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.

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.

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