Financial-services firms such as Fidelity Investments, Mellon Financial Corp., State Street Corp. and Citigroup are taking on the duties of traditional human-resource departments from companies looking to cut costs and boost efficiency.
The investment firms have the technology infrastructure in place to manage the responsibilities because they spend billions of dollars on updating systems each year, the Globe reports. These firms also are experts in managing records and handling customer service calls, thereby taking the load off of their customers, according to the Globe.
Peter Smail, president of Fidelity Employer Services Co., says it’s a burgeoning business for his firm.
“It’s a bigger business than anybody thinks," Smail tells the Globe. “They are really looking at how they can cut costs anywhere the can, and how can they bring a better focus to their business.”
The newspaper notes that in the l990s Fidelity began to offer to its customers a range of addtional services, including 401(k) record keeping, benefits administration and payroll and other human-resources functions.
IBM Corp. hired Fidelity last summer to manage its benefits function. IBM expects to save millions of dollars, according to the newspaper. Executives for the financial-services firms say that most employers could save from 10 to 20 percent when they outsource the functions.
panies known for their investment advice are capitalizing on other firms’ desire to outsource human-resource functions, the Boston Globe reports.