Payroll Outsourcing Services
Payroll services is the process of evaluating and generating payslips for employees based on attendance. Outsourcing payroll allows employers to concentrate on its core activities and helps to reduction or control of expenditure by avoiding the hiring of new staff and technology-driven cost. The report highlights the key trends, sourcing practices and suppliers in the market.
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Payroll Outsourcing Services Industry Benchmarks
The average annual savings achieved in Payroll Outsourcing Services category is 6.20%
The industry average payment terms in Payroll Outsourcing Services category for the current quarter is 45.0 days
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Payroll Outsourcing Services market frequently asked questions
Beroe's report provides an accurate update on the latest payroll outsourcing statistics. As per the report, the payroll services industry is expected to reach a market size of $10336 million by 2023 at a CAGR of 4.4%.
The major contributors to the payroll services industry are North America and Europe with a market share of approximately 71%. Other emerging players are APAC and LATAM.
Some of the latest trends in the payroll services industry are the emergence of factors such as political uncertainty and low crude oil prices affecting the industry. Key players such as North America and Europe have grown to hold considerable market size in the industry. Finally, payroll labor and non labor costs also contribute to the total cost of payroll services.
The payroll services industry is expected to grow at a constant CAGR of 4.4%.
Some of the global drivers of the payroll services industry are outsourcing that can offer cost saving options, better compliance with payroll legislations and growth of cloud-based payroll services. Furthermore, there's also an expected increase in the abilities of single vendors who can handle payroll across countries.
Payroll Outsourcing Services market report transcript
Payroll Outsourcing Services Market Analysis and Global Outlook
- The global payroll outsourcing market was estimated to be around $19 Bn by 2020 at a CAGR of 4.4% and is projected to reach $19.95 Mn by 2021, with a market growth at a CAGR of 4–5%.
- Due to the impact of COVID-19, companies are planning to go for a single global provider with an MCPO sourcing model. Also, they are looking to consolidate the global payroll vendors.
- North America continues to lead the payroll outsourcing services market over the forecast period owing to factors such as the utilization of business analytics, automated sub-processes, and big data along with the employment of mobility and cloud delivery models to governments.
- Payroll outsourcing market maturity is lowest in the Middle East and Africa (MEA).
- With the growing and emerging economies in APAC and Latin America, a high growth rate (approximately 7–11%) has been witnessed in these regions.
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 Services Global Industry Trends
- 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%.
- 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.
- Latin America and APAC perceive the adoption of cloud-based services as a way to leap ahead of their competitors on technological grounds.
- Global payroll trends include bundling payroll services, multi-country payroll outsourcing (MCPO), process automation and adoption of cloud-based services.
- Countries like Poland, Turkey, Switzerland, Portugal, Germany, Argentina and Mexico show more than 10% bi-annual change in the global payroll outsourcing complexity index.
- Companies processing payroll in-house due to the risk of compromising confidential data, are being offered partial/hybrid payroll solutions by suppliers.
- The cost components of the payroll industry include the system costs, payroll labor and non-labor costs and payroll maintenance costs.
Payroll Outsourcing Services 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.
- International payroll outsourcing companies are focusing on creating reusable service delivery platforms with automation and scalability by employing innovative software solutions and tools for automatic deduction calculations, payment calculations, and record-keeping.
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.
Low-cost competitiveness due to the presence of mature payroll service providers is challenging the profit growth of emerging industry players.
Constant regulatory changes to keep pace with the economic growth in APAC are hitting the profit margins of payroll outsourcing companies.
COVID-19 Impact on Payroll Outsourcing Services Market
The COVID-19 crisis has altered and challenged business operations in almost every way. Even the best-formed business continuity plans (BCP) are under-prepared to deal with the huge disturbance and ambiguity caused due to the public-health crisis.
As such, companies worldwide are rethinking their strategies fast, while payroll and HR teams need to focus on keeping up with the evolving requirements to remain compliant, while assisting employees fit into a ‘new normal’ workspace.
A recent survey has revealed that businesses that outsource their payroll functions find it easier to stay ahead of the curve and implement changes in rules and regulations.
Why You Should Buy This Report
- The report gives details on key global suppliers like Workday, ADP, NGA Human Resources, etc. including a detailed SWOT analysis.
It provides information on the payroll outsourcing market size and Porter’s five force analysis on the developed and emerging markets.
It lists out the key drivers and constraints of the global payroll outsourcing industry.