Monday, March 06, 2006

Trends in HR Outsourcing

HR outsourcing has been growing at a fast pace in the last few years, more and more companies today have outsourced HR Processes to vendors .It’s a challenge as well as an opportunity for Hr folks to stamp the role of Hr in business today.

Pamela Babcock talks about the aspects of HRO in SHRM article.

HR professionals looking to purchase outsourced services may be able to gain both lower costs and improved service at the same time, as they capitalize on providers’ efforts to offer competitive pricing and as providers expand their skills and processes through mergers and acquisitions.

The total value of all HRO contracts in 2005 was nearly $6 billion—up from $2 billion in 2004, according to the TPI Index, a quarterly report on global outsourcing. And Martorelli predicts that the market for multiple-process HRO will continue to increase by 15 percent to 20 percent annually for the next few years.

The factors which have led to the increase in in Demand for HRO are: Marginalized perceptions of human resources, increasing globalization and the fact that existing vendors have a captive audience with organizations they already support.

Technology: Another key factor is rising information technology (IT) costs. HR executives facing the prospect of high costs to install, support, upgrade or consolidate Enterprise Resource Planning software often opt instead to outsource.

Click here to read more.

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