The Future of HR Outsourcing in 2020 – What Insiders Say

March 9, 2020
The Future of HR Outsourcing in 2020 - What Insiders Say

The HR outsourcing industry is an ever-evolving field, constantly adapting newer practices and technologies to keep up with the needs, demands, and fluctuations in the market. 2020 is here, and organizations are rushing to adopt more new policies and trends that could become major catalysts for their growth in the months to come. HR trends govern the kinds of services that will be available to major organizations that will provide these services to large organizations as a cost-cutting measure.

Some HR outsourcing services trends, according to insiders, to look out for in the coming year include:

AI as a Recruitment Tool

The HR outsourcing services industry has already effectively adopted AI technologies as a part of their services. AI is a useful tool that has proven in helping recruiters ease the burden of HR. AI has helped recruiters handle tasks with a lot of volumes that help recruiters handle other tasks with higher priorities.

AI chatbots have also slowly made their way into the recruiting process. Chatbots are software that conducts interviews over text or on camera for prospective employees based on a set of pre-written parameters. According to Korn Ferry’s data, 63% of talent acquisition professionals have reported that AI has changed how recruiting is conducted.

According to statistics released by, 80% of businesses are expected to have chatbot automation by 2020, 58% of companies currently using chatbots are B2B, and 71% of companies with chatbots have between 1 and 50 employees. Chatbots seem poised to become the technology of the future.

Data Analytics

Data Analytics is anticipated to become a major area for HR outsourcing services in 2020. HR will begin to use data analytics in a more precise manner to increase productivity, innovation, and revenue at workplaces. In this wat, Data Analytics can facilitate employee-centric environments. Data-driven strategies can thus boost effectiveness at the workplace as well as management strategies even better.

Cloud-Based Payroll

According to the Zion Market research report, the global cloud-based payroll software market was valued at approximately USD 7,884 million in 2018. The cloud-based payroll market is expected to generate around USD 13,374 million by 2026, at a growth rate of around 6.8% between 2019 and 2026.

Given that the industry is poised for massive growth in the year ahead, organizations will be looking to shift to HR payroll services that have cloud-based payroll services simply for benefits such as better security, accessibility, low investment, time, and cost to the company and so on.

Providing Personalized Employee Experiences

HR outsourcing and payroll services can ensure that their processes are effective by providing personalized experiences with their payroll systems.

Employee payroll systems have become more personalized and more accessible by employees, giving them a greater sense of control and accessibility over their records. One way they have become more efficient is by providing this experience via smartphone. According to statistics published by, 9.4% is the projected increase in the size of core HR software from the year 2017 to 2025. 13.8 billion USD is the projected total value of the market for hosted HR software. Given that the digitization of HR is now a foregone conclusion, most HR professionals can take note of this to implement their payroll systems effectively.

Remote Workplaces and Contract Hiring

Contract staffing and the emergence of shared or remote workplaces have to change the way organizations and businesses conduct their activities. Multiple statistics courtesy of flex work on remote work have attested to the effectiveness of remote workplaces. Another statistic by also stated that 5 billion USD were saved thanks to remote work. Therefore, contract-based jobs and remote gigs are being touted as major areas for potential investment.

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