Hay Group was a global management consulting firm specializing in transforming strategies into tangible results by developing talent, enhancing organizational effectiveness, and motivating employees to perform at their best. Founded in 1943 by Edward N. Hay, the firm was headquartered in Philadelphia, Pennsylvania, and operated in 87 offices across 49 countries, serving clients from various sectors, including private, public, and not-for-profit organizations. It was acquired by Korn Ferry in 2015.
Brief History of Hay Group (Founding and Growth)
Hay Group was founded in 1943 in Philadelphia by Edward N. “Ned” Hay, a pioneer in modern human resources management. Early on, the firm focused on compensation management and developed a consistent job evaluation system. In 1951, a Hay Group consultant (Dale Purves) introduced the “Hay Guide Charts,” a methodology for job evaluation based on factors like know-how, problem-solving, and accountability; this system became the world’s most widely used job evaluation technique. Over subsequent decades, Hay Group expanded its services and geographic reach. By the 1980s it had grown into a global consultancy – in 1984 it was acquired by advertising conglomerate Saatchi & Saatchi for around $100–125 million. At that time, Hay Group operated approximately 100 offices in 27 countries, making it Saatchi’s largest acquisition to date. The firm returned to independent ownership in 1990 via a management buyout when Saatchi (then Cordiant) sold Hay Group back to its management for £48.2 million. In the ensuing years, Hay Group continued to grow as a private company, opening new international offices and enhancing its consulting offerings. It also made targeted acquisitions to bolster its capabilities – for example, in 2014 Hay Group acquired Talent Q, a UK-based online psychometric assessment and training firm, to strengthen its assessment and talent analytics services. This acquisition brought innovative online assessment tools into Hay Group’s portfolio, aligning with the firm’s strategy to blend consulting with technology-driven talent insights. By the mid-2010s, Hay Group had over 70 years of experience in people strategy and stood as one of the few mid-sized, specialist HR consultancies still independent in a field increasingly dominated by large firms or merged entities.
Consulting Services, Industries, and Notable Projects
Service Areas: Hay Group was known for a broad range of human capital consulting and advisory services centered on improving organizational and people performance. Key practice areas included:
- Job Evaluation and Reward Strategy: Hay Group developed and owned the widely used Hay Guide Chart job evaluation methodology, employed by thousands of organizations worldwide to define job roles and determine equitable compensation. Building on this, the firm advised clients on compensation strategy, salary structure design, and executive remuneration policies (often branded as Total Reward frameworks). Its proprietary database PayNet housed over 15 million employee salary records across 100+ countries (22,000 organizations), which Hay Group used to benchmark pay and benefits and inform reward decisions.
- Talent Management and Leadership Development: The firm helped companies identify and develop talent at all levels. This included succession planning, competency modeling, performance management systems, and customized leadership development programs. Hay Group leveraged decades of research on leadership behavior – for instance, through its McClelland Center for Research (affiliated with Harvard), it collected over 5.5 million leadership assessment data points since the late 1960s to discern what drives effective leaders. These insights underpinned Hay Group’s training workshops, coaching services, and leadership assessment tools used by clients to nurture future leaders.
- Organization Design and Transformation: Consultants from Hay Group worked on restructuring organizations for better performance. They advised on organizational design (e.g. structuring roles, layers, and reporting lines), workforce planning, and change management initiatives. The firm often tackled issues such as improving employee engagement, building high-performance cultures, managing mergers & acquisitions integration, and public sector reform by aligning people and structure with strategy.
In practice, Hay Group’s projects typically addressed challenges like boosting employee motivation, developing talent pipelines amid leadership shortages, linking rewards to performance, and navigating the people aspects of globalization. Their approach combined data-driven analysis (drawing on Hay’s extensive databases of pay and leadership metrics) with tailored consulting.
Industries and Clients: Hay Group served clients across virtually every sector and region. Its client base spanned private, public, and nonprofit organizations in industries including chemicals, media and communications, education, financial services, consumer goods (FMCG), healthcare and life sciences, manufacturing, and oil & gas, among others. With offices on every continent, Hay Group was truly global in scope – it worked with over 9,000 client organizations in 122 countries by the 2010s. Many of the world’s largest and most prominent companies were Hay Group clients (the firm often highlighted that it partnered with a majority of Fortune “Most Admired” companies). In addition to corporate clients, it advised government agencies and NGOs on human capital issues. For example, Hay’s methodologies have been used in public sector pay grading and in nonprofit job evaluations, demonstrating the flexibility of its tools across sectors.
Notable Projects and Research: Hay Group was especially renowned for its thought leadership and long-running studies in the HR field. One flagship project was its annual “Best Companies for Leadership” study, conducted globally (often in partnership with media like Fortune or Bloomberg BusinessWeek). This study benchmarked which organizations excel at developing leaders and identified trends in leadership practices. For instance, Hay Group’s research would rank companies (P&G, GE, Coca-Cola, etc. often topped the list) and extract how those firms groom talent and foster innovation through leadership. The study’s findings, released each year, became a reference for HR professionals looking to emulate top leadership development practices. Another area of note is Hay Group’s influence on compensation design – its Hay Guide Charts (job evaluation) system has been implemented by over 8,000 organizations worldwide, fundamentally shaping how many companies determine job worth and pay scales. Implementing a Hay job evaluation project in a large organization (to create a consistent global grading structure, for example) was a common engagement for the firm. Additionally, through PayNet, Hay Group provided clients with compensation benchmarking services; thousands of HR professionals worldwide used PayNet data to make pay decisions. This service was particularly notable in industries where market pay data is crucial (tech, finance, etc.). In summary, Hay Group’s legacy includes not only client-specific consulting projects (ranging from redesigning a Fortune 500 company’s incentive plans to helping a government modernize its HR practices) but also enduring contributions to HR management practices and tools that are still in widespread use.
Pre-Acquisition Size and Financials (circa 2014–2015)
On the eve of its acquisition by Korn Ferry, Hay Group was a substantial mid-sized consultancy in the HR advisory space. The most recent available statistics before the 2015 merger showed that Hay Group had approximately 3,000–3,100 employees worldwide and a significant global footprint. The firm operated 86–88 offices in roughly 49–50 countries, serving clients in over 100 nations via its network. This global presence underscored Hay Group’s ability to deliver consulting services across all major regions. In terms of finances, Hay Group was generating roughly $500 million in annual revenue (on a 2015 run-rate basis) with an EBITDA of around $40 million. This revenue level made it one of the largest independent HR consulting firms, though smaller than the integrated consulting divisions of giants like Mercer or Willis Towers Watson. To illustrate scale: combined with Korn Ferry, the new entity would have about $1.7 billion in projected annual sales post-deal (Korn Ferry’s revenue prior to acquisition was on par with Hay Group’s, so the combination roughly doubled that business). Hay Group’s client base was broad, numbering in the thousands of organizations – including a high proportion of Fortune 500 and global corporations, as well as government clients – though exact client counts are not publicly disclosed. Its research assets were also notable: by 2015 Hay Group’s databases contained leadership assessment data on over half a million individuals and salary data from over 22,000 organizations worldwide, reflecting the firm’s extensive reach and institutional knowledge. Overall, just before being acquired, Hay Group was a 70+ year-old firm with a robust global platform, a workforce of just over 3,000, and annual revenues in the half-billion dollar range – a strong player in its niche, albeit an order of magnitude smaller than the multi-billion dollar diversified professional services firms.
Korn Ferry’s 2015 Acquisition of Hay Group: Rationale and Impact
The Deal: In September 2015, Korn Ferry – a leading executive search firm – announced a definitive agreement to acquire Hay Group for a total price of approximately $452 million (about $252M in cash and $200M in Korn Ferry stock). The transaction was completed by December 2015 after shareholder and regulatory approvals. This was the largest acquisition in Korn Ferry’s history (Korn Ferry itself was founded in 1969 as an executive recruitment specialist). Upon closing, Korn Ferry combined Hay Group with its own smaller Leadership & Talent Consulting unit and initially branded the combined advisory business as “Korn Ferry Hay Group,” indicating that the Hay name would remain as a sub-brand under Korn Ferry. The merged firm had roughly 7,000 employees globally – Korn Ferry’s headcount nearly doubled from about 3,900 pre-deal to around 7,000 with Hay Group’s staff added. Gary Burnison, Korn Ferry’s CEO, noted in the acquisition announcement that “since the beginning of time, people have been the ultimate differentiator…we need a new conversation on people,” underscoring a vision to elevate Korn Ferry from a pure search firm to a broader human capital advisory firm.
Strategic Rationale: The acquisition was driven by Korn Ferry’s strategy to diversify its revenue stream and expand into talent management consulting. Historically, Korn Ferry’s business was heavily weighted toward executive recruitment, which can be cyclical and dependent on hiring trends. By buying Hay Group, Korn Ferry aimed to “evenly split” its focus between talent acquisition and human-capital advisory services. In fact, after the deal, Korn Ferry’s revenue mix shifted to roughly Fifty-four percent search and recruitment, and 46% advisory (in line with Hay Group’s contribution). This balance meant that when clients aren’t hiring executives, Korn Ferry can still generate business by advising on leadership development, organizational design, compensation, and other advisory areas. The move was described as “transformative” for Korn Ferry – an analyst called it “consistent with KFY’s long-stated strategy to be the global leader in talent acquisition, development, and strategy,” noting it clearly differentiates Korn Ferry from traditional executive search competitors. By acquiring Hay Group’s well-regarded brand and intellectual property, Korn Ferry instantly gained credibility and offerings in consulting domains it previously had limited presence in. The deal also gave Korn Ferry access to Hay Group’s vast databases of pay and leadership data, which Burnison highlighted as “one of the most comprehensive leadership, reward and assessment databases in the world,” providing a scientific underpinning for Korn Ferry’s advisory services. In essence, Korn Ferry saw Hay Group as the vehicle to become a full-fledged “pre-eminent global people and organizational advisory firm,” rather than just the world’s largest search firm.
Operational Impact: The immediate operational changes included integrating Hay Group’s consultants and offices with Korn Ferry’s global network. Korn Ferry organized into three business lines post-deal: 1) Executive Search, 2) Hay Group (advisory consulting), and 3) Futurestep (its existing recruitment process outsourcing and mid-level recruitment division). Stephen Kaye, then-CEO of Hay Group, stayed on to lead the Hay Group division within Korn Ferry, ensuring continuity of leadership during the transition. The companies combined their office locations in many cities to eliminate redundancies (Korn Ferry indicated that some offices would be consolidated to save on real estate). They also anticipated cost synergies by merging back-office functions – Burnison noted that layoffs would likely occur in support roles like finance and IT where overlap existed. Korn Ferry targeted at least $20 million in annual cost synergies within the first year, through operational efficiencies, technology platform consolidation, and reducing general and administrative expenses. Culturally, Korn Ferry initially kept the “Hay Group” brand name alive in its consulting business, leveraging Hay Group’s strong reputation with existing clients. For clients, the combined firm positioned itself as offering end-to-end talent solutions. Burnison used the metaphor of “a complete consultancy when it comes to the world’s most precious commodity – people”, indicating that Korn Ferry + Hay Group could address everything from hiring a CEO to setting that CEO’s pay, developing their team, and transforming the organization’s structure. The acquisition roughly doubled Korn Ferry’s consulting revenues and gave it a presence in new markets where Hay Group was strong (notably Europe and Asia – about 80% of Hay Group’s business was outside the U.S., which complemented Korn Ferry’s U.S.-heavy operations). In summary, the 2015 acquisition dramatically expanded Korn Ferry’s capabilities and scale, with strategic intent to create a one-stop shop for talent and organizational advisory services, while also necessitating integration of people, systems, and offices to realize synergies.
Integration of Hay Group’s Expertise into Korn Ferry
Integrating Hay Group into Korn Ferry was a complex process, but ultimately it infused Korn Ferry with a comprehensive suite of human capital consulting capabilities. Immediately after the deal, Korn Ferry merged Hay Group’s team with its existing advisory unit and continued to operate that combined group under the Hay Group banner (initially called “Korn Ferry Hay Group”). This meant that Hay Group’s consultants, methodologies, and products became part of Korn Ferry’s offering, rather than remaining separate. Hay Group’s expertise in human capital consulting was systematically integrated into Korn Ferry’s broader talent management services in several ways:
- Expanded Solution Portfolio: With Hay Group on board, Korn Ferry was able to offer a much wider range of advisory solutions to clients. Korn Ferry’s services portfolio grew to include Organization Strategy, Leadership Development, Assessment & Succession, and Rewards & Compensation consulting – areas where Hay Group had established methodologies – alongside Korn Ferry’s traditional strengths in talent acquisition. For example, Korn Ferry launched new or rebranded offerings such as “Korn Ferry Pay” (a compensation benchmarking and rewards design platform grounded in Hay Group’s PayNet data and reward methodologies) and “Korn Ferry Listen” (employee engagement and survey solutions, building on Hay Group’s employee opinion survey practice). It also bolstered Korn Ferry’s “Leadership & Professional Development” offerings, leveraging Hay Group’s leadership assessment tools and training programs. Essentially, Korn Ferry could now consult on the “entire leadership and people continuum,” from hiring and assessment to development, retention, and rewards. This integrated approach was a key selling point in the merger – aligning people to strategy and developing them to succeed became a seamless service under one roof.
- Intellectual Property and Tools: Hay Group brought with it a rich set of proprietary tools, frameworks and data. Korn Ferry integrated these into its product suite. For instance, Hay Group’s job evaluation system (Hay Points method) is now incorporated into Korn Ferry’s solutions for job grading and leveling. The massive compensation database (PayNet) and related analytic tools were folded into Korn Ferry’s rewards consulting practice, enhancing the data-driven advice Korn Ferry can provide on salary, benefits, and incentive plan design. Korn Ferry’s management noted that together the combined firm now shared “some of the best and most comprehensive leadership, reward and engagement databases in the world” to inform client work. Another example is in assessments: Hay Group’s competency models and psychometric assessments (augmented by the 2014 Talent Q acquisition) were integrated with Korn Ferry’s pre-existing assessment catalog. Over time, Korn Ferry unified these under the “Korn Ferry Leadership Architect” and related platforms, which blend Hay Group’s behavioral competency research with tools from Lominger (a prior Korn Ferry acquisition). In short, Hay Group’s decades of research and IP became part of the Korn Ferry Institute (the firm’s research arm) and its consulting toolkits, strengthening the scientific foundation of Korn Ferry’s advice.
- Human Capital Expertise in Korn Ferry’s DNA: Culturally, the integration meant Korn Ferry evolved from being known mostly as an executive recruiter into a firm equally adept at advisory work. Nearly half of the combined company’s talent were consultants specializing in areas like rewards, talent development, and change management (areas where previously Korn Ferry had minimal staff). Hay Group’s senior leaders took on key posts – beyond Stephen Kaye initially leading Korn Ferry Hay Group, many Hay Group subject-matter experts assumed leadership roles in practice areas (e.g., heads of reward consulting, leadership development, etc., within Korn Ferry). This cross-pollination helped embed Hay Group’s human capital consulting ethos into Korn Ferry’s culture and brand. For clients, Korn Ferry positioned the integrated firm as a one-stop partner for talent and organizational needs. A client could now engage Korn Ferry not only to find a top executive but also to advise on that executive’s onboarding, their team’s development, the company’s organizational design, and its compensation strategy – a breadth that was achieved by integrating Hay Group’s expertise. One external analysis noted that combining Hay Group’s deep expertise with Korn Ferry’s global network and resources made the new Korn Ferry “well-positioned to give the more generalist firms a run for their money” in the HR consulting arena.
- New Products and Innovation: Post-merger, Korn Ferry invested in new technology platforms that married Hay Group’s content with Korn Ferry’s scale. For instance, Korn Ferry Architect (a digital platform for competency modeling and role profiling) and KF Select (talent assessment for recruitment) were enhanced by Hay Group’s competency libraries and Talent Q assessments. Similarly, KF Advance (a career development offering for individuals) drew on Hay Group’s coaching and leadership development frameworks. These integrations show how Hay Group’s knowledge base was not just maintained but actively utilized to innovate Korn Ferry’s service delivery. The combined firm also continued publishing influential research (often branded as Korn Ferry Hay Group studies in the first few years) on topics like employee engagement, leadership trends, rewards and benefits, etc., indicating an ongoing integration of thought leadership.
Overall, the integration of Hay Group’s capabilities made Korn Ferry a much more holistic human capital advisor. As one Korn Ferry executive summarized, when people are aligned to strategy and developed to their full potential, “anything is possible” – combining Korn Ferry and Hay Group was intended to ensure the firm can address that alignment and development from all angles. While the integration process involved rebranding and restructuring, by about 2017 Korn Ferry had fully absorbed Hay Group into a unified advisory segment, allowing clients to access a unified consulting experience under the Korn Ferry name, powered by Hay Group’s expertise.
Pre- vs. Post-Acquisition Capabilities (Leadership Development, Compensation, Workforce Transformation)
The merger with Hay Group significantly enhanced Korn Ferry’s capabilities in leadership development, compensation strategy, and workforce transformation. A comparison of Hay Group’s positioning before the acquisition versus Korn Ferry’s offerings after integration highlights the progression:
- Leadership Development: Pre-acquisition, Hay Group was highly regarded for its leadership development consulting – it provided assessment centers, leadership style surveys, talent pipeline planning, and executive coaching programs for clients. Hay’s approach often emphasized research-based competencies and emotional intelligence (inherited from its work with the McClelland Center) to help organizations nurture future leaders. However, as a standalone firm, Hay Group’s role was typically advisory – e.g. designing a leadership program or succession plan – and the client might use third parties or internal teams to execute large-scale training. Post-acquisition, under Korn Ferry, these leadership development capabilities were amplified and could be delivered end-to-end. Korn Ferry had acquired a training firm (PDI Ninth House) in 2013, and with Hay Group’s content, Korn Ferry now offers a full suite of leadership development programs – from executive assessments and CEO succession planning to leadership academies and on-demand learning – all under one roof. The combined Korn Ferry now designs and implements leadership development initiatives. For example, Korn Ferry can assess leadership potential (using Hay Group’s assessment tools), develop leaders through formal programs (leveraging Hay Group’s methodologies and Korn Ferry’s trainers), and even provide coaching and e-learning at scale. In effect, Hay Group’s pre-merger thought leadership in what makes a great leader became integrated into Korn Ferry’s talent development offerings, greatly expanding their depth. Korn Ferry’s post-merger branding began highlighting its ability to “develop leaders who thrive and drive impact”, something that directly builds on Hay Group’s legacy. In short, the acquisition moved Korn Ferry from just finding leaders to developing and sustaining leaders, using Hay Group’s expertise to bolster that capability.
- Compensation Strategy (Total Rewards): Pre-acquisition, Hay Group was a powerhouse in compensation consulting and reward strategy. It advised many companies on job grading, salary structures, incentive plan design, and executive compensation benchmarking. Hay Group’s signature job evaluation method and its PayNet database gave it a strong competitive edge in this domain. However, as an independent, Hay Group’s work in compensation was advisory in nature – providing recommendations and market data to clients’ HR teams. Post-acquisition, Korn Ferry integrated these compensation consulting services and data offerings into a productized, tech-enabled solution set. Korn Ferry launched “Korn Ferry Total Rewards” as a capability, which encapsulates compensation strategy, benefits advisory, and pay benchmarking with the analytical rigor Hay Group had honed. The firm now markets tools like Korn Ferry Pay, an online platform that clients can use to access compensation data (essentially an evolution of Hay Group’s PayNet) and model pay scenarios. This means Korn Ferry not only continues to provide the same expert advice on salary and incentives that Hay Group did, but it can do so at a larger scale and often in a more digital, interactive way for clients. Korn Ferry’s executive search consultants also gained access to this compensation expertise, allowing them to advise clients on competitive pay during recruiting – a cross-selling advantage. In terms of positioning: before, Hay Group was seen as a top specialist in rewards consulting; after, Korn Ferry is able to position itself as a one-stop rewards and talent solution provider, blending search and reward expertise. For workforce-level compensation strategy or CEO pay governance, Korn Ferry post-merger can leverage Hay data and methodologies, giving it parity with or even an edge over other big HR consultancies in designing compensation programs.
- Workforce Transformation (Organization Design & Change): Pre-acquisition, Hay Group offered services to help companies restructure or transform their organizations. This included diagnosing organizational effectiveness issues, redesigning structures and roles, and managing the people side of change (communications, culture shift, etc.). Hay Group had depth of experience and intellectual property in this arena – for example, frameworks for assessing organizational climate and alignment. However, Hay was mid-sized, which sometimes limited its ability to support the largest “enterprise-wide transformations” without partnering with bigger firms. Post-acquisition, the combined Korn Ferry has both the scale and breadth to tackle large-scale workforce transformations. By adding Hay Group’s seasoned organizational consultants to its team, Korn Ferry can engage in, say, a global reorganization or post-merger integration not just as a recruitment partner but as a full-service change management advisor. An industry commentary at the time noted that a specialist like Hay Group, once combined with Korn Ferry’s global scale, could become “a formidable competitor” in large transformation projects – it marries Hay’s depth of IP with Korn Ferry’s resources and reach. Indeed, Korn Ferry now advertises “Organization Strategy” and “Workforce Transformation” as key offerings, which involve redefining organizational structures, roles, and competencies to execute new business strategies. These services take advantage of Hay Group’s methodologies (such as role evaluation and competency frameworks) and are delivered through Korn Ferry’s large consulting workforce across the globe. In practice, this means post-merger Korn Ferry can do things like redesign a client’s operating model, then recruit new talent for new roles, and train existing staff for new competencies – a soup-to-nuts solution in workforce transformation. Comparatively, before the acquisition Hay Group would provide the design and people strategy input, but not the recruiting execution; after, Korn Ferry does both. Additionally, the change management capability (ensuring changes “stick” culturally) was enhanced by Hay’s expertise in employee engagement – now offered via Korn Ferry’s advisory, including tools like Korn Ferry Listen (employee surveys) to monitor transformation progress. Overall, Korn Ferry’s post-acquisition positioning in workforce transformation is far stronger, combining strategic advisory with implementation support, whereas Hay Group pre-merger, while expert, had a narrower delivery scope.
In summary, Hay Group’s pre-acquisition strengths – leadership and talent development consulting, compensation and rewards expertise, and organizational effectiveness advice – have been integrated and augmented in Korn Ferry’s post-acquisition service lineup. Korn Ferry today can credibly claim robust capabilities in leadership development (not just identifying leaders but developing them), in compensation strategy (with proprietary data-driven tools), and in guiding workforce and organizational transformations (with end-to-end support), largely thanks to inheriting and building upon Hay Group’s legacy. This combined offering has allowed Korn Ferry to compete directly with the established HR consulting giants in these areas, whereas before 2015 Korn Ferry was not a major player in them.
Comparison with Peer Firms (Mercer, Willis Towers Watson, Aon) in Human Capital Consulting
Hay Group has often been compared with other leading human capital consulting firms such as Mercer, Willis Towers Watson (WTW), and Aon (Aon Hewitt). All of these firms are in the category of large, global HR consultancies that specialize in human resources solutions. However, there are distinct differences in their focus areas, scale, and operating models:
- Mercer: Mercer (a subsidiary of Marsh & McLennan, founded in 1945) is one of the world’s largest HR consulting firms, with about 25,000 employees and over $5 billion in revenue as of 2019. Mercer’s services span health and benefits consulting, retirement actuarial consulting, investment consulting, and “career” (talent) consulting. In the human capital space, Mercer is consistently recognized as a leader, especially in talent management and workforce analytics. For example, Mercer offers extensive expertise in areas like benefits plan design, compensation surveys (through Mercer’s iconic remuneration surveys), and talent strategy. Compared to Hay Group pre-acquisition, Mercer was much larger and had a broader service menu (including areas Hay Group didn’t cover, like employee health benefits and pension advisory). Hay Group was more focused purely on people and organizational performance, whereas Mercer combines that with its strengths in benefits and actuarial science. That said, in the specific area of human capital strategy consulting, Mercer and Hay Group were peers – Mercer’s talent consulting practice and Hay Group’s offerings often competed. Both provided compensation consulting, leadership development, etc., though Mercer could bundle these with its other services. Post-acquisition, Korn Ferry (with Hay Group’s capabilities) emerged as a new competitor to Mercer’s talent business. Korn Ferry’s advantage is an integrated recruitment arm, which Mercer doesn’t have (Mercer does not do executive search). Meanwhile, Mercer’s advantage remains its deep roots in benefits and large-scale HR outsourcing (administration) which Korn Ferry doesn’t do. In summary, Mercer is a broader HR consultancy (part of an even larger professional services enterprise), whereas Hay Group was a specialized boutique – the Korn Ferry–Hay Group combination brought that boutique expertise into a larger platform, somewhat analogous to Mercer’s scale in the talent arena.
- Willis Towers Watson (WTW): Willis Towers Watson is a result of multiple mergers (the 2010 merger of Towers Perrin and Watson Wyatt, and the 2016 merger of that entity with Willis, an insurance broker). Today WTW is a global professional services firm with around 40,000 employees in 140 countries. WTW’s offerings straddle risk management (insurance brokerage), human capital & benefits consulting, and software solutions. In the HR consulting domain, WTW (and its predecessor Towers Watson) has been a powerhouse particularly in benefits consulting, actuarial services, and compensation data. Towers Watson historically ran industry-standard compensation surveys and benefits benchmarking (similar to Hay’s PayNet, Towers Watson has its own compensation database and tools). WTW’s Human Capital and Benefits segment advises on executive pay, employee rewards, talent management, employee engagement (WTW inherited the well-known “Global Workforce Study” on engagement), etc. A key differentiator is that WTW also provides technology solutions – for instance, it offers compensation management software and HR analytics platforms as noted in industry analysis. Compared to Hay Group, WTW was much bigger and had a strong foothold in areas like pension plan consulting and insurance – areas Hay didn’t touch. However, in reward consulting and talent management, Hay Group and Towers Watson had overlapping competencies. Hay Group’s edge was its proprietary methods (like Hay job evaluation) and perhaps a more qualitative, culture-focused approach, whereas Towers Watson had strength in quantitative analytics and actuarial rigor (being born from an actuarial firm). By acquiring Hay Group, Korn Ferry stepped into the ring with firms like WTW. Post-merger, Korn Ferry’s capabilities in rewards and talent rival WTW’s, though WTW still leads in benefits consulting. One could compare: WTW offers end-to-end solutions in rewards including software (e.g., it has a popular job leveling and compensation software suite); Korn Ferry, with Hay Group’s data, now offers similar data-driven reward consulting (KF Pay, etc.). WTW doesn’t do recruitment, while Korn Ferry does – again highlighting a difference in model. It’s also worth noting that by 2015, the industry had seen consolidation – Towers Watson itself merged with Willis in 2016 – indicating the trend of needing both scale and breadth. Hay Group was one of the last independent mid-sized players until Korn Ferry bought it. So now Korn Ferry (post-Hay) stands more on par with WTW in talent advisory scale. In summary, WTW is a diversified risk and HR advisory firm with massive scale and a legacy in benefits/actuarial work, whereas Hay Group was a focused human capital specialist; post-acquisition, Korn Ferry has incorporated that specialized focus and added more scale, but it does not directly compete in WTW’s insurance/benefits realm.
- Aon (Aon Hewitt): Aon plc is a global professional services firm primarily known for insurance brokerage and risk management, but in 2010 it acquired Hewitt Associates (a major HR consultancy and outsourcing firm) to form Aon Hewitt. Aon Hewitt (now often just referred to as Aon’s Human Capital Solutions practice) is a global leader in HR consulting and outsourcing, with tens of thousands of employees (Aon overall has ~50,000, though not all in HR) and operations worldwide. Aon Hewitt historically excelled in HR outsourcing (benefits administration, HR BPO) and also in consulting on retirement, health & welfare, and talent programs. It provides a comprehensive range of services to manage human resources, benefits, and compensation practices. In talent and rewards consulting specifically, Aon’s offerings include compensation benchmarking (Aon’s surveys like the Radford tech compensation survey), talent assessment (Aon has online assessment solutions), employee engagement consulting (Aon ran the **“Best Employers” survey globally for years), and strategic advisory on HR transformations. Pre-acquisition, Hay Group was smaller than Aon Hewitt and had no outsourcing arm, but both competed in areas like compensation and talent consulting. Hay Group’s brand was perhaps more niche and “pure consulting,” while Aon’s was tied to a larger insurance/risk firm. Aon Hewitt often leveraged its data and outsourcing relationships to cross-sell consulting (for example, managing a client’s pension plan and also advising on workforce pensions strategy). Hay Group leveraged deep expertise and intellectual capital to win consulting projects. An analysis in 2013 noted that traditional HR giants like Aon Hewitt and Hay Group had been challenged by newer approaches in the market, as clients expected more innovation and analytics – it said these incumbents were seen as not “saying anything new” while firms like the Big Four were pushing into the space. This context helps explain why Hay Group joined forces with Korn Ferry (to gain more scale and innovation investment) and similarly why Aon had acquired Hewitt earlier. After Korn Ferry’s acquisition of Hay, the competitive landscape has Korn Ferry (advisory) versus Aon Hewitt in talent solutions. Aon continues to bill itself as the global leader in HR consulting and focuses on measurable results – “partnering with organizations to measure, design, develop, and deliver strategies” across people and rewards. Korn Ferry, with Hay’s integration, offers a similar proposition but with the addition of recruitment services. A key difference is Aon’s integration of consulting with outsourcing and its focus on benefits and risk (e.g., Aon can advise on and also administer a health insurance program). Korn Ferry does not administer HR programs; it sticks to advising and implementing talent strategies (and recruitment). In terms of peer comparison: Hay Group pre-2015 was often up against Mercer, Towers Watson, and Aon Hewitt in bids for projects like redoing a company’s compensation structure or leadership development program. It often differentiated itself with its proprietary tools (the Hay methodology) and its boutique focus. Post-acquisition, Hay Group’s capabilities under Korn Ferry still compete with those firms, but Korn Ferry as an organization is a different beast (with recruiting and a publicly traded corporate structure focused on talent solutions).
To sum up, Mercer, WTW, and Aon are broader HR consultancies (each part of or allied with larger insurance/finance conglomerates) offering a mix of human capital consulting and other services. Hay Group was a specialist boutique in people and organization consulting. Pre-acquisition, Hay Group’s niche positioning meant it was acclaimed for depth in its field but lacked the breadth of its larger peers. Post-acquisition, Korn Ferry has used Hay Group’s strengths to stand toe-to-toe with these peers in areas like leadership and rewards, while Korn Ferry’s own unique offering – the integration of talent advisory with talent acquisition – sets it apart. In a way, the Korn Ferry–Hay Group combination created a new peer for Mercer, WTW, and Aon in the human capital consulting space, one that blends the specialist heritage of Hay with the scale of Korn Ferry. As one industry observer noted at the time, by acquiring Hay Group (one of the few remaining mid-sized HR specialists), Korn Ferry gained a chance to compete more aggressively with the big integrated firms, and it was a sign that the HR consulting market was turning a corner toward more consolidation and full-service offerings.
Post-Integration Developments (Leadership and Strategic Changes)
Following the integration of Hay Group into Korn Ferry, there have been several notable leadership and operational changes, as well as strategic evolutions, within the combined organization:
- Leadership Transitions: By early 2017, Korn Ferry announced that the integration of Hay Group was “substantially complete,” and with that milestone, a change in leadership was enacted in the advisory business. Stephen Kaye – who had been Hay Group’s CEO and led the division through the merger – decided to depart Korn Ferry at the end of the 2016–17 fiscal year. Kaye had a 24-year career at Hay Group (including being its CFO and then CEO) and was instrumental in facilitating the sale to Korn Ferry. Korn Ferry appointed Mark Arian as the new CEO of the Hay Group (Advisory) segment, effective April 2017. Mark Arian was a seasoned HR consulting executive recruited from EY’s People Advisory Services and formerly a senior leader at Aon, Towers Perrin, and Hewitt – bringing experience from multiple Hay Group competitors. His mandate was to continue broadening the Hay Group platform within Korn Ferry, unify the combined team, streamline operations, and drive cross-selling across Korn Ferry’s lines of business. This leadership change signaled the end of the transitional period and the beginning of a new growth phase under Korn Ferry’s ownership. Under Arian’s leadership, the integration proceeded to full operational blending, and he focused on aligning Korn Ferry’s advisory services into a coherent global practice. (Notably, Arian would later be recognized as the CEO of Korn Ferry’s Advisory segment, dropping the Hay Group-specific title as the brand integration progressed.)
- Brand and Structural Integration: In 2018, Korn Ferry undertook a rebranding initiative to fully incorporate Hay Group into the Korn Ferry brand architecture. The company announced that it would rename the “Hay Group” segment to “Korn Ferry Advisory” and similarly rename “Futurestep” (its RPO arm) to “Korn Ferry RPO & Professional Search.” By the first quarter of fiscal 2019, the Hay Group name was officially retired in financial reports, with the firm reporting through the Korn Ferry Advisory segment. This marked the culmination of the brand integration – going forward, all services would be marketed under the Korn Ferry name. However, Korn Ferry has continued to honor Hay Group’s legacy in subtler ways (for instance, for a few years it referred to its consulting offerings as “Korn Ferry Hay Group” in marketing materials, and the term “Korn Ferry Hay Group” still appears in some research reports and legacy client relationships). Operationally, Korn Ferry integrated systems and processes: the Hay Group consultants moved onto Korn Ferry’s single global HR and financial systems, and the separate Hay Group website was subsumed into Korn Ferry’s site. The firm also aligned its sales force – training Korn Ferry’s search consultants to spot advisory opportunities and vice versa. By integrating Hay Group fully, Korn Ferry positioned itself with a single brand and unified go-to-market strategy. For example, a client CEO would now get a consolidated Korn Ferry proposal that might include executive search, compensation benchmarking, and leadership development all together, rather than piecemeal from Korn Ferry and Hay Group separately.
- Strategic and Business Impact: Strategically, the acquisition and integration proved successful in repositioning Korn Ferry. The firm’s financial results in the years after 2015 showed strong growth in the advisory segment. By FY2017, Korn Ferry’s Hay Group (Advisory) segment contributed approximately 46% of Korn Ferry’s total revenues in the third quarter, helping offset a slowdown in the traditional search business during that period. This validation was significant: it showed that Korn Ferry’s bet on counter-cyclical advisory revenue paid off. Korn Ferry essentially transformed from an “executive search company” into a diversified talent consultancy. Gary Burnison, the CEO, frequently spoke about Korn Ferry’s evolution: “Our firm is growing in both size and complexity… reflecting our firm’s transformation.” He noted that Korn Ferry was aligning its business with opportunities in broader talent and organizational consulting, indicating that the Hay Group integration was central to that new identity. One outcome was that Korn Ferry’s leadership structure was adjusted – new practices were created (like a Rewards practice, a Leadership Development practice) under the Advisory segment, often led by ex-Hay Group experts, to continue innovating service offerings. The firm also doubled down on its thought leadership post-integration: the Korn Ferry Institute began producing more research on organizational strategy, employee engagement, and rewards (areas traditionally championed by Hay Group). For instance, Korn Ferry’s research publications in 2016–2018 often carried the joint moniker “Korn Ferry Hay Group” and presented insights drawn from the combined databases of both legacy firms.
- Continued Integration and Growth Initiatives: After fully integrating Hay Group, Korn Ferry didn’t stop expanding. It launched new digital products (some of which built on Hay Group’s content) and made additional acquisitions in adjacent areas (e.g., in 2019 Korn Ferry acquired Miller Heiman and other sales/leadership training firms, further bolstering the advisory business). Those moves were in line with the path set by the Hay Group deal: expanding capabilities in talent development and consulting. Korn Ferry’s organizational strategy consulting offerings grew, and it started taking on large-scale projects that historically might have gone to firms like Deloitte or Mercer. The presence of former Hay Group leadership in Korn Ferry’s management ensured continuity – for example, although Mark Arian joined in 2017 to lead Advisory, other Hay Group veterans held key roles, and the Hay Group culture of rigorous research continued to influence Korn Ferry’s advisory approach. By 2020, Korn Ferry had essentially completed the absorption of Hay Group – the Hay Group name was phased out publicly, and clients saw one Korn Ferry brand. Internally, Korn Ferry had achieved the synergies it anticipated and more: it reported improved margins in the advisory segment after streamlining operations, and cross-selling between search and advisory began contributing to wins (e.g., a company coming for a C-suite search also hiring Korn Ferry for a pay benchmarking study and leadership assessment, combining services).
In terms of operational changes, aside from leadership and branding, Korn Ferry also rationalized office locations post-integration. In cities where both Korn Ferry and Hay Group had offices, many were consolidated, which contributed to cost savings. The support staff reductions Burnison hinted at did occur in the first year – overlapping IT, finance, and administrative roles were trimmed as systems were merged. However, Korn Ferry also invested in growth, hiring new consultants in high-demand areas (like analytics or change management) to complement the Hay Group team. Culturally, the integration required blending Korn Ferry’s sales-driven culture with Hay Group’s consulting and research culture. Over a couple of years, the teams coalesced, aided by shared successes and a unified incentive structure.
Sources
The information above is compiled from recent analyses and credible reports, including the firm’s own publications and reporting by reputable outlets.
