EDS Likely To Open HR Center In ChinaEDS Likely To Open HR Center In China

EDS officials say the company will likely establish a human-resources outsourcing center in China as part of its effort to establish a bigger footprint in the fast-growing market for HR services.

At least two major companies have asked EDS to provide outsourced HR services in China to support their expansion into the country, says Steve Bohannon, EDS's VP for HR services. "We have to go there and we're anxious to do so," he says.

The worldwide market for HR outsourcing services is expected to grow 21% annually to $7 billion in 2008, consulting firm NelsonHall says.

Any HR service center that EDS establishes in China would be operated by the joint venture company EDS has formed with HR consulting firm Towers Perrin. Bohannon will be named CEO of the joint venture once it's formally launched. EDS will own 85% of the company, with Towers Perrin owning the rest. The deal still needs to clear regulatory hurdles. EDS and Towers Perrin have not yet disclosed a name for the venture.

An HR services center would add to EDS's presence in China. The company already operates IT outsourcing centers in a number of cities throughout the country. Towers Perrin also maintains a strong HR consulting presence in China.

Businesses entering the Chinese market need help dealing with the country's complex employment laws and other red tape, Bohannon says, and thus he expects significant demand for HR outsourcing services in the world's fastest-growing economy. "HR services need to follow the employee base that you are serving," he says.

Other vendors see the same opportunity. Affiliated Computer Services last month opened a service center in China to provide HR and other business-processing-outsourcing services. "China mirrors the India advantage in that you have a stable government and a highly educated workforce in almost unlimited numbers," says Tom Blodgett, managing director for ACS's BPO group. ACS already provides Motorola Inc. with HR services from an existing facility in China.