Framingham, Mass. -- According to a newly released IDC study, worldwide HR service spending will experience a compound annual growth rate (CAGR) of 9.6 percent through 2009 to reach $113.4 billion, as compared to $71.9 billion in 2004. This study also identified HR business process outsourcing (BPO) as the fastest-growing segment of HR services and predicts that it will grow at a CAGR of 16.1 percent to reach over $16 billion in the U.S. by 2009.
"The worldwide market for HR services showed moderate growth in 2004, although the market experienced some consolidation," says Lisa Rowan, Program Manager for HR Management and Staffing Services at IDC. "HR service providers have an opportunity to grow their businesses through the pursuit of several strategies, including expanding their offerings to encompass workforce optimization capabilities, delivering meaningful HR metrics, and simplifying their pricing models."
While historically HR deals primarily focused on core HR processes of payroll, benefits, and HR record keeping, many new engagements now encompass transformational elements that help optimize the workforce in addition to core HR. The HR services market has also experienced numerous mergers, acquisitions, and formations of joint ventures in the continuing effort to capture market share. Despite the contraction, some HR markets are still crowded and vendors will need to distinguish their offerings to rise above the throng.
The IDC study, Worldwide and U.S. HR Management Services 2005-2009 Forecast (IDC #33028), examines the competitive landscape and provides a five-year forecast for the worldwide and U.S. markets for human resources management services, including discrete HR outsourcing, HR consulting, and full-service HR outsourcing. The study analyzes key factors influencing the timing and magnitude of opportunities in the worldwide and U.S. market for HR service providers, while offering essential guidance and recommended strategies.