HR Administration

Towers Watson 2010 Merger Fuels Top Consultant Firms’ Growth

By Emily Laermer

Aug. 15, 2012

The total number of local consultants at New York’s Top 20 benefits consulting firms grew 12.7% last year. Much of that growth was fueled by Towers Watson & Co., where the staff size nearly tripled, thanks primarily to a merger two years ago. But the average employment numbers for the other 19 firms were nearly flat, dropping less than one percent.

This is the first time the number of local consultants in Crain’s New York Business’ annual list of Top 20 firms has dropped since the recession. The list of largest benefit consulting firms, ranked by number of New York-area professionals, ran in the Aug. 13 of Crain’s.

At these same top 20 firms, though, their worldwide headcounts grew by 3.6%.

“New York has become so consolidated with large brokers, there really aren’t a whole lot of middle-market brokers left,” said Richard Fleder, managing director of Alliant Insurance, which ranked No. 20 on Crain’s list. “In some other locations, you can succeed as a small independent firm. In New York, it becomes difficult.”

Indeed, Fleder had been the president of T&H Benefits, which was purchased last year by Alliant. The merger, he said, allowed both firms to increase their services. Though Alliant’s local head count shrank, the firm grew worldwide. Some of its corporate services were moved to California.

In all, 12 of Crain’s top firms saw their number of local consultants grow, while four shrank, including Mercer, which despite shedding 1.1% of its local headcount, ranked No. 1 on the list for the fifth straight year. Another four on the list were flat.

At Towers Watson, a merger between Towers Perrin and Watson Wyatt in January 2010 spurred most of its growth, according to a company spokesman. The firm, which ranked No. 2 on Crain’s list, reported 801 local professionals in 2011, up from 204 in 2010.

Many firms expect health-care reform to help boost their head counts next year, thanks to the Supreme Court’s recent ruling on the constitutionality of the Affordable Care Act. Corporate clients are starting to review their benefits in the wake of the decision.

“With all the press and all the talk about health care in the U.S., and all the benefits that now make up an employee’s benefits program, it’s natural for there to be an increased level of visibility and awareness of the industry,” said Ed O’Malley, president of NFP’s corporate client group.

At NFP, which ranked No. 7 on Crain’s list, the local consultant head count grew by 2.6%, and firmwide employment grew by less than one percent. The firm expects growth to continue this year because it acquired three corporate brokerage and consulting firms earlier this year. This was the firm’s first major deal to date, and Bill Austin, the managing director of NFP’s New York office, calls it a “sneak peek of what’s to come.”

Emily Laermer writes for Crain’s New York Business, a sister publication of Workforce Management. To comment, email

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