Introduction

The nine-year-old Human Resource Outsourcing (HRO) market has entered the emerging rapid growth phase. Understanding the underlying market dynamics in this evolving market is key for the stakeholders to be successful in this market. This report provides comprehensive coverage of the global 2006 HRO market including detailed analyses on market size, transaction characteristics, buyers adoption, and supplier landscape. This report will assist buyers, suppliers, investors, and technology providers understand the changing dynamics of the HRO market and will help them identify value creation opportunities as well as identify potential risks involved.

Scope

• All human resources outsourcing contracts as of March 31, 2006, with a minimum of three HR functions and servicing more than 3,000 employees
• Global focus: North America, Europe, Asia Pacific, and Latin America
• All suppliers having signed at least one HRO transactions
• All industries

Contents

This report examines the global 2006 HRO market and provides insights, detailed analyses and implications for stakeholders along three key dimensions: Market overview and trends; Suppliers, capabilities, and operating models; and Buyers, selection criteria, and experiences. Each dimension is discussed in detail (and illustrated with supporting data and analysis) to provide the reader information in easy-to-apply, bite-size pieces. For example, Market overview and trends offers the following insights, among others:

• Overall size & growth
  • Total deal signings grew from 87 to 126, representing annual growth of 45%.
  • There are two distinct HRO market segments: 3K-15K employees and >15K employees. They have tracked each other in terms of the absolute number of HRO transactions in each segment
• Transaction characteristics
  • Prices seem to have stabilized for the >15K employees segment, although they are still declining for the 3K-15K employees segment
  • The average TCV has fallen 28% in the last five quarters (2005 - Q1 2006)
• Technology
  • Proprietary systems dominate North America, while SAP is the leading ERP platform in Europe, South America, and Asia-Pacific
• Adoption of offshore
  • 44% of HRO transactions have an offshore component