Authored By: Sarah
15 Aug 2024

 Human Resource Outsourcing (Hro) Market Size to grow by USD 13.3 billion between 2024-2028

According to a research report “ Human Resource Outsourcing (Hro) Market” by End-user (Large enterprises, SMEs) Service (PO, BOA, MPHRO, RPO, LSO) Geography (North America, Europe, APAC, South America, Middle East and Africa)- Global Forecast to 2028 published by Technavio, the market size is estimated to grow by USD 13.3 billion, at a CAGR of 5.28% during the forecast period. The global Human Resource Outsourcing (HRO) market is experiencing robust growth, driven by the digitization trend in various sectors including BFSI, IT, healthcare, retail, hospitality, and manufacturing. In these industries, the implementation of digitized HR solutions such as Recruitment Process Outsourcing (RPO), Payroll Outsourcing (PO), and Learning and Staffing Outsourcing (LSO) services, is streamlining HR operations. In the manufacturing sector, the adoption of advanced technologies like analytics, 360-degree feedback, and the Internet of Things (IoT) is transforming HR systems, enabling real-time management of complex tasks through RPO. This empowers HR managers to effectively source and hire suitable talent, thereby fueling the growth of the HRO market during the forecast period..

Browse market data tables, figures, and in-depth TOC on “Human Resource Outsourcing (Hro) Market” by End-user (Large enterprises, SMEs) Service (PO, BOA, MPHRO, RPO, LSO) Geography (North America, Europe, APAC, South America, Middle East and Africa) Global Forecast to 2028. Download Free Sample

By End-user, the Large enterprises segment is projected to dominate the market size in 2024

In the business landscape, large enterprises, characterized by a workforce exceeding 5000 employees, seek strategic collaborations and partnerships with industry leaders across the Americas, Europe, and Asia. These alliances serve as a dynamic avenue for Human Resource Outsourcing (HRO), enabling innovation and expansion. Notably, vendors such as Automatic Data Processing Inc. provide large enterprises with secure, integrated payroll and Human Capital Management (HCM) solutions, enhancing operational efficiency and driving the market's popularity. The HRO market gains traction as more companies engage with these large organizations, fostering growth and innovation.

By Service, PO  segment is expected to hold the largest market size for the year 2024

The Professional Employer Organizations (PEO) segment held a significant market share in the global Human Resource Outsourcing (HRO) market in 2023. This trend is anticipated to persist throughout the forecast period. Key drivers fueling the expansion of this segment include enhanced payroll control and visibility through analytics, adherence to regulatory compliance, and cost reduction. For instance, Automatic Data Processing Inc. (ADP) provides advanced payroll services, incorporating features such as garnishment payment services, State Unemployment Insurance (SUI) management, background checks, and job postings, in addition to payroll processing. Moreover, ADP's automated online payroll system minimizes costly errors, thereby adding value to clients.

North America is forecasted to hold the largest market size by region in 2024

The Human Resource Outsourcing (HRO) market signifies a significant trend in business operations, enabling organizations to delegate HR functions to specialized service providers. This strategic move allows companies to focus on their core competencies, while HRO vendors manage critical HR processes such as recruitment, payroll, benefits administration, and training. The outsourcing industry's expertise and economies of scale lead to improved efficiency, cost savings, and enhanced compliance with labor laws.

The Human Resource Outsourcing (Hro) Market growth and forecasting report also includes detailed analyses of the competitive landscape of the market growth and forecasting and information about 20 market companies, including:

  • Accenture Plc
  • Adecco Group AG
  • Aon plc
  • Automatic Data Processing Inc.
  • Capgemini Service SAS
  • Capita Plc
  • Ceridian HCM Holding Inc.
  • CGI Inc.
  • FMR LLC
  • Genpact Ltd.
  • HCL Technologies Ltd.
  • Hewlett Packard Enterprise Co.
  • Hexaware Technologies Ltd.
  • Infosys Ltd.
  • International Business Machines Corp.
  • ManpowerGroup Inc.
  • MHR International UK Ltd.
  • Randstad NV
  • UKG Inc.
  • Wipro Ltd.
.

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Research Analysis Overview

The Human Resource Outsourcing (HRO) market is witnessing significant growth due to the increasing demand for efficient and specialized HR services. With the digitization of HR functions, HRO providers offer solutions for talent acquisition, employee engagement, payroll outsourcing, learning services, and benefit administration. Technological advancements such as Augmented Reality, Big Data, Cloud Computing, IoT, and Recruitment Analytics are transforming HR processes. Employers in various sectors, including BSFI and IT, are outsourcing HR tasks to third-party organizations for scalability, efficiency, and access to specialized expertise. HRO agencies provide services like performance management functions and industrialization of HR processes through Service Level Agreements. Employee engagement is a crucial aspect of HRO, with social media platforms and digital tools facilitating communication and collaboration. The hospitality sector, in particular, benefits from HRO due to its seasonal workforce requirements. The market development opportunities are vast, with the integration of AI, machine learning, and chatbots in HR services. Overall, HRO offers a competitive edge to organizations by streamlining HR processes and enhancing employee performance.

Market Research Overview

Human Resource Outsourcing (HRO) market is witnessing significant trends and advancements, with workforce optimization, HR software solutions, and strategic workforce planning leading the way. Employee relations, leadership development, and workforce diversity are also key areas of focus. Global workforce management, remote work solutions, and workforce analytics are essential for managing a diverse and geographically dispersed workforce. HR outsourcing trends include talent management, data security, and compliance with labor laws. Succession planning, performance metrics, and organizational culture are crucial for long-term business success. Offboarding and onboarding processes are essential for maintaining a productive workforce. Technological advancements, such as recruitment automation, augmented reality, digitization, and cloud-based services, are transforming HR operations. Payroll outsourcing, healthcare, BFSI, learning services outsourcing, and benefit administration outsourcing are popular HRO services. Market distortion and financial imbalance can result from outsourcing, but a well-structured Service Level Agreement (SLA) and clear communication with outsourcing agencies can mitigate risks. Industrialization, market development opportunities, and recruitment analytics are essential for scaling businesses and reducing administrative burden. Remote work solutions, social media, and cloud computing have transformed recruitment processes. Big data and IoT bring new opportunities for HR analytics and performance management functions. Security and privacy concerns are essential considerations for outsourcing HR tasks to third-party organizations or external service providers. Specialized expertise, cost savings, employee performance, and feedback mechanisms are significant benefits of HRO. Performance appraisal systems and performance management functions help improve employee engagement and productivity. External HR professionals bring fresh perspectives and best practices to HR operations.

Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 844 364 1100
UK: +44 203 893 3200
Email: media@technavio.com
Website: www.technavio.com/

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