BPOUkraine » Economic Slowdown Driving HR Work Offshore

Economic Slowdown Driving HR Work Offshore

November 19, 2008 on 6:07 am | In Uncategorized |

DALLAS, November 13, 2008

In an increasingly slowing economy, offshore providers of human resources services are well positioned to take market share from US-based suppliers as buyer companies are now more focused on early cost savings that can be gained from labor arbitrage, according to a new study by the Everest Research Institute.

Other high-level insights from the in-depth analysis include:

- Market size and growth: The multi-process HRO market slowed in 2008, and is estimated to reach US$2.9 billion by the end of the year (in terms of annual contract value). Compared to 47 new deals signed in 2007, Everest estimates only 28-32 deals to be signed in 2008. However, multiple factors will ensure market growth in the future

- Changing dynamics: In a slowing economy, buyers prefer a componentized model over a wide-scope transformation model. Further, an “offshore-led” lift-and-shift (of employees and functions) model is coming into play for buyers looking for earlier cost savings

- Buyer adoption trends: Buyer adoption varies across geography, industry and employee segments. Demand from continental Europe and the United Kingdom continues to rise. Manufacturing, high-tech and telecom, and financial services are leading HRO adopters. In terms of number of deals, the mid-market is growing at a faster rate than the large market

- Potential and penetration: The multi-process HRO market has low penetration, especially in the mid-market. Both the mid-market and large market have comparable revenue potential

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Economic Slowdown Driving HR Work Offshore

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