Part - I

Human Resource Business Process Outsourcing (HR BPO) forms a specific segment in the BPO market. This nascent industry offers a great scope of study. Quantitative data suggests that India is just missing the bus in the growing global HR BPO industry. India is well below the overall growth rate of Industry, but the euphoria of BPO industry is giving us a different flavor.

HR BPO

Global HR BPO industry is in a transition stage, not only looking at the age of industry but also some crucial decisions those are to be taken on big deals. (Eg. BP, Exult. Most contracts singed for 5 or 7 years will be revised in 2004-05). Many success stories that are going around in this industry are pulling the others in and making the space fast growing.

Why are companies going for Outsourcing?

Gartner reported recently that "Most enterprises are well aware of business processing outsourcing (BPO), and the human resources (HR) segment is the hottest part of the BPO market."

Companies are viewing HR as low risk and good value service provider. Research has also shown that 87 per cent of the funds mid-sized companies budget for HR goes towards routine processing transactions, rather than strategies that could actually impact business, enabling it to gain efficiencies. By outsourcing them companies can be more focused on their primary issues. HR Outsourcing is helping companies in converting fixed cost into variable cost, which gives them a fair chance of standing out amid economic downturn. As per the PricewaterhouseCoopers 85% of companies who outsource human resources have become more profitable.

Companies are going for HR outsourcing to: -

• Improve company focus.
• Reduce & Control operating costs.
• Gain access to world-class capabilities.
• Resources not available internally.
• Accelerate reengineering benefits.

Next

* Contributed by -
Suresh Vytla,
Kirloskar Institute of Advanced Management Studies,
Karnataka.