Resourceful human resources
In October 2010, Aon Corporation completed its purchase Hewitt
Associates in order to expand the reaches of its consulting arm.
This purchase was valued at almost $5 billion, and nearly tripled
the size of their consulting divisions. As a result of the merger,
the newly formed Aon Hewitt intends to operate as an independent
business line of the larger corporation. In addition, their
consulting services intend to eliminate redundancy by firing around
1,500 employees, saving the company an estimated $280 million.
Hewitt Associates is one of the world's largest management
consulting firms specializing in maximizing organizations'
investment in human resources solutions. Its claim to fame:
It is the world's largest provider of benefits and multiservice HR
business process outsourcing, and integrates HR outsourcing and
consulting. The firm's 23,000 employees, working from 110
offices in 33 countries, serve more than 3,000 clients, which
include nearly two-thirds of the Fortune 500 companies and more
than a third of the Fortune Global 500.
Hewitt might be big, but it's likable, too-nearly 95 percent of
Hewitt's largest clients have worked with the firm for at least
five years. In fact, the firm has been recognized as one of
America's Most Admired Companies by Fortune magazine every year
A list of firsts
The firm was founded in 1940 by Ted Hewitt as an insurance
brokerage in a bank building in Lake Forest, Ill. As Hewitt
Associates grew, so did its expertise, and the firm pioneered a
number of now-standard HR functions. In the 1940s, it
designed the first noncontributory employee savings and pension
plan recognized by the Internal Revenue Service. In the
1950s, it was the first to measure ongoing investment performance
for defined benefit plans. In the 1960s, Hewitt was one of
the first consulting firms to tie benefits and compensation to
corporate goals and missions, communicating total compensation as
part of a business plan. In the 1970s, it designed the total
compensation measurement methodology to gauge the value of salary
packages, and in the following decade it was the first to design a
large employer 401(k) plan. In the 1980s, Hewitt created one
of the first full-service, outsourced benefits centers.
In 2000, Hewitt became the first firm to provide HR benefits
process outsourcing services-including benefits, payroll, HR
information systems, recruiting, learning and other HR
services-integrated with consulting expertise. Today, the
firm provides services annually to more than 20 million employees
around the globe.
Hewitt's business is broken down into three business segments: HR
consulting services, HR benefits outsourcing services and
integrated HR business process outsourcing solutions. The
firm works with clients to create and manage retirement programs;
design and deliver health plans; help attract, keep and reward the
best employees; find ways to reduce HR costs; address HR and people
issues in mergers, acquisitions and divestitures; administer HR and
Benefits programs; communicate and drive organizational behavior
changes; and develop comprehensive HR solutions to improve clients'
In 2009, Hewitt's HR consulting business saw its revenue drop by
1 percent, after seeing it grow by 12 percent the previous
year.. The segment, which comprises 33 percent of the firm's
total revenue, consists of four main practices: retirement and
financial management, health management, communication, and talent
and organization consulting.
Making up slightly more than half of Hewitt Associates' revenue
in 2009, however, was its benefits outsourcing segment. The
unit offers clients a way to outsource their defined benefit,
defined contribution, and health and welfare administration
services, as well as absence management, flexible spending and
participant advocacy programs. Pulling up the rear in
Hewitt's 2009 ledger books was its HR BPO segment, which made up 16
percent of revenue.