Increasing number of mid-market companies with about 3,000-15,000 employees, are expected to adopt Human Resources Outsourcing in the coming years in an attempt to bring down cost and reap gains from latest technologies, says a study.
Moreover, in terms of adopting HRO, these firms are projected to surpass larger corporations having 15,000 or more employees in the next few years, reveals the study conducted by Everest Research Institute, the research arm of global consulting firm Everest Group.
According to the report, companies in the mid-market segment are adopting HRO due to the allure of a growing supplier base that continues to bring forward focused offerings that support cost reductions, access to up-to-date technology and standardised processes.
Estimates show that even though the mid-market segment at present comprises 51 per cent in terms of HR outsourcing activity, it constitutes only 16 per cent of the total market in terms of annual contract value.
However, in terms of market activity, the study highlighted that the mid-market would grow at a faster rate than the large market in coming years.
Noting that HRO suppliers have developed profitable offerings to penetrate the mid-market level, Everest Research Institute's Vice President, HRO Research Monica Barron said, "... This is why we're seeing a significant increase in HRO suppliers — including offshore suppliers — and offerings focused on the mid-market buyer.
"And this, in turn, is really good for the buyer because they now have more suppliers and offerings from which to choose."
