Multi-process human resource outsourcing (MPHRO) deals are again on the rise this year after a disruption due to the pandemic as clients seek end-to-end services that include talent acquisition and development and that keep employee experience at the core, says leading IT research firm Everest.
MPHRO deals are those in which a minimum of three HR processes, including payroll and recruitment process outsourcing (RPO), are included and the buyer employee size is 1,000 or more.
Under the single process human resource outsourcing, multiple HR processes like payroll, learning services outsourcing and benefits administration outsourcing are provided as a single, stand-alone service. However, under MPHRO, clients are outsourcing multiple HR processes to one service provider in an integrated way.
Everest’s research said that 42 per cent of MPHRO buyers cite ‘enhanced employee experience’ as a key priority for the HR function. The only priority ranking higher (53 per cent) is ‘digitising’ HR processes through next-generation technologies such as automation.
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The MPHRO market was valued at approximately $5.4 billion in 2021. An increased focus on experience, reskilling and digital transformation along with complex compliance and cost takeout will drive the market to approximately $7.5 billion by 2026, says Everest report.
Tata Consultancy Services, Wipro, Infosys, ADP, Accenture Hexaware, Capgemini and WNS are some of the leading MPHRO service providers, the research firm said.
North America and EMEA (Europe, Middle East and Asia) dominate the HRO markets as greater than 70 per cent of the new deals emerge from those signing regions. Increased activities in Asia Pacific and Latin America regions are being observed.
The share of deals in the retail sector bounced back. Manufacturing, hi-tech and IT, and healthcare are other industries having a sizable number of new deals.
There has been a marked increase in the inclusion of more processes in the MPHRO deal as buyers seek end-to-end solutions. Digital HR services have experienced more demand owing to ongoing digital efforts by clients, the report said.
MPHRO providers are continuing to make investments in next-generation technologies, automation and analytics, and are also adding an experience layer to their products to provide a seamless, integrated experience to users.
Everest Group projects that this focus on employee experience, reskilling and digital transformation will drive a 7-9 per cent growth in the MPHRO market by 2026.
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“Enterprises are facing a perfect storm when it comes to their HR operations,” said Priyanka Mitra, practice director at Everest Group.
“On the heels of the pandemic and the Great Resignation, organisations are battling for talent, trying to upskill and reskill existing employees, undergoing digital and cultural transformations to retain talent and offer the hybrid working models that employees want, and adopting next-generation solutions to stay ahead of competitors.“