IBM Latest To Outsource HR, Taps Fidelity

July 2, 2002 ( - In the latest example of an emerging trend, IBM has decided to outsource the administration of its pension and health and welfare plans, along with a broad range of HR services to Fidelity Employer Services Company (FESCo).

In a related announcement, IBM Global Services and Fidelity have formed a relationship to market HR payroll and benefits outsourcing services, according to the companies. 

The two firms will provide clients with consulting services involving the evaluation and implementation of HR and benefits outsourcing alternatives.
Outsourcing Trends
The announcement follows several other large employer decisions, including American Express, which tapped Mellon HR Solutions (see American Express Picks Mellon as HR “Source” ) and AT&T’s selection of Aon Consulting for a similar range of services (see AT&T Outsources HR to Aon ).  Late last year Xerox opted to outsource the asset management function of its program to GMAM (see Anatomy of an Outsourcing Deal ). 

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Human resources is the second most outsourced area at companies included in a recent Hewitt Associates survey, with defined benefit and defined contribution plans the HR area most frequently given to an outside vendor (see Retirement Plans Top Outsourcing List ).

Blue Notes

According to Fidelity, the transition is scheduled to begin August 1, 2002, when approximately 450 employees working in the IBM Employee Service Center, who provide HR transaction and administrative support to IBM U.S. employees and retirees, will transfer to Fidelity Employer Services Company. 

There they will continue to provide HR transaction and administrative support to IBM employees and retirees in the US. 

Fidelity said that it plans to expand the Raleigh, North Carolina service center to accommodate growth in its HR payroll and benefits outsourcing business.