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Gathering Momentum: Mid-Market HRO

August 2008
Monica Barron, Rajesh Ranjan, Sudhanshu Saxena
ID: ERI-2008-3-R-0266
31 pages

Price: $2,999 (USD)
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Introduction

To date, employers in the larger segment, i.e., those in the over-15K active employees (>15K) segment, have received more attention because of the higher total revenue associated with these bigger HR outsourcing deals. However, lost in the hype of the bigger deals, there has also been a lot of activity in the mid-market, i.e., 3K-15K active employees segment. Sensing the opportunity, an increasing number of suppliers are eying this market now. This research report provides a comprehensive coverage of the 3K-15K employees segment including detailed analyses on market size and growth, comparison of transaction characteristics in the 3K-15K employees segment and the >15K employees segment, along with analyses on the changing market dynamics. The report will help the mid-market buyers understand their options in terms of suppliers, technology, and process scope. It will help the suppliers understand the potential in the mid-market segment and suggest ways in which they can make their strategy more effective.

Scope

  • All multi-process HRO deals as of December, 2007 with a minimum of three HR functions and servicing more than 3,000 employees
  • Geographic focus: Global
  • All industries

Contents

This research traces the growth of mid-market segment, and examines the factors that make it attractive for suppliers. Further, it compares the transaction characteristics of the 3K-15K employees segment and the >15K employees segment. It also identifies the key implications of the research findings for buyers and suppliers in the mid-market segment. Some of the findings in this report, among others, are:

  • While the overall HRO market slowed somewhat in 2007, the mid-market segment has remained stable in recent years
  • The mid-market is a potentially attractive segment due to high revenue and margin potential
  • Overall, there is lesser adoption of talent management components in the 3K-15K employees segment compared to the >15K employees segment, however, more transactions in the 3K-15K employees segment include the talent management components in the recent years
  • Within mid-market, the 3K-10K employees segment and the 10K-15K employees segment are dominated by different set of suppliers

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Opportunity in the 3K-15K Employee Size Buyer Segment
In the Human Resource Outsourcing (HRO) market, the larger employers, those in the "over 15K active employees" (>15K) segment, have received more media and supplier attention because of the higher total revenue associated with these bigger deals. However, lost in the hype of the bigger deals, there has also been a lot of activity in the "3K-15K active employees" (3K-15K) segment. | More

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