Unilever HR deal will not spark rush to outsource

Unilever’s large-scale HR outsourcing deal with Accenture will not signal a rush by other companies towards signing similar contracts, experts predict.

Last week, the consumer goods giant signed a seven-year deal with Accenture covering about 200,000 staff in 100 countries. The HR services to be provided include recruitment, payroll and core HR administration.

The full value of the contract has not been revealed, but it is thought to be considerably larger than Accenture’s HR deal with BT signed last year, which is worth £306m over 10 years.

The move by Unilever –owner of brands including Persil, Flora and Lynx – follows decisions by other large organisations to fully outsource their HR functions, including BAE Systems, Cable & Wireless and BT.

Figures from researchers Yankee Group indicated that global HR business process outsourcing is expected to grow to £42.8bn by 2008.
But Samad Masood, analyst at research firm Ovum Holway, said the market had not reached the point where organisations sign up because competitors have done so.

“Full HR outsourcing is not for everyone, and most companies still focus on outsourcing just payroll. We would caution against assertions that end-to-end HR outsourcing is nearing mainstream adoption based on a few large deals,” he said.

Martyn Hart, chairman of the National Outsourcing Association, said full HR outsourcing was still the preserve of multinationals. But he added: “If you are an HR professional in a large company that hasn’t [outsourced HR], then you ought to be worried.”

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The impact of HR outsourcing 

Unilever’s hr outsourcing deal

• Seven-year agreement starts on 1 July.
  
• The programme is part of the ‘One Unilever’ initiative to improve competitiveness, which includes IT operations and business consulting outsourcing.
  
• Other services covered include workforce reporting, performance management, reward administration, HR software, and third-party supplier management.
  
• Accenture will also provide a range of learning services.
  
• Unilever claimed “less than half” of its 3,300 global HR staff would be affected by the transition of roles and services to Accenture.