IDC Survey of HR Service Providers Yields Bullish Expectation for 2002

FRAMINGHAM, MA – APRIL 1, 2002 – Despite a level of uncertainty regarding the U.S. economy many HR service providers are optimistic about their expectations for 2002, IDC reveals. In a new study, IDC surveyed 28 providers of HR consulting and outsourcing to assess key sales and performance metrics. Service providers reported that leading indicators, such as depth of sales pipeline and time-to-close for leads, are more favorable currently than they were one year ago. This optimistic outlook is also supported in IDC's market forecast for HR services.

 

IDC's new forecast of the U.S. HR Management Services market predicts that HR service revenue will grow to $56.0 billion by 2006 and that HR BPO will remain the fastest growing segment of HR services spending.

"The coming 18 months stand to be a pivotal time for HR services," says Marc Pramuk, senior analyst for HR Management Services at IDC. "As companies continue to deal with the impact of the economy and the need to optimize their performance, there will be a clear shift in the mix and types of consulting and outsourcing services sought. With the need to incorporate technology into services growing and competition increasing, it is more important than ever to understand the key trends and opportunities to reduce the risk associated with making strategic decisions."

Economic uncertainty is impacting not only the U.S. but also most regions around the globe. IDC believes that it is more important today for HR consulting and outsourcing providers to understand the key market trends impacting the various service opportunities around the world. IDC predicts that worldwide HR service revenue will reach $108 billion by 2006. This indicates that despite the temporary slowdown in the worldwide economy, many service providers are looking to new markets and geographies to support their growth and profitability objectives.

IDC has a positive outlook for the HR services opportunity in 2002. IDC believes that for service providers to realize the growth potential for HR services, they must invest in capabilities that support client needs in HR self service, demonstrate the specific quantifiable ROI of their HR services,

and stay lean and nimble to respond quickly to new opportunities while preserving profitability and performance.

The research provided in this release comes from three new studies published by IDC's Human Resources Management Services program. The studies include:

Survey of HR Service Providers Yields Bullish Expectations for 2002 (IDC #26656), U.S. HR Management Services Market Forecast, 2002-2006 report (IDC #26693), and Worldwide HR Management Services Market Forecast, 2002-2006, (IDC #26754). To purchase any of these documents, call IDC's volume sales hotline at 508-988-7988 or email jnagle@idc.com.

For more information about IDC's Human Resources Management Services research, please contact Jill Toole at 508-988-6915 or jtoole@idc.com.

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in- depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

All product and company names may be trademarks or registered trademarks of their respective holders.