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HR outsourcing to get a boost from recovering economy
20 April 2010:
Recent research by the Everest Research Institute has predicted that the total contract value for multiprocess outsourcing - where three or more HR processes covering at least 3,000 workers are outsourced to a single company - will increase from $2.9bn in 2009 to $3bn globally in 2010.
The UK will account for 25 per cent of multiprocess outsourcing, which can include HR services such as payroll, recruitment and training, this year due to the large number of multinational companies headquartered here. UK-headquartered companies with significant HRO deals include pharmaceutical giants AstraZeneca and GSK, as well as telco BT and oil company BP.
The UK has been relatively quiet in terms of deals over the past two years - between 2008 and 2009, eight multiprocess outsourcing deals were signed in the UK compared to 19 between 2006 and 2007 - but Everest expects resurgence in 2010.
In 2010 alone, research director at Everest, Rajesh Ranjan, predicts there will be seven to 10 deals of this type signed in the UK with outsourcing companies including Accenture, ADP, Ceridian, Hewitt, IBM and - increasingly - Indian giants Infosys and TCS, among those likely to benefit.
The public sector will continue to be the biggest adopter of multiprocess HR outsourcing in the UK - the sector has been the source of nearly half of all deal value to date - as HRO lends itself to the shared services model currently popular in Whitehall and the efficiencies it can generate also satisfy the government's need to cut back office costs.
The pharmaceutical, manufacturing and high-tech sectors will also remain significant users of HRO. According to Ranjan this may be due to the fact that these kinds of companies often have a geographically dispersed workforce and using a single HR provider can help ensure a consistency of HR services across the globe.
Meanwhile, financial services will be an important growth area for HRO in 2010 as the sector recovers from the worst of the recession.
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Source: Silicon.com
