Recent News in the Consulting Industry

Last month, consolidation in the HR consulting market continued as Aon Corporation scooped up HR consulting giant Hewitt Associates for $4.9 billion. According to reports, Aon plans to integrate Hewitt with its existing consulting/outsourcing business, creating a new entity called Aon Hewitt. Current Hewitt CEO, Russ Fradin, would then become CEO of Aon Hewitt.

That transaction follows on the heels of Mercer’s acquisition of IPA, the health and benefits administration technology provider. And, in January of this year, Towers Watson completed the merger of Towers Perrin and Watson Wyatt.

Speaking of Hewitt, according to a recent Hewitt study, global employee engagement and morale are nose-diving as the economy picks up steam. Almost half of surveyed organizations reported a drop in employee engagement levels at the end of June 2010. It’s the steepest drop-off Hewitt has reported since it began conducting employee engagement research 15 years ago.

Hewitt’s analysis shows a link between employee engagement levels and financial performance. Organizations with high levels of engagement (where 65 percent or more of employees are “engaged”) outperformed the total stock market index even in volatile economic conditions.

In a moment of clarity, executives at consultancies A.T. Kearney and Booz & Company ended talks about a possible merger. The two firms have danced around a possible combination before and reached the same conclusion. It’s doubtful that this latest round of talks did anything more than create unnecessary firm-wide turmoil at a time when both firms need market focus, not political intrigue.