After customer care services and medical transcription, outsourcing of human resource services or HR BPO was emerging as the next big opportunity for Indian BPOs with the global market in this segment estimated at $40-60 billion per annum. HR BPO comes to about 33% of the outsourcing pie. India has immense potential as more than 80% of fortune 1,000 companies will discuss offshore BPO as a way to cut costs and increase productivity . “HR opportunity is absolutely new. It is a sunrise opportunity with huge potential. In HR BPO, revenues depend on the number of employees the clients have. This is in sharp contrast to a typical customer care centre, where bills are charged on the workers servicing a client in the BPOs. Despite huge potential, not many companies have leveraged the offshore strategy. The main reasons for not leveraging the offshore benefit have been companies being undercapitalised or not knowing enough about the offshore business.
HR outsourcing services are very popular with small and mid-sized companies. Companies that are young and in the developmental stages often have limited resources. Rather than hiring HR staff full time, offshore HR outsourcing is a more cost effective and hassle-free way of meeting HR demands. Various strategic projects of an organization are looked after by HR outsourcing companies, giving you ample time and resources for other important core business issues
Taking advantage of the benefits of outsourcing is one of the ways that companies become more competitive, according a recent study of CFOs. "Outsourcing The Back Office: The Path Toward Sustainable Benefit, “report prepared by CFO Research Services debunks several myths and shows, as one executive said, that outsourcing has become a "ticket" to the fast-changing game of business. Here are some findings from the report:
72% of executive found that their outsourcing efforts "met or exceeded" expectations.
73% said they will outsource everything that is not core to their business
Executives view outsourcing as way to integrate newly merger companies and to speed growth.
The most popular outsourcing destinations are U.S., India, China and Western Europe.
Most of human resource outsourcing (HRO) contracts coming up for renewal are likely to witness a significant restructuring. This shift is likely to see more such work outsourced to India. More than 111 HRO contracts, with a combined total contract value of about $6 billion, are nearing their term end in 2010-12.
India could overtake Japan to become the world’s third largest economy behind the United States and China by 2012 when measured by purchasing power parity, according to a new forecast by PricewaterhouseCoopers. The accounting and professional services firm says its projections suggest China could be the largest economy in the world as early as 2020. But it warns that India will only fully realise this potential if it continues with the “growth-friendly” economic policies of the last two decades. The report, released by PwC in London last week, comes as both China and India continue to rebound from the global financial crisis faster than any of the other major economies