Texas outsourcing state HR and payroll services

Convergys Corp. says it landed a contract to provide human resources and payroll services to 46,000 government employees in Texas. State officials say the contract is worth up to $85 million over five years.

Cincinnati-based Convergys (NYSE: CVG) will perform the work for the Texas Health and Human Services Commission, according to a news release. Convergys will open a new shared service center in Austin to serve the state employees, and the company expects the first phase of the transition to take about one year. The company says it will hire up to 150 employees for the new call center.

It is also unclear how many state jobs would be affected by the move. The state says the commission will not make any cuts before June 2005, but that there may be cuts after that time.

The company has started a similar program for the state of Florida. Convergys already employs about 5,000 people in Texas contact centers, and it was immediately clear if the company will be adding more to service the new contract. Cincinnati-based Convergys is a provider of outsourced billing, human resources and customer care services.