten everything. The power of the combination allows us to do that.
On health care reform, have you gotten a sense from many clients that they will say, the heck with it, we are going to fold our plans, pay the financial penalty and bump up employees' salaries to help them buy coverage through state insurance exchanges?
Savacool: Will the landscape change? Undeniably. Are large employers being very thoughtful about this issue? They understand they must change the cost curve, but in large part, they are not anxious to dump and run. They are being very thoughtful. They take the benefits seriously. People are the lifeblood of their organizations and their ability to grow and they are not cavalier in any way about that.
Dail: They are not going to dump and run. They understand that they have to create a value proposition for their employees. Part of the value proposition, increasingly so, is the benefits component. So they are taking this very seriously.