Wide-ranging HR outsourcing remains preserve of the few

The BBC’s £100m 10-year HR outsourcing deal with Capita should not be taken as evidence of increased growth in “multi-service” HR outsourcing deals in the UK, according to business analyst firm Ovum Holway.

Under the terms of the deal Capita will deliver recruitment, the administration of pay (excluding pensions), some aspects of staff development, occupational health and a number of other HR-related services.

Wide-ranging HR agreements of this type are not common in the UK, and the signing of the BBC deal led some observers to claim that multi-service agreements would become more commonplace.

But Tola Sargeant, analyst at Ovum Holway advised caution over such claims.

“Apart from multinationals, we don’t think there are that many UK companies ready to hand over large swathes of their HR function straight away,” she said.

“We expect most HR outsourcing deals to continue to focus on single services such as payroll, pensions administration, training, and recruitment – rather than handing over everything at once.”

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