Human Resource Outsourcing (HRO) Market Size will Observe Substantial Growth by 2032 with a CAGR of 4.91%

Prudour Private Limited

Updated · Mar 24, 2023

Human Resource Outsourcing (HRO) Market Size will Observe Substantial Growth by 2032 with a CAGR of 4.91%

Market Overview

Published Via 11Press: Human Resource Outsourcing Market involves outsourcing various HR functions like recruitment, payroll management, benefits administration, training, and development to a third-party service provider. This outsourcing can be conducted either domestically or internationally.

One of the primary drivers for growth in the Human Resource Outsourcing (HRO) Market is companies' need to reduce operational expenses and boost efficiency. By outsourcing HR functions, businesses can focus on core business operations while also accessing specialized HR knowledge and technology.

Another factor fueling the growth of the HRO market is the growing adoption of cloud-based HR solutions, which enable companies to access HR services from anywhere and on any device. This has resulted in an influx of cloud-based HRO service providers offering these solutions.

The Global Human Resource Outsourcing (HRO) Market size is forecast to reach USD 59.2 Bn by 2032 from USD 36.6 Bn in 2022, growing at a compound annual growth rate (CAGR) of 4.91% between 2023 and 2032.

The report forecasts that the Asia Pacific region will experience the fastest growth in the HRO market due to the increasing adoption of outsourcing by companies there.

Some of the leading players in the HRO market include Accenture, ADP, IBM, Infosys, Paychex, and Randstad. These firms provide a variety of HRO services such as payroll processing recruitment process outsourcing (RPO) and human capital management (HCM).

Drivers, trends, and challenges have an impact on market dynamics, which can impact businesses. Request for PDF sample report

Key Takeaways

  • The Human Resource Outsourcing (HRO) market is expected to experience substantial growth over the coming years, driven by companies need to reduce costs and boost efficiency while adopting cloud-based HR solutions.
  • Global Human Resource Outsourcing (HRO) Market value is expected to reach USD 59.2 Bn by 2032 from USD 36.6 Bn in 2022, growing at a compound annual growth rate (CAGR) of 4.91% between 2023 and 2032.
  • Some of the major players in the HRO market include Accenture, ADP, IBM, Infosys, Paychex, and Randstad.

Regional Snapshot

  • North America is the leading market for HRO services, due to the abundance of established providers and the widespread adoption of outsourcing among businesses in this region.
  • Europe is a key market for HRO, driven by the increasing adoption of cloud-based HR solutions and the necessity for companies to adhere to stringent HR regulations.
  • The Asia Pacific region is expected to experience the fastest growth in the HRO market due to companies' increasing preference for outsourcing in this region. Furthermore, this region is experiencing rapid economic development, which in turn drives demand for HRO services.
  • Latin America and the Middle East and Africa (MEA) are rapidly developing markets for HRO services, with companies there increasingly turning to outsource in an effort to boost efficiency and cut costs. Nonetheless, these regions still lack a substantial HRO presence compared to North America, Europe, and Asia Pacific.


  • Cost Reduction: Companies are increasingly driven to reduce operational expenses. Outsourcing HR functions to a third-party service provider allows companies to save on overhead costs associated with in-house HR operations.
  • Focus on Core Business Activities: Outsourcing HR functions allows companies to prioritize their core operations, which can enhance efficiency and productivity.
  • Access to Specialized HR Expertise: HRO service providers offer specialized HR knowledge and technology that may not be available internally. This gives companies access to cutting-edge best practices and creative HR management solutions.
  • Increasing Adoption of Cloud-based HR Solutions: The adoption of cloud-based HR solutions is driving growth in the HRO market, as they enable companies to access HR services from anywhere and on any device.


  • Risk of Data Breach: Outsourcing HR functions also involves sharing sensitive employee information with third-party service providers, increasing the potential risk for data breaches and cyber-attacks.
  • Loss of Control: Outsourcing HR functions may lead to the loss of control over key HR responsibilities, which may cause concern for some companies.
  • Quality of Service: HRO service providers' quality standards may differ, which could cause client dissatisfaction.
  • Compliance With HR Regulations and Laws: Adhering to HR regulations and laws when outsourcing HR functions can be a challenge, particularly when operating across different countries with differing laws and regulations.


  • Growth Potential in Small and Medium-sized Enterprises (SMEs): The HRO market presents significant expansion potential for SME firms, as they often lack the resources to manage HR functions internally.
  • Expansion into Emerging Markets: The HRO market offers service providers the chance to expand into emerging countries where outsourcing is increasingly popular.
  • Increased Focus on Employee Engagement: The increased emphasis on employee engagement and experience presents HRO service providers with an opportunity to provide innovative solutions that boost employee satisfaction and retention rates.
  • Demand for Artificial Intelligence (AI) and Analytics: As HR management increasingly relies on AI and analytics, HRO service providers have an opportunity to offer cutting-edge HR solutions.


  • Intense Competition: The HRO market is highly competitive, with many service providers competing for market share.
  • Need for Customization: Companies have unique HR needs that may necessitate customized solutions from service providers – something which presents a challenge to service providers.
  • Complicated HR Regulations: Complying with HR regulations can be complicated when outsourcing HR functions, especially if your operation spans multiple countries with different laws and regulations.
  • Data Privacy and Security: Data privacy and security are paramount concerns in the HRO market, so service providers must guarantee they abide by data privacy regulations to maintain client trust.

Recent Developments

  • In January 2022, Accenture announced the acquisition of Workday consultancy firm Elevate HR to bolster its HRO capabilities.
  • Similarly, ADP acquired SAP SE's HR outsourcing business in September 2021, further increasing its global presence within this space.
  • In August 2021, Cognizant announced the acquisition of TQS Integration, a provider of consulting and advisory services in the HRO market.
  • In July 2021, Infosys acquired WONGDOODY, a US-based creative agency, to further bolster its digital transformation and creative capabilities within this space.

Key Market Segments


  • Payroll Outsourcing
  • Benefits Administration Outsourcing
  • Multiprocess Human Resource Outsourcing
  • Recruitment Process Outsourcing
  • Learning Services Outsourcing


  • BFSI
  • Healthcare
  • IT
  • Hospitality
  • Retail
  • Other

Key Market Players

  • Accenture Plc (Ireland)
  • Adecco S.A. (Switzerland)
  • Aon Hewitt LLC (USA)
  • Automatic Data Processing#Inc. (USA)
  • Capita HR Solutions (UK)
  • Cielo#Inc.
  • Ceridian HCM#Inc. (USA)
  • CGI Group Inc. (Canada)
  • Empower Software Solutions#Inc. (USA)
  • Fidelity Management and Research LLC (USA)
  • General Outsourcing Co#Ltd. (Thailand)
  • Genesys (USA)
  • Hewlett-Packard Company (USA)
  • Infosys BPO Ltd. (India)
  • International Business Machines Corporation (USA)
  • Intuit#Inc. (USA)
  • Mercer#LLC (UK)
  • NGA Human Resources (UK)
  • Paychex#Inc. (USA)
  • Randstad Holding NV (The Netherlands)

Report Scope

Report Attribute Details
The market size value in 2022 USD 36.6 Bn
Revenue forecast by 2032 USD 59.2 Bn
Growth Rate CAGR Of 4.91%
Regions Covered North America, Europe, Asia Pacific, Latin America, and Middle East & Africa, and Rest of the World
Historical Years 2017-2022
Base Year 2022
Estimated Year 2023
Short-Term Projection Year 2028
Long-Term Projected Year 2032

Frequently Asked Questions

Q: What is Human Resource Outsourcing (HRO)?

A: Human Resource Outsourcing (HRO) is the practice of outsourcing HR functions to a third-party service provider. This can include payroll processing, benefits administration, recruiting, training, and other HR functions.

Q: What are the benefits of HRO?

A: The benefits of HRO include cost reduction, access to specialized HR expertise, improved efficiency and productivity, and the ability to focus on core business activities.

Q: What are the challenges of HRO?

A: The challenges of HRO include data privacy and security, compliance with HR regulations, intense competition, and the need for customization.

Q: Which regions are the largest markets for HRO?

A: North America and Europe are the largest markets for HRO, with the Asia Pacific region expected to experience the fastest growth in the coming years.

Q: Who are some of the key players in the HRO market?

A: Some of the key players in the HRO market include Accenture, ADP, IBM, Infosys, Paychex, and Randstad.

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    Prudour Private Limited

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