Adoption of Payroll Services and RPO to Streamline Business Operations to Drive Global Opportunities for Human Resource Outsourcing

The global market for Human Resource Outsourcing is projected to reach US$43.9 billion by 2024, driven by cost reduction and improving operational efficiency by enterprises leading to adoption of payroll services, recruitment process outsourcing and other services.

Human Resource Outsourcing (HRO) is the outsourcing of HR functions by organization and businesses to maximize efficiency and reduce labor costs. HR outsourcing relieves the business owners with several employer-associated responsibilities and enables them to focus on strategic competencies to have an edge over counterparts. The objective is to penetrate HR services such as HR planning, flow integration, system design & innovation, satisfaction of employees, compensation planning, employee relations, training, and enterprise culture planning. HRO includes contractual relationship for HR services with external providers, and helps businesses in maintaining competitive advantage by managing, recruiting, and retaining skilled personnel. Plagued with challenges as well as mounting complexity and compliance pressures of business processes, organizations are increasingly opting for outsourcing of HR functions. Factors driving HR outsourcing include cost efficiencies offered by outsourced HR services, and cutthroat competition among companies to reduce operational costs, enhance productivity and profitability. Additionally, the need to align business operations with changing HR policy framework and employment legislation is driving growth in the market. Growth in the HRO market is also 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.

Increasing need for alignment between business operations and HR, cost reduction, compliance management, changing policy framework, and access to technology are driving growth in the HR outsourcing market, with payment and benefits among the most commonly outsourced HR processes. New deals, contract renewals, and mid-tenure scope expansions are key factors driving growth in the HRO market. Rising demand from areas such as financial services, manufacturing and telecom, and increased demand are expected to foster growth in the HR outsourcing services market. 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. The growing service provider focus on technology innovation is benefiting the commercial success of cloud/BPaaS as a HRO service delivery model. In the coming years, benefits administration is forecast to garner greater interest among enterprises especially in the healthcare sector. Another area with untapped potential for growth is Recruitment Process Outsourcing (RPO) and talent acquisition.

As stated by the new market research report on Human Resource Outsourcing, the United States represents the largest market worldwide. Asia-Pacific is forecast to emerge as the fastest growing market with a CAGR of 8.8% over the analysis period, driven by strong HRO growth in China, India, and Indonesia. RPO and multi-process HRO are dominant segments in the human resource outsourcing market in the region. Payroll Services represents the largest service market in terms of revenue, whereas Recruitment Process Outsourcing emerges as the fastest growing service type with a CAGR of 10.6% over the analysis period.

Major players in the market include Accenture Plc, Adecco Group AG, ADP LLC, Aon Hewitt, Cielo, Inc., Ceridian HCM, Inc., CGI Group, Inc., Equifax, Inc., General Outsourcing Co., Ltd., Infosys BPM Ltd., International Business Machines Corp., Intuit, Inc., Kronos, Inc., Mercer, LLC, NGA Human Resources, Paychex, Inc., Randstad Holding NV, and Ultimate Software Group, Inc., among others.

The research report titled “Human Resource Outsourcing (HRO) - Market Analysis, Trends, and Forecasts ” announced by Global Industry Analysts Inc., provides a comprehensive review of market trends, growth drivers, product innovations and strategic industry activities of major companies worldwide. The report provides market estimates and projections of revenues for Human Resource Outsourcing in US$ Million at the Service Provider’s levels for all major geographic markets - US, Canada, Europe (France, Germany, Italy, UK, and Rest of Europe), Asia-Pacific, and Rest of World. The market for Human Resource Outsourcing is also analyzed by service type - Benefits Administration Services, Payroll Services, Education & Training Services, Recruitment Process Outsourcing, and Other Services.

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