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.

June 2005

ADP, Aetna, American Dental Association, BrassRing, Employease, MetLife, Monster, O.C. Tanner, Private Healthcare Systems, SPECTRUM Human Resource Systems, UnitedHealthcare, VSP

Commentary and Analysis:The top advertisers this month include the usual mainstays ADP, Aetna, MetLife and UnitedHealthcare. Monster continues their recent increase in advertising expenditures as does VSP, a $1+ billion provider of eye-care plans. A newcomer to the list this month is Employease, who has been a regular advertiser for years in the HR space but showed an increase in ad expenditures this month. While there is no correlation between the two (just compare the lists if you don’t believe us), Employease also had a slight increase in HR trade media coverage in June, after several months of virtually no coverage. Employease is a provider of “on-demand” benefits administration software. By the way, add the term “on-demand” to your glossary’s as the analysts adore this phrase. What is it? It is essentially an ASP / web-based application, but since analysts and Wall Street over- hyped ASP’s in the late 1990’s and early 2000, they coined a new phrase to reinvent the space. Anyway, kudos to Employease – founded in 1996, they’ve been battling in this space for a long time and have over $50 million invested in them by over seven VC’s. You can bet this company will be an IPO or acquisition candidate in the future.

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.

June 2005

Aon, Ceridian, GE, General Motors, Hewitt Associates, IBM, Mercer Human Resource Consulting, Oracle, Pension Benefit Guaranty Corporation, PeopleSoft, PricewaterhouseCoopers, SHRM, Watson Wyatt

Commentary and Analysis: Pension issues, health care costs and outsourcing continue to dominate the news in the HR space and this is reflected by the types of companies and stories making the HR trades – i.e., General Motors and Pension Benefit Guaranty Corporation. Unlike General Motors, whose media coverage was less than positive, General Electric received quite a bit of positive coverage from how they develop leaders to employee-retention strategies to new products. Yes, for those of you who don’t know, GE also sells HR products and services. IBM continues to receive significant media placements and like GE, IBM makes the news as an employer and HR service provider. IBM’s CEO Sam Palmisan is committed to making IBM the dominant player in outsourcing services, from IT to HR and this should concern anyone competing in the HRO space.

Although pension issues, health care costs and outsourcing continue to dominate the news in the HR space, here are the other 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.

Selling More Vision

There are two demographic employee groups that have a growing need for vision correction today – young employees and middle-aged employees (and their dependents). This is likely to force many employers to either revise or rework their vision benefits. Brokers have a big challenge to ensure that they are ready to help their clients through this transition. The use of vision as a wellness benefit has helped to make it more palatable and to increase its scope in comprehensive plans.

M&A More Successful with HR’s Involvement

Economists predict that the number of mergers will continue to increase in 2005. When HR gets involved early in the merger process, then the likelihood of success is much greater, according to a 2004 Towers Perrin study entitled HR Rises to the Challenge: Unlocking the Value of M&A. Because most HR executives are now involved in M&A due diligence, researchers found that nearly 80 percent of M&As completed in the last few years have substantially met key strategic objectives.

The PeopleSoft Legacy

The legacy of PeopleSoft lives on months after Oracle purchased the company. PeopleSoft was always known as a great company to work for and attracted the “best and the brightest,” most of whom have gone on to other human capital careers and even start new companies but still look back fondly on their former employer. PeopleSoft had also attracted loyal HR customers over the years, many who are now undecided as to whether or not they’ll keep their business with Oracle or move on to another company and system.

Working Together to Curb Benefits Costs

Company executives are ordering their finance and purchasing experts to work with benefit managers on the benefits-buying process. This reason is obvious – to reign in exorbitant benefits costs, particularly health care expenses. However, this can be difficult because procurement executives deal in commodities that are easier to bargain for, while benefit managers and HR directors have to purchase products where price is not always a good indicator of quality. These departments must work together to offer the best benefits value for their employees.

Investing in Customers

As HR helps external customers become more connected to their organizations and encourages investors to invest, their strategic value will greatly increase. Dave Ulrich and Wayne Brockbank recommend five things HR professionals should do to the improve customer experience – develop customer literacy, think and act like a customer and a competitor, measure and track the firm’s share of targeted customers and contribute to their value proposition, align HR practices to the customer value proposition, and engage target customers in HR practices.

Measuring the HR Value

According to a recent report by The Conference Board, 84 percent of 104 human resource executives surveyed predicted their use of human-capital metrics will rise over the next three years, and they want to connect their results directly to specific corporate strategies. But many experts recommend that there are metrics worthy of measuring and those that are a waste of resources. For example, Jac Fitz-enz, founder of the Saratoga Institute, says that “number hired” means nothing in itself. “What’s more important is how many hires were for new positions and how many just to replace lost personnel? This tells us if we are growing or not.”

Contingent Workforce Outsourcing

As the contingent workforce continues to increase (temps, independent contractors, and consultants), the problems of tracking these contingent workers has become much more difficult for organizations. A new form of outsourcing – contingent workforce outsourcing, or CWO – is now on the rise. These new CWO providers help their clients track spending, billing, and performance of their contingent workforce. Some of the trends on why contingent work has increased include retired employees with valuable skills who want to work, and employees who work as consultants so they can have a flexible lifestyle.

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: The human capital marketplace is a very broad and complex space, and not all sectors rise with the same tide. It is possible to have payroll processing and recruitment and staffing firms perform well, while other sectors like training and development and/or employee benefits struggle. In fact, it is very likely that you can spend your entire career with an HR supplier in one space, say training and development, and never know what an EAP is (a hundred-million-dollar sector within employee benefits). One of the great joys of working at HRmarketer is that we get to talk with a variety of suppliers across the entire human capital marketplace, and in doing so, have a pretty good sense for the overall health of the space from month to month.

We are sticking with our "Great" rating this month and with much more confidence. In talking to HR suppliers, we are seeing an overall increase in RFP activity and what appears to be growing corporate spending. Some of the major trade publications are seeing increased ad placements and there are even a few new HR trade publications. We are also seeing an increase in HR content in other industry trade publications. Lastly, some great earnings reports across a variety of HR sectors including payroll processing, recruitment and staffing, employee benefits, and training and development. A sampling includes:

• Monster Worldwide posted a solid Q2 earnings
• ADP profits jumped 22% in the Q2
• Ultimate Software reported record new annual recurring revenues in the Q2
• Robert Half International reported a 77% increase in Q2, helping to boost shares of other staffing firms including Manpower and Labor Ready
• TALX reported record 1st quarter earnings and raised it's full-year earnings outlook
• SAP posted a strong Q2

By the way, SAP and other HR enterprise management firms are looking to grow their business by taking PeopleSoft customers from Oracle. While there is no hard evidence that this is happening to any major degree (yet), a recent Yankee Group survey found that almost half of PeopleSoft customers indicated that they were either very likely or somewhat likely to replace their legacy PeopleSoft applications. Stay tuned. Can somebody tell us again why SAP and Oracle chose not to attend SHRM's annual expo in June?

In the employee benefit space, large health insurers continue do do well including WellPoint, UnitedHealth Group and Aetna. And if privately held Employease is any indicator of the health of the employee benefits software industry, things are looking great for this sector (See Commentary and Analysis Advertising above).

Some recent M&A activity included Qwiz, Inc., a supplier of web-based pre-employment hard skills testing merging with ePredix, Inc., a provider of soft skills assessment and employee development content. Saba, a training and development firm, completed its acquisition of THINQ Learning Solutions and also reported revenue growth of 22% over prior year.

Skim through the publications to whom you're pitching and get an idea of what articles they've recently published.Try to come up with an appealing twist that will get the journalist's attention.

"I can't tell you how many times someone has called to pitch me a generic story about, for instance, how consumer-driven health plans will help reduce health care costs. We know that. We just ran a story on that subject two months ago and, chances are, we've done another four articles during the last six months. Give us a different angle. Give us a case study about an employer who managed to sign up 70% of their employees for a consumer-driven health plan and slashed their health care costs by 20% or, if you're pitching for our broker magazine, advice on how brokers and advisers can successfully pitch the idea to their clients' employees. Give us a reason to listen to you."

Karen Lee, Editor in Chief, Employee Benefit Adviser magazine

HRmarketer continues to expand the information databases we maintain to include coverage of marketing and media resources across niche industry markets.

For example, if your organization wanted to initiate a marketing campaign that targeted HR decision makers or employee benefit brokers in the food services industry, you could search HRmarketer’s information databases to access publications and journalists who cover the respective market segment or sales channel - plus bylined article and speaking opportunities, award competitions, trade shows and events, analysts, online buyer guides and more.

Other verticals where we're expanding our marketing and media resources include retail, gaming, IT, financial services, colleges & universities, health care, and construction.

Many of our members have told us that they want the ability to network with like-minded marketing and media relations professionals within the HRmarketer community.

Well, they'll soon have their chance!

HRmarketer has begun development on an online community forum for its members. The new community forum will offer the following features:

• Job Listings: HRmarketer members will be able to post, search for, and respond to marketing and public relations related job opportunities within the HR marketplace.

• Networking: HRmarketer members will be able to approach other members to discuss partnership opportunities, solicit feedback on the success of recent special events, promotional efforts, trade show exhibitions, direct mail lists, and any other marketing and PR topics you wish to discuss.

Within our new community forum, HRmarketer members will have the ability to confidentially and/or anonymously pursue partnerships and various other sensitive business discussions with other members (HR suppliers) in either one-on-one and/or private group communications via a secure online messaging system.

Look for our new community forum this fall!

If you haven't done so already, we invite you to bookmark our popular HRmarketer.com Blog and/or grab the RSS feed to receive our interesting commentary and perspective on the HR marketplace.

Some of our most recent blog postings include:

• HR Products and Services: Sold in USA. Built, Serviced and Supported Elsewhere?
• Quality Content Is Where It’s At
• IPOs in the HR Space: Should I Stay Private or Go Public?