Masters of HR

Tracing its roots back as far as 1878, Watson Wyatt has a long history of consulting work in the actuarial field; long enough, in fact, that it was offering consulting-style services before the term "consulting" even existed.  These days, operating out of more than 100 offices in 34 countries, the company provides human capital and financial management consulting services, advising clients on such issues as compensation, retirement, health care, insurance and investment plans.  The consultancy prides itself on "putting clients first", an approach that the firm says "means many things", be it "moving quickly" or "moving mountains".  One thing the firm says it always means, however, is that it consults with clients, rather than at them.

The company operates through five segments: benefits, technology and administration solutions, human capital, investment consulting, and insurance and financial services.  The benefits practice is by far the largest, accounting for more than half of all annual revenue.  The segment's offerings include the design and management of benefit programs, actuarial services such as funding and risk management strategies, international human resource strategies such as transfer policies and compensation mirroring, mergers and acquisitions advising, and assistance with compliance and governance.  The other four segments together make up the remaining portion of Watson Wyatt's offerings, with each contributing somewhere between seven and 12 per cent of annual revenue.

W + W = Quadruple U?

As mentioned above, Watson Wyatt traces its roots back to 1878, when one Reuben Watson started a small actuarial firm in London, an outfit recognized today as the world's oldest actuarial company.  That little enterprise grew to be one of the most respected establishments in the UK through its work with the government on social insurance plans.  As its reputation grew over the years, so did Watson's family; so much so that by the middle of the 20th century, Watson & Sons was one of the most recognized names in the European consulting world.  The other half of Watson Wyatt, The Wyatt Company, founded in the United States in 1946, also began as an actuarial concern, but later expanded its services into health care and compensation consulting.

Over the latter half of the 20th century, both The Wyatt Company and Watson & Sons continued to grow and expand their reach in an increasingly global economy, an economy that meant the two firms were coming into the other's sphere of influence more and more.  Spotting an opportunity for a unique alliance, 1995 saw the two joined together in a partnership that separated the company into two branches covering different geographic segments.  Watson Wyatt & Company looked after the North American and Asia Pacific markets, while Watson Wyatt Partners covered Europe.  The collaboration was an immediate success, with the joint concern's earnings growing by 30 per cent in the first year alone.  Indeed, Watson Wyatt & Company's business grew so much over the next five years that the firm made the decision to launch an IPO on the New York Stock Exchange in 2000.  The consultancy's stock has traded there under the ticker symbol "WW" ever since.
Just one step remained in the nuptials, an official merger.  That occurred in 2005, with the new entity adopting the name Watson Wyatt Worldwide to signify the joining of its two geographic sectors.  

Research, report, repeat

In addition to its prodigious consulting output, Watson Wyatt consultants have been known to commit an idea or two to paper, in the form of research reports, technical papers, surveys and books.  Also on the research front, the firm maintains a data services unit (Watson Wyatt Data Services).  Operating out of five survey centres around the world, the unit conducts surveys and publishes over 200 annual compensation reports, a service that gives clients the opportunity to gain insights into workplace conditions on all levels, from local to global.


Two become one
June 2009

In a deal that will establish the world's largest consultancy dedicated to HR and employee benefits, Watson Wyatt agreed a merger with Towers Perrin.  Billed as a "merger of equals," the deal will create a company with some 14,000 employees, expected to rake in some $3.2 billion in revenue in its first year.  According to industry analysts, the deal is a reflection of the downturn in business associated with the recession; both companies had seen revenue fall off as clients cut spending and brought certain HR functions back in-house.  The two firms will continue as separate entities until the deal officially closes, an event scheduled for the end of 2009, at which point the new entity will be known as Towers Watson & Co.

Tallying the future of pensions

June 2009

Final-salary pension schemes have captured the attention of the press with a number of high-profile companies closing their schemes in favor of offering defined-contribution plans instead.  In The Sunday Times, a Watson Wyatt survey cited that about 15 per cent of 160 final-salary schemes are expected to close to future accrual by the end of 2010, followed by 40 per cent in the next decade.

Dobro pozhalovat v Moskvu (Welcome to Moscow)
June 2009

Continuing a policy of expanding its footprint in emerging markets, Watson Wyatt opened an office in Moscow.  According to the firm, the move was made in response to increasing demand for its services in the country, services that will initially focus on the provision of consulting services "to insurance and financial services companies, and human capital and strategic reward consulting".

A long road to the top
April 2009

Martin Pike was named the new global director of Watson Wyatt's insurance and financial services consulting practice.  Having spent more than a quarter of a century at the firm (he joined in 1983), Pike was well placed to take over the role from the retiring Philip Brook, who had served as the European head of the insurance and financial services practice since 2006.  He is tasked with delivering growth to the unit across all geographic regions, a priority identified by CEO John Haley in an interview in June 2008 (see below for details).

Staying positive

Watson Wyatt should come through the economic turbulence with ease, according to its consultants who believe it is "recession-proof".  Many of the firm's services "are required by every pension fund in the UK, so our services won't go out of demand easily," explains an insider.  "Compared to a lot of other firms, we are doing very well.  Obviously we've been hit by the slowdown, but clients need us whether they're doing well or badly.  Because the company has its fingers in many pies, we have the robustness to survive and come out the other end in a good position," claims another.  

But respondents don't hide the fact that "there has been a slowdown in work coming through the door," which they believe might affect on how much the firm is able to charge clients.  "As we are seen as the best, the prices we charge for our services are often higher than our competitors, and we may have to start to justify these prices," warns one source.  But as "no job cuts are expected and the firm is still hiring for 2009, the outlook is positive" consultants indicate.

Pass your exams first

Promotions happen "very much on an individual basis" and, for juniors, whilst promotion doesn't happen until they qualify, exam passes are recognized financially.   Beyond that, the process is meritocratic, so people "aren't forced out by not moving up the ladder".  The speed at which consultants move up depends on personal preference, according to sources.  "Those who are hardworking can qualify quickly and move up, whereas those looking for a more sedate work/life balance can move more slowly," a source explains.  

Training at the consultancy includes "a structured training course spread over the first year", including professional qualifications, in addition to "on-the-job training and informal mentoring".  

A happy ship

Compensation at Watson Wyatt doesn't draw too much criticism from its consultants, who take note that although their salaries "are on par with rival firms", the work/life balance and number of hours they put in mean that their "pay per hour is more."  They also note that the firm's benefits are stacked in their favor as well, with an extensive "study package for qualifications, including exam fees and up to 40 paid study days".  Other financial remuneration includes "free health care, subsidized staff canteen, reduced dental care, free travel passes and huge discounts on Microsoft software".  The consultancy also encourages its consultants to buy into the firm through "reduced-rate shares", in addition to annual "spot bonuses" dependant on team performance, but normally in the range of 10 per cent of base salary.  And having colleagues in the same age bracket is real benefit for junior consultants.  One Londoner comments, "The social life at the company far exceeded my expectations with a high number of peers with the same mentality.  I would rank this as a very high benefit due to the impact it has on my general working life".

A good mix

"Women are absolutely on par with men" at Watson Wyatt, sources say, and the firm has taken great strides over recent years with its female recruiting policies.  Says one insider, "Our firm was very male-orientated a few years ago, but the number of females is steadily increasing, and I would say our graduate intake is roughly 50 per cent female, which is outstanding for a financial firm."  The firm is also doing its best to make sure women stay on for the long haul, with an array of "options available for childcare, in addition to flexible working hours".  As one female consultant puts it, "I never feel that I am treated differently, except when my chivalrous colleagues hold the doors open for me."

In fact, Watson Wyatt has "a very diverse body of staff at all levels", respondents point out, including a number of employees from ethnic minorities.  "I work with colleagues of many different minorities, and this is representative of the good general mix within the workplace," says one insider, while a colleague adds, "I am a minority myself and the firm has no acts of discrimination in any form."  This also applies to consultants' sexual preference, which we are told is "not an issue".

Charity begins at Watson Wyatt

Taking part in charity work is heavily encouraged and "people participate very extensively in various charity projects."  The firm supports a number of charities , and its graduate programme includes a three-month project where teams of graduates work with  charities to understand their objectives and create solutions for them.  Local schools also benefit from the consultancy's "frequent charity drives" and its support of "Junior Achievement, in which associates teach business-related classes to local secondary schools".  Number Partners is another programme consultants can choose to take part in.  An insider explains, "I use my lunch time once a week to go down to a local school and play math-based games with eight-year-old children.  It's great fun and a good hour break from work."



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Watson Wyatt Worldwide Europe

21 Tothill Street
London SW1H 9LL
Phone: +44 (0)207 222 8033
Fax: +44 (0)207 222 9182


  • Employer Type: Public
  • Stock Symbol: WW
  • Stock Exchange: NYSE
  • Chairman, President & CEO: John J. Haley
  • 2009 Employees: 7,700

Key Financials

  • 2009 Revenue: $1,650 million

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