Despite low offshore adoption in HRO, India growing fastest among global offshoring destinations: Everest study
Gurgaon, November 13, 2008
In an increasingly slowing economy, offshore providers of human resources services are well positioned to take market share from US-based suppliers as buyer companies are now more focused on early cost savings that can be gained from labor arbitrage, according to a new study by the Everest Research Institute (Everest Group).
The Institute study, Human Resources Outsourcing (HRO) Annual Report, provides comprehensive coverage of the global 2008 HRO market, including detailed analyses on market size and buyer adoption, transaction characteristics, and supplier landscape. Study scope includes focus on North America, Europe, Asia Pacific, and Latin America; suppliers having signed at least one HRO transaction; and all industries.
Says Gaurav Gupta, Principal & Country Head, Everest Group, “The growth of multi-process HRO market slowed in 2008, and is estimated to reach US $2.9 billion by the end of the year (in terms of annual contract value). Compared to 47 new deals signed in 2007, Everest estimates only 28-32 deals to be signed in 2008. However, multiple factors will ensure market growth in the future. Overall offshore adoption in HRO is low compared to offshoring in finance & accounting, customer service & IT. We expect it to increase in coming times. In the last 12 months, all key offshoring regions grew, both in terms of number of suppliers and FTEs, with India growing the fastest.” The number of suppliers of multi-process HRO has grown from 9 in 2006 to 13 in 2007, and while the FTEs have more than doubled from 4600 to 10900, he added.