Tapping the HR Market

30 April 2010:

For a business almost nonexistent in China two decades ago, human resource (HR) outsourcing has since turned the country into a potential goldmine as outsourcing solution providers look to establish or expand their operations. To cater the growing HR outsourcing need in the China's markets, U.S. integrated computing and business outsourcing company Automatic Data Processing Inc. (ADP), is expanding its market presence to serve both multinational and local companies.

Considering China "a key growth opportunity," ADP opened offices in Shanghai and Beijing in 2006. Last April, its employer services division acquired a majority stake in ChinaLink, a Shanghai-based HR agency service provider. And ADP is open to acquiring local HR service providers, too. Through these acquisitions, "ADP will expand its opportunities in China in line with its long-term strategy," said ADP President and CEO Gary Butler.

"Although ADP China has yet to turn a profit, ADP will continue to invest in this unique market where patience and education are needed to make the concept of professional HR outsourcing services acceptable to a larger client base," said Amer Ahktar, Managing Director of ADP China.

China's HR outsourcing market is worth up to $1 billion and will grow 20 percent annually in the coming years. It is expected to reach $1.5 billion by the end of this year, said Ahktar, citing International Data Corp. statistics.

HR outsourcing

The HR services industrial value grew to 50.6 billion yuan ($7.4 billion) last year due to continued efforts to open the country's markets and rapid economic development. However, while HR agency services have been widely adopted, HR business process outsourcing (BPO) has only recently emerged in China.