More than 170,000 HR jobs across Europe are at threat from India and other low-cost countries, according to a major research and advisory company.
The Hackett Group found that the continent’s top 500 companies could save €48bn (£32bn) a year by offshoring back-office functions.
This involves each organisation replacing an average of 348 internal HR employees with workers in countries such as India, China and the Czech Republic.
The Hackett Group’s senior HR business adviser Brian Siller told Personnel Today: “We are going to see a move towards more offshoring of HR. The savings are so overwhelming that firms will find them difficult to ignore.”
Offshoring has matured rapidly in recent years, according to the research firm, and can now offer companies a saving of 62% of their HR spend.
Hackett believes Europe’s top firms should offshore IT, finance, procurement and HR. The organisation is currently focusing on data reporting, rewards administration and payroll – but in the future, even more HR functions could be sent abroad.
“There are already early indications that we could have centres of excellence offshore,” said Siller. “There is no reason why HR experts should not be located in low-cost countries.”
HR could even go on to replicate the heavily offshored financial services industry, according to Hackett.
“There is a lot more to happen,” said Siller. “HR offshoring is a growing trend, and where finance goes, HR often follows.
“Large corporations in certain sectors have led the way, but as offshoring is established, smaller firms and those in other sectors will take advantage.”