Talent is the Word: IDC Expects Strong Growth in HR Services Spending To Continue Through 2010
FRAMINGHAM, MA – JUNE 5, 2006 – According to a recent IDC study, HR services spending grew over 10% worldwide in 2005, primarily due to the recovering economy, and will experience a compound annual growth rate (CAGR) of 9% from 2006 through 2010. The study also reveals a significant increase in deal activity, indicating that growth will continue in future years as recent deals mature and begin contributing to recurring revenue streams.
"The worldwide market for HR services showed solid growth in 2005," said Lisa Rowan, program manager for HR and Talent Management Services at IDC. "In 2006 and beyond, the focus will turn to managing talent as a key area for expertise. With a scarcity of resources in both the North America and Asia/Pacific regions, buyers of HR services will seek consulting services to better scope their talent risks and identify top performers and look to outsourcing as a strategy to do more with less."
The study finds that the North American and European markets grew solidly and represent the largest markets for HR services. The United States in particular outpaced all other countries with a 12.5% increase in 2005 over 2004, due in part to an improving economy and lower unemployment. Although smaller than the North American and European markets, the Asia/Pacific market experienced the most dramatic growth as employers in a number of countries expand their presence due to offshoring contracts, along with the market opening its doors to payroll processing and other HR services.
Additional key findings within this study include:
— There is increased interest in the midmarket, where there are nearly 8,000 firms in the United States alone with 1,000-10,000 employees
— With reduced unemployment and a graying workforce particularly in the North America and Asia/Pacific regions, we are facing a reemerging war for talent
— The Asia/Pacific market which has been traditionally closed to payroll processing and other HR services has shown signs of opening to global suppliers
The study, Worldwide and U.S. HR Management Services 2006-2010 Forecast: Talent Is the Word (IDC #35029), presents the five-year forecast for the worldwide and U.S. markets for human resource management services, including discrete HR outsourcing (i.e. processing), HR consulting, and full-service HR outsourcing (i.e. business process outsourcing). The study describes key trends in the worldwide and U.S. market opportunity for HR service providers. The study also offers essential guidance for service providers to help them distinguish or expand their services brand in the market, as well as for buyers on how to best take advantage of services.
IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. Over 850 IDC analysts in 50 countries provide global, regional, and local expertise on technology and industry opportunities and trends. For more than 42 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting http://www.idc.com.