The estimated value of human resource outsourcing is reportedly $78 billion globally but India has very few players to exploit the opportunity. Anup Kumar, vice-president, India Life Hewitt, talks about the opportunities available and the country’s positioning

What is HR outsourcing?
The process of managing human resources is complex and differs from company to company and country to country. Outsourcing this process, including human resources management such as pay roll, provident fund, benefits, pension management and administration, etc is part of the Business Process Outsourcing (BPO) and HR is a small piece of the big pie.

Why would companies outsource their HR processes?
There are four reasons why corporates should outsource their HR processes. Cost, quality, sticking to core business and staying away from complexities. Companies end up saving up to 30 to 40 per cent of their cost by outsourcing their HR process, while quality of the services end up being higher since all the information is automated and received almost by a click of a finger. Overall, the complexities of government regulations are also higher and handling these issues is not the companies’ core business. In these tough times, companies are also bringing down their IT budget for the HR department. So, to stick to business without worrying about the complexities involved, HR outsourcing is beneficial.

Is it a manpower intensive process like any other IT enabled services?
It is manpower intensive process but just like any other sector, technology enables to simplify the process.

How can technology be used to simplify the process?
We, in India Life, have simplified the process to a great extent with the assistance of technology and Internet. We have developed some of our own applications with the help of partners for our services. Our self-service options include e-mail, Web Access, Web Chat, IVRS and call centers. For e-mail, we have tied up with Talisma, while for Web Access and Web Chat we have partnered with NIIT and Web Login. For IVRS and call centers, we have joined hands with Parsec.

What is the opportunity available in HR outsourcing, globally?
According to a McKinsey report, the global HR outsourcing market is valued at $78 billion by 2004. So it’s a huge opportunity.

How does India stand to benefit on this?
India benefits as a cost-effective contender in this segment. All three elements of the cost, labor, technology and CRM are advantageous to India. The country is strategically positioned to grab a lion’s share of this pie available.

Where does India lack on this contention?
There are hardly five to six big names in this market and none are multiple nation servicing. We are in the process of extending our services to the Asia Pacific and Middle East region. However, overseas HR servicing companies are looking at the Indian market to set up shop, since there are not many big names in India engaged in this work.

What about the domestic market?
With a 40 million workforce, India is one of the largest markets in the world. The organized sector of HR servicing caters to about two per cent of the total market. However, the unorganized sector enjoys a significant market share in HR servicing in India. A single chartered accountant services about 30 to 40 companies with 10 to 15 professionals’ assistance. The issue with the unorganized sector is that there is absolutely no security, whatsoever.

CIOL Bureau