Growing Need to Streamline Operations and Reduce Costs Drives the Global Human Resource Outsourcing (HRO) Market, According to New Report by Global Industry Analysts, Inc
San Jose, California (PRWEB) May 14, 2012
Follow us on LinkedIn – Human resource outsourcing (HRO) includes the integration of people management strategies, operational business services, and technology that offers potential benefits for buyers, service providers and consultants. Plagued with mounting complexity and compliance pressures of business processes, organizations are increasingly opting for outsourcing of HR functions. Growth in the market is dependent on factors such as sales and marketing capabilities, domain expertise, business risk management, breadth and depth of coverage, data compliance with regulatory specifications, and location advantage. Large multinational corporations constitute the primary clients for HRO services. However, HRO is steadily gaining prominence among smaller companies, who are exhibiting willingness to outsource HR functions, primarily due to the availability of suitable outsourcing models from service providers.
Rising demand from areas such as high-tech, financial services, manufacturing and telecom, and increased demand from the UK and Continental Europe are expected to foster growth in the HR Outsourcing services market. The sector is also witnessing increased demand from developing markets and small and medium enterprises. While India remains the offshoring stronghold, new alternate centers are emerging rapidly across Eastern Europe and Southeast Asia. With uncertainty continuing to plague the global economy, companies are opting for smaller projects, whereby select projects/functions are offloaded to reduce operational burden and costs. The uncertain market environment is driving companies to adopt ‘piecemeal’ approach, wherein the impact of cost reduction would be highest in specific areas. Such an approach has slowed down the demand for comprehensive HRO services in the short run. Long-term growth would be dependent on factors such as business optimization, innovation as well as business transformation. Aging workforce in western countries and emergence of novel concepts such as Platform BPO are expected to drive a new wave of outsourcing, particularly amongst mid-market companies.
As stated by the new market research report on Human Resource Outsourcing, the United States and Europe account for a major share of global HRO market. Asia is poised to register the fastest compounded annual growth rate over the period 2009-2017. HR outsourcing trend is gaining prominence in manufacturing and finance services industries, while retail and government sectors offer potential growth opportunities in the future. Segment-wise, payroll and benefits, the most widely outsourced HR processes, would remain the preferred function for outsourcing. This is largely attributed to enterprises’ desire to commence outsourcing through such transactional processes, and subsequently move onto outsourcing of other HR functions such as recruitment and learning.
In the coming years, benefits administration outsourcing is likely to garner greater interest of enterprises. In particular, the healthcare reforms underway in the US are expected to enhance demand for outsourcing in the areas of health and benefits administration. Another area with potential growth prospects is Recruitment Process Outsourcing (RPO). Though Western countries continue to struggle due to rising unemployment numbers, the need to cut back on costs incurred on recruitment staff favors RPO market. However, fastest growth is expected from the Education and Training Services segment.
Growth in the HR BPO market is partly driven by the increasing numbers of middle market BPO engagements, although these contracts lack the complexity commonly associated with arrangements involving Fortune 500 companies. The keen interest shown by mid-market companies in HR outsourcing is also attributed to the increasingly selective approach adopted by large companies towards outsourcing deals. Though mid-market buyers were affected by the recession, the year 2010 witnessed strong comeback following the resurgence in the global economy. Companies from this segment opted for multi-process HRO services to benefit from cost savings and to gain access to expert services for compliance management needs.
Consolidation activity is gaining momentum as service providers look to access expertise in varied HR functions, gain economies of scale and location, expand into novel geographic regions, and maintain a competitive edge over counterparts. Major players profiled in the report include Accenture Plc, Adecco S.A., Xerox-ACS, Aon Hewitt LLC, Automatic Data Processing Inc., Ceridian Corporation, Empower Software Solutions Inc., Fidelity Management and Research LLC, General Outsourcing Co., Ltd., Genesys, IBM Global Business Services, Mercer, NorthgateArinso UK Limited, Paychex Inc., Pinstripe Inc., Randstad Holding NV, Talx Corporation, TriCore Inc., and Ultimate Software Group, Inc.
The research report titled "Human Resource Outsourcing (HRO): A Global Strategic Business Report" announced by Global Industry Analysts, Inc., provides a comprehensive review of trends, issues, strategic industry activities, and profiles of major companies worldwide. The report provides market estimates and projections for service segments Benefits Administration Services, Payroll Services, Education and Training Services, Recruitment and Staffing Services, Hiring Administration Services, and Other Services across geographic markets such as the US, Canada, Japan, Europe (France, Germany, Italy, UK, and Rest of Europe), Asia Pacific and Rest of World.
About Global Industry Analysts, Inc.
Global Industry Analysts, Inc., (GIA) is a leading publisher of off-the-shelf market research. Founded in 1987, the company currently employs over 800 people worldwide. Annually, GIA publishes more than 1300 full-scale research reports and analyzes 40,000+ market and technology trends while monitoring more than 126,000 Companies worldwide. Serving over 9500 clients in 27 countries, GIA is recognized today, as one of the world's largest and reputed market research firms.