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Difficulties Continue for HR BPO
18 August 2009:
Is the end of the HR business-process-outsourcing industry in sight?
Given the dismal financial results posted by Convergys Corp. during the second quarter of this year, which it largely attributes to its HR BPO business, and the recently announced exit from the business of ExcellerateHRO, one could be forgiven for wondering.
And yet, there are some who say that, thanks to technological innovations and economic pressures, there may still be life in the business model.
At the end of last month, Cincinnati-based Convergys announced a second-quarter net loss of $61 million, results that included losses of $121 million in its HR outsourcing business. This year's results compare unfavorably with the same period last year, when the company reported quarterly profits of $41 million.
The company said most of the charges in its HR outsourcing business (which it calls HR Management) were caused by unexpected implementation delays at one client, although Convergys' CEO has spoken of working with two clients.
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Source: Human Resources Executive Online
