Human Resources (HR) BPO is the fastest-growing segment of HR services, and will grow at a CAGR of 16% in the U.S.A., reaching $18.9 billion in spending by 2010, according to a recent report by IDC. The research found that most companies today, even midsized firms, are launching operations outside of the country housing their headquarters.

As the HR BPO market continues to grow, IDC’s research indicates that the barriers for the entry are rising at the high end of the market despite increasing market interest in HR BPO services. This trend may change in the future as India-based firms set their sites on HR, believes IDC. There has been increased interest in the less served midmarket, and with fewer barriers to entry, more competitors have emerged to serve the midmarket. Overall, the landscape continues to evolve through mergers, acquisitions and joint ventures.