Analytics and automation rank as the Top 2 priorities of enterprise human resource functions, according to a recent Everest Group survey of senior executives in HR operations. Rounding out the top five key objectives cited are “move toward cloud,” centralization of HR processes, and cost reduction hrtech news.

“Cumulatively, these priorities reflect that access to digital solutions is a paramount concern for buyers of MPHRO solutions,” said Priyanka Mitra, practice director at Everest Group. “These digitally focused priorities also align with a clear shift we’re seeing in enterprise HR operating models as organizations seek innovative and flexible solutions to tackle tough HR challenges such as reducing operating costs, finding talent, best cms and improving employee experience.”

Asked to classify their HR operating models, the executives surveyed by Everest Group described a continuum of capabilities that is clearly moving toward cloud-based and next-generation models. Twenty to 30% described their operations as fragmented (State 1); 15-25% described their operations as centralized (State 2); 45-55% chose the cloud-based model as the most descriptive of their operations (State 3); and nearly 10 percent claimed to have achieved a next-generation operating model (State 4).

“Enterprises are looking for opportunities to undergo end-to-end transformation of their HR processes, and they are demanding that their service providers evolve from administrators to strategic partners that can help orchestrate a next-generation approach,” said Mitra. “Providers are responding by making heavy investments in technology, particularly analytics and automation. In addition, providers are also expanding their capabilities by widening their geographic reach and by adding high-end, value-added services such as talent management and advisory services.”

Everest Group reports that the MPHRO market registered a healthy growth rate of approximately 5% between 2017 and 2019 and is expected to remain steady at 5-8% for the next two years, crossing the $5 billion mark by 2021. However, looking ahead to 2021, Everest Group cautions that a potential recessionary wave may lead enterprises to delay decisions to outsource additional HR functions.

These findings and more are explored in Everest Group’s recently published report, “Multi-Process Human Resources Outsourcing (MPHRO) Annual Report 2020 – Preparing for a Digitally Enabled Decade.” This research provides comprehensive coverage of the 2017-2018 HRO market and analyzes it across various dimensions such as market overview, evolving market situation, and buyer adoption trends.

Additional Findings:

• New deal activity: Mid-market buyers are developing substantial interest in the MPHRO market as they realize the benefits of outsourcing HR services. New deals signed in 2018 witnessed a drastic shift toward the mid-sized market with a growth rate of more than 50% in the number of deals signed.
• Geographic distribution: North America continues to dominate as the primary decision-making location; however, its share is slowly being acquired by other geographies such as Asia Pacific and Latin America.
• Industry adoption: While manufacturing and financial services still lead the adoption in MPHRO, non-traditional adopters such as healthcare and retail have witnessed significant growth.
• Process scope: With enterprises taking a more strategic outlook toward HRO, there has been a marked increase in the inclusion of talent management processes such as recruitment and learning in their deals.
• Shoring mix: The market continues to witness steady inclusion of offshoring and nearshoring within deals. India still retains its position as the most favored offshore location; however, providers are also investing in Eastern Europe and Latin America.
• Global market shares: Alight Solutions leads the market in terms of annual MPHRO revenue, followed by Accenture, IBM and ADP. ADP, Accenture and TCS are the only providers that appear among the top five service providers across all industries and buyer segments.

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services and sourcing. We are trusted advisors to senior executives of leading enterprises, providers and investors. Our firm helps clients improve operational and financial performance through a hands-on process that supports them in making well-informed decisions that deliver high-impact results and achieve sustained value. Our insight and guidance empowers clients to improve organizational efficiency, effectiveness, agility and responsiveness. What sets Everest Group apart is the integration of deep sourcing knowledge, problem-solving skills and original research. Details and in-depth content are available at http://www.evererstgrp.com.