AI, Integration Supercharge HR Outsourcing Services

Enterprises are partnering with HR outsourcing (HRO) service providers to implement AI and analytics for improved employee experience and workforce performance, according to new research reports published today by Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm.

The 2025 ISG Provider Lens™ Transformational HR Outsourcing (HRO) Services report for the U.S. finds that U.S. companies are at the forefront of adopting HRO services, which are now helping organizations expand the role of HR from a support function to a strategic differentiator. The global 2025 ISG Provider Lens™ HRO Services report, also published today, finds that a growing number of enterprises around the world are adopting multiprocess HRO (MPHRO) services that incorporate many functions within a unified service delivery model.

“Technology has an increasingly important role in optimizing costs and transforming the manager and employee experience, and companies are seeking to operationalize the benefits of AI and analytics,” said Stacey Cadigan, partner, ISG Human Capital Management and Enterprise Transformation. “The transformation has begun, and HRO service providers are helping to make it possible.”

In technologically advanced U.S. enterprises, HR is moving from manual to digital processes and administration, a transition that is increasing efficiency and access to HR information, ISG says. Companies are working with HRO providers to enable decision-making based on real-time data and predictive insights from analytics. Many are adopting HR dashboards to track trends such as employee engagement levels, quality of hires and performance of outsourced services.

With the help of HRO providers, many U.S. enterprises are already using AI to automate and improve HR functions, ISG says. AI enables companies to automatically personalize employees’ experiences when using HR platforms and offer recommendations tailored to individual needs. U.S. companies are using generative AI for functions such as drafting job descriptions and doing first-level analysis of applicants. GenAI also powers new virtual assistants that field employee inquiries and requests. Using AI-powered analytics, employers are gauging employee sentiment and predicting attrition rates.

MPHRO services have evolved from cost-focused solutions to strategic enablers of HR transformation, the global report says. Enterprises partner with MPHRO providers on broad goals including streamlining and standardizing HR operations across regions, improving employee experience and integrating new technologies such as AI and automation. The scope of an MPHRO engagement typically spans core HR functions, recruitment, payroll, benefits administration, employee data management and other applications.

“MPHRO provides integration that helps companies reach their HR goals,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Emerging markets are using it to rapidly digitalize HR, and mature enterprises are seeking transformational long-term partnerships with providers.”

The reports also explore other U.S. and global HRO trends, including the rise of employee-centered health and welfare benefits administration and the growing demand for providers to address regulatory complexity and risk.

For more insights into the HR outsourcing challenges facing U.S. enterprises, including evolving employee expectations and a fragmented provider landscape, plus ISG’s advice for overcoming them, see the ISG Provider Lens™ Focal Points briefing here.

The 2025 ISG Provider Lens™ Transformational HR Outsourcing Services (HRO) report for the U.S. evaluates the capabilities of 37 providers across two quadrants: Health and Welfare Benefits Administration (H&W) Services and Recruitment Process Outsourcing.

The report names Alight, Allegis Global Solutions, AMS, bswift, Businessolver, Cielo Talent, Conduent, IBM, Korn Ferry, PeopleScout, Randstad Sourceright, Talent Solutions (ManpowerGroup), TELUS Health, Wilson and WTW as Leaders in one quadrant each.

In addition, Sevenstep is named as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant.

The global 2025 ISG Provider Lens™ HRO Services report evaluates the capabilities of 15 providers in one quadrant: Multiprocess HR Outsourcing (MPHRO) Services.

The report names Accenture, IBM, Strada and TCS as Leaders in the quadrant. In addition, Cognizant and SD Worx are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition.

In the area of customer experience, Wipro is named the global ISG CX Star Performer for 2025 among HRO providers. Wipro earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

The 2025 ISG Provider Lens™ Transformational HR Outsourcing Services (HRO) report for the U.S. is available to subscribers or for one-time purchase on this webpage. The 2025 global Transformational HR Outsourcing Services (HRO) report is available here.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

About ISG

ISG (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data, in-depth knowledge of provider ecosystems, and the expertise of its 1,600 professionals worldwide working together to help clients maximize the value of their technology investments.

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