HR Outsourcing and Consultancy Service Market Growth, Size, Share, Trends, and Forecast 2032

HR Outsourcing and Consultancy Service Industry Prospective:

The global HR outsourcing and consultancy service market size was worth around USD 46.83 billion in 2023 and is predicted to grow to around USD 73.30 billion by 2032 with a compound annual growth rate (CAGR) of roughly 5.1% between 2024 and 2032.     

Request Free Sample

HR Outsourcing and Consultancy Service Market: Overview

Hiring external companies to do specific HR responsibilities on a company's behalf is known as HR outsourcing. Employing specialized HR teams, this approach frees up enterprises to concentrate on their core competencies. Giving organizations expert counsel and solutions on a range of HR-related issues is another aspect of HR consulting. Typically, businesses employ human resource consultants to handle particular tasks or issues that call for their knowledge. Various factors affect companies in all sectors of the economy, and these factors are the cause of the current spike in demand for HR outsourcing and consulting services. These businesses provide HR services such as organizational development consultancy, hiring and payroll outsourcing, and strategic HR management guidance.

Key Insights

• As per the analysis shared by our research analyst, the global HR outsourcing and consultancy service market is estimated to grow annually at a CAGR of around 5.1% over the forecast period (2024-2032).
• In terms of revenue, the global HR outsourcing and consultancy service market size was valued at around USD 46.83 billion in 2023 and is projected to reach USD 73.30 billion, by 2032.
• The emergence of advanced technology is expected to drive the global HR outsourcing and consultancy service market growth over the forecast period.
• Based on the type, the payroll outsourcing segment is expected to capture the largest market share over the projected period.
• Based on the application, the large enterprise segment is expected to hold a prominent market share over the projected period.
• Based on region, North America is expected to dominate the market during the forecast period.

Request Free Sample

HR Outsourcing and Consultancy Service Market: Growth Drivers

Growing adoption of recruitment analytics drives market growth

The difficulties in handling enormous volumes of labor data are increasing. Because of this, a lot of businesses use analytics. Analytics tools use statistical and scientific methods to derive useful insights from unstructured data. Businesses are progressively integrating more technologies connected to analytics. Proactive hiring practices, intensive use of big data, and social media usage are on the increase in the human resource outsourcing industry. Active recruitment, also referred to as headhunting, is the most challenging task since it involves searching for executive profiles using contemporary technologies. This might become standard practice for a larger variety of occupations. Therefore, the increasing use of recruitment analytics is a significant trend that is creating opportunities for the global HR outsourcing and consultancy service market to expand.

HR Outsourcing and Consultancy Service Market: Restraints

Dependence on outsourcing agencies hinders market growth

Businesses that outsource their HR tasks run the risk of coming to depend more and more on these firms for all of their HR requirements. Outsourcing may result in a loss of control since the demands made by their contractors may alter the rules of the game. These behaviors may cause a great deal of discontent among the workforce. This could be a serious problem preventing HR outsourcing and consultancy service industry growth. As soon as this issue is resolved, the market will expand.

HR Outsourcing and Consultancy Service Market: Opportunities

Technological advancements offer a lucrative opportunity for market growth

The digitization of human resource outsourcing and its technology advancements serve as major drivers of HR outsourcing and consultancy service industry progress. Online platforms need to be digitalized to support the industry 4.0 trend and state-of-the-art database management systems. Industrial processes are being revolutionized by the implementation of cutting-edge technologies such as IoT, cloud computing, big data, analytics, and augmented reality. These developments help industries combine vertical and horizontal organizational systems. Businesses also require resource outsourcing to oversee their divisions. Furthermore, human resources increase total productivity and significantly reduce access costs per user. As a result, it is expected that the market will grow quickly over the projected timeframe.

HR Outsourcing and Consultancy Service Market: Challenges

Lack of control over HR function and high cost pose a major challenge to market expansion

Outsourcing HR functions to an external provider involves significant upfront costs, such as the implementation of new systems, training, and potential disruption of current processes. Organizations may feel they are giving up too much control over their HR processes when outsourcing, which could result in potential misalignment with organizational goals and culture. Resistance can arise within the organization, particularly from leadership and employees who prefer in-house management of sensitive HR tasks.

HR Outsourcing and Consultancy Service Market: Segmentation

The global HR outsourcing and consultancy service industry is segmented based on type, application, and region.

Based on the type, the global HR outsourcing and consultancy service market is bifurcated into payroll outsourcing, recruitment process outsourcing, benefits administration outsourcing, and others. The payroll outsourcing segment is expected to capture the largest market share over the projected period. Contracting with outside service providers to handle the administrative and compliance parts of employee payroll entails doing things like calculating wages, withholding taxes, making sure tax laws are followed, and issuing paychecks. The market for HR outsourcing and consultancy services, especially the payroll outsourcing segment, is expected to grow significantly in revenue due to rising regulatory complexity, technological advancements, and the need for affordable, compliant payroll solutions. Companies of all sizes are realizing the advantages of outsourcing payroll functions, which is fueling the market's robust expansion.

Based on the application, the global HR outsourcing and consultancy service industry is bifurcated into small enterprises, large enterprises, and medium enterprises. The large enterprise segment is expected to hold a prominent market share over the projected period. There is potential for significant revenue growth in the HR outsourcing and consulting services sector, especially from large enterprises. These businesses increasingly go to outside suppliers for complete HR solutions due to their demands for strategic focus, technology innovation, operational efficiency, and regulatory compliance. Service providers that can provide creative, scalable, and legal HR solutions will likely experience significant revenue increases from this important market area as it develops.

HR Outsourcing and Consultancy Service Market: Report Scope

HR Outsourcing And Consultancy Service Market: Regional Analysis

North America is expected to dominate the market during the forecast period

North America is expected to dominate the global HR outsourcing and consultancy service market during the forecast period. A highly developed economy that requires complex HR solutions, a multitude of huge firms, and a variety of industries are the primary factors. Particularly in the United States, there is a thriving market for HR consulting services, with businesses providing everything from management and talent acquisition to employee engagement and training. The US HR consulting industry is seeing several new developments, such as the growth of flexible & remote work schedules, heightened attention to diversity, equity, & inclusion (DEI) programs, and an increasing significance placed on employee experience & employer branding. Besides, the Asia Pacific is expected to grow at the highest CAGR during the forecast period. The increasing number of startups in the region and the presence of several companies drive the market growth of the region.

HR Outsourcing and Consultancy Service Market: Competitive Analysis

The global HR outsourcing and consultancy service market is dominated by players like:

• Accenture HR
• Insperity
• G&A Partners
• MSI Global Transformation Solutions
• Acadia HR
• Oasis Outsourcing
• CPEhr
• Globalization Partners
• Aon Hewitt
• Alliant
• Adecco
• People Strategy
• Astron Solutions
• XcelHR

The global HR outsourcing and consultancy service market is segmented as follows:

By Type

• Payroll Outsourcing
• Recruitment Process Outsourcing
• Benefits Administration Outsourcing
• Others

By Application

• Small Enterprise
• Large Enterprise
• Medium Enterprise

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa