Hewitt Associates was a prominent American human resources consulting firm established in 1940 by Edwin “Ted” Hewitt in Lake Forest, Illinois. The company specialized in human capital and management consulting services, offering solutions in benefits outsourcing, compensation, talent management, and retirement planning. Over the decades, Hewitt expanded its global footprint, operating 500 offices in 120 countries and serving a diverse clientele, including a significant portion of Fortune 500 companies. It was acquired by Aon in 2010.
Brief History of Hewitt Associates
Hewitt Associates was founded in 1940 by Edwin “Ted” Hewitt in the Chicago area (Lake Forest, Illinois) as an insurance brokerage and personal financial services firm. In the post-World War II era, the company’s expertise in employee benefits grew in importance amid new tax laws and rising living costs. Hewitt pioneered personalized employee benefit statements and developed some of the first IRS-approved corporate benefit programs in the 1950s. By the 1960s, Hewitt had become a trusted advisor on employee benefits policy – it was the only firm asked by the U.S. government to consult on the design of the landmark Employee Retirement Income Security Act (ERISA). In 1974, Hewitt expanded into investment consulting by forming the Hewitt Investment Group to help companies manage employee benefit plan assets.
Through the 1980s, Hewitt Associates continued to innovate in human resources (HR) services. It conducted industry-wide research on emerging HR issues and was an early adopter of technology for benefits administration. In 1988, the firm launched Hewitt Technologies to develop software and systems for automating HR and benefit processes. Hewitt also began its international expansion; by 1990 it had entered the UK market and reached annual revenues of $250 million, ranking as the world’s fourth-largest benefits consulting firm at that time. Throughout the 1990s, Hewitt helped clients adapt their reward and benefit programs to economic pressures – for example, redesigning retirement and health plans to cope with inflation and rising healthcare costs. It also introduced new services like flexible benefits and analyses of HMO vs. PPO health plans, keeping the firm at the forefront of HR consulting trends.
In the 2000s, Hewitt accelerated its growth via acquisitions and global expansion. In 2000 it merged its UK operations with Bacon & Woodrow, a British retirement consulting firm, strengthening its European presence. After nearly six decades as a private partnership, Hewitt went public on the NYSE (ticker: HEW) in June 2002, raising capital to fuel expansion in Europe and Asia. The firm made several strategic acquisitions: it purchased Cyborg Worldwide (a payroll/HR software provider) in 2003, and in 2004 Hewitt acquired Exult Inc., a large California-based HR business process outsourcing (BPO) firm, for ~$700 million. These moves dramatically expanded Hewitt’s outsourcing capabilities. By 2004, revenue had grown to $2.2 billion and the company had over 22,000 employees in nearly three dozen countries. Hewitt was recognized as the largest benefits outsourcing provider in the U.S. (and second largest globally) by 2004. It continued to win major HR BPO contracts mid-decade – adding clients like Thomson Corporation, Sun Microsystems, Marriott International, PepsiCo, and Wachovia by 2005. Despite some leadership turnover in 2006 (longtime CEO Dale Gifford retired and was succeeded by Russell Fradin), Hewitt sustained growth through the late 2000s. Ultimately, its strong position in HR consulting and outsourcing set the stage for acquisition by insurance brokerage giant Aon in 2010.
Services and Industries Served by Hewitt Associates
- Hewitt Associates’ Service Portfolio: Hewitt was a global human resources consulting and outsourcing firm offering a broad range of HR solutions. On the consulting side, it advised organizations on designing and managing employee benefit programs, retirement and pension plans, health care and welfare programs, compensation schemes, and talent management strategies. Its consultants (including actuaries and HR experts) helped employers develop and communicate HR policies, from reward programs to workforce strategies. Hewitt also had a significant outsourcing business: it provided end-to-end administration of benefits and human resources for clients, including running pension and 401(k) plans, health plan enrollment, payroll processing, and other HR business process outsourcing (HR BPO) services. By the late 2000s, Hewitt touted itself as the only firm fully integrating HR consulting with HR outsourcing, delivering “end-to-end” human capital solutions. In practice, this meant Hewitt could both advise on HR strategy and handle day-to-day HR operations for its clients.
- Industries and Notable Clients: Hewitt’s client base spanned virtually every industry, focusing on large employers (including many Fortune 500 companies). As of early 2010, Hewitt served approximately 2,600 clients worldwide, including over half of the Fortune 500 and about one-third of the Fortune Global 500. This roster included leading companies in sectors such as technology, financial services, manufacturing, consumer goods, and healthcare. For example, in 2005 Hewitt signed major outsourcing contracts with Thomson Corporation (media), Sun Microsystems (technology), Marriott International (hospitality), PepsiCo (food & beverage), and Wachovia (banking) – demonstrating its cross-industry reach. The firm also partnered with public-sector clients; for instance, it provided benefit administration for large state government plans. In addition to client engagements, Hewitt was known for its influential research and surveys on HR trends (such as annual studies of health care cost increases and employer benefits trends) which reinforced its thought leadership in the HR field. Overall, by 2010 Hewitt Associates had built a reputation as a premier advisor and outsourcing partner for complex HR and benefits challenges across industries.
Size and Financials Before Acquisition (circa 2009–2010)
On the eve of its acquisition, Hewitt Associates was one of the largest HR consulting and outsourcing firms globally, with robust financials and a wide geographic footprint. The company’s annual revenues were in excess of $3 billion – for example, Hewitt reported about $3.2 billion in fiscal 2008 revenue (an 8% increase over the prior year). Revenue for 2009 was on a similar order of magnitude, keeping pace with its main competitors in the HR consulting sector. In terms of workforce, Hewitt employed roughly 23,000 to 27,000 associates worldwide by 2010. (The company’s own 2010 merger press release cites ~23,000 employees, while other sources note over 27,000 employees across 86 offices in 37 countries as of early 2010.)
This global team served clients in more than 30+ countries on six continents. Hewitt’s reach and scale were further illustrated by its client count (2,600 organizations, as noted) and the fact that it administered HR benefits for over 18 million client employees and retirees worldwide. By 2010, Hewitt’s blended consulting-outsourcing model had proven financially successful. The firm had been publicly traded since 2002 and was financially solid, though growth had matured. It achieved consistent profitability (operating income of $313 million in 2008, for example) and had a strong backlog of long-term outsourcing contracts. This scale and stability made Hewitt an attractive partner for a larger firm seeking to expand in human capital services. Indeed, Hewitt’s final independent year highlights – ~$3.2B revenue, ~25,000 employees, operations in 30+ countries – underscored its position as a market leader in HR consulting and benefits administration heading into the 2010 acquisition.
Aon’s 2010 Acquisition of Hewitt: Strategic Rationale and Initial Impact
In July 2010, Aon Corporation (a global insurance brokerage and professional services firm) announced a definitive agreement to acquire Hewitt Associates for approximately $4.9 billion in cash and stock. This deal – Aon’s largest ever – reflected a strategic bid to “leapfrog” archrival Marsh & McLennan (the parent of Mercer) and create the world’s largest human resources services company. Earlier in 2010, two other major HR consultancies, Towers Perrin and Watson Wyatt, had merged to form Towers Watson, signaling rapid consolidation in the industry. Aon’s leadership saw acquiring Hewitt as a necessary move to stay competitive in this evolving landscape. As one source close to the deal put it, “If [Aon’s CEO Greg Case] really wanted to become the biggest and the best in HR services, Hewitt was the last and only deal to make that happen.”
By purchasing Hewitt, Aon aimed to instantly expand its consulting arm from a $1.2 billion business to a roughly $4.3 billion combined human capital operation, vaulting ahead of Mercer (which had $3.3 billion in HR consulting revenue in 2009). The strategic rationale also included gaining Hewitt’s deep expertise in benefits and HR outsourcing, accessing its blue-chip client base, and achieving greater global scale in professional services.
Initial Integration and Synergies:
The acquisition officially closed on October 1, 2010, upon which Hewitt Associates ceased trading on the NYSE and was merged into Aon’s consulting division. Aon combined Hewitt with its smaller existing unit (Aon Consulting) to form a new subsidiary Aon Hewitt, signaling the importance of the Hewitt brand and business. Greg Case (Aon’s CEO) kept Hewitt’s CEO Russell Fradin on as chief executive of the new Aon Hewitt segment, reporting directly to him. From an operational perspective, Aon outlined significant cost synergies and integration plans. Management projected $355 million in annual cost savings by 2013 through reducing overlapping corporate and support functions, consolidating technology platforms, and eliminating duplicate facilities.
In fact, within weeks of closing, Aon announced a restructuring plan to cut 1,500–1,800 jobs worldwide (about 5–6% of the combined workforce) as part of integrating Hewitt. These cuts targeted mainly back-office and support roles, with Aon taking a one-time $325 million charge to streamline operations. At the same time, Aon emphasized the growth potential of the merger: the two firms had complementary strengths, with relatively little client overlap (Aon Consulting had focused more on mid-market clients, while Hewitt served primarily large enterprises).
The combined Aon Hewitt business, with 29,000 employees and $4.3B in revenue, was positioned to offer a broader suite of services than either firm alone. Aon’s leadership highlighted cross-selling opportunities – for example, marketing Hewitt’s outsourcing and benefits administration services to Aon’s corporate insurance clients, and offering Aon’s risk and insurance solutions to Hewitt’s HR clients. In summary, the acquisition’s immediate impact was transformative: Aon gained scale and new capabilities in human capital consulting, while Hewitt’s operations were consolidated within a global platform, albeit with some painful workforce reductions in the transition.
Integration of Hewitt’s Expertise into Aon Hewitt and Aon’s Services
Following the merger, Hewitt Associates’ capabilities were integrated under the new Aon Hewitt banner, which functioned as Aon’s Human Resource Consulting and Outsourcing division. Aon signaled the importance of Hewitt’s legacy by retaining its name in the joint brand and even stating that the Hewitt brand was a key attraction in the deal. Under Aon Hewitt, the full spectrum of Hewitt’s services – from retirement and health & welfare consulting to benefits administration and HR IT systems – was combined with Aon’s existing consulting practices. This integration created a one-stop shop for clients’ human capital needs. For example, Aon’s pre-merger strengths in pension actuarial consulting and compensation surveys blended with Hewitt’s strengths in benefits outsourcing and talent management consulting, giving the combined entity a more well-rounded service portfolio. Aon immediately began leveraging the new capabilities: it could now offer Hewitt’s renowned benefits administration platform to Aon’s insurance clients, and conversely introduce Aon’s risk and insurance offerings (e.g. corporate health insurance brokerage or executive risk benefits) to former Hewitt clients. The integration also expanded geographic reach – Aon’s global network in 120+ countries augmented Hewitt’s footprint, meaning Aon Hewitt could deliver services to multinationals in virtually any region.
Over time, Aon further absorbed Hewitt’s operations into its broader business services. While Aon Hewitt initially operated as a semi-autonomous subsidiary, by the mid-2010s Aon moved toward full integration. Notably, in 2017 Aon sold its benefits outsourcing arm (the legacy Hewitt outsourcing business) to private equity firm Blackstone in a $4.8 billion deal. That outsourcing unit was rebranded as Alight Solutions, effectively separating the large-scale HR administration platform from Aon’s portfolio. This strategic move suggested Aon’s focus was shifting more toward advisory services and away from transaction-heavy outsourcing. After the spin-off, Aon streamlined its remaining human capital offerings (such as consulting on retirement, health, talent, and rewards) into its unified Aon brand. In fact, the “Aon Hewitt” name was retired; Aon ceased using it as a distinct brand around 2017–2018, folding the business into Aon’s broader consulting practice. Today, what was once Hewitt Associates lives on as part of Aon’s Human Capital business units, which continue to be led by many former Hewitt experts. In essence, Aon took Hewitt’s capabilities and integrated them company-wide, leveraging the Hewitt team’s deep HR knowledge across its global client base and cross-functional offerings. The end result was that Hewitt’s legacy greatly strengthened Aon’s position in human resources consulting, even as the standalone Hewitt brand and its outsourcing services eventually spun off and evolved separately (as Alight).
Hewitt Associates vs. Aon Hewitt: Pre- and Post-Acquisition Capabilities
- Pre-Acquisition Hewitt (Independent): Before joining Aon, Hewitt Associates was highly specialized in human resources functions. It had built a reputation as a premier HR consulting and outsourcing specialist, offering end-to-end services within the HR domain. Hewitt’s core capabilities lay in benefits consulting (designing retirement plans, health benefits, etc.), actuarial services (pension valuations and insurance-related analytics), compensation and talent consulting (advising on pay, leadership development, etc.), and large-scale HR outsourcing (running HR processes for clients). The firm primarily served large corporations – including many Fortune 500 companies – focusing on complex, enterprise-scale HR transformations and multi-year outsourcing partnerships. In other words, Hewitt’s pre-acquisition positioning was as a best-in-class human capital consultant and benefits administrator for big employers. It prided itself on being able to handle an organization’s HR needs from strategy through implementation (hence the “fully integrated HR outsourcing and consulting” claim). However, as an independent firm, Hewitt’s scope was essentially limited to HR and benefits; it did not offer the broader risk advisory or insurance brokerage services that firms like Aon or Marsh could provide.
- Post-Acquisition Aon Hewitt (Combined): After the 2010 merger, the newly formed Aon Hewitt dramatically expanded the context in which Hewitt’s capabilities were delivered. Scale and reach increased – Aon Hewitt had about 29,000 colleagues and operations in over 120 countries, far larger than Hewitt alone. The addition of Aon’s resources meant the HR consulting team could tap into Aon’s vast client network (including mid-market companies that Hewitt previously had less presence with). Importantly, Aon Hewitt’s service offering could become more holistic. Clients could now get “one-stop” advisory solutions that combined human capital consulting with complementary offerings like insurance, risk management, and data/analytics services. For example, a multinational client of Aon Hewitt could receive advice on its pension plan design and also leverage Aon’s insurance brokerage for pension risk transfer – a synergy not available from Hewitt Associates alone. In terms of capabilities, Aon Hewitt continued to excel in Hewitt’s traditional areas (benefits consulting, outsourcing, talent solutions), but now also had the backing to innovate further (such as leveraging Aon’s investment consulting for pension assets, or using Aon’s global benchmarking data to enhance compensation consulting). Additionally, Aon Hewitt was positioned as a provider for both large and mid-sized clients, whereas Hewitt alone mostly served large enterprises. The merger also infused more capital for technology upgrades and analytics, helping Aon Hewitt push into areas like cloud-based HR systems (Workday partnership) and workforce analytics. In summary, Hewitt pre-merger was a focused HR expert with deep but narrower offerings; Aon Hewitt post-merger became a broader human capital solutions powerhouse, combining Hewitt’s HR proficiency with Aon’s global scale and multi-disciplinary services. The fundamental HR consulting and benefits administration strengths remained, but were augmented by cross-selling opportunities and a more diversified service menu under Aon’s umbrella.
Comparison with Peer HR Consulting Firms (Mercer, Willis Towers Watson, Korn Ferry
Hewitt Associates historically competed in the top tier of HR consulting and outsourcing firms, alongside peers like Mercer, Towers Perrin/Watson Wyatt (and later Willis Towers Watson), and to some extent Korn Ferry in talent consulting. Prior to its acquisition, Hewitt was comparable in size to the largest players in this space. For instance, Mercer (the HR consulting subsidiary of Marsh & McLennan) generated about $3.3 billion in revenue in 2009, roughly on par with Hewitt’s revenue at that time. Mercer and Hewitt offered similar services – both had large retirement and health benefits consulting practices, talent and rewards experts, and they each developed benefits administration outsourcing units (Mercer’s outsourcing arm, however, was smaller than Hewitt’s industry-leading operation). Another major rival, Towers Perrin and Watson Wyatt, merged in early 2010 to form Towers Watson, creating an HR consulting firm with about 14,000 employees globally. Even so, this was only about half the workforce size of Aon Hewitt, which launched later in 2010 with ~29,000 employees after combining Hewitt and Aon’s consulting teams. Towers Watson (and later Willis Towers Watson after a 2016 merger with Willis Group) and Aon Hewitt became the two giants in the human capital consulting arena – each blending insurance brokerage heritage with HR advisory expertise. Willis Towers Watson (WTW) and Aon Hewitt both could offer clients an integrated package of insurance, risk, and HR consulting, whereas Mercer remained focused purely on HR consulting and benefits with the backing of its parent MMC.
Korn Ferry occupied a somewhat different niche. Korn Ferry is known primarily as the world’s largest executive search and talent management firm, not as a traditional benefits consultant. However, it increasingly competed in the broader HR advisory market by expanding beyond recruiting. In 2015, Korn Ferry acquired Hay Group, a global HR consultancy famous for reward and organizational consulting, in a $452 million deal. This acquisition roughly doubled Korn Ferry’s consulting capacity and “evenly split” its business between executive search and human-capital advisory services. Even after that, Korn Ferry’s revenue (~$1.5–2 billion mid-2010s) and staff size (around 7,000) were smaller than the likes of Mercer, Aon Hewitt, or WTW. Moreover, Korn Ferry’s services skew toward talent strategy, leadership development, and recruitment process outsourcing, rather than the benefits, retirement, and core HR operations focus that Hewitt/Mercer/WTW have. In summary, Hewitt Associates vs. Mercer/WTW: all were leading full-service HR consulting firms with comparable scale, especially by 2010 after consolidation (Hewitt and Mercer both ~20–25k employees, Towers Watson 14k before merging with Willis). Hewitt distinguished itself with its large HR outsourcing platform, whereas Mercer and Towers Watson were known more for consulting and actuarial expertise (though they too had some outsourcing offerings). Hewitt vs. Korn Ferry: Hewitt focused on benefits and HR process outsourcing for large employers, while Korn Ferry focused on talent acquisition and advisory – effectively two different domains within HR consulting. Each of these firms was a key competitor in helping organizations manage their workforce, but they brought different strengths: Hewitt (and later Aon Hewitt) in benefits and HR operations; Mercer/WTW in benefits and risk consulting (often with insurance brokerage ties); and Korn Ferry in talent and leadership solutions.
Post-Integration Leadership and Strategic Changes
Following the integration into Aon, there were several notable leadership and strategic shifts affecting the former Hewitt organization.
- Leadership Changes: Hewitt’s CEO at the time of the merger, Russell P. Fradin, stayed on to head the Aon Hewitt division immediately after 2010. However, in May 2011, not long after integration, Fradin stepped down from that role. Aon then appointed Kristi Savacool and Baljit (Bal) Dail as co-CEOs of Aon Hewitt in 2011, entrusting them with leading the combined consulting and outsourcing business. This transition marked the hand-off from Hewitt’s legacy leadership to Aon’s next generation of managers for the division. Over the next few years, additional senior leadership positions were consolidated or realigned under Aon’s corporate structure (for example, Aon’s CEO Greg Case and other Aon group executives took a more direct oversight role of the human capital business).
- Operational and Strategic Changes: On the operational front, Aon executed the aforementioned restructuring plan to achieve merger synergies. This included integrating systems and processes and the difficult step of eliminating ~1,500+ positions over three years as redundant roles were phased out. While painful, these cuts and other efficiency moves (IT integration, office consolidations) delivered the expected cost savings of around $280 million per year by 2013. Strategically, Aon initially maintained the full suite of Hewitt’s offerings, but over time it refocused its portfolio. The most significant strategic shift came in 2017, when Aon decided to divest the benefits administration and HR BPO segment that had come from Hewitt. Blackstone acquired this outsourcing business, which was re-launched as Alight Solutions, focusing on cloud-based HR and benefits services. This sale allowed Aon to concentrate on its core consulting, advisory, and insurance brokerage services, aligning with a broader industry trend of separating pure outsourcing operations from advisory work. After the spin-off, Aon fully integrated the remaining Hewitt consulting practices into the Aon brand. By 2018, Aon had dropped the “Aon Hewitt” co-brand; the Hewitt name was officially phased out, as all services were marketed simply under Aon (e.g., Aon’s Talent, Rewards & Performance practice, Aon Retirement Solutions, etc.). Despite the name change, the expertise and solutions developed by Hewitt Associates live on within Aon’s human capital business units, which continue to be led by many former Hewitt experts. In summary, the years following the Aon–Hewitt integration saw: a changing of the guard in leadership (from Russ Fradin to new Aon-appointed leaders), a streamlined operating structure with cost synergies, and a strategic pruning of the business (spinning off outsourcing) to focus on higher-margin HR consulting and advisory services. These changes solidified Aon’s position as a top player in human capital consulting, while Hewitt’s legacy persists through Aon’s enhanced capabilities and the ongoing operations of Alight Solutions in the outsourcing domain.
Sources
The information above is compiled from recent analyses and credible reports, including the firm’s own publications and reporting by reputable outlets.
