Convergys Corp. has won its largest employee-care outsourcing agreement, a $280 million, seven-year contract with the state of Florida.

        Under the agreement, the Cincinnati-based billing and customer care provider will supply benefits administration, recruiting, staffing services and core training for Florida's 189,000 state employees.

        The agreement — representing a 50 percent increase in Convergys' annual employee care revenues of $80 million — is expected to be an icebreaker in winning similar agreements from other states.

        “We think this represents a great opportunity for us,” said Morris Applewhite, vice president for business development in the employee care business.

        In the face of tighter state budgets, a number of states are exploring outsourcing employee care as a way to reduce costs and improve services, he said.

        Chairman James Orr, in an interview this spring, said he envisions employee care becoming a $500 million annual business for the company within a few years. Convergys shares closed Tuesday at $17.35, up 27 cents.

        The agreement, part of a privatization move by Florida Gov. Jeb Bush, will consolidate personnel functions and is expected to save the state up to $173 million over seven years.

        Convergys already has extensive operations in Florida and now employs 7,400 there. It expects to add 550 employees as well as new employee service centers in Tallahassee, the state capital, and Jacksonville.

        The outsource agreement has been opposed by American Federation of State, County and Municipal Employees union, which has said it could eliminate up to 800 state jobs.

        Mr. Applewhite said Convergys “plans to work closely with the state to identify opportunities for displaced employees.”

        Convergys sees managing employee care for other large companies and governments as a natural extension of its traditional customer relationship management functions.

        Brian Bingham, analyst with International Data Corp., a Boston technology-consulting firm, said the agreement is significant because it diversifies Convergys into a new sector in the already congested customer-relationship management market. Convergys prevailed over 4 finalists for the Florida contract.

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