Market Overview

The human resources (HR) and general affairs (GA) outsourcing market consists of fourteen segments and reached 11.8011 trillion yen in FY2024, marking a 3.4% increase from the previous fiscal year. 

The respective performance of the sectors was as follows: the shared services sector (consisting of shared service centers and school administration outsourcing) declined 0.1% year over year, reaching 577.7 billion yen; the HR operation outsourcing sector (consisting of payroll calculation outsourcing, attendance management ASP services, corporate training services, RPO, and assessment tools) expanded by 4.8% year over year, reaching 1.1163 trillion yen; the GA outsourcing sector (consisting of EAP, health check support services, welfare outsourcing, and B2E services) grew 4.4% year over year, reaching 317.5 billion yen, and the hiring sector (consisting of temporary staffing, recruitment, and outplacement) grew 3.4% year over year, reaching 9.7962 trillion yen. The hiring sector accounts for more than 80% of the total HR/GA outsourcing market.

Noteworthy Topics

Government Policies Encourage the Overall Market to Thrive

In the context of an uncertain domestic economy and a persistently shrinking workforce*, the government’s initiatives for workstyle reform, human capital management, and digital transformation are fueling growth in the HR and GA outsourcing market. Even in the areas where demand for outsourcing services has diminished with no expectation of a rebound, government policy can generate new demand for these services by establishing systems. Thus, depending on the system, government policy plays an important role in reviving demand for outsourcing services.

*Source: “The Labor Force Survey” by the Statistics Bureau of the Ministry of Internal Affairs and Communications.

Future Outlook

Traditionally, Japanese companies performed all operations in-house. However, the retirement and resignation of skilled HR and GA workers in major companies has increased demand for outsourcing services. Additionally, new demand from small- and medium-sized enterprises (SMEs) and repeat client companies to expand the service areas has broadened the customer base.

In response, outsourcing service providers have strengthened their promotional efforts targeting large domestic companies and SMEs. The market is therefore expected to grow further. Specifically, demand has rapidly increased alongside the rising interest in cloud services among some SMEs that have already introduced IT systems to increase work efficiency and that tend to use affordable cloud services. While not all of these companies will eventually use outsourcing services, cloud services have contributed to the increased demand for these services. As this trend is expected to continue and expand, cloud services will likely remain in the spotlight as a growth factor for this market.

Research Outline