HR outsourcing on a rise- Tops Q1 2006 outsourcing market

The outsourcing of HR processes by organizations is at an all time high. For the first time, Human resource outsourcing (HRO) has topped the outsourcing industry with a market of 29% closely followed by IT outsourcing (ITO) with a market of 23% at the end of Q1 2006. The HRO industry also employees the second most number of consultants after Information technology.

It is therefore not surprising that Global HR consultants such as Hewitt, Randstad are on a business expansion spree. Dutch HR major Randstad recently acquired major stakes in Indian HR firms such Team4U, EmmayHR while Hewitt is agressively planning its expansion in India.

With increasing complexity in business processes, multinationals are prefering to outsource their HR operations in particular recruitments to third parties. The research on availability of human resources in a new market before expansion is another role that the HR consultants are playing for the multinationals. This enables the MNCs to take the vital decision of wether to expand to a new market.

Another important trend is the interests of HR consultants to expand in emerging markets such as Brazil, China and India. The rising interest of multinationals to tap the vast reservoir of talented human resource in these economies is pushing HR consultants to have a strong hold on the HR industry in these economies.

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