Hewitt Associates Inc.HEW

Morningstar Rating

Stock Research and Analysis

by Vishnu Lekraj

Hewitt Associates is a one-stop shop for human resources outsourcing. The firm has experienced some success in the past because of high customer switching costs and scale. However, operating margins have trended down since 1999, and during the last Read more

Bulls Say

High switching costs have created a fairly sticky client base, with client retention averaging 95%.

Leveraging its clients' vast number of employees, Hewitt can provide cost-effective outsourced services.

The firm has built a good reservoir of expertise during its 68-year history.

Hewitt's business reorganization has already helped with improving year-over-year profitability. Read more

Bears Say

The firm has struggled with maintaining its profitability as it has strayed outside its core competencies.

Hewitt's recent acquisition decisions have not worked out, handicapping the firm's long-term strategies.

Economic gyrations can have a damping effect on revenue growth. Read more

Strategy

Hewitt is refocusing on expanding its core benefits outsourcing business, which currently makes up two thirds of revenue. High-level management changes and sales efforts have emphasized a greater urgency Read more

Management

Russell Fradin became CEO and chairman in September 2006. Previously, he served three years as president and CEO of Bisys Group, a provider of outsourcing services to financial services companies. Before that, he spent seven years in various executive Read more

Profile

Hewitt Associates competes in the human resources outsourcing market with an emphasis on retirement and health-care benefits servicing. Benefits servicing contributes about Read more

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