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State of the Multi-Process HR Services Market


The multi-process HR services market has evolved significantly over the years. The traditional approach, characterized by comprehensive end-to-end HR BPS services over a long term (often 7-10 years) leveraged on-premise solutions that were heavily customized. This gave way to the transitional approach, best characterized by hybrid technology solutions where core HR and payroll is on-premise, and talent management processes leverage cloud-based solutions. And now, multi-process HR services have evolved to a modern approach, characterized by:

  • Cloud-based HCM platforms, either vendor proprietary or TP systems, such as Workday HCM and SAP SuccessFactors, as well as Oracle HCM Cloud to a lesser extent
  • Narrow HR BPS services, typically HR administration and payroll, for 3-5 years
  • Mid- and large-market buyers, including the lower end of the mid-market (<5k employees)
  • Automated processes and configuration.

Currently, the modern approach accounts for ~30% - 35% of the market, with ~45% - 55% of deals taking the transitional approach, and the remainder under the traditional approach. Over the next five years, the modern approach will increase, representing ~60% - 65% of the multi-process HR services market.

There are many issues shaping the modern approach to multi-process HR services, including:

  • Globalization and growth, driving the need for standardization and simplification
  • Maintaining compliance, as regulatory changes are rampant globally
  • The need to replace inefficient and time-consuming labor-intensive processes
  • Moving beyond cloud HCM technology-only deals due to challenges managing and optimizing release updates
  • Demands for personalization and the need to digitalize the user experience to increase engagement and collaboration.

Accordingly, vendors tend to take one of two approaches to the modern multi-process HR services market:

  • Emphasizing the use of intelligent technologies such as robotics, automation, machine learning, and advanced analytics
  • Focusing on assisting organizations migrating to, or operating in, a cloud HCM environment by providing broader cloud support services such as SaaS deployments and ongoing application management support services.

Both of these approaches have multi-process HR BPS services as the foundation, and are focused on enhancing these core services. Stay tuned for a follow-up blog that will take a closer look at the modern approaches to multi-process HR services.

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