by: Sarah Joson
Wednesday, May 16, 2012 | Outsourcing News |
In the report, the HRO market is anticipated to reach $199.6 billion by 2017. Some of the key drivers for the industry’s growth are business solutions that can help align internal processes, specifically HR, reduce costs, improve operational standards and framework, and maximize the latest technologies. Human resource outsourcing is also becoming more and more popular among large companies that are seeking to expand business operations internationally. Furthermore, since HRO providers offer flexible terms and services that can tap markets worldwide, they are able to land multi-purpose HRO contracts.
Human resource outsourcing mainly deals with people management services. It can cover processes such as people management, software and hardware, needed for business operations, and even operations management services.
Outsourcing major HR functions is especially beneficial to businesses that are in transition and are working to meet compliance regulations. But like any other market, growth mainly depends on the vendors’ ability to market services, skills, and ability to manage and prevent problems, services menu, and regional and cultural advantages.
Majority of the buyers in the HRO market are large companies that operate globally, but small and medium players and emerging markets are also beginning to take interest in outsourcing HR functions due to availability of workable business models.
The regions predicted to adopt HR outsourcing services are the UK and Continental Europe. Meanwhile, industries such as technology, financial services, manufacturing, and telecom are also expected to contribute to the market’s growth.
On the provider side, even if India is the leading outsourcing vendor, other outsourcing locations, specifically in Eastern Europe and Southeast Asia, are rapidly developing. Also, buyers are now more likely to request for contracts that are smaller in size, and are only outsourcing minimal and select functions to tackle problems head on.
The report also stated that the United States and Europe get the lion’s share of the global HRO market, while Asia is expected to post a rapidly growing compound annual growth rate from 2009-2017.