BMO turns over HR to American outsourcer

BMO Financial Group Wednesday said it has outsourced its key human resources functions to an American firm that is just gaining a foothold in the Canadian market.

Irvine, Calif.-based Exult Inc.

is an HR specialist with an American financial client roster that includes Bank of America and Prudential. Through an agreement worth $750 million over 10 years, the company will take over HR administration for BMO including payroll, benefits, HR call centre management and employee records.

“”You’ve got companies — both in Canada and the U.S. — who don’t do all (aspects of) HR, they just do benefits or just do pension. You’re looking for a supplier who has the capability for doing all of it, or else you’re very fractured with different suppliers,”” said BMO’s executive vice-president of HR, Rose Patten. “” You can imagine that with 34,000 (BMO employees) there’s lots of individual routine transactions. That’s what we’re outsourcing.””

The main improvement that will be realized through the outsourcing agreement is standardizing on core technology. BMO has a mix of HR tools that have become part of its IT infrastructure through a number of acquisitions over the years. BMO Financial Group comprises Bank of Montreal, Chicago-based Harris Bank and investment firm BMO Nesbitt Burns.

The company has been using various iterations of PeopleSoft throughout its organization, but will make the move to one central version through the Exult deal. “”The transition starts now, and we see phasing the transition carefully throughout the next 12 months,”” said Patten.

The financial institution’s 250 HR employees will stay on to service BMO, but many of them will now be part of Exult, which will operate as Canada Exult Inc. north of the border. Canada Exult has leased part of BMO’s offices, meaning HR staff won’t even have to leave their desks.

“”It means the transitioning of all the same people, the same talent and it makes for a very smooth and almost seamless transition when you’ve got the same people doing tomorrow what they did yesterday, but with better technology,”” said Patten.

She added that BMO employees won’t see any visible changes through the transition, but eventually they’ll have self-serve HR tools at their disposal. The agreement will also allow Patten to focus on employee initiatives she has developed over the last year. They comprise four main areas: talent management (workforce planning, recruiting, staffing, promotions, employee development); performance alignment and compensation; institute for learning; and employee equity and engagement (employee relations and retention). “”We can really concentrate on the design and the policy and the work environment,”” she said.

BMO is Exult’s first major Canadian client and part of a strategy to expand the American company’s client base. “”We’ve just been in borrowed space here in Bank of Montreal and working out of hotels and so on as we continue to market to other companies around here,”” said Exult chief operating officer Kevin Campbell. The company is in the process of opening a permanent Canadian office in downtown Toronto.

Campbell wouldn’t discuss specific customers Exult is working on but “”generally we’re considering anybody over 10,000 employees in Canada. Obviously there’s some other banks that are on the list.”” Exult is also courting Canadian firms in communications, manufacturing and retailing and will approach existing U.S. and overseas customers that have Canadian offices.

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