Multi-process HR outsourcing (MPHRO) market is estimated to grow 6% in Annual Contract Value (ACV) in 2012 according to a study by Everest Group. The new report ‘Multi-Process Human resources Outsourcing Annual Report 2012’ published by the global consulting and research firm Everest Group, revealed that the market has attained a modest growth of 2% for the year 2011. The study reported that the market will grow by 6% to reach US$3.3 billion in the current financial year.
The reason for the slow growth in the year 2011, despite the signing up of new deals in the market was primarily due to the small-sized contracts, non-renewal of contracts and termination of deals on account of legal issues. On the other hand, the adoption of MPHRO in new market, greater adoption of new technologies by the outsourcing companies and the scope of expanding existing contracts are the factors contributing to the projected growth of the market.
Highlights of the report:
- Adoption of MPHRO by Asia-Pacific and Latin American regions is higher.
- There will be a gradual growth in adoption of Software-as-a-Service (SaaS) based MPHRO solution in the market.
- The outsourcing companies will play a major role by offering new pricing models and by adopting new business models for their buyers.
- There will be a decrease in the number of termination and non-renewal contracts in the market as most of the contracts have reached end-of-term.
- There was a significant growth in new deal signing from Asia- pacific region for the year 2011.
- It was seen that manufacturing and retail sectors were the greatest adopters of MPHRO, while the financial and hi-tech sectors outsourced less.
- India remains the popular offshore destination for HR outsourcing, whereas Southeast Asia and Latin America is the new upcoming offshore destination for MPHRO.
- There is significant growth in adoption of MPHRO by mid-sized companies post recession, while there is a visible irregularity in adoption of the same by the large companies.
- Accenture, Aon Hewitt, IBM and Northgate Arinso are the major players in the market and together enjoy a 53% of the market share between them.
The study also reports that the expansion scope of the deals are wider as transaction based processes are becoming more complex and companies do not have the talent and expertise to deal with these complexities. Increased access to standardized practices, better delivery model and less investment in technology are the main drivers in adopting MPHRO by the companies. It is evident that MPHRO will continue to reinvent itself by integrating new analytical methods to cater their clients better.
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