India is likely to get a large amount of offshore HR work in the next three years. According to a study by Everest Group, a global consulting and research firm, some 111 global HRO (human resources outsourcing) contracts worth $6 billion are nearing term end in 2010-12 and 75-85 percent of these engagements are likely to be extended while 15-25 percent will be repatriated or transferred to new suppliers.
The study says, “Given the maturity of India as an offshore delivery location and presence of high number of HRO suppliers, more work is going to come to the country.” In the next three years, contract restructuring is likely to play a significant role as early adopters of HRO services face impending renewal cycles. HRO clients will increasingly evaluate how to drive incremental value for their organizations through the end-of-term process.
“The areas of restructuring range from modifying the number and type of in-scope processes, to enhancing delivery models through global sourcing, to introducing alternative pricing models,” says the study. The mid-market and large market HRO buyers, who used to be reluctant to take services from offshore locations, are expected to leverage off shoring much more in their second generation deals due to the increased cost pressures in recent times.