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I would like to kickstart the series on Emerging Trends in Human Resources by touching
upon the area which has got a renewed focus now i.e. HR Outsourcing.

Ha Outsourcing is not a very new concept to Indian outsourcing market. It essentially

means managing the human resource department of companies that are hard-pressed
for time and expertise when it comes to taking care of their HR spectrum. Research
indicates that an ÷
 

 






  

 



 
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. If these processes are outsourced then the
trained HR staff could be re-deployed in the core process which will add substantial
value to the organization.

Riding on the success of the BPO and IT industries, India has always been well
positioned to be a leader in the HRO space. After a decade, the HRO industry continues
to evolve in a rather mixed way²while many well known IT companies have joined the
fray to give the necessary fillip and visibility to the sector, there are a few factors that
continue to hold back.

Many large global HRO service providers have a presence in India and see the country
as a key delivery location. In recent times, offshoring of HR outsourcing has been
gaining ground. 
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. That is why offshoring to a location
like India makes sound business sense. These apart, presence of a few big Indian IT
companies having entered the market have added to the success story.

Most of human resources outsourcing (HRO) contracts coming up for renewal are likely
to witness a significant restructuring. This shift is likely to see more such work being
offshored to India. Everest Group-global research firm, in a study µ÷





 
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said the areas of restructuring
range from modifying the number and type of in-scope processes, to enhancing delivery
models through global sourcing, to introducing alternative pricing models.

According to the research firm, about 75-85 % of engagements will likely be extended
while 15-25 % will be repatriated or transferred to new suppliers. '

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.)&). . Everest analysts foresee scope for reduction with large
market buyers, whereas mid market buyers will likely expand narrow scopes and
leverage expanded supplier offerings that include talent management services.

While the global spend on BPO is estimated to be $234 billion, being a comparatively
new phenomenon HRO is expected to reach $67 billion. /




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2 This projection
can be further substantiated by the fact that large-scale HR off-shoring has already
taken place and giant names such as Tata Consultancy Services, Wipro, Caliber Point
(a subsidiary of Hexaware Technologies), and Infosys are some big Indian HRO
suppliers. Hewitt, Mercer, Manpower, Adecco, Fidelity Investments, Convergys,
Accenture, IBM, Exult Inc and Automatic Data Processing Inc. are global players.

HRO industry in India is still evolving. While the ability to deliver at a large global level
with the offshore component has attracted buyers, the growth has been in select
processes like 
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etc., but not in other parts of HRO. The Indian service
providers capable of delivering the end-to-end HRO services are just a handful at the
moment while there is a large number of single/stand alone service providers. The
domestic HRO is more established and growing with some players beginning to
standout. With some exceptions, the captives in general do a lot more comprehensive
HRO work than the typical third party BPO player. +


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Typically, HR outsourcing can be classified into "









 
 


 
 
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 . While transaction
and administration outsourcing deals with the day-to-day and month-to-month activities
like payroll management, employees benefits management, and pension management*
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  is a much more complex process that constitutes   



 

 



 3 2 Transaction and administration
outsourcing form the low-end of the value chain of an organization.

‡ Payroll
‡ Benefits
‡ Recruitment Process Outsourcing
‡ HR helpdesk
‡ Workforce administration
‡ Pension administration
‡ Learning and training
‡ Expatriation management
to
upon on the drift in HR in the shifting business landscape.
In my next post, I shall