Mercer plans to spend $50 million in the next three years building and operating the center, to be located in Noida, a suburb of New Delhi, according to the announcement. The investment reflects the strong growth of offshoring business in India, especially for IT functions (See Research: IT Outsourcing to Balloon by 2015).
Many companies are choosing to outsource retirement plan administration, health and benefit administration, and absence management to companies in India, the announcement said. Jeff Miller, president of Mercer HR Services, said global revenues in the area were currently at $50 billion and were expected to grow to $75 billion in the next three to five years.
Mercer will team up with Patni Computer Systems, the sixth-largest Indian IT services provider, to establish the center. According to Miller, Mercer will work with Patni under a build-operate-transfer model, with the running of the business transferred to Mercer after a few years.