Top advertisers, listed alphabetically below, are determined by measuring advertising placements across the major monthly HR trade publications, not including buyer guide or product directory listings.

November 2005 (December coming soon!)

• Aetna
• American Express Incentive Services
• Delta Dental
• MetLife
• Recruitmax
• T. Rowe Price

Commentary and Analysis: Aetna, Delta Dental and Met Life consistently make our list of top advertisers in the HR trades. American Express Incentive Services is also a regular advertiser, but this is the first month they have made the top list, due to aggressive promotions of their gift cards during the holidays (we even bought a few). T. Rowe Price and Recruitmax make the list this month for the first time since March 2005, although both regularly advertise in the major HR trades. Research shows that unless you are committed to running at least a 1/2 page advertisement in your key trades every month for at least a six-month duration, then you probably should not be running ads. Your marketing dollars will be better spent on direct marketing and marketing PR. In their best-selling book, The Fall of Advertising, Al and Laura Ries write that advertising is generally not worth what it costs, with one exception: when it serves a functional purpose like defending an established brand (not building one).

So where should HR suppliers spend their marketing and PR dollars? In 2006, HRmarketer.com will be releasing the first-ever reports on this subject in a series entitled "Trends in HR Marketing." The schedule of reports is as follows:

• Q1: Trends in HR Marketing: Annual Report
• Q2: Trends in HR Marketing: Marketing Activities
• Q3: Trends in HR Marketing: Online Advertising
• Q4: Trends in HR Marketing: Budgeting

The reports will be based on ongoing HRmarketer.com surveys of hundreds of leading HR suppliers across all HR industry segments including recruiting & staffing, compensation & employee benefits, training & development, HR software, Consulting, etc.). The reports will also segment findings by size/revenue of companies and type of HR product/service sold, allowing HR suppliers to benchmark against their competition. Lastly, HRmarketer.com's leading marketing and PR analysts will identify best-practice trends by analyzing the marketing and PR practices of highly successful HR suppliers in each industry segment.

To request an advanced copy, click here...

To determine the organizations receiving the most media coverage, we look at the number of non-paid editorial placements across the major monthly HR trade publications.

November 2005 (December coming soon!)

• Accenture
• Aon
• Hewitt Associates
• IBM
• Kaiser Family Foundation
• Mercer Human Resource Consulting
• SHRM
• Watson Wyatt

Here are some of the top stories in the major HR trade publications from last month. Visit HRmarketer News for a comprehensive listing of HR marketplace news releases and articles over the last 90 days.

The Right Marketing Combination for Selling Benefits

A successful benefits program comes down to whether employees understand and appreciate the package. Unfortunately, one of the most common complaints from both advisers and employers is that workers usually don’t. And although benefit advisers often find the right pitch to sell the case, few go far enough toward crafting a message that will hold an employee’s attention. Benefits are a product like any other, and they need to be sold as such, with the right visual design, the right slogan and the right medium for the message.

Performance-Based Compensation

Global competition has made it impossible for old-guard companies like Delphi and GM to rely on high wages, employer-sponsored health care and pension benefits to attract and retain workers. And as wages spiral downward (and these employers file for bankruptcy), more employers will need to turn to performance-based compensation and other incentives to retain skilled workers, keep them motivated and attract the next generation of younger workers.

The Leading Issues and Concerns Affecting HR

The challenges and responsibilities of HR are becoming increasingly taxing and complex. With the business world speeding across a sea of change – through monumental shifts toward globalization, offshoring and outsourcing, shifting workforce demographics and new technologies – HR executives are being asked to take on new roles, and quickly. The challenges are huge – from finding ways to combat the rising cost of health care and the demands of an aging workforce, to fending off the snowball-down-the-mountain of class-action lawsuits, to finding a way to rise to the ever-pressing demand to step up as true business leaders and strategic forces in their organizations.

Health Care Inflation Is Slowing

New evidence confirms that health care inflation is easing, even if the cost burden still feels heavy for employers. Health premiums increased an average of 9.2% this year, down from 11.2% in 2004, according to a new survey of 2,995 employers by the Kaiser Family Foundation and the Health Research and Educational Trust. The 2005 figure ended a four-year streak of double-digit increases, but the growth rate still is more than three times the growth in workers’ earnings (2.7%) and more than double the rate of general inflation (3.5%).

Innovative Training Program Pays Off

In the wake of rapid and sometimes taxing growth, Mayo Clinic Arizona, the Scottsdale-based branch of the prestigious Rochester, Minnesota, healthcare institution, faced rising employee dissatisfaction and a high employee turnover. Rather than throwing a cookie-cutter training solution at the problems and hoping for the best, the HR department took its lead from Mayo scientists and launched a research project to find the best solution for the problems. The result: Two years after initiating the “experiment,” which included training, multiple evaluations, and the use of metrics for determining outcomes, the employee turnover rate is shrinking and employee satisfaction is on the rise.

The Trouble with 457 Plans

Many public-sector sponsors cannot get even half of employees to sign up for their 457 plans. Most government workers have defined benefit plans, and most think that covers them so they don’t need 457 plans, which is false. A couple of things that could motivate participation are offering a modest match, and public sponsors could switch to either automatic enrollment or negative enrollment – making people opt out of the plan rather than opting into it.

Safeguarding HR Information

Employees routinely give companies their life history in the form of a resume or biography, followed by a background check and maybe a drug test – and they expect employers to protect it. Experts suggest a phased approach to employee data protection that starts with support from the company’s CEO or board of directors. Once executive buy-in has been established, an HR professional should lead the process. The next phase begins by understanding the internal and external processes and data flows that invoice personal employee information. When considering the life cycle of employee records, employers should focus, in broad terms, on data input, storage and disposal.

Great!

Our unscientific measure of the human capital industry's health looks at the aggregate number of advertising placements across the major HR trade publications and our subjective analysis of other "activity" within the sector including new investment money flowing into the space, IPOs, M&As, closures, etc. We then benchmark against the previous month to come up with a 5 point rating system of Excellent / Great / Good / Average / Poor. Again, we caution readers that our rating is a subjective analysis and may not be a true reflection of the industry's health.

Commentary and Analysis: We maintain our "Great" rating this month as a result of continued strong earnings from major HR suppliers and very strong M&A activity - a sign of a healthy marketplace! Also like previous months, most HR suppliers we speak with are expressing optimism on the future of the HR space and their own company's revenue outlook. Few companies announced earnings in December (most will in January) but one who did was Paychex.

Paychex announced their second-quarter earnings rose 30% from last year to $112.6 million, or 30 cents a share. Analysts were forecasting earnings of 29 cents a share. The stock was downgraded to the equivalent of neutral by a CIBC analyst who said recent appreciation has left it fairly priced. However, other financial companies, like The Motley Fool, have had glowing reviews of Paychex as well as competitors Ceridian, ADP and Administaff. The Fool said this about Paychex: "As of its last annual filing, the company had roughly 522,000 clients, many of which are small- to medium-sized businesses located in America's largest markets and have fewer than 100 employees. Paychex has managed to maintain a high fiscal-year client retention rate, just shy of 80%, but the majority of those it does lose are small companies going out of business. This kind of market exposure and information on small business success rates provides a unique snapshot of the general robustness for our economy. A look through its second-quarter report portrays a company that is still going strong. Its top line grew by 15.1% for the quarter, in part because of a 66% increase in revenue from administrative fees -- which is essentially a customizable human resources product tailored to the needs of small businesses."

One of the fastest-growing segments of the HR industry continues to be the HR services (what the above write-up refers to as administrative fees), and presents huge opportunities for HR suppliers who can develop partnerships with these major payroll, insurance and financial services firms.

Recent M&A activity in the HR space:

1. Kenexa announced on December 21, 2005 that it will buy Webhire for about $34 million in cash. This represents about a 2X revenue valuation based on Webhire's annual revenue of about 17.34 million. Webhire's current market cap is about 27.13 million.
2. First Advantage Corporation (NASDAQ: FADV), a global risk mitigation and business solutions provider, announced the acquisition of TruStar Solutions, Inc., an online talent acquisition services firm. The addition of TruStar Solutions' services expands First Advantage Employer Services' portfolio, which provides employers with hiring solutions that now encompass recruiting strategies, applicant tracking, tax credits screening, background screening, substance abuse testing and more.
3. Long Term Care Group, Inc., the country's largest long-term care insurance administrator, announced it has closed on a transaction to acquire Nation's CareLink, a national provider of underwriting and claims assessments and care management services.
4. PAI Group, Inc. announced the acquisition of five companies to create the firm's newly established payroll processing division which will operate under the name PayChoice. The companies acquired by PAI Group, Inc. include: Payrolls Plus, Inc. of Danvers, MA; Payroll Associates of Dallas, TX; PayChoice division of ECI of Elkhart, IN; Payday Solutions of Louisville, KY; and PromptPay, Inc. of Buffalo, NY.
5. Kronos announced details on the nearly $75 million they spent on acquisitions in 2005. Kronos has been acquiring North American resellers of its software the past several years, with only four remaining in the United States. Resellers accounted for $6 million of Kronos' $519 million in revenue during its fiscal 2005 period ending Sept. 30. In its annual report filed Dec. 9, Kronos disclosed it spent $31 million in September to acquire CTR Systems Time and Attendance Inc., which resold Kronos applications in Pennsylvania. The company also revealed it spent $17 million in February to acquire NexTime Inc., a Tennessee reseller.
6. TALX acquired Business Incentives Inc., doing business as Management Insights Inc., for $24 million. The Dallas-based, 25-year-old Management Insights is expected to have annual revenue of more than $9 million. Management Insights is a provider of tax credit and incentive services.
7. Barrett Business Services, Inc. (Nasdaq:BBSI) announced that it has reached an agreement in principle to acquire certain assets of Pro HR, LLC, headquartered in Boise, Idaho, effective January 1, 2006. Pro HR, LLC, a privately-held professional employer organization (PEO) company, operates three offices in Boise and Rexburg, Idaho, and Grand Junction, Colorado. Pro HR has estimated its 2006 gross revenues will total $110 million.

Ring in the New Year...with a Media Plan

In this time of increasing competition for the media’s attention, it’s more important than ever to start 2006 with a media relations strategy and plan for the year ahead. Here are a few ideas to move your media relations efforts forward in the New Year:

• Plan your media relations program – devote some real planning time to what you want your media relations efforts to accomplish this year, and then outline a campaign. Assess what worked last year and what didn’t. Don’t stop with one story pitch idea –maximize your coverage by parceling out potential stories to various media outlets. Include online media outlets in your plans.
• Narrow your press targets – Decide which publications are most important, and read them regularly so you can understand their coverage topics. Reduce your media list size so that it’s manageable, and so you’re concentrating on those pubs with the most impact.
• Try some new ideas - Instead of sending a press release and calling to make sure a journalist received it (which most journalists hate), why not call them first to alert them of the release you’re about to email? Or make a “top five” list of journalists you most want to develop relationships with, and call them in January to offer your company as a resource, and learn what kinds of news they’re interested in receiving. Send a pitch letter, which normally isn’t as time-sensitive, by regular postal mail, rather than e-mail.

- Based on tips from the PRSA newspaper "Public Relations Tactics”

This monthly feature highlights how HRmarketer helps our loyal members...

“It’s been a pleasure doing business with HRmarketer. They have been responsive to all of our needs. The help HRmarketer provides me with the editing and suggestions for the press releases has been an invaluable tool getting Travis Software on the road to effective use of Public Relations. We look forward to a long-lasting relationship that will mutually benefit both of our companies for years to come. I would recommend them to anyone. Thanks for making my job easier.”

Amanda K. Kirkpatrick, Director-Product Marketing & Quality Assurance, Travis Software Corp.

Every dollar of your HRmarketer membership goes toward HRmarketer operations and improvements, and we have some very ambitious plans for 2006. Here are a few examples of what's coming:

Enhanced Publication Profiles

Within each publication profile (for print and eNewsletter pubs) we will be including a "Details" link for Advertising Rates, Outside Articles and List Rentals. For Advertising, we will begin to publish the entire rate card for each publication that offers advertising. In the case of eNewsletters, the rates will refer to sponsorship and/or banner ads. Details for Outside Articles will include information about submission guidelines, length and types of articles the respective publication accepts. Lastly, details for List Rentals will include sort specs and rates for renting a publication's subscriber list for direct marketing campaigns. If the publication is an eNewsletter, these rates will refer to the cost of sending a dedicated mailing to the list. To see a sample of what to expect, log in to your HRmarketer account and visit the profiles for Employee Benefit News and their eNewsletter BenefitNews.com Adviser.

Community Forum Feature

We will be launching a new HRmarketer Community Forum feature this year that will offer members the ability to network (in a private, secure and closed environment) with other HRmarketer members--some of most senior, influential and intelligent marketing minds in the human capital industry. You can discuss partnership opportunities, solicit feedback on the success of recent events, promotional efforts, trade show exhibitions, direct mail lists, and any other marketing and PR topics you wish to discuss. Members will also be able to post, search for, and respond to marketing and public relations related job opportunities within the HR marketplace.

Timed Press Releases

Later this year you'll be able to upload your press releases in your HRmarketer account and schedule the specific date and time you want them to be distributed, along with which saved lookups (media distribution lists) you want them distributed to. Plus, you'll be able to do the same thing with your Direct2Net Internet wire service releases.

HRintelligence is a premium HRmarketer service that tracks media and advertising placements in the major industry trade publications for all HR service providers, helping vendors monitor competitive information and track their own media and advertising placements. Much of the analysis in this monthly newsletter comes from the HRintelligence service.

For more information about HRintelligence or any of HRmarketer's services, please contact us at 831-460- 9700 or via email at info@hrmarketer.com