Multi-process human resource outsourcing (MPHRO) deals are on the rise again in 2022 as enterprises seek end-to-end services that include talent acquisition and development and that keep employee experience at the core.
MPHRO providers are continuing to make investments in next-generation technologies, automation and analytics, and are also adding an experience layer to their products to provide a seamless, integrated experience to users.
Everest Group projects that this focus on employee experience, reskilling and digital transformation will drive a 7-9% growth in the MPHRO market by 2026.
According to Everest Group's latest research, MPHRO State of the Market Report 2022—Entwining Employee Experience and MPHRO in the New Normal, 42% of MPHRO buyers cite “enhanced employee experience” as a key priority for the HR function. The only priority ranking higher (53%) is “digitizing HR processes through next-generation technologies such as automation.”
“Enterprises are facing a perfect storm when it comes to their HR operations,” said Priyanka Mitra, practice director at Everest Group.
She added that organizations are battling for talent, trying to upskill and reskill existing employees, undergoing digital and cultural transformations to retain talent and offer the hybrid working models that employees want, and adopting next-generation solutions to stay ahead of competitors.
“MPHRO providers can be highly valued advisors and partners in addressing these challenges. We’re already seeing a rise in the number of providers that offer end-to-end services and an integrated platform comprising core HR, talent management, workforce management, service delivery, and employee experience solutions.”
Priyanka Mitra
MPHRO Trends in 2022
The MPHRO market was valued at approximately US$5.4 billion in 2021. An increased focus on experience, reskilling and digital transformation along with complex compliance and cost takeout will drive the market to approximately US$7.5 billion by 2026.
North America and EMEA (Europe, Middle East and Asia) dominate the HRO markets as greater than 70% of the new deals emerge from those signing regions. Increased activities in Asia-Pacific and Latin America regions are being observed.
The share of deals in the retail sector bounced back. Manufacturing, hi-tech and IT, and healthcare are other industries having a sizable number of new deals.
There has been a marked increase in the inclusion of more processes in the MPHRO deal as buyers seek end-to-end solutions. Digital HR services have experienced more demand owing to ongoing digital efforts by clients.
