CAGR for HR outsourcing will increase by about 37% by 2024

The Human Resource (HR) outsourcing market is becoming one of the most popular and sustainable business segments. It has seen steady growth over the past couple of years and this is expected to continue at least through 2024. Analysts see an incredible future for the segment and are predicting a compound annual growth rate (CAGR) of around 37% over the period, reaching as high as $43.8 billion.

HR outsourcing includes subcontracting personnel-related functions to an external supplier. It can be highly lucrative for the company, as it allows them to use an expert organization to recruit, train and place personnel, as well as focus more on business growth. An HR outsourcing firm will be able to handle the changing environment of personnel management in greater detail, since its sole function is HR. Additionally, an outsourced HR solution will handle all payroll and benefits issues, processes that are resource-intensive more at certain times of the month than others.

Payroll is currently the largest market, followed by benefits administration and recruitment. Outsourcing common functions will result in more cost savings, improved performance and better efficiency. Those companies that are experiencing less employee strength can turn to an HR outsourcing firm to create a model that specifically suits the organization.

As HR outsourcing becomes more popular, there is increased competition in the field. This is leading to even more growth, which is pushing the CAGR up. There is increased attention being given to the segment across the world, including in the U.S., Latin America, Southeast Asia and Europe, and many of the regions will follow the pattern created by the U.S.