Arthur J. Gallagher & Co. closed its largest benefits acquisition to date, snapping up integrated benefits, technology and services provider Buck this week to bolster its offerings amid increasing demand for employee engagement and internal communication services and products.
The transaction, valued at $660 million, represents the largest HR acquisition to date for Gallagher, a global insurance brokerage, risk management and consulting services firm that is valued at $41 billion.
Gallagher’s acquisition comes at a time when employee engagement demands are rising. For example, 45% of U.S. executives anticipate increasing interest in enhanced employee engagement software following the pandemic, according to an International Data Corp. survey of 500 executives. The continuing decline in employee engagement may be fueling this interest, with Gallup reporting current engagement levels retracting back to those found in 2015.
Related: Peloton, Hearst and REI land new chief people officers
Gallagher and Buck are two powerhouses in the internal communications and employee experience arena and the acquisition makes the combined company a formidable market leader, says William Ziebell, CEO of Gallagher’s Benefits & HR Consulting Division, in an interview with HRE.
Employers are seeking employee engagement solutions to help attract and retain workers in a tight labor market. It turns out that nearly 72% of HR leaders are somewhat or extremely concerned about losing talent in the next 12 months, according to a recent HRE survey.
Buck, which carries the formal name BCHR Holdings L.P., will become part of Gallagher’s existing Benefits and HR Consulting Division and will help it expand and grow faster than it could have done otherwise, says Ziebell.
“In this case, it’s not one plus one equals two but one plus one equals three,” Ziebell says, adding that in areas where Gallagher has a large benefits presence, Buck has a smaller one and vice versa.
What Buck brings to the table
Gallagher offers HR tech advisory services for benefits but does not own any of the technology that it has created, whereas Buck does own its tech, including its bSuite benefits administration and employee engagement software platform and its flexibility platform, says Ziebell.
And where Gallagher has a large defined contribution and executive benefit consulting business, Buck is much smaller.
The acquisition can also enhance Gallagher’s plan administration, benefits strategy, compliance, employee engagement, total rewards and investment consulting offerings.
RELATED LINKS: Here’s how inflation is taking a toll on retirement
Although Gallagher operates in approximately 130 countries, its Benefits and HR Consulting Division covers the U.S., Canada, the UK and Australia. Buck also covers the U.S., Canada and UK, boosting Gallagher’s presence in those regions.
Gallagher, which named John Tournet as CEO of its U.S. regions last year, is based in Illinois. BCHR Holdings called New York its headquarters.
Meanwhile, the Buck acquisition comes at a time when employers are facing historically low unemployment and a workforce that has different values and priorities than years before, which, in turn, is forcing organizations to rethink their talent management. That was among the findings of Arthur J. Gallagher’s recent report Organizational Wellbeing & Talent Insights report.
Related Link: Exclusive: Mercer acquires HR consulting firm Leapgen
Gallagher Benefits and HR Consulting on a buying binge
In addition to Buck, Gallagher acquired the Roc Group in December to add to its Benefits and HR Consulting division. The Roc Group focuses on employee communications and offers human resources and enterprise change solutions in the U.S.
The Roc acquisition feeds into the powerful position both Gallagher and Buck hold in the internal employee communication and engagement field, where both are leaders, Ziebell says.
Gallagher grows its business through acquisitions and organic development of its operations and expects to create a strong pipeline this year for more acquisitions, especially in the retirement and financial wellness areas, he says.
He adds Gallagher is particularly interested in these two areas as employers are increasingly finding their employees are concerned about inflation and protecting their retirement plans, as well as having a strong interest in financial education.