IBM, Mercer Partners in HR Services Deal with American Airlines

March 2, 2007 ( - Computer services giant IBM and Mercer HR Services are partnering to deliver a variety of Business Transformation Outsourcing (BTO) services to American Airlines.

The 7 1/2-year, $217 million contract with the air carrier announced Friday will allow American to transform and manage many of its human resources functions, according to a news release announcing the deal. Mercer’s share of the contract is about 40%.

With the agreement in place, American will be able to use IBM’s suite of automated services and Mercer’s administrative and consulting offerings in delivering services to its 88,000 workers in the U.S. and Canada.

The news release said as part of the agreement, IBM will provide American support for standardized human resources processes including training, recruitment and staffing and HR-related information technology and call center support.

Further, Mercer will deliver health and benefit, pension plan and compensation administration, in addition to health and benefit and employee communication consulting services.

“Through our agreement with IBM, we’re acquiring state-of-the-art tools and processes that will enhance our employees’ access to and use of HR services,” said Jeff Brundage, Senior Vice President-Human Resources, American Airlines, in the announcement. “Moving the transactional work to IBM allows us to focus our energies and resources on our strategic business imperatives.”