Worldwide HR BPO market is expected to reach $24.6 billion in 2006, says Gartner

Human resources business process outsourcing (HR BPO) continues to be a major component of the overall worldwide BPO market, as worldwide HR BPO is expected to reach $24.6 billion in 2006, an increase of 4.7 percent from $23.5 billion in 2005, according to Gartner, Inc. The overall worldwide BPO market is expected to reach $134.7 billion in 2006, an increase of 8.3 percent over 2005.
HR BPO is the biggest component of the overall worldwide BPO market at 18.7 percent of the market. Payroll services and benefits administration services comprise the largest segment of the total worldwide HR BPO, together comprising nearly three-fourths of the market in 2006. The remainder of the market is composed of education and training, hiring and recruiting, and personnel administration services.
  • Payroll outsourcing is also a key area for consideration among small and midsize businesses that are often underserved by larger, more-strategic forms of BPO.
  • Benefits administration, payroll and basic HR call center functions are good candidates for process standardization in internal-shared service centers.
  • The internal staff is the biggest competitor to external HR BPO providers. Fear of losing control is a major obstacle to BPO adoption.

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