SUMMARY
HR outsourcing market is booming and India is one of the emerging players in
this market. The article explains the reasons for the growth in this segment
and India’s contribution to HR outsourcing.
INTRODUCTION
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Major consultancy firms are predicting a
big boom for HR outsourcing as a whole. According to
Gartner, McKinsey and others the outsourcing market is
expected to touch US$ 78 billion by 2004. Gartner predicts
that the worldwide HR outsourcing market will grow from
$21.7 billion in 2000 to $58.5 billion in 2005 1.
HR outsourcing is expected to be the fastest growing segment
in the outsourcing market. 80 percent of companies now
outsource at least one HR activity, and the number is
growing fast.
Though some analysts argue that by outsourcing major HR
activities, the number of HR jobs is decreasing, others feel
that on the contrary by outsourcing these kinds of
repetitive and administrative jobs, higher-level HR
professionals get the time they need to tackle strategic
workforce challenges. |
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With the growing market there are a number of vendors available who cater to
the diverse needs of various markets and provide HR services, including
staffing, payroll, benefits administration, training, employee relations,
and compensation. Consequently, what started in the 1980s as a simple
payroll outsourcing has exploded into a $32 billion a year business
involving all facets of HR. In just four years, one HR services
provider-Exult-has grown from a start-up with a handful of people to an
established company with 1,500 employees and more than $400 million in
annual revenues. Other big players include Accenture HR Services, ADP,
Fidelity, Hewitt, and Convergys.
| Service Line in India |
Market Potential (in billion) |
| Human Resources |
3.5-4.0 |
| Customer Relationship |
7 |
| Payment services |
3.0-3.5 |
| Content Development and others |
2.5-3.0 |
| Administration |
1.5 |
| Health care |
1.5-2.0 |
Source: Businessworldindia.com, 4th August 2003.
More >>
[1] Outsurce2india.com Management Trends in Outsourcing.
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