HR outsourcing is next big opportunity: experts

Chennai | Updated: Nov 23 2004, 05:30am hrs
After customer care services and medical transcription, outsourcing of human resource services or HR BPO was emerging as the next big opportunity for Indian BPOs with the global market in this segment estimated at $40-60 billion per annum, experts said on Monday.

HR BPO comes to about 33% of the outsourcing pie. India has immense potential as more than 80% of fortune 1,000 companies will discuss offshore BPO as a way to cut costs and increase productivity, said V Chandrasekaran, co-founder of Secova eServices Ltd, the first Indian HR BPO.

Sensing the potential, global BPO players including Fidelity, Exult and Hewitt have begun setting up operations in India. However, most HR BPO players had not leveraged the offshore advantage as yet, he told PTI.

Research firm Gartner has forecast HR BPO to reach $51 billion and represent 39% of all BPO revenue by 2004-end.

HR opportunity is absolutely new. It is a sunrise opportunity with huge potential, Mr Chandrasekaran, who formed Secova eServices to tap this potential, said. Our initial focus will be only on HR administration, benefits and payroll, in the mid-market which accounts for $13.2 billion.

In HR BPO, revenues depend on the number of employees the clients have. This is in sharp contrast to a typical customer care centre, where bills are charged on the workers servicing a client in the BPOs. Despite huge potential, not many companies have leveraged the offshore strategy. The main reasons for not leveraging the offshore benefit have been companies being undercapitalised or not knowing enough about the offshore business, said Mr Chandrasekaran.