By 2017 the global human resource outsourcing (HRO) market is projected to hit $199.6 billion, with market growth being predominantly driven by the increasing need for alignment between business operations and HR, cost reduction, compliance management, changing policy framework, and access to key technologies.
Human resource outsourcing ensures superior performance at low cost and is also capable of converting fixed costs to variable costs. By employing the services of low-cost offshore firms, companies can realise significant cost reduction without affecting the overall quality.
The US and Europe account for a major share of the global human resource outsourcing market, while Asia is poised to register the fastest compound annual growth rate over the period to 2017.
Over the past decade, Europe has lagged along way behind the US in terms of prevalence of human resource outsourcing. This has largely been put down to European firms adopting a more conservative approach to using outsourcing due to having to consider more legislative and demographic variations in their business operating model.
Segment-wise, payroll and benefits, the most widely outsourced HR processes, would remain the preferred function within the human resource outsourcing market. 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.
For more information on the human resource outsourcing market, see the latest research: Human Resource Outsourcing Market Report
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