Sustainability of Business Service Outsourcing: the Case of Human Resource Outsourcing

This paper discusses the theory and evidence behind the logic of business process outsourcing, with a specific focus on human resource outsourcing (HRO). Market analysts project rapid growth in the global market for HRO, from around $30 billion in 2005 to just over $40 billion in 2008. The paper interprets HRO as a case of the unbundling of corporate functions, used as part of fundamental corporate restructuring by global multinational companies. Demand for HRO is satisfied by a mixed type of vendors who believe that their survival depends on growth in the scope of expertise and economies of scale, leading to consolidation through M&A. As HRO deals grow in...