Report Overview

India Human Resource Outsourcing (HRO) Market - Industry Trends & Forecast Report, 2029

India human resource outsourcing (HRO) market size was estimated at USD 94.36 million in 2022. During the forecast period between 2023 and 2029, the size of India human resource outsourcing (HRO) market is projected to grow at a CAGR of 25.09% reaching a value of USD 361.45 million by 2029. Major growth drivers for the India human resource outsourcing (HRO) market include the rising preference of small businesses for outsourcing services, enabling them to concentrate on core competencies while entrusting human resource tasks to external service providers. Emerging economies like India, with a robust business ecosystem and a skilled human resource pool, have the potential to attract multinational firms and stimulate foreign direct investment. The focus on transactional services, including payroll, benefits, HR compliance, time and attendance, by outsourcing companies further augments the expansion of the HRO industry in India. Outsourcing HR functions allows businesses to easily adjust the size of their workforce based on requirements. Service providers offer adaptable packages that grant businesses on-demand access to essential HR tools, resources, and services, allowing them to maintain agility without the cost of an internal HR team. The growth of Indian human resource outsourcing services is further propelled by the availability of diverse services such as payroll and recruitment. The integration of artificial intelligence in outsourcing services streamlines processes like recruitment, contributing to market expansion. The increasing establishment of small firms in India, which predominantly outsource their human resource services, is expected to further accelerate the growth of the HRO market in the country.

India Human Resource Outsourcing (HRO) Market – Overview

The India Human Resource Outsourcing (HRO) market pertains to the sector in India where companies, particularly small businesses, enlist external service providers to handle various human resource tasks. These tasks encompass payroll processing, benefits administration, HR compliance, time and attendance tracking, and recruitment services. The market is experiencing growth driven by the increasing preference of small businesses to outsource HR functions. This allows them to concentrate on their core competencies while leveraging external expertise for human resource-related activities. Furthermore, the market benefits from India's robust business ecosystem, skilled workforce, and the integration of artificial intelligence in outsourcing services, enhancing overall efficiency and contributing to the expansion of the HRO industry in the country.

India Human Resource Outsourcing (HRO) Market

Growth Drivers

Digitization of HRO

The digitization of Human resource outsourcing (HRO) is a key catalyst for the growth of the India HRO market. Various industries, including BFSI, IT, healthcare, retail, hospitality, and manufacturing, are embracing HRO services such as RPO, PO, and LSO provided by vendors. RPO HR services, leveraging advanced analytics and 360-degree feedback, significantly enhance operational efficiency and enable real-time talent acquisition. These advancements present lucrative opportunities for companies in the HR outsourcing market. Additionally, the integration of technologies like IoT, cloud computing, big data, analytics, and augmented reality in industrial processes contributes to organizational structure integration, leading to cost reductions and improved overall productivity. As a result, these factors are anticipated to fuel market growth during the forecast period.

Restraints

Data Security Concerns

Data security concerns significantly impede the growth of the India human resource outsourcing (HRO) market. As businesses increasingly turn to outsourcing for HR functions, the risk of inadequate alignment with existing standards and the potential for unnecessary demands arise. This can lead to employee dissatisfaction, hindering market expansion. Service-level agreements may not comprehensively cover management decisions, fostering conflicts between client organizations and third-party providers. The profit-driven motive of some outsourcing companies might result in subpar services, negatively impacting clients' objectives. Additionally, the loss of control over sensitive information and high dependency contribute to restricting market growth during the forecast period.

Impact of COVID-19 on India Human Resource Outsourcing (HRO) Market

COVID-19 pandemic had a mixed impact on the India human resource outsourcing (HRO) market. The widespread adoption of remote work prompted a surge in demand for HRO services to manage distributed workforces. The focus shifted towards digitalization, with increased reliance on technology for recruitment, training, and employee engagement. However, uncertainties in the business environment led to a cautious approach, affecting market growth. Companies prioritized cost-cutting measures, impacting outsourcing decisions. The resilience of the HRO sector in adapting to the evolving needs of businesses, along with ongoing recovery efforts, will determine its trajectory in the post-pandemic landscape.

India Human Resource Outsourcing (HRO) Market

Segmental Coverage

India Human Resource Outsourcing (HRO) Market – By Type

By type, the India human resource outsourcing (HRO) market is divided into Employee Relations & Compliance, Payroll Services, Workers Compensation, Employee Benefits, Talent Acquisition, Employee Screening & Background Verification, Pre-Employment Skill Tests, and Sexual Harassment Prevention Training segments. The payroll services segment holds the highest share in the India human resource outsourcing (HRO) market by type. It is primarily due to its critical role in managing and processing employee payroll efficiently. Companies, particularly small and medium-sized enterprises, often opt to outsource payroll functions to streamline processes, ensure compliance with tax regulations, and reduce the burden of administrative tasks. Outsourcing payroll services provides cost-effective solutions, access to specialized expertise, and allows businesses to focus on core operations. As payroll is a fundamental aspect of HR management, its prominence in the outsourcing landscape contributes to the significant share held by the payroll services segment in the Indian HRO market.

India Human Resource Outsourcing (HRO) Market – By Application

Based on application, the India human resource outsourcing (HRO) market is divided into BFSI, Healthcare, Information Technology, Hospitality, and Retail segments. The information technology segment holds the highest share in the India HRO market by application. It can be attributed to the industry's high reliance on skilled workforce management and the dynamic nature of IT operations. Companies in the IT sector leverage HRO services for recruitment, payroll processing, and talent management to ensure agility in adapting to technological advancements. Outsourcing HR functions allows IT firms to focus on core business activities, enhance operational efficiency, and access specialized HR expertise. As a result, the IT segment emerges as a key driver, holding the highest share in the Indian HRO market by application.

India Human Resource Outsourcing (HRO) Market – By Region

Regionally, the India human resource outsourcing (HRO) market is segmented as North India, South India, East India, and West India. South India region is expected to hold the highest share in the India human resource outsourcing (HRO) market during the forecast period. South India has a robust and diverse economic landscape, hosting a significant number of IT companies, manufacturing units, and service industries. The presence of a skilled workforce and a growing number of businesses in this region increases the demand for HR outsourcing services. Moreover, South India is known for its progressive approach to technology adoption, aligning with the digital transformation trends observed in HRO services. These factors collectively position South India as a key contributor, holding the highest share in the Indian HRO market.

Competitive Landscape

Major players operating in the India human resource outsourcing (HRO) market include Randstad India Private Limited, Adecco India Private Limited, ManpowerGroup Services India Private Limited, TeamLease Services Limited, Innovsource Services Pvt Ltd, Quess Corp Limited, PERSOLKELLY India Private Limited, Careernet Technologies Pvt Ltd, ABC Consultants Pvt Ltd, HCL Technologies Ltd, Infosys Ltd, and Wipro Ltd. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In February 2023 - Boeing underwent restructuring, cutting 2,000 white-collar jobs in finance and human resources. Some functions were outsourced to Tata Consulting Services in Bengaluru, India, while others were eliminated through streamlined processes.

Scope of the Report

By Type

• Employee Relations & Compliance

• Payroll Services Workers Compensation

• Employee Benefits

• Talent Acquisition

• Employee Screening & Background Verification

• Pre-Employment Skill Tests

• Sexual Harassment Prevention Training

By Application

• BFSI

• Healthcare

• Information Technology

• Hospitality

• Retail

By Region

• North India

• South India

• East India

• West India

1. Research Framework
   1. Research Objective
   2. Product Overview
   3. Market Segmentation
2. Executive Summary
3. India Human Resource Outsourcing (HRO) Market Insights
   1. Industry Value Chain Analysis
   2. DROC Analysis
      1. Growth Drivers
         1. Need to improve HR value chain
         2. Digitization of HRO
         3. Growing demand for neo-sourcing
      2. Opportunities
         1. Expanding range of HRO services
         2. Growing demand from SMEs
      3. Restraints
         1. Data security concerns
         2. Competition from global players
      4. Challenges
         1. Talent shortage
         2. Pricing pressure
   3. Technological Advancements/Recent Developments
   4. Regulatory Framework
   5. Porter’s Five Forces Analysis
      1. Bargaining Power of Suppliers
      2. Bargaining Power of Buyers
      3. Threat of New Entrants
      4. Threat of Substitutes
      5. Intensity of Rivalry
4. India Human Resource Outsourcing (HRO) Market Overview
   1. Market Size & Forecast, 2019–2029
      1. By Value (USD Million)
   2. Market Share & Forecast
      1. By Type
         1. Employee Relations and Compliance
         2. Payroll Services
         3. Workers' Compensation
         4. Employee Benefits
         5. Talent Acquisition
         6. Employee Screening and Background Verification
         7. Pre-Employment Skill Tests
         8. Sexual Harassment Prevention Training
      2. By Application
         1. BFSI
         2. Healthcare
         3. Information Technology
         4. Hospitality
         5. Retail
         6. Other
      3. By Region
         1. North India
         2. South India
         3. East India
         4. West India
5. North India Human Resource Outsourcing (HRO) Market
   1. Market Size & Forecast, 2019–2029
      1. By Value (USD Million)
   2. Market Share & Forecast
      1. By Type
      2. By Application
6. South India Human Resource Outsourcing (HRO) Market
   1. Market Size & Forecast, 2019–2029
      1. By Value (USD Million)
   2. Market Share & Forecast
      1. By Type
      2. By Application
7. East India Human Resource Outsourcing (HRO) Market
   1. Market Size & Forecast, 2019–2029
      1. By Value (USD Million)
   2. Market Share & Forecast
      1. By Type
      2. By Application
8. West India Human Resource Outsourcing (HRO) Market
   1. Market Size & Forecast, 2019–2029
      1. By Value (USD Million)
   2. Market Share & Forecast
      1. By Type
      2. By Application
9. Competitive Landscape
   1. List of Key Players and Their Offerings
   2. India Human Resource Outsourcing (HRO) Company Market Share Analysis, 2022
   3. Competitive Benchmarking, By Operating Parameters
   4. Key Strategic Developments (Mergers, Acquisitions, Partnerships, etc.)
10. Impact of Covid-19 on India Human Resource Outsourcing (HRO) Market
11. Company Profile (Company Overview, Financial Matrix, Competitive Landscape, Key Personnel, Key Competitors, Contact Address, Strategic Outlook, SWOT Analysis)
    1. Randstad India Private Limited
    2. Adecco India Private Limited
    3. ManpowerGroup Services India Private Limited
    4. TeamLease Services Limited
    5. Innovsource Services Pvt Ltd
    6. Quess Corp Limited
    7. PERSOLKELLY India Private Limited
    8. Careernet Technologies Pvt Ltd
    9. ABC Consultants Pvt Ltd
    10. HCL Technologies Ltd
    11. Infosys Ltd
    12. Wipro Ltd
    13. Other Prominent Players
12. Key Strategic Recommendations
13. Research Methodology
    1. Qualitative Research
       1. Primary & Secondary Research
    2. Quantitative Research
    3.  Market Breakdown & Data Triangulation
       1.  Secondary Research
       2.  Primary Research
    4.  Breakdown of Primary Research Respondents, By Region
    5.  Assumptions & Limitations

*Financial information of non-listed companies can be provided as per availability.

**The segmentation and the companies are subject to modifications based on in-depth secondary research for the final deliverable.

List of Figures

Figure 1       India Human Resource Outsourcing (HRO) Market Segmentation

Figure 2       India Human Resource Outsourcing (HRO) Market Value Chain Analysis

Figure 3       Company Market Share Analysis, 2022

Figure 4       India Human Resource Outsourcing (HRO) Market Size, By Value (USD Billion), 2019–2029

Figure 5       India Human Resource Outsourcing (HRO) Market Share, By Type, By Value, 2019–2029

Figure 7       India Human Resource Outsourcing (HRO) Market Share, By End Use, By Value, 2019–2029

Figure 8       India Human Resource Outsourcing (HRO) Market Share, By Region, By Value, 2019–2029

Figure 10     North India Human Resource Outsourcing (HRO) Market Size, By Value (USD Billion), 2019–2029

Figure 11     North India Human Resource Outsourcing (HRO) Market Share, By Type, By Value, 2019–2029

Figure 12     North India Human Resource Outsourcing (HRO) Market Share, By End Use, By Value, 2019–2029

Figure 13     South India Human Resource Outsourcing (HRO) Market Size, By Value (USD Billion), 2019–2029

Figure 14     South India Human Resource Outsourcing (HRO) Market Share, By Type, By Value, 2019–2029

Figure 15     South India Human Resource Outsourcing (HRO) Market Share, By End Use, By Value, 2019–2029

Figure 16     East India Human Resource Outsourcing (HRO) Market Size, By Value (USD Billion), 2019–2029

Figure 17     East India Human Resource Outsourcing (HRO) Market Share, By Type, By Value, 2019–2029

Figure 18     East India Human Resource Outsourcing (HRO) Market Share, By End Use, By Value, 2019–2029

Figure 19     West India Human Resource Outsourcing (HRO) Market Size, By Value (USD Billion), 2019–2029

Figure 20     West India Human Resource Outsourcing (HRO) Market Share, By Type, By Value, 2019–2029

Figure 21     West India Human Resource Outsourcing (HRO) Market Share, By End Use, By Value, 2019–2029

List of Tables

Table 1        India Human Resource Outsourcing (HRO) Market Size, By Type, By Value, 2019–2029

Table 2        India Human Resource Outsourcing (HRO) Market Size, By End Use, By Value, 2019–2029

Table 3        India Human Resource Outsourcing (HRO) Market Size, By Region, By Value, 2019–2029

Table 4        North India Human Resource Outsourcing (HRO) Market Size, By Type, By Value, 2019–2029

Table 5        North India Human Resource Outsourcing (HRO) Market Size, By End Use, By Value, 2019–2029

Table 6        South India Human Resource Outsourcing (HRO) Market Size, By Type, By Value, 2019–2029

Table 7        South India Human Resource Outsourcing (HRO) Market Size, By End Use, By Value, 2019–2029

Table 8        East India Human Resource Outsourcing (HRO) Market Size, By Type, By Value, 2019–2029

Table 9        East India Human Resource Outsourcing (HRO) Market Size, By End Use, By Value, 2019–2029

Table 10      West India Human Resource Outsourcing (HRO) Market Size, By Type, By Value, 2019–2029

Table 11      West India Human Resource Outsourcing (HRO) Market Size, By End Use, By Value, 2019–2029

Table 12      Randstad India Private Limited Company Overview

Table 13      Randstad India Private Limited Financial Overview

Table 14      Adecco India Private Limited Company Overview

Table 15      Adecco India Private Limited Financial Overview

Table 16      ManpowerGroup Services India Private Limited Company Overview

Table 17      ManpowerGroup Services India Private Limited Financial Overview

Table 18      TeamLease Services Limited Company Overview

Table 19      TeamLease Services Limited Financial Overview

Table 20      Innovsource Services Pvt Ltd Company Overview

Table 21      Innovsource Services Pvt Ltd Financial Overview

Table 22      Quess Corp Limited Company Overview

Table 23      Quess Corp Limited Financial Overview

Table 24      PERSOLKELLY India Private Limited Company Overview

Table 25      PERSOLKELLY India Private Limited Financial Overview

Table 26      Careernet Technologies Pvt Ltd Company Overview

Table 27      Careernet Technologies Pvt Ltd Financial Overview

Table 28      ABC Consultants Pvt Ltd Company Overview

Table 29      ABC Consultants Pvt Ltd Financial Overview

Table 30      HCL Technologies Ltd Company Overview

Table 31      HCL Technologies Ltd Financial Overview

Table 32      Infosys Ltd Company Overview

Table 33      Infosys Ltd Financial Overview

Table 34      Wipro Ltd Company Overview

Table 35      Wipro Ltd Financial Overview

Table 50      Other Prominent Players Company Overview

Table 51      Other Prominent Players Financial Overview