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Any and all aspect of HR can be outsourced. According to research by Gartner, Inc., 80 percent of companies now outsource at least one HR activity, and the number is swiftly growing. Increasing numbers of organizations are turning to specialized firms to supplement various aspects of human resource management. While outsourcing makes sense for many reasons, the primary benefit is containment/reduction of costs of routine transactional and administrative work. Another key reason is the belief that a company should outsource all non-mission critical aspects of its business. The Placement consultant agencies, popularly known as the professional employer organization (PEO), has sprung up and are well-equipped to take on the entire scope of human resources activity. Most PEO clients are small- to medium-sized companies that sign up with a PEO, obtaining better deals on the purchase of benefits as a group rather than as a single small entity. By contracting with a PEO, small firms can afford to give employees a range of benefits comparable to those offered by larger companies. This helps level the playing field for small companies, who are competing with large firms in hiring top candidates. Larger companies are also outsourcing HR tasks, but they more typically go with specialty firms. The most commonly outsourced function is employee assistance, and outplacement services

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The human capital marketplace remains highly competitive and is poised for enormous growth in the next 10 years, since, companies around the world are investing heavily in their human resources infrastructure. Human Resources Sourcing or the Placement Industry (engaged in international/national recruitment) is recognized as the fastest growing industry. Establishments classified under this industry may assist either employers or those seeking employment. In India only, while 150lacs agencies help non-professional labor with placements such as construction, transport and certain industrial jobs, about 800lacs work with professionals in ever-widening fields, such as nursing and teaching. HR Sourcing (placement) is a large and complex universe in itself, encompassing the many different functions associated with the HR department.

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