Offering payroll in brussels, HR administration in Paris, and benefits consulting in London, these leading global providers give HRO buyers many vendor choices in the market. A full complement of providers also means the market continues to grow and that consolidation—usually a hallmark of a mature industry—has stagnated. But will all these organizations remain standing in the near future?

by Andy Teng

Astute readers of HRO Europe and HRO Today (our U.S. sister publication) might recognize that this list of leading service providers looks suspiciously similar to one we publish in the U.S. edition. Fear not, we didn’t erroneously publish the same information.

The fact is that HRO is a global business, and everyone listed here has some sort of international presence, servicing clients in at least a handful of countries. Some of the leaders such as Accenture and Convergys are in many more than just a handful; they cover the world over. That’s why the listings are similar: nearly every large European HRO provider also serves clients in North America, Asia, or South America as well as Europe, the Middle East and Africa (EMEA).

One fact you might observe from this list is that the provider ranks haven’t thinned much from last year, indicating that consolidation has stagnated. This reveals two truths: marginally successful providers still see market opportunities for themselves and are holding on in hopes of winning more significant deals that will add to the bottom line; and that no one is willing to pay enough of a premium for one of those companies. So for the near future, expect to see the same cast of characters and possibly even more as a few traditional IT providers look for opportunities to enter the HRO market.

But this fact may be an encouraging bellwether of the HRO market. Mature industries under increasing price pressures tend to undergo waves of consolidation so that only a few economically viable suppliers remain in the market. That more than a dozen global providers are still here is an encouraging sign and speaks volume about growing demand for outsourced services.

Furthermore, the longer a provider remains in the market, the more lessons learned. Buyers widely recognize that HRO in the early years was plagued by delivery problems, but that has changed quite a bit for the better. More recently, buyers have said that providers are improving on key metrics and doing much better on meeting service level agreements (SLAs). Sure there is still plenty of room for improvement, but the group of providers listed here have demonstrated an ability to meet their clients needs.

We hope this feature can serve as a broad reference for HR buyers considering outsourcing. If nothing else, it’s a starting point. Remember, HRO is every bit the positive experience that providers tout it to be, as long as you take the necessary steps to ensure a successful outcome. More importantly, choosing the appropriate partner—perhaps one listed here— will play a critical role.

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