HR services firm Hewitt Associates has acquired RealLife HR, a health and benefits services vendor that targets the midmarket, for an undisclosed amount. The deal is expected to boost Hewitt’s benefits outsourcing business – the company’s largest division, accounting for nearly half of sales, but one that posted flat growth in the most recently reported quarter.
RealLife serves companies with fewer than 15,000 employees. It currently has 35 clients on its roster, including Bombardier, US Airways, and Adidas, to which Hewitt hopes to offer additional HR-related services. All of the approximately 85 of RealLife’s employees will transfer over to Hewitt. Hewitt expects the deal to close at the end of the month.
The midmarket has attracted other big outsourcers who wish to take their enterprise offerings downstream and cash in on a fast-growign market of typically first-time outsourcers. Last year Accenture bought Savista, and HR and F&A vendor, to establish its own midmarket BPO practice. Now Hewitt has taken a similar route, choosing to acquire an established midmarket player rather than just scale down its existing services.
RealLife’s proprietary platform is a big selling point, since most midmarket companies can’t shell out the big bucks to implement Oracle and SAP systems. Instead they’ll typically pay monthly or annual fees to vendors for their technology and support services.