The outsourcing market for human resources is expected to gross more eighty billion dollars in China in the next year to 15 months.

A new study conducted by EquaTerra says that the Chinese market was moving at a very rapid pace and would grow by at least 25 per cent by the end of 2009. The market was valued at around 15 billion dollars five years ago.

As part of the study, the company sought responses from 15 top HR directors of foreign companies based out of China, who cited several reasons for not moving HR outsourcing to the region including data security and poor management control.

However, they were unanimous in the perception that over the next three to five years, a substantial part of HR administration functions would be offshored to China, including recruitment and payroll.

EquaTerra has however raised an alarm over the availability of skilled manpower to handle the growing demand from the outsourcing market, a factor that could well push some of the business India’s way.

Besides, such a shortfall could also lead to acceleration of wages for the providers and margin erosion in the short to medium term, the report said adding that only those players who can obtain and retain quality delivery people will be dominant.