Aon Hewitt, the field changes for Mercer, ADP, Kenexa


My wife and I watched the full collection of West Wing episodes not to long ago and I couldn’t help but recall the conversation President Bartlet had with his Joint Chiefs about the virtue of a proportional response as I read this mornings news.  I was greeted with news that consulting giant Aon, Inc. has announced it’s acquisition of Hewitt Associates.  Looking back over the year, I have to wonder, if this the icing on the cake for Aon or just another course in the meal?

We know Aon as a global player in the risk management, reinsurance and Human Capital consulting space, but as a benefit provider?  You bet.  Aon has been in the HR Outsourcing market for quite a while and officially launched its seemingly successful and growing Benefits solution practice in November of 2008. They’ll now happily handle your employee life cycle from hire to retire and then some.

Interestingly though, the last several months have seen Aon picked up the pace in growing its benefit and HRO offerings and making several high-profile hires.  Let’s take a look.

Back in February, Aon promoted Bob Mongia as the VP of development for the global consulting organization and the Benefits Solution Practice.  Later that month, Aon announced that with adding 13 new benefits clients they’d passed the 100 client mark with over 1.5million participants within 14 months of launching the service.  At this point, Aon Shaka Maharajh, Senior VP and Client Solutions Leader said, “The improvements in our technology have been critical to our growth”.  File that quote away for later.

In March, Aon entered into an agreement to acquire J.P. Morgan Compensation and Benefit Strategies Division.  Then Aon picked up a small contract to provide benefits and human capital solutions services.  It was for the U.S. Army with a 5 year contract for $1.27 billion.

April saw the hiring of a new VP of development for the Recruitment Process Outsourcing in the central and west regions and Richard Kantor as a senior VP responsible for development and implementation of the total rewards service line as well as the global benefits and strategic human capital consulting opportunities.  Also in May, Aon issued a press release about the success of their Benefits SolutionsTM as a Canadian pioneer.  Again they mention the solutions that they have built.

In May it was announced that Jim Causey was to be another VP for the RPO practice and Kirby Bosley was brought on as the senior VP and H&B practice leader for the west region.

On June 3rd, Aon released an announcement calling out awards released by Risk & Insurance and HR Executive magazines in which 6 of their consultants were declared “Employee Benefits Power Brokers”.

June 29th, Aon sold of their subrogation business unit to Praxis , reducing their food-print in the reinsurance space.

And as you know, today, Aon acquired Hewitt, who incidentally joined forces with Salary.com back in May.

So, as the dust settles, there is a new business unit at Aon call Aon Hewitt.  Good news for current Hewitt clients in that Hewitt chairman and CEO Russ Fradin who will report directly to the CEO of Aon.  Aon is now a marked leader in the Benefit administration arena having picked up Hewitt’s over 3000 clients.

Hewitt representatives are reeling from the announcement too and today are telling clients that their technology will prevail as it is much better than Aon’s, so clients need not worry about any impacts to them.  Is Aon really going to dump all that technology that they’ve invested in the past 18 months to build the Benefits business as they have?

Aon now has a fairly comprehensive product and services offing too – From its Recruitment Process Outsourcing to Benefits Admin, to Payroll and Talent Management, there is now less of a delta between them and other major employer services companies like ADP and solution providers like Kenexa and Taleo.

I don’t think we’ve seen the end of this yet.  My guess is that we’ll soon see some realignment within Aon between existing and new products and services and a cross selling which will make them a major player in some of these spaces they are just starting to dangle their feet into.

Will Mercer respond by moving another leg in the coming months?

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