Exclusive: Mercer acquires HR consulting firm Leapgen

HR consulting giant Mercer expanded its presence in the digital HR strategy market, snapping up fast-growing HR tech consulting firm Leapgen, Mercer announced Wednesday.

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Under the deal, Mercer, a global business unit of professional services firm Marsh McLennan, will bolster its U.S. operations with the six-year-old Minnesota-based company, which generates over $10.7 million in annual revenue and counts Adobe, McDonald’s, Kohler and other Fortune 500 titans among its HR technology consulting clients. Former Leapgen CEO and co-founder Jason Averbook, who is speaking at this week’s HR Tech Conference Virtual, has taken on the new role of global leader, digital HR strategy, at Mercer.

New York-based Mercer, which offers a suite of HR consulting services and software tools, plans to leverage Leapgen’s consulting experience in digital HR strategy and transformation, workforce solutions and improving employees’ digital experience with its Workforce and HR Transformation solutions.

“The thing we love about Leapgen is it’s really committed to meeting clients where they are, no matter whether the client is a sophisticated user of technology or just getting started,” Jean Martin, a senior partner at Mercer, told Human Resource Executive in an exclusive interview. “It’s very aligned with how Mercer works with our clients. It’s not about having an answer, it’s about having the right answer for each client’s needs.”

Leapgen’s ability to compare and determine specific technologies needed for any given client, regardless of size or industry, was one of the driving catalysts for Mercer’s interest in the company, Martin said.

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Companies, as Mercer’s recent research shows, need answers when it comes to finding effective human capital management technology. Of the 245 HR leaders in the U.S. surveyed by Mercer, it found 60% believe their HCM technology falls short of business goals.

See also: Today’s ‘golden age of HR tech’ presents the best time for transformation

Mercer believes Leapgen can help its customers take a strategic and holistic approach to their HR tech and sidestep underutilization of their technology and a low return on their investment.

For Leapgen, this acquisition will allow it to expand internationally in the near future and also increase the technical capabilities it offers customers, Averbook said.

In addition to seeking a partner that could help it scale its business through increasing its technical capabilities and gaining an international footprint, the Mercer deal also achieved two other items on Leapgen’s wish list, Averbook said in an exclusive interview with HRE.

“We wanted a partner that shared similar values. The leap in Leapgen stands for love, energy, audacity and proof. If you love what you do, it generates energy to do the audacious and prove value,” Averbook said. “That’s one of the things we also saw in Mercer. They wanted to do the same thing.”

And lastly, Mercer’s HR technology platform provided Leapgen the means to put technology-enabled HR services into the palm of customers’ hands, Averbook said, noting it elevated Leapgen beyond consultants providing clients information on a one-to-one basis. Instead, information could be delivered to customers through a wider and global distribution with the Mercer deal.

Related: The HR tech market categories to watch this year

Although terms of the deal were not disclosed, Averbook said all of Leapgen’s approximately 50 to 70 employees will be going over to Mercer as part of the acquisition.

He noted that many of Leapgen’s clients are Fortune 500 and Fortune 1,000 companies, and many of those are also Mercer clients.

“Our clients kept telling us how frustrated they were that business leaders were not viewing them as needing to be state of the art with modern technology,” Martin said. “It was really painful for us at Mercer, because we pride ourselves in combining empathy with economics. We searched for a company that could help us address this urgent problem for our clients and were thrilled to have found it in Leapgen.”

Dawn Kawamoto, Human Resource Executive
Dawn Kawamoto
Dawn Kawamoto is HR Editor of Human Resource Executive. She is an award-winning journalist who has covered technology business news for such publications as CNET and has covered the HR and careers industry for such organizations as Dice and Built In prior to joining HRE. She can be reached at [email protected] and below on social media.