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 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
- Outsourcing helps the buyer to stay updated with the changes in payroll regulatory legislations, especially in a global environment.
- Governments’ adoption of e-filings and digital services is driving the growth of cloud-based payroll services.