Mid-sized companies to lead outsourcing into the mainstream

Medium-sized companies are set to lead the way in signing HR outsourcing deals during 2005, after a large rise in contracts last year.

In 2004, for the first time, ‘mid-to-large’ businesses – as opposed to ‘large to very large’ businesses – dominated HR outsourcing, according to analyst firm Datamonitor.

Companies with between 5,000-25,000 employees did more broad-based business processing outsourcing deals including HR functions, according to Datamonitor. In the past, companies with more than 25,000 employees were the ones signing HR outsourcing deals.

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Commenting on the research, Michel Janssen, president of supplier solutions at outsourcing specialist Everest Group, said: “In 2005 business process outsourcing will go mainstream, and it will be driven by mid-sized client organisations.”

The findings echo earlier research from analyst firm the Yankee Group, which estimated that global HR business process outsourcing was worth £27.3bn in 2004 and is expected to grow to £42.8bn by 2008.