Introduction

As the HR Outsourcing (HRO) market bounces back and the competition increases, buyers and service providers need to capture value and still remain cognizant of the risks they are taking. Catalyzed by recent economic, political, and social happenings around the world, the market is keen to take a fresh look at managing risk. The main goal is not to eliminate uncertainty, but rather to be proactive in assessing and managing risk for the advantage of the market.

Within the single-process HR outsourcing (SPHRO), Benefits Administration Outsourcing (BAO) is one of the most mature markets with the global market size of ~US$5 billion. Everest Research has found that more than half of BAO deals have an offshoring component, which is almost singularly delivered from India. Its tendency to concentrate its global sourcing options to a single geography peaks the risk for the activity.

Although uncertainty has always been a factor in corporate decision-making, it is important to seek a comprehensive, integrated approach to identify and manage risks. The intent of this document is to highlight global sourcing concentration risks and suggest ways to mitigate them.