7 HR Outsourcing Trends: Skills-Based Hiring, L&D and More

HR professionals are immersed in change management. The human resources field is constantly evolving as businesses seek new and better ways of achieving their goals. And a big part of that change is the continued shift toward outsourcing HR tasks.

According to a report on the HR outsourcing market, the global market for human resource outsourcing is expected to grow from $42.4 billion to $68.9 billion from 2024 to 2032—a rate of 6.2% a year. North America leads the global HR outsourcing (HRO) market, with a 42.6% share.

The central forces behind the strength of this market continue to be the need of businesses to reduce overhead costs, improve efficiency and meet compliance regulations while maintaining a focus on core issues and growth. HR outsourcing benefits small and medium-sized enterprises (SMEs) in particular, because they often lack the resources to manage complex HR tasks themselves.

Recent trends in HR outsourcing include:

• AI integration and automation
• Advanced data analytics and insights
• Skills-based hiring
• Remote and global workforces
• Compliance, risk management and data privacy

Keeping up on current trends can inform your efforts to keep costs under control, stay competitive and keep your company thriving. This article will arm you and your HR team with information about the most impactful modern HR outsourcing trends.

HR Outsourcing Trends

New developments in HR reflect the pressures driving the industry, including the growth and complexity of compliance requirements, the growth of hybrid and remote work models, and advances in AI-driven HR technologies.

1. Growth of professional employer organizations

Professional employer organizations (PEOs) continue on a growth trajectory. The global professional employer organization (PEO) market is expected to grow from $73.58 billion in 2025 to $170.8 billion by 2033, a compound annual growth rate of 11%, according to the Straits Research group.

The report identifies a sector that is heating up: More healthcare providers are turning to PEO services as a cost-effective way to manage complex HR needs. Analysts also project strong growth in small and medium-sized businesses—a key client base PEOs. The demand for HR outsourcing also is being increased by rising labor costs and continuing talent shortages in healthcare, IT, customer support and other industries.

Many businesses are selecting comprehensive HR services, which PEOs provide. The services often include talent acquisition, payroll, compliance, benefits administration and employee engagement strategies.

2. AI integration and automation

According to a Deloitte Global Outsourcing Survey, more than 87% of HR leaders are planning to adopt AI as part of their outsourced services.

Outsourcing companies are using AI to transform HR by:

• Automating 40% of repetitive recruitment tasks.
• Using robotic process automation (RPA) to eliminate high-volume, repetitive, transactional HR tasks.
• Deploying AI and machine learning in hiring and chatbots for routine queries.

3. Advanced data analytics and insights

HR outsourcing can give businesses access to improved analytics capabilities. Employers can mine data gathered from payroll processing, benefits administration and other HR functions. This data, which used to be siloed in the HR department, can be used to improve decision making for the entire organization.

Predictive and HR analytics have become useful for:

• Forecasting workforce needs
• Optimizing talent acquisition
• Identifying turnover risks
• Guiding retention strategies

The Straits Research report cited TriNet as "a major PEO provider that uses AI-driven analytics to offer personalized HR solutions and predictive insights to its clients." Workforce analytics and automated systems can streamline administrative tasks, reduce manual errors and improve overall efficiency.

4. Skills-based hiring

As perceptions of the value of a college degree decline, hiring managers are shifting toward skills-based hiring. Over half the states in the country have issued directives to encourage skills-based hiring, according to the National Governors Association.

Resumes are no longer the golden ticket. Instead, new emphasis is being placed on skills assessments, work samples and video interviews that can show what someone can do.

In this climate, it's more important than ever to have efficient, consistent recruitment and onboarding processes. PEOs can provide automated workflows, custom questions and skills assessments, and other services as part of an applicant tracking system.

5. Remote and global workforce management

The news is filled with reports of employers demanding that workers return to the office. Even so, hybrid and remote work arrangements are not going away, and they continue to fuel demand for HRO.

Remote work enables businesses to spread a wider net for job candidates, even a global net. However, they put extra HR burdens on businesses, which must meet the regulatory requirements of multiple cities, states and/or nations.

HR outsourcing companies continue to develop and refine tools to support remote and global services such as onboarding, time tracking, performance evaluation and multi-jurisdictional compliance.

6. Compliance, data privacy and risk management

The burden of compliance, risk management and data privacy seems to go in only one direction: Up.

Pay transparency, pay equity and concerns about reverse discrimination claims are among the issues that have added to the difficulties, and importance, of risk management.

In an annual survey of corporate counsel by the Norton Rose Fulbright law firm, 48% said data management and data privacy issues are likely to increase in 2025.

Data security isn't the only concern, however. Changing rules on data privacy are an issue, too. Over half the respondents, (58%) said staying compliant with cybersecurity and data privacy regulations could increase their risk.

For business leaders who want to avoid sleepless nights thinking about GDPR, CPRA, CCPA, HIPAA, COBRA and other regulation thickets, HR outsourcing can give them some peace of mind.

7. Learning and development

More employers are recognizing that learning and development are essential for retaining Millennials and Gen Z employees.

In a Gartner survey of job candidates, 47% said greater opportunities for career growth is the main decision driver for accepting an offer, second only to compensation. At the same time, increased use of AI in the workplace could lead to the loss of entry-level jobs that typically give people the opportunity to learn and grow.

In this climate, businesses need more solutions for learning and development programs.

Staying Ahead of Industry Trends

Managing every facet of an HR department is a big undertaking, especially for smaller companies with limited resources and budgets.

Outsourcing some or all of your HR processes can offer powerful advantages that help your organization stay efficient, well-staffed, productive and in compliance.

Could your organization benefit from an HR outsourcing solution? Trust TriNet to provide you the HR expertise you need to stay viable and relevant in today's workplace. Find out how TriNet can provide you with a complete, innovative HR solution.

To learn more about HR outsourcing, download our free eGuide: Finding the Best Value in an Outsourced HR Solution.