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Human Resources Consulting Procurement Research Report Now Available from IBISWorld
Date:12/2/2013

Los Angeles, CA (PRWEB) December 02, 2013

HR consulting services have a buyer power score of 3.8 out of 5. The higher the score, the better the negotiating conditions are for buyers. The score reflects a marginal increase in prices over the past five years. Supplier margins have risen since 2008, largely due to consolidation that occurred during the recession. Unfortunately for buyers, says IBISWorld analyst Kevin Culbert, increased margins are not expected to translate into greater buyer power in 2013 as prices rise. Demand is expected to rise in 2013 as the unemployment rate continues to decline and businesses increase their consumption of outsourced services as corporate profit rises. These trends will boost input costs, specifically labor, which represents the greatest input cost for HR consulting firms. Although HR consulting services are expected to get more expensive, prices will likely rise in moderation.

There is a considerable range in prices. Although a wide price range can increase a buyer's power at the negotiating table, it is important to note that price is not the primary factor for most buyers when choosing a supplier, continues Culbert. Other factors, including experience and brand name, are also considered. Furthermore, the cost of switching providers is moderate, especially when a buyer's management or accounting system uses a supplier's proprietary software. These factors ultimately limit a buyer's negotiating power. Another factor that will limit buyer's power going forward is the expectation of continued supplier consolidation over the next three years. During the past three years, two new giants emerged in the market after two separate acquisitions: Towers Watson and Aon Hewitt. The decline in the numb
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