Mercer HR Outsourcing and Consulting Briefing
Mercer provided an update on their HR outsourcing, talent management and consulting products and services for 2011. Mercer is a major player in the overall Human Capital Management and Health and Benefits markets with total revenues at $3.5 billion, 27,000 customers, and over 4 million employees using their solutions. Here is a quick take on some of the interesting things that they are up to.
Mercer Outsourcing
Mercer’s global outsourcing leadership provided an update on their business that includes their Total Benefits and point solutions outsourcing offerings. The company has made an important shift from the broader HRO market to focus more on their strength around Total Benefits Outsourcing or TBO. Mercer’s outsourcing clients make up 80% of the US Fortune 500, so they are very strong at the high-end of the market.
In a recent announcement Mercer is now partnering with SAP in Germany for their pension administration. This partnership will allow SAP to deliver a robust pension solution to their large German and multi-national customers including organizations like Dow, Rockwood Holdings and J.P Morgan.
Mercer has made a major investment in building out a very high quality offshore processing center in India, their Global Operations and Shared Services center over the past 2-3 years. The key to making this offshore capability work is that Mercer isn’t just outsourcing benefits work to a partner, the GOSS employees are Mercer employees and part of their core delivery teams. Today this service center handles only back office and delivery functions, at a much lower cost than could be achieved from US-based resources. This positions the company to offer lower cost TBO solutions to mid-market sized organizations. Mercer also doesn’t offshore their call center or employee-facing functions to India at this time, due to possible concerns from their customers, these functions are still handled by US employees.
Mercer’s Americas operations provided an overview of their business which is primarily based on their TBO platform. Mercer’s Health and Benefits business capabilities include defined contribution, defined benefits, health and benefits and absence management. Their TBO business typically services clients with at least 7,500 employees and more than 80% of their new clients are leaving existing benefits engagements with other industry providers. Unlike competitors, Mercer’s Americas TBO business has very high customer retention rates, in excess of 95%.
Human Capital Connect
Recently launched their integrated Performance and Rewards solution built on top of PeopleclickAuthoria‘s SaaS-based talent management platform. This solution has been infused with Mercer’s rewards best practices as well as a link to their ePRISM compensation management technology. Mercer clients and prospects like the idea of leveraging the company’s extensive embedded intellectual capital, integrated into a leading a TMS SaaS platform to help them deliver faster and better HR transformations.
The initial uptake on the offering has been a little slower than they planned but are now seeing stronger momentum and should be able to announce some new wins in the second half of this year.
Mercer WIN
Mercer’s Information Products team previewed their upcoming product called the Workforce Information Network that is a new rewards analytics platform that accesses Mercer’s vast warehouse of compensation and job family information. Mercer has compiled comprehensive data from more than 20 million employees and 8,000 organizations globally.
The Mercer WIN offering is now in beta, with 50 charter clients, and the company is planning to expand the offering to service up to 10,000 users by the end of 2011. The plan for 2012 is to broaden the available data sources to include survey data from other providers along with other Mercer data, that will them to deliver libraries of benchmarks for pricing, reporting and survey submissions. These tools will allow their clients to deliver more competitive pay programs segmented by regions and against their peer groups. Over time this data can be shared among other Mercer offerings including ePRISM and with the Human Capital Connect product set.
This potentially is a very interesting subscription service based on a large data asset that Mercer has been sitting on, that could be made available to all of the company’s clients over the next few years.
