Press Release

Saudi Arabia HR Outsourcing Market to Boost with the Ongoing Economic Transformation

The Saudi Arabia HR Outsourcing Market is projected to grow at a CAGR of around 7.2% in the forecast period of 2025-30, says MarkNtel Advisors in their recent research report. Saudi Arabia’s Economic Diversification Vision 2030, to attract notable investments across the service & manufacturing sector, is widely catalyzing this demand. The country is witnessing the rapid adoption of digital transformation across various industries to enhance operational efficiency.

Consequently, the trend towards digitalized HR outsourcing services is gaining traction throughout the country, offering benefits such as improved performance management. Flexible employment models and the increasing need for talent acquisition and management have driven companies to outsource these functions to experts who offer tailored solutions.

Simultaneously, the government's focus on streamlining bureaucratic processes and creating a business-friendly environment is opening doors for international HR outsourcing firms to enter the market. Recent reforms, such as the Labor Reform Initiative launched in 2022, have further necessitated meticulous adherence by employers.

Owing to this, businesses, especially new entrants, ought to opt for HR outsourcing to gain expertise in navigating this complex regulatory landscape, and to reduce risks related to legal consequences of non-adherence. Further, organizations in the country are increasingly focusing on their core competencies. This is leading to increased outsourcing of non-core functions like shared HR services, thereby enabling them to allocate resources more strategically while achieving seamless integration to connect with stakeholders globally.

These factors are anticipated to promote the demand for HR outsourcing in Saudi Arabia during the forecast years, further states the research report, "Saudi Arabia HR Outsourcing Services Market Analysis, 2025."

Saudi Arabia HR Outsourcing Services Market Segmentation Analysis

Multi-process Human Resource to Register Considerable Growth Rate in the Saudi HR Outsourcing Market

Based on services, the market is bifurcated into Payroll Services, Benefits Administration, Recruitment Process, Learning Services, Multi-Process Human Resources, and Others. Among them, the demand for Multi-Process Human Resource services in Saudi Arabia is poised to grow in the coming years. The expansion of small- and medium-sized enterprises (SMEs) in the country is a significant driver to support this demand.

SMEs make up a substantial portion of the Saudi economy, and as their numbers continue to increase, these businesses often lack the resources, both human and capital, to efficiently handle HR functions. As a result, they increasingly turn to HR outsourcing to manage various services like payroll, recruitment, and benefits administration, boosting the need for multi-process HR outsourcing services.

Hospitality Sector to Hold Lion’s Share in the Saudi Arabia HR Outsourcing Services Market

Based on the End User, the Saudi Arabia HR Outsourcing Market is fragmented into Oil & Gas, BFSI, Hospitality, Healthcare, IT & Telecom, Public Utilities, and Others (Education Institutions, etc.). Among them, the Hospitality sector is gaining notable momentum. The shifting focus of the Saudi government toward the non-oil sector has exhibited a catalyzing effect on the growth of the hospitality sector in the country.

With the rapid expansion of hotels, resorts, and tourism-related businesses in the country, the hospitality industry is facing various HR challenges, including effective workforce management, ensuring compliance with labor regulations, and providing training solutions to maintain service quality.

Hence, to overcome these challenges & focus on delivering exceptional customer experiences, the hospitality sector is increasingly turning to HR outsourcing services, encompassing functions like payroll, benefits administration, and staffing.

Key Competitors

With strategic initiatives, such as mergers, collaborations, and acquisitions, the leading market players, Sovereign Group, Nathan & Nathan, Miza Business Solutions, Tharwah, Respeed, IRSAA Business Solutions, The First National Human Resource Company (FNRCO), Etisal International, Marcom Arabia, Raya Customer Experience, etc., are looking forward to strengthening their market position.

Key Questions Answered in the Research Report

1. What are the industry’s overall statistics or estimates (Overview, Size- By Value, Forecast Numbers, Segmentation, Shares)?
2. What are the trends influencing the current scenario of the Saudi Arabia HR Outsourcing Services Market?
3. What key factors would propel and impede the industry across the country?
4. How has the industry been evolving in terms of geography & service adoption?
5. How has the competition been shaping across the country?
6. How has the buying behavior, customer inclination, and expectations from product manufacturers been evolving during 2020-2030?