INDIA BUSINESS WORLD - JUNE 2006
THE MONTH THAT WAS...

UNILEVER OUTSOURCES HR TO ACCENTURE FOR 7 YRS

  CONSUMER goods giant Unilever announced that it has awarded a seven-year contract to Accenture for its global HR operations. IT solutions major Accenture will provide a range of HR services, from recruitment to payroll processing and performance management, in 100 countries. The rollout is expected to begin in a phased manner across the Unilever world, with the first phase of implementation set to begin from the second half of 2006 till 2009.

With this deal, Unilever joins a growing list of Fortune 100 multinationals that are increasingly choosing to focus on a few core functions and outsource the rest. Says Unilever chief human resources officer Sandy Ogg, “This global outsourcing deal represents a major strategic choice for Unilever. We believe that it is best for our business if we concentrate on our core competencies, and transfer our back office to make it someone else's front office. We can also leverage Accenture's capabilities and expertise. This deal allows us to create a simpler and more agile global HR function to better support Unilever's growth agenda.”

Accenture plans to provide a bundle of services, including recruitment, payroll administration, reward administration, performance management, workforce reporting, core HR administration and third-party provider management services. Unilever is expected to shift a part of its 3,300 global HR staff employees to Accenture. The rest will either be moved to new roles within Unilever or opt for voluntary retirement. In order to provide Unilever with these services, Accenture will deploy and manage critical HR software applications for the client.

In recent years, Unilever has experienced performance pressures. At one end, the growing clout of global retailers like WalMart and Tesco have gradually eroded its competitiveness and crimped margins, while at the other end, Unilever has also been unable to discover new growth markets, forcing it to rationalise costs and make the global organisation a lot more lean and mean. Last year, Unilever had outsourced its financial functions across Europe to IBM in a similar seven-year deal.