HR – BPO - The Billion Dollar Opportunity.
January 21, 2004 (Press Release) --
What is HR Outsourcing? Any activity, in which a company lacks internal expertise and confidentiality and requires an unbiased opinion on human resources, can be outsourced. An important reason why various businesses turn to outsource HR services is that they do not have the time or expertise to deal with the situation.
“Companies outsource their HR functions more than any others and will continue to do so”, according to Gartner Inc., which predicted that HR outsourcing would grow 18% by the end of this year over last year. HR business process outsourcing (BPO) revenue is set to grow to US$46 billion in 2003, Gartner said, compared to US$39 billion in 2002. What’s more, the researcher predicted that the market would reach US$51 billion by 2004 and represent 39 percent of all BPO revenue.
There is an expected change in the HR outsourcing scenario though, with many mid – sized companies focusing on HR outsourcing. Research proves that the market for HR outsourcing in the APAC region could grow from $1.14 billion in 1999 to $2.56 billion in 2004. Although it is not a very huge growth, it has still shown an upward trend. All that is required is to find a sensitive route map thorough the murky waters.
According to Elixir Web Solutions the work acquisition requires three main tasks.
· Sourcing the right people from the best talent pools quick, cost effectively and virtually.
· Selecting the right mix of competencies, experiences and behaviors from the talent pool.
· Hiring the best candidates and transitioning them from applicants to employees swiftly, easily, competitively and equitably.
So there is no disputing that, in principle, HR business process outsourcing is an attractive proposition; reduce operational costs, improve quality, commercially enforceable service levels, introduce process best practice, all sound very appealing. The danger is that BPO could be seen as the silver bullet for solving these issues much like ERP systems were seen as the silver bullet for solving business process integration issues in the 1990s. Organizations, which have yielded greatest benefit from their ERP systems, have understood how the ERP system needs to be used for the benefit of their business and not the other way round. The same is true for Human Resource Business Process Outsourcing (HR – BPO). As mentioned earlier HR outsourcing is predicted to grow to US $46 billion this year, and India has the potential of taking in 10 – 15% of this share, it comes to 4 – 5 billion dollars. So things have been discovered but they are yet to be conquered.
“Companies outsource their HR functions more than any others and will continue to do so”, according to Gartner Inc., which predicted that HR outsourcing would grow 18% by the end of this year over last year. HR business process outsourcing (BPO) revenue is set to grow to US$46 billion in 2003, Gartner said, compared to US$39 billion in 2002. What’s more, the researcher predicted that the market would reach US$51 billion by 2004 and represent 39 percent of all BPO revenue.
There is an expected change in the HR outsourcing scenario though, with many mid – sized companies focusing on HR outsourcing. Research proves that the market for HR outsourcing in the APAC region could grow from $1.14 billion in 1999 to $2.56 billion in 2004. Although it is not a very huge growth, it has still shown an upward trend. All that is required is to find a sensitive route map thorough the murky waters.
According to Elixir Web Solutions the work acquisition requires three main tasks.
· Sourcing the right people from the best talent pools quick, cost effectively and virtually.
· Selecting the right mix of competencies, experiences and behaviors from the talent pool.
· Hiring the best candidates and transitioning them from applicants to employees swiftly, easily, competitively and equitably.
So there is no disputing that, in principle, HR business process outsourcing is an attractive proposition; reduce operational costs, improve quality, commercially enforceable service levels, introduce process best practice, all sound very appealing. The danger is that BPO could be seen as the silver bullet for solving these issues much like ERP systems were seen as the silver bullet for solving business process integration issues in the 1990s. Organizations, which have yielded greatest benefit from their ERP systems, have understood how the ERP system needs to be used for the benefit of their business and not the other way round. The same is true for Human Resource Business Process Outsourcing (HR – BPO). As mentioned earlier HR outsourcing is predicted to grow to US $46 billion this year, and India has the potential of taking in 10 – 15% of this share, it comes to 4 – 5 billion dollars. So things have been discovered but they are yet to be conquered.
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