HR BPO – A Growing Industry

Experts have recently reported that after customer care services and medical transcription, the actual outsourcing of human resource services or HR BPO is becoming the next big break for Indian BPOs. The global market on this industry is estimated to be around $40 to $60 billion annually.

V Chandrasekaran who is the co-founder of Secova eServices, LTD said that
“HR BPO comes to about 33 per cent of the outsourcing pie. India has immense potential as more than 80 per cent of Fortune 1000 companies will discuss offshore BPO as a way to cut costs and increase productivity,” Secova is the first Indian HR BPO.

Most people in the HR BPO industry have not yet leveraged the offshore advantages although global players such as Fidelity, Exult and Hewitt have begun setting up their operations in India in anticipation of the wide potential.

HR BPO is expected to reach a $51 billion high and will represent an estimated 39 percent of all BPO revenue in the future. Gartner research firm stated that “Payroll and benefits services are the most popular in HR BPO and are driving the growth of the market,”

The HR opportunity is fairly new. It is a ground breaking opportunity that has great potential according to Chandrasekaran.

The actual revenue of HR BPO depends highly on the number of employees that each client obtains, as opposed to a typical customer care center where bills are charged on the workers who service the clients.

HR BPO comprises payroll which accounts for 35 percent of the total market, benefits which account for 31 percent, education and training which account for 15 percent and recruiting and staffing which accounts for 12 percent. Another 7 percent is attributed to others.

However, despite the large potential of this industry, there are very few companies who have actually leveraged the offshore strategy. Chandrasekaran accounts the reason for this to be that companies simply do not have enough knowledge of offshore business.

Another reason could be that existing BPO business has been growing at a rate of 46 percent on an annual basis.

An official with a Chennai-based BPO servicing credit cards clients stated that “When we have enough business on the existing model, our first job will be to meet those business demands” .