The intersection between HR strategy and HR technology


Mercer HRO takes off

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Well, I was wrong again. I really thought the Mercer SynHRgy merger was going to be a flop. In fact, I was fully convinced that Mercer would spin the HRO arm off sometime this year. Instead, they have 15 new deals so far in 2005 adding an additional 300,000 employees to their services.

For those of you who don’t really know what pricing is like for full service HRO, let’s call it $10 to $20 per employee per month. $10 might be for just payroll and call center, and $20 might be for PR, benefits, and HR call center. I’ll split the difference and we’ll just say $15 pepm. 300K ee’s times $15 pepm times 12 months comes out to a staggering $54,000,000 of additioanl revenues per year. And that was just the first quarter. Keeping up this sales pace, they will be adding $200M in revenues each year.

OK – next few days I’ll put up a post regarding why HRO is so hard and why nobody is making huge money.

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