Introduction

The MPHRO market witnessed an uptake in new deal signings in 2012 compared to last two years, with increased momentum from emerging markets (especially Asia Pacific) and the mid-market in North America. With the SMAC (social media, mobility, analytics, and cloud) phenomenon making a mark in the MPHRO space, the high interest around third-party SaaS-based (especially Workday) solution turned into actual adoption. Buyers’ expectations continue to increase and they are increasingly seeking advanced analytics, better change management, and other value-added services in their solution mix. On the other side, service provider landscape continues to undergo major flux with newer entrants, provider exits, and a high M&A activity. In such a dynamic space, providers need to align their offerings and capabilities to “up” the buyer experience and satisfaction levels.

In this report, we analyze the MPHRO market across various dimensions:

• Market overview and key regional trends
• Buyer adoption and solution trends
• Service provider landscape
• Outlook for 2013

Scope of analysis

• HRO deals in which a minimum of three HR processes are included
• The buyer employee size is over 3,000 employees
• All geographies and industries

Content

This report provides a comprehensive coverage of the 2012 MPHRO market and analyzes it across various dimensions such as market overview and key regional trends, buyer adoption and solution trends, and service provider landscape. Additionally, it includes predictions for the 2013 MPHRO market. Some of the findings in this report, among others, are:

• While the new deal volume is up compared to the last two years, the market grew at a modest pace of ~2% in 2012
• Though the developed markets (North America and Europe) are still underpenetrated, the emerging markets (especially Asia Pacific) are growing faster
• Similar trend is observed in the large market (>15,000 employees) vs. mid-market (3,000-15,000 employees) where mid-market is growing faster though there is ample head room for potential growth in the large market
• Buyers approach HRO in a phased manner from a process scope perspective. Talent management components are often included in the second phase of the MPHRO arrangement
• The SMAC (social media, mobile solutions, analytics, and cloud/platform/SaaS offerings) phenomenon is making its mark in the MPHRO space. There is an increasing “pull” for these from the buyer community though current maturity of these components differ
• The MPHRO space was a hotbed for mergers and acquisitions in 2012