Human Resources Business Process Outsourcing (HR BPO) represents the biggest component of the overall BPO market in Asia Pacific
Human Resources Business Process Outsourcing (HR BPO) represents the biggest component of the overall BPO market in Asia Pacific, according to Gartner.Payroll services, benefits administration and training and development are the most common HR activities outsourced in the region. The Asia Pacific (excluding Japan) HR BPO market is expected to reach USD 1.3 billion in 2006, representing 24.7 percent of the total BPO market and an increase of 9 percent from USD 1.2 billion in 2005.The overall BPO market in Asia Pacific is expected to reach USD 5.4 billion in 2006, an increase of 13.5 percent over 2005. Australia experienced growth rates higher than the Asia Pacific average for HR BPO, at 10 percent from 2005 to 2006. The total BPO market in Australia will expand from USD 779 million in 2005 to USD 855 million in 2006.“HR has long been identified as a key area for outsourcing, usually for payroll and benefits administration services,” said TJ Singh, research director for Gartner. “As a back-office function, aspects of HR are often deemed core, yet non-critical functions and are often most companies’ first stop on the BPO journey. Payroll outsourcing is also a key area for small and midsize businesses that are often underserved by larger, more-strategic forms of BPO.”HR BPO adoption is still in its early stage in most parts of Asia Pacific, and Gartner expects healthy growth rates to continue through to 2010. India’s domestic HR BPO witnessed the highest growth rate, an increase of 23 percent from USD 97 million in 2005 to USD 119 million in 2006. Besides Australia and India, HR BPO continues to grow significantly in China, Korea, Singapore, Taiwan, Malaysia (albeit from a lower base) and Hong Kong.