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The APAC Market Figure 1 Distribution of overall offshore HRO FTEs by geographies Number of FTEs Figure 2 HRO FTE growth by offshore delivery location in Asia Pacific Number of FTEs 1 Southeast Asia primarily includes Malaysia, Vietnam, Philippines, and Singapore Note: Analysis is based on 19 MPHRO service providers for which FTEs information is available Source: Everest Group (2012) India pioneered HRO offshoring by leveraging a mix of low costs, improving infrastructure, and a large labour pool with good English language and IT skills. "India was and is the hub of that model," says Ranjan. But other Asian countries soon began to follow suit and establish their own centres. Now, even more APAC locations are "staking a claim in this global pie" says Rohail Khan, group president of HR solutions and outsourcing at Xerox, which provides HRO services to clients in 80 countries. Analysis of regional multi process activity by Everest Group illustrates this. First, APAC clearly dominates other regions as an offshore location (see Figure 1). Second, HRO offshoring activity in the three key subregions—India, China and Southeast Asia—grew roughly 22 per cent overall from 2010 to 2011. But while India maintained its lead and continued to grow, and while China consolidated its substantial position, activity in Southeast Asia (including the Philippines, Malaysia, Vietnam, and Singapore) surged by almost 60 per cent (see Figure 2). Cost remains the main driver of migration to new locations. Wages and operational costs are rising in the major cities of India and China, so solutions providers are expanding in more competitive wage environments. "Globally and regionally, the client still needs to have a business case for looking to outside vendors. One of the key elements continues to be cost savings," says Khan. Another factor is that HRO solutions providers prefer not to keep all their delivery eggs in one basket: "Organisations want to de-risk their location exposure to avoid possible disruption, so they are establishing multiple delivery locations," adds Ranjan. WINTER 2012 | www.hroglobal.com [9]