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HR Outsourcing Providers Eye Buying ExcellerateHRO

A number of HR outsourcing providers are interested in buying ExcellerateHRO from Hewlett-Packard if the firm is in fact up for sale, insiders say.



“We know a number of people are interested, but we don’t know if any of them have gotten discussions going with HP,” said Lowell Williams, executive director of EquaTerra, a Houston-based information technology and business process transformation consulting firm.


Earlier this month, Hewlett-Packard bought Towers Perrin’s shares of ExcellerateHRO, causing industry experts to speculate that the Palo Alto, California-based company is preparing to sell the HRO provider. HP bought EDS in May but hasn’t shown any interest in ramping up its HRO business.


“Our assumption has been that ExcellerateHRO is dead since no attention has been paid to it since the EDS acquisition,” said Stan Lepeak, managing director of global research at EquaTerra. “They hadn’t been getting much traction in the market anyhow, and reviving it would require a significant investment.”


In the four years since ExcellerateHRO was established, it has made only two end-to-end HR business process outsourcing deals and a number of benefits administration deals, experts say.


Still, the company could be a great addition to an HRO provider that is strong in benefits administration, Williams said.


“ExcellerateHRO had about 10 to 15 benefits deals, so they would be a good fit for companies that are big into benefits like Hewitt Associates, Affiliated Computer Services or Fidelity Investments,” he said.


Calls to a spokeswoman at Hewitt were not immediately returned. A Fidelity spokesman and an ACS spokeswoman declined to comment. An HP spokeswoman declined to comment.


ACS, in particular, could be a likely candidate to purchase ExcellerateHRO because it has been ramping up its HRO business in the past several months, said Phil Fersht, an analyst at AMR Research.


In May, the Dallas-based company launched SynchHRO, a self-service standardized HRO service targeting the midmarket as well as larger employers.


“ACS does seem to be doubling down on HRO,” Fersht said.


Other possible buyers could be the Indian HRO providers, such as Infosys, which are looking to gain market share in the U.S., Lepeak said.


“This could be a way for them to gain a local presence in terms of HR acumen and connections,” he said.


—Jessica Marquez


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Public Health Insurance Option ‘Makes Sense,’ Obama Says

President Barack Obama is speaking forcefully in favor of the inclusion of a public health insurance plan as part of health care reform, but he refused to say whether such a plan would be nonnegotiable as he pushes Congress to deliver a bill to his desk this summer.


During a briefing at the White House on Tuesday, June 23, Obama ignored the question the first time it was asked, and when another reporter repeated it, he responded, “Right now, I will say that our position is: A public option makes sense.”


Obama dismissed fears expressed by the health insurance industry and some lawmakers, including some in his own party, that a government-run plan would drive private insurers out of business.


“That defies logic,” Obama said.


“If they tell us they are offering a good deal [to consumers], and when they say the government can’t run anything, why would it drive them out of business?” Obama asked.


The question referred to a June 19 letter from America’s Health Insurance Plans and the Blue Cross and Blue Shield Association to Sen. Ted Kennedy, D-Massachusetts, one of the leaders of reform efforts on the Hill, which argued that a public plan would have “devastating consequences on the health insurance coverage that employers and individuals currently have.”


Obama was challenged to concede that businesses are likely to drop the coverage they currently offer employees and turn instead to the less-expensive alternative offered by the government, even though he has said his plan will allow people to keep their health plans if they like them.


“The government is not going to make you change plans under health reform,” Obama responded.


If Congress fails to do anything, he added, people are likely to see higher premiums and reduced benefits, or lose coverage.


“I can guarantee there’s a possibility for a whole lot of Americans they’re not going to end up having the same coverage they have,” Obama said.



Filed by Gregg Blesch and Rebecca Vesely of Modern Healthcare, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


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401(k) Fees Bill to Include Pension Funding Relief

The House Education and Labor Committee plans to add modest funding relief for defined-benefit pension plans to a 401(k) plan fee disclosure bill scheduled for a vote Wednesday, June 24.


Provisions expected to be added would delay the effective date of regulations mandated under a 2006 law that toughened pension funding requirements.


Under current law, the rules can be effective as soon as July 1.


The amendments would delay the effective date until at least January 1, 2010.


In addition, employers would be given more flexibility in choosing an interest-rate methodology to value pension plan liabilities this year and next year.


On the other hand, more employers would be required to report plan actuarial and financial information to the Pension Benefit Guaranty Corp. Under current law, only plans that are less than 80 percent funded have to report this information to the PBGC.


The legislation would change that requirement to require a PBGC report if plan underfunding exceeded $50 million. Such a change is needed, according to a committee summary.


“Since large plans that are more than 80 percent funded can still be underfunded by hundreds of millions of dollars, the PBGC is not getting information on many underfunded plans,” according to the summary.


The core of the legislation, H.R. 1984, would require 401(k) and other defined-contribution plan sponsors to improve disclosure of fees and other financial information to plan participants.



Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


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Tonya Armbruster’s Top NOLA Restaurants and Things to See and Do

Tonya Armbruster’s Top 5 Restaurants


  1. NOLA: Grand, fine dining. It’s not just a meal, it’s an experience. (French Quarter)


  2. Wolfe’s: World cuisine with a French flair. (French Quarter)


  3. Rio Mar: Latin seafood. (Warehouse District)


  4. Angeli’s: Lighter food, pizza, casual. (French Quarter)


  5. Deanie’s Seafood: Seafood, seafood and seafood—and casual. (French Quarter)

Tonya Armbruster’s Top 5 Can’t-Miss Things to Do or Visit in New Orleans


  1. French Market: In the French Quarter near the river, it has everything from produce to jewelry to stained glass.


  2. Royal Street: Full of art and antique galleries. Make sure to take note of the exquisite architecture.


  3. Faubourg Marigny (aka The Marigny): On the edge of the Quarter, this neighborhood’s Esplanade Avenue is full of jazz, blues, folk and Latin music.


  4. Audubon Zoo Cruise: There is a package available that allows you to tour the aquarium, then travel via paddleboat upriver, where you can disembark and tour the zoo. Three treats in one!


  5. St. Charles Streetcar: It begins on Canal Street and will take you through the Garden District and Uptown area of New Orleans. It’s true Southern architecture and foliage. “I’ve lived here most of my life, and it still takes my breath away,” Armbruster says.

Workforce Management Online, June 2009 — Register Now!

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Outsourcing on the Home Front

Unlike Indian outsourcing companies, domestic outsourcing firms, which use customer service agents who work from home, have found their business has picked up in recent months. “We’re finding the economy to be good to us,” says Rob Duncan, COO of Denver-based Alpine Access.


Angie Selden, chief executive of Miramar, Florida-based Arise, whose home-based agents work as independent contractors, says half of new potential clients are re-evaluating their commitment to India. Of 47 current clients, six have pulled back from outsourcing their call center work to India, most in the past year, Selden says.


Selden says rising unemployment in the U.S. has been a boon to her workforce. In 2007, 62,000 people made inquiries into working at home as call agents; in 2008, that number was 110,000.


“We’ve seen an unbelievable increase in the quality of talent—a significant uptick in sales acumen, professionalism and business knowledge,” Selden says.


One reason these companies are increasingly competitive, executives say, is that they have a workforce they can draw upon from anywhere in the country. The workers are motivated, well-educated and mostly female. Duncan says the economic downturn has meant an abundance of well-qualified workers—85 percent of whom have some college experience—to meet the needs of businesses more concerned than ever with customer satisfaction and increasingly sensitive to keeping jobs in the U.S.


“No executive wants to be seen as adding fuel to the fire of unemployment,” says Peter Allen, a partner with global sourcing consultants TPI. “If there is a domestic option, executives will take it.”


Maria Felton, a 42-year-old mother of three, works as a customer service agent from her home in Centerville, Maryland. To become an agent for Arise, she had to form her own business, pay a few hundred dollars for a background check and training, and spring for home-office supplies like a dedicated phone line, broadband Internet and a computer. She remembers some of her first calls.


“People would say, ‘Oh, thank God, you are not in another country,’ ” she says. “They were just happy that I didn’t have an accent and they knew they were calling the States.”


The job’s flexibility is one reason why home-based customer service agents have lower attrition rates, executives say. Felton has a master’s degree and is planning to keep her job while going to law school. She chooses to work early in the morning or late at night, when her children—and her barking dog—are asleep.


At-home call agents are paid less than their counterparts at call centers, but what they lose in pay they make up in savings on transportation, food and time, the agents say. The job appeals particularly to stay-at-home moms and older workers. Eighty-seven percent of Alpine Access’ agents are women whose average age is 41, the company says.


One Alpine Access agent is Lillian Crosby, 30, a mother of two children. Crosby used to work at a call center, but now she works from home in El Paso, Texas. The shifts in the economy have lifted Alpine’s business, but Crosby feels the pressure it’s putting on some of the people she talks to, especially if she is trying to collect on debts for a credit card company client.


In such cases, she finds that her work requires more than following the usual call center script.


“The last few months, because of the economy, I’m hearing a lot more personal stories,” she says. “My job is to listen to the customer and find out what’s happening, so we know what to do to help them out.”


Workforce Management, May 18, 2009, p. 33 — Subscribe Now!

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LinkedIn Connects With New CEO

LinkedIn on Wednesday, June 24, named Internet industry veteran Jeff Weiner as its CEO.


Weiner, who had served as interim president of the professional networking site since January, also was appointed to LinkedIn’s board of directors.


Weiner is taking the helm of one of the pioneers in the social networking field, which is blossoming partly because people are pushing to improve their employment prospects amid the recession.


LinkedIn founder Reid Hoffman, who served as CEO from December of last year until this month, has become executive chairman of the Mountain View, California-based firm.


“LinkedIn was founded to harness the power of the Internet to create a tool that would help individuals become more effective and successful professionals,” Hoffman said in a statement. “Over the past six months, Jeff has done an exceptional job leading the company and I look forward to continuing the work that we have begun together.”


Founded in 2003, LinkedIn allows people to create profiles of themselves, connect with others and communicate with people in their extended networks.


While some other early social and business networking sites such as ZeroDegrees have faded, LinkedIn has grown stronger over the years. It boasts more than 42 million members worldwide, up from 30 million members last October.


The firm has secured more than $100 million in funding from investors including Sequoia Capital, Greylock Partners and SAP Ventures.


LinkedIn says it turned a profit in 2008 and expects to be profitable again this year. A shift in online recruiting practices is goosing those results.


Organizations that once relied on general purpose job boards are turning to alternative strategies, including social networking sites, search engine marketing and niche job sites.


In a May study by research firm AIM Group, nearly 45 percent of recruiters surveyed said they used networking sites such as LinkedIn and Facebook with mixed or great results.


LinkedIn offers services to recruiters including expanded results when searching the LinkedIn network, targeted job postings and direct access to candidates.


In February, LinkedIn said it saw responses to job postings on the professional network double from six months earlier.


Earlier this year, the company also introduced what it called “custom company profiles” with “viewer-aware” information. These profiles are designed to adapt to viewer characteristics such as location and industry.


Recruiting industry analyst Peter Weddle named LinkedIn one of the top 100 job boards this year. He says the site makes networking easier, but notes that networking is a time-consuming method for landing candidates.


LinkedIn “is a site with great potential for recruiters,” Weddle says. “We’re still trying to figure out how to use it efficiently.”


Weiner has more than 14 years of consumer Web experience. Before joining LinkedIn as interim president, Weiner was executive in residence at venture capital firms Accel Partners and Greylock Partners. Greylock helped finance LinkedIn.


He also held leadership roles at Yahoo, most recently serving as executive vice president of Yahoo’s network division with responsibility for Yahoo’s consumer Web product portfolio, including Yahoo’s front page, mail, search and media products.


—Ed Frauenheim


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Vault.com Undergoes a Career Change

With companies undergoing multiple rounds of layoffs and the nation’s unemployment rate creeping toward 10 percent, it may seem counterintuitive for anyone to be investing in job Web sites.


But the economic downturn hasn’t shelved expansion plans for career Web site Vault.com, which on Tuesday, June 23, unveiled a multimillion-dollar revamp.


“If you’re an attorney, it’s not the same world now. If you’re in finance, your world is very different,” said Erik Sorenson, president and chief executive of Vault. “The definition of a career has changed in the last decade; we’re not necessarily going to sit in one silo for our entire work life.”


The new Vault.com includes a number of features aimed at moving the Web site beyond mere job hunting and into what Sorenson calls “career management.” Vault is adding more than 150 industries to its coverage, moving beyond the professional services realm into fields as varied as health care, energy and government. The new site features nearly 500 professions, up from around 60, and includes blogs, industry-specific news and video from publishers such as Dow Jones and TheStreet.com.


But key to the site’s revamp is MyVault, a customizable interface that allows users to create profiles of their interests. Through those profiles, they can follow customized news feeds and find other information related to them specifically. MyVault is part of a broader goal to push tailored information to Vault users, rather than having them look for it, Sorenson says.


“If you’re really focused on something, it’s worth giving us some profile information so we can push the relevant content to you,” he said.


Sorenson joined Vault in 2007, when the company was acquired by private equity firm Veronis Suhler Stevenson. Vault’s founders—three Stanford grads who launched the company in 1996—were named Crain’s New York Business Top Entrepreneurs in 2005.


Tuesday’s revamp is the first major change at Vault since Veronis took over; traffic—between 2 million and 2.5 million unique visitors a month—had leveled off in recent months, after years of growth. But the lagging economy may be helpful for smaller sites like Vault, which appeal to job seekers with their personalized feel.


“It’s no longer ‘just get the job,’ ” said Charlie O’Donnell, co-founder and CEO of career site Path101.com. “The job that’s right for you is also the job you have a higher percentage chance of getting. So finding which jobs are appropriate for you helps you filter.”


Path101 has members fill out of an extensive survey to give them guidance on which jobs are most appropriate for them.


For Vault, recession resistance also comes in the form of three revenue streams. The company makes money through advertising and from premium subscribers, and also sells its services to institutions such as universities and libraries. Sorenson also says he hopes Vault will be well-positioned when more jobs become available.


“I think people are just getting their brains around what happened to the economy and their career,” he said. “It feels like things have stabilized, and people are starting to calibrate.”


Filed by Kira Bindrim of Crain’s New York Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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True HR Believer Jack Welch Jump-Starts SHRM

Here’s a question you may want to ponder: How important is Sunday’s SHRM conference general session speaker, former General Electric CEO Jack Welch?

Answer: He’s probably the most relevant and topical HR thinker to address the conference in at least the last five years—maybe the most relevant one ever.

Here’s just one example, from the BusinessWeek column he writes along with his wife, Suzy Welch: “HR should be every company’s ‘killer app.’ What could possibly be more important than who gets hired, developed, promoted, or moved out the door? Business is a game, and as with all games, the team that puts the best people on the field and gets them playing together wins. It’s that simple.”

Or this, also from a recent BusinessWeek column: “Look, we’ve written before about HR and the game-changing role we believe it can—and should—play as the engine of an organization’s hiring, appraisal, and development processes. We’ve asserted that too many companies relegate HR to the mundane busy-work of newsletters, picnics, and benefits, and we’ve made the case that every CEO should elevate his head of HR to the same stature as the CFO. HR matters enormously in good times. It defines you in the bad. … If there was ever a time to underscore the importance of HR, it has arrived.”

Welch began his career with General Electric in 1960, and he worked his way up through the ranks to become the company’s chairman and CEO in 1981. During his 20-plus years as CEO, GE’s market capitalization rose from $13 billion to $400 billion, while revenue grew from $27 billion to $125 billion and earnings grew to almost $14 billion. Welch became a management superstar along the way. In 2000, he was named “Manager of the Century” by Fortune. The irony here is that he’s a pinch-hitter at the conference, stepping in for former NBC news anchor Tom Brokaw, who was originally scheduled to speak.

A 2005 “Last Word” column in Workforce Management put it this way, and it’s still true today: “In Jack Welch’s world, HR is not only a key part of the business, but HR people in the organization need to have special qualities to help the managers throughout the organization build leaders and careers.”

Some might disagree with this assessment, because Welch is also known for creating the infamous 20-70-10 employee assessment plan (known by its critics as “rank and yank”), where the top 20 percent of GE’s workforce each year got big raises, while the bottom 10 percent were shown the door.

In fact, Welch was frequently critical of human resources, according to former General Electric HR chief Bill Conaty.

But as critical as he can be, Welch also appreciates what HR means to a high-performing organization. Welch has said that HR leaders should not be “kingmakers or cops, but big-leaguers, men and women with real stature and credibility.” He will undoubtedly have a message on Sunday that SHRM conference attendees really need to hear.

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Suit Against Kenexa Seeking Class-Action Status

A lawsuit seeking class-action status has been filed against Kenexa Corp., a Wayne, Pennsylvania-based recruitment software and recruitment process outsourcing firm, alleging the company’s top officers misled investors and violated federal securities law between May 8, 2007, and November 7, 2007, according to a court filing.


The company said Friday, June 12, that the allegations are without merit and it will defend itself.


The complaint in the lawsuit cites positive comments made by the CEO and CFO regarding Kenexa during first- and second-quarter earnings releases on May 8, 2007 and August 8, 2007. However, the company missed its third-quarter revenue estimates.


And, on November 7, 2007, Kenexa reported it lost a customer in its recruitment process outsourcing division and cited longer sales cycles, according to the lawsuit. As a result, Kenexa’s shares fell to $16.61 from $27.84, the suit said.


The named plaintiff in the suit is the Plumbers and Pipefitters Local Union No. 630 Pension-Annuity Trust Fund.


—Staffing Industry Analysts


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Exec Comp Proposals May Mark Huge HR Change at Financial Firms

The Obama administration’s executive compensation proposals would not only increase the workload of compensation and HR managers, but they may also change how firms—particularly those in the financial services sector—recruit talent.


On June 10, Treasury Secretary Timothy Geithner proposed a series of changes to how companies determine executive compensation. Among them was allowing shareholders to have a nonbinding vote on executive compensation and an effort to reduce incentives that result in executives taking excessive risks. Specifically, the administration wants companies to replace short-term bonus plans with more long-term incentive plans, such as granting restricted stock.


If passed into law, these proposals could mark a massive change for financial services firms, which largely rely on mammoth annual bonuses to recruit and retain talent, experts say.


“The days of an individual producer making a $20 million bonus in a year are going to decline,” said David Swinford, president and CEO of Pearl Meyer Partners, a New York-based executive compensation consultant.


The challenge for HR and compensation professionals will be to figure out how to define risk and structure compensation in a way that makes sense, experts say.


“What’s troubling about this idea of defining risk is that when you look at the blowup we are living in right now, it didn’t seem incredibly risky before it happened,” said Alan Johnson, a New York-based compensation consultant. “Who thought we could go broke on mortgages?”


To address this, compensation and HR executives will have to work closely with their compensation committees to develop an analysis that assesses the risk of their companies’ incentive plans, said Andrew Goldstein, co-practice leader of executive compensation in North America for Watson Wyatt Worldwide.


While the proposals still have to go through Congress, experts agree that these changes along with President Barack Obama’s call for increased regulation of financial services companies will result in these companies changing the profile of their ideal job candidates.


“I do think that HR will put more emphasis on people who follow rules well as opposed to the super-entrepreneurial types,” Swinford said.


The days of getting rich quick on Wall Street are over, and that means companies are going to want employees who have a longer-term perspective, said Jack Dolmat-Connell, CEO of DolmatConnell & Partners, a Boston-based executive compensation consulting firm.


All of the increased regulation over the financial services industry may make it harder for these firms to attract and retain talent, Goldstein said.


“The question is whether those people who would have otherwise been attracted to work in this industry still want to do so, given more government regulation,” he said. “I think some of the bloom is off the rose.”


—Jessica Marquez


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