State of the Human Resources Outsourcing Industry 2010

Introduction

The global human resources outsourcing (HRO) market activity picked up in 2010, following a slump in the overall outsourcing market in 2008 and 2009. The contract activity in the market has shown an increase in terms of the number of small deals.

Features and benefits

• Results of the world's largest primary research project on customer satisfaction with outsourced service provision.
• Analysis of activity by region, industry and service type in the global HRO market.

Highlights

This report finds that most users of outsourced services are satisfied with the service delivered by outsourcing vendors.The providers receiving the highest rankings in the 2010 Black Book of Outsourcing survey tend to be niche players which focused on specific service areas and sectors. A larger scale of operation (in terms of revenues) did not assure a company a higher rating in customer satisfaction.The manufacturing sector accounted for the most number of contracts in 2009. However, the local governments contributed the highest aggregate contract value. This market is increasingly tending towards contracts with smaller value and focused service providers.

Your key questions answered

• Which HRO service providers provide the highest levels of customer satisfaction?
• Which factors do clients consider most important when assessing satisfaction with HRO service delivery?

Table Of Contents

Executive Summary
Niche players doing well on customer satisfaction
Core HRO vendors expanding their delivery capabilities in offshore/ nearshore locations
The US and the UK are the largest HRO markets during 2006–10
Impressive performance by small vendors
Focus on SME market for growth
Increasing consolidation in the HRO market

OVERVIEW
Introduction
Summary
Methodology
Satisfaction criteria
Questionnaire design

2010 SURVEY FINDINGS: OVERALL SATISFACTION
Overall satisfaction ranking for the HRO industry
Overall satisfaction ranking for the RPO industry
Overall satisfaction ranking for benefits administration

SURVEY FINDINGS 2010: PERFORMANCE CRITERIA
Overview
Requirements awareness
Shared goals
Financial benefits
Risk mitigation
Partnership approach
Problem resolution
Corporate reputation
Skills and resources
Future orientation

GLOBAL HUMAN RESOURCES OUTSOURCING CONTRACT ACTIVITY
Overview of Datamonitor's contracts database
Human resources outsourcing activity, 2006–09
A changed landscape for mega HRO deals
Large sized deals
Improving HRO contract activity in 2010
Manufacturing sector accounts for largest number of HRO contracts in 2009
Manufacturing accounts for most of the HRO deals during 2006–10
Local governments accounted for most of the TCV in 2009
Services and banking constitute two other active markets for HRO
Central/federal government ranked third for ACV but fifth for TCV
Energy and utilities sector provides a major thrust to HRO activity in 2010
Apart from the traditional hubs, only two countries were involved in contract activity in 2009
The US and the UK were the central hubs of HRO activity during 2006–10
The US was a major contributor to HRO activity in terms of TCV
Canada became a leading player in terms of TCV during January–October 2010
Convergys bagged largest number of HRO deals in 2009
Three companies won a majority of contracts
Three vendors consistently win contracts in the last five years
Top five vendors account for most of the TCV
US based players accounted for bulk of TCV
Increasing confidence in relatively small vendors
Annual contract value decreased across the board
RPO deals signed during 2006–10
Outsourced benefits administration during 2006–10

HR OUTSOURCING GLOBAL MARKET TRENDS
Consolidation and standardized-software platform to drive the market
Alliances provide complementary capabilities
Offshoring along with nearshoring continues to grow
Restructuring is evident in European HR outsourcing market
Vendors are increasingly focusing on SMEs for growth

VENDOR PROFILES

Introduction

ACCENTURE
Business description
Revenue analysis
Clients
Major services and solutions
Key facts
Recent developments

ADECCO
Business description
Revenue analysis
Clients
Major solutions and services
Key facts
Recent developments

AON HEWITT
Business description
Revenue analysis
Clients
Major services and solutions
Key facts
Recent developments

AUTOMATIC DATA PROCESSING
Business description
Revenue analysis
Clients
Major solutions and services
Key facts
Recent developments

CAPGEMINI
Business description
Revenue analysis
Clients
Major services and solutions
Key facts
Recent developments
HAYS
Business description
Revenue analysis
Clients
Major services and solutions
Key facts
Recent developments

HP
Business description
Revenue analysis
Clients
Major services and solutions
Key facts
Recent developments

IBM
Business description
Revenue analysis
Clients
Major services and solutions
Key facts
Recent developments

MANPOWER
Business description
Revenue analysis
Clients
Major services and solutions
Key facts
Recent developments

PAYCHEX
Business description
Revenue analysis
Clients
Major services and solutions
Key facts
Recent developments

RANDSTAD HOLDING
Business description
Revenue analysis
Clients
Major services and solutions
Key facts
Recent developments

XCHANGING
Business description
Revenue analysis
Clients
Major services and solutions
Key facts
Recent developments

APPENDIX
Methodology
Further reading
Ask the analyst
Disclaimer