HR outsourcing market to reach $65.3Bn by 2029
NEW JERSEY, UNITED STATES — The Human Resource Outsourcing (HRO) services market is projected to grow at a compound annual growth rate (CAGR) of 7.2% from 2023 to 2029, reaching a value of $65.3 billion in the next six years.
According to a new report by Infinity Business Insights, the rise in HRO is driven by “the growing complexity of HR operations, the need for cost reductions, and the goal of enhancing HR efficiency.”
HRO involves outsourcing HR functions like payroll, benefits administration, hiring, training, and performance management to a third-party provider. While HRO has existed for some time, the report notes a significant expansion in recent years due to the aforementioned factors as well as rising demand for specialized HR services.
The HRO market saw major growth as companies seek greater cost-efficiency, access to specialized expertise, and ways to handle increasingly complex HR operations. Trends like multi-process outsourcing (MPO), where companies use a single vendor for multiple HR activities, drive further growth by enabling greater cost reductions, efficiency, and integration of HR operations.
Analysts predict continuing growth in the HRO market in the coming years, fueled by the adoption of advanced technologies like artificial intelligence (AI) and machine learning (ML) to streamline and enhance HR processes.
The Asia Pacific (APAC) region, in particular, is expected to grow rapidly as small and medium-sized enterprises increase their demand for HR services and economic expansion continues.
