Gartner research director TJ Singh, said the challenge in this region is to find a service provider that can provide comprehensive HR BPO across their existing footprint.

"Australian and New Zealand customers are second or third generation HR BPO users who are more likely to move towards more 'comprehensive' engagements," he said.

Singh says fear of losing control is a major obstacle to BPO adoption.

"There is also the fear that, once a process is outsourced, it will be difficult to transfer it back if needed," he said.

"Gartner recommends organizations carefully weigh up strategies that displace internal functions and staff."