Mellon HR Expands Outsourcing Reach with TPO Acquisition

November 8, 2002 ( - Mellon HR Solutions has acquired the training process outsourcing (TPO) business of Franklin Covey, a Utah-based training and consulting services organization.

The move further expands Mellon HR Solutions’ arsenal of human resource outsourcing capabilities, and one in keeping with an emerging trend in corporate training. projects that the market for corporate training could reach $62.5 billion by 2003, with outsourced training accounting for $15 billion of that total, according to Mellon HR Solutions.   Additionally, the firm cites statistics from W.R. Hambrecht & Co. that suggest the marketplace for online training will nearly double in size each year through 2003, eventually totaling $11.5 billion.

“Learning is a mission critical HR process for our clients,” said Jude Metcalfe, president and chief executive officer of Mellon HR Solutions.   “This acquisition adds top-tier talent and product depth to our existing capabilities in HR and training outsourcing.”

Operation Outsource

Training process outsourcing, or TPO, represents the complete outsourcing of a company’s training operation and infrastructure.   However, in addition to operating a company’s entire learning program, TPO can also represent the potential for a complete redesign of the processes leading to greater efficiency, effectiveness and cost control in the delivery of training services, according to Mellon HR Solutions.  

Current clients of Franklin Covey include 90% of the Fortune 100, more than 75% of the Fortune 500 and thousands of small- and mid-size businesses, as well as numerous government entities and educational institutions, according to the firm.   More than 3,000 Franklin Covey associates provide professional services and products in 39 offices and in 95 countries.

Terms of the agreement with Mellon HR Solutions were not disclosed.

Source “Spots”

Earlier this year Mellon rolled out its first “learning services” assignment with American Express.   That deal involved managing the process of seeing that the right people have access to the training that is right for their experience, skill, and job levels, as well as vendor management oversight to ensure that the employer is getting the right quality and best price for that training.

While hardly a new concept, HR outsourcing is enjoying a fresh level of interest from providers and plan sponsors alike.   In an upcoming story in PLAN SPONSOR magazine, Mellon Senior Vice President Tony Martin notes that while only about 2% of the 500 largest US corporations have made large-scale outsourcing deals to date, 15% to 20% are likely to have done so five years from now. At the same time, proposing such a move is bound to attract the attention of numbers-conscious bigwigs such as CFOs.

Other HR outsourcing deals announced in 2002 have included  American Express,  AT&T,  Prudential, and  Sony .