Payroll Outsourcing Global Industry Outlook

The global payroll outsourcing market was worth $16.4 billion in 2015, and it is estimated to be around $17.4 billion in 2016

  • The payroll outsourcing market is expected to continue a healthy growth rate of around 5–7 percent to reach around $22 billion by 2020 
  • Factors, like political uncertainty and the low crude oil prices, which could affect business in the Middle East, are likely to impact the payroll outsourcing trends

payroll-outsourcing-global-market-size Payroll Outsourcing Global Market Maturity  

Payroll outsourcing market maturity is lowest in the Middle East and Africa.

  • With the growing and emerging economies in APAC and Latin America, a high growth rate (approximately 7–11 percent) has been witnessed in these regions

Payroll Outsourcing Global Industry Trends

Bundled payroll services have become a market trend due to the increasing market maturity of payroll outsourcing services.

  •  With the increasing demand for cost reduction and time efficiency by the MNCs, MCPO has emerged as a trend, growing at a rate of approximately 20 percent.
  • Buyers’ increasing interest in self-service platforms, which leads to easier access to employee data and thus better employee satisfaction, is driving the growth of technology adoption.
  •  Regions such as Latin America and APAC perceive the adoption of cloud-based services as a way to leap ahead of their competitors on technological grounds

Payroll Outsourcing Global Drivers 

Cost savings (above 20 percent)

  •  Outsourcing payroll leads to the reduction or control of expenditure by avoiding the hiring of new staff and technology-driven cost.

Rising demand for MCPO 

  •  Increasing ability of single vendors to handle payroll across countries

Better compliance

  • Outsourcing helps the buyer to stay updated with the changes in payroll regulatory legislations, especially in a global environment. 

 Technological advantage

  • Governments’ adoption of e-filings and digital services is driving the growth of cloud-based payroll services.