Hewitt Associates
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| Hewitt Associates | |
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| Type | Public (NYSE: HEW) |
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| Founded | Lake Forest, IL (1940) |
| Headquarters | Lincolnshire, IL |
| Key people | Russell P. Fradin, Chairman & CEO |
| Industry | HR Outsourcing and Consulting |
| Revenue | $2.9 billion in 2005 |
| Employees | ~26,000 |
| Website | www.hewitt.com |
Hewitt Associates (NYSE: HEW), based in Lincolnshire, Illinois is a global human resources (HR) outsourcing and consulting firm delivering a complete range of integrated services to help companies manage their total HR and employee costs, enhance HR services, and improve their workforces.
Hewitt went public on June 27, 2002. The offering price was $19.00 (US) per share.
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[edit] History
On October 1, 1940, Ted Hewitt formed Edwin Shields Hewitt and Associates as an insurance brokerage specializing in financial planning for business executives. The first client was Parker Pens.
[edit] Growth Strategy
Prior to 2000, most of Hewitt's growth was organic. Acquisitions and joint venture with very small boutique firms, primarily defined benefit plan actuaries and human resources consultancies were typical. In 2000, Hewitt began growing through larger mergers and acquisitions. The first of these was the announcement, in late 2000, of a plan to integrate its UK and Ireland business with Bacon & Woodrow, a leading retirement and financial management consultancy in the UK
In June of 2003, Hewitt announced the completion of the acquisition of Northern Trust Retirement Consulting, L.L.C. , expanding its portfolio of outsourcing clients. Later in 2003, Hewitt acquired Cyborg Worldwide, Inc., expanding outsourcing capabilities to include payroll services.
On October 1, 2004, Hewitt completed the acquisition of Irvine, CA - based Exult, a company specializing in Human Resources Business Process Outsourcing or HR BPO. This move was to ensure Hewitt would remain competitive within the HR Consulting and Outsourcing space, in which HRBPO is a rapidly growing area.
In 2005, Hewitt, in conjunction with América Economía magazine created the list of the Best Employers in Latin America. This is the first list created for companies in the region and it was featured on the June 18 edition of the magazine.
Hewitt currently has over 2,600 clients making it the world's largest provider of multi-service HR business process outsourcing (BPO), and it claims to be the only firm fully integrating HR outsourcing and HR consulting. Hewitt's clients include over half the Fortune 500 and a third of the Fortune Global 500. Hewitt has offices in 35 countries and employs over 26,000 employees.
[edit] Response to competitive challenges
Facing increased competition in the business process outsourcing market, significant investment in a number of new outsourcing engagements, and declining margins in its traditionally strong consulting business, Hewitt announced substantive changes to employee benefits including health insurance, profit sharing, sick leave, and arguably their most famous benefit, the elimination of free lunch (in North America) in late 2005, perhaps providing an additional proof to the adage "there ain't no such thing as a free lunch". The company was spending 35M annually on the free lunch program. The company acknowledged, in SEC filings, that employee reductions were taking place in certain segments of the business.
[edit] Leadership change
On Thursday, June 15, 2006, it was announced that CEO and Chairman Dale L. Gifford would be stepping down. The announcement was made in the face of Hewitt's declining stock performance and market worries about the entire BPO sector, but Mr. Gifford, who has served as chief executive officer since 1992, indicated the decision was his own, and that he planned to retire. [1]
Just after the closing of the stock market on Thursday, August 10, 2006, the company announced the appointment of the fourth CEO of Hewitt Associates, Russell P. Fradin[2], whose tenure commenced on September 5, 2006.
