Unilever HR Outsourcing Deal Shows Buyers Are Willing to Use Multiple Providers

Unilever’s recent decision to outsource its HR processes for its Latin America workforce to IBM signals that employers are now more likely to go to different HR business process outsourcing vendors for different parts of their business.

On Wednesday, April 22, IBM announced that it had signed an HR BPO contract to take over the HR processes for Unilever’s 27,000 employees in Latin America. Under the agreement, IBM will provide services to Unilever through its centers in Hortolandia, Brazil, and San Jose, Costa Rica.

The agreement marks a five-year extension of a current contract between Unilever Latin America and IBM by which IBM provides payroll, benefits administration, employee data management and contact centers for Unilever’s employees in Brazil Mexico And Chile, says Mary Sue Rogers, general manager Global HR and learning at IBM. It also extends that agreement to include 16 additional Latin American countries. Rogers declined to comment on the value of the contract.

The announcement about the deal had some analysts wondering if the move was a departure for Unilever, which had signed a global, seven-year HR BPO deal with Accenture in 2006. But sources say that Latin America was not part of that deal.

“When the Accenture deal came up a few years ago, there was reluctance for anyone from Unilever Latin America to abandon IBM,” said Neil McEwen, managing consultant at PA Consulting. “This deal shows that significance of such strong relationships.”

IBM also has a finance and accounting outsourcing contract with Unilever, said Phil Fersht, a research director at Boston outsourcing researcher AMR Research.

“IBM has emerged as leaders in Latin America, so this deal really makes sense,” he says.

The contract may also indicate a renewed willingness by HR BPO buyers to go to different providers for different regions, said Michel Janssen, managing director at Hackett Group, a Miami-based business process outsourcing consultant.
 
“It does show a willingness to split the work among different vendors,” he said.

Whether this will be a trend, however, remains to be seen, Janssen said.