5 Questions for Christian Marchetti, Managing Director, Accenture HR Services

Accenture HR Services made headlines in June when it won a seven-year HR outsourcing contract with consumer goods giant Unilever. The deal, which has been valued at $1.1 billion, is the biggest HRO contract ever, analysts say. Under the agreement, Accenture will oversee HR administration, recruiting, training and performance management for Unilever’s 206,000 employees in 100 countries.

Christian Marchetti, who works in Accenture HR’s Paris office, recently spoke with Workforce Management staff writer Jessica Marquez about the deal and the overall HRO market during a November meeting in Brussels, Belgium.

Workforce Management: How did you first hear that Unilever was looking to do HR outsourcing?

Christian Marchetti: Unilever has been an important client of Accenture for a long time through a lot of consulting work. About two years ago, we started these C-level discussions around how HR can contribute to their strategic agenda. They had some identified objectives on how they wanted to transform the company, and the question became how to transform HR as part of that. Through those discussions, they became convinced that outsourcing and HR transformation were the best way to go. It was not something that jumped into our face through a request for proposal. It was an ongoing discussion based on an existing relationship. Then they decided to put out the RFP.

WM: In the Unilever deal, as well as several of your deals, Accenture is partnering with other providers to offer services like payroll and benefits. Will that continue to be part of your strategy, or will you build or buy more capabilities?

Marchetti: The HR domain is quite wide, and I have no intent to do all capabilities. Partnering will continue to be our strategy. We may adjust this strategy at some point to build some parts of capabilities ourselves, and we may end up doing some pieces that are currently subcontracted. But in terms of technology and specific processes, there will always be a domain where we will have to partner.

WM: When we spoke a few months ago to Michelle Adelman, a senior executive at Accenture HR Services, she mentioned that Accenture might do its own benefits administration. Is that still a consideration?

Marchetti: This is ongoing thinking. This is not something in progress. To ensure that we have a structure of alliances, we know who are the players and we know who we want to work with. Benefits [administration] has been a longstanding question. It’s still open.

WM: Does Unilever’s decentralized structure present challenges in implementing HRO?

Marchetti: We will see. Decentralization isn’t a challenge by itself. The challenge is that they have a decentralized organization and a decentralized culture, which is requiring more standardizing and consistent processes. So the decision-making process is happening despite the decentralized nature of the organization.

WM: What trends are you seeing in the HRO market overall?

Marchetti: This market has been very aggressive over the last few years, so we will see the consequences of some providers going through difficult deals. At the same time we will see very big transformational deals like Unilever. It can have a huge impact on the momentum of the market if we are successful. I think the lift-and-shift transactions are having so many problems that there will be less and less of them. I don’t know if there will be consolidation. I think there are too many players saying they will play. Maybe some of them will just continue other businesses they are in and not stay in HR outsourcing.