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A number of high-profile mergers and acquisitions within the HR services and outsourcing market have hit the headlines in the past month. This has raised questions as to why the market is consolidating, and how this will affect HR professionals who are exploring outsourcing as an option.
At the start of May, HR software firm Northgate bought a majority stake in international outsourcing company Arinso, putting the value of the company's HR services revenue at £257m.
Arinso is a provider of SAP-based HR services, including HR outsourcing, technology integration services and strategic consulting. It employs more than 2,500 staff in 27 countries.
Hot on the heels of that deal, software giant Sage bought rival firm Snowdrop Systems for £17m. Sage serves 5.2 million customers worldwide, while Snowdrop provides HR and payroll management software to more than 700 mid-sized businesses in the UK.
A new trend?
So why the sudden rush to consolidate? Anthony Bruce, director of HR effectiveness at consultancy PricewaterhouseCoopers, said multi-million pound corporate deals in the HR technology and services market were not new phenomena - just part of "a continuing trend".
To back this up, he pointed to two significant deals in recent years: consultancy Hewitt buying outsourcing provider Exult for £380m in 2004, and IT firm EDS joining forces with consultan
