NEW YORK and DALLAS, March 28, 2006 (PRIMEZONE) -- Human resources functions, led by benefits, payroll, employee data management and HR information technology, are increasingly moving offshore, according to Everest Research Institute's HRO Market Update -- Offshore Adoption. The new report, which focuses on offshore adoption trends among buyers and suppliers of HR outsourcing services, found that almost half (44 percent) of the more than 70 major HRO transactions currently in force have an offshore component. This number is expected to increase as HRO suppliers continue to invest in their offshore capabilities.
A chart showing major HR outsourcing suppliers is available at: http://media.primezone.com/cache/6149/file/2842.jpg
"HR offshoring can result in savings of up to 18 percent off the total HR cost base, and this is clearly driving offshore growth in this sector," said Marc Pramuk, Vice President at Everest Research Institute. "Most HRO suppliers already have a moderate to significant offshore presence, with plans to aggressively expand their offshore capabilities. A number of regions around the world provide substantial and sustainable HRO labor arbitrage opportunities for developed nations and are attracting significant investment from the major HRO suppliers."
Other key findings from the Everest Research Institute report include:
-- Benefits, payroll and non-voice employee data management are the
primary candidates for offshoring -- HR information technology
is also frequently offshored due to proven IT expertise in
locations such as India.
-- The healthcare and energy sectors lead HRO offshore adoption --
They are followed by the manufacturing, telecommunications,
financial services, hi-tech and retail sectors in adopting HRO
offshoring.
-- The HRO market is expanding globally -- While India has the
greatest number of HRO centers, Eastern Europe is becoming an
integral part of the offshore equation due to low costs, language
offerings and regulatory restrictions on employee data movement.
Central and South American locations are gaining in popularity as
near-shore locations for North American clients with processes
that require greater contextual knowledge and real-time support.
"Despite the signs of rapid growth and maturity that we are seeing in the HRO offshore market, HR still lags behind other areas that companies are offshore outsourcing," Pramuk added. "HRO buyers have been a relatively cautious group, skeptical of the offshore center's level of HR expertise and ability to deliver high-touch employee services. Yet the major suppliers have been focusing on elevating their offshore HR skills, and with the constant pressure to control costs, it's only a matter of time before the HR sector catches up with IT, customer care and other areas in adopting the offshore model."
About Everest Research Institute
Everest Research Institute (www.everestresearchinstitute.com) serves as a central source of strategic intelligence, analysis and actionable insight for corporate buyers, service providers and investors in the global business process outsourcing and information technology outsourcing marketplace. The Institute is dedicated to providing the global outsourcing community with the information it needs to build highly productive outsourcing relationships and programs, focusing on the drivers that are continually reshaping the industry landscape and analyzing how they impact member organizations and the success of their outsourcing strategies. The Institute's distinguished Board of Advisors, all senior executives and thought leaders in global outsourcing, oversee the Institute's research agenda to ensure that it fully supports the business information needs of corporate buyers, service providers and investors.
Everest Research Institute members gain unique and highly personalized analytical and advisory services, not available elsewhere, including:
-- Unlimited analyst access -- In addition to a full-day strategic
planning session for in-depth, face-to-face discussions, Everest
analysts are available for ongoing consultation to address
members' immediate issues and concerns. Such access is
unprecedented in the industry, and gives members a distinct
competitive advantage as they seek to take advantage of emerging
opportunities, changing market conditions and unforeseen
developments.
-- Visionary research with actionable insight -- Members receive
in-depth reports on major outsourcing topics, supplemented by
quarterly updates and monthly research notes on market-shaping
events, including regulatory developments, technological
advancements and emerging sources of risk and value. These
forward-looking reports not only cover important trends and
developments, but also project future scenarios and outcomes of
outsourcing decisions made today. This comprehensive
interpretation of data provides members with actionable insights
to support decision-making.
-- Wealth of knowledge and experience -- Members benefit from the
domain expertise and perspectives that come from Everest's direct
involvement in structuring and negotiating more than 530 ITO and
BPO transactions and more than 800 best practice case studies.
Everest analysts have intimate knowledge of the strengths and
weaknesses of service providers in different markets, processes,
industries and geographies. They also have a first-hand
understanding of how buyers approach the vendor selection process
and, ultimately, of the factors essential to outsourcing success.
In addition, the Institute has tapped multiple market sources and
collected proprietary information to assemble the industry's most
comprehensive database.
Everest Research Institute was established by the Everest Group, which provides strategic advisory services that help companies harness the power of outsourcing. Since its formation in 1991, Everest Group has served as business advisors for hundreds of IT and business process outsourcing transactions worldwide.