Payroll Outsourcing Market to reach $10.33 billion by 2023, says Beroe Inc
Source: PR Newswire
RALEIGH, North Carolina, September 17, 2019 - The global market for payroll outsourcing is expected to grow at a CAGR of 4.4 percent until 2023, according to Beroe Inc., a procurement intelligence firm. The payroll outsourcing market is flourishing due to the cloud-based systems, which generates new opportunities within the global payroll field and align HR services and payroll globally.
North America and Europe hold $10.28 billion and $5.5 billion market share respectively and are more mature markets as they account for a sizable part of the global payroll outsourcing activity. Asia Pacific and Latin America are emerging Multi-Country Payroll Outsourcing (MCPO) markets, and payroll outsourcing market development is lowest in the Middle East and Africa regions.
Beroe, which is based in North Carolina, further stated that procurement experts can access this report on its recently launched market intelligence platform Beroe LiVE: live.beroeinc.com
Outsourcing payroll has helped reduce the expenditure of payroll by nearly 20% by avoiding the hiring of new staff and technology-driven cost, which has proven to be a key driver in the payroll industry. However, outsourcing payroll leads to the sharing of confidential, financial, and employee data with third parties, which can be a constraint if compromised and can result in lawsuits.
According to Porter’s Five Forces Analysis, payroll suppliers in developed markets have an established clientele with an average contract length of 4 - 6 years. Thus, competition among suppliers is lower compared to the emerging markets. In the emerging regions, the payroll outsourcing market is in a growing stage; therefore, suppliers have low maturity and limited services capabilities.
The future trend in the payroll outsourcing market is that vendors will have to upgrade the infrastructure in order to sustain the demand, which will result in higher cost. Moreover, an increase in salary, requirement of training professionals to keep abreast with the developments, and the hiring of new staff will lead to a rise in payroll cost.
- The MCPO market is rapidly growing at a CAGR 0f 19 - 23 percent annually to cross over $1.5 billion with the growing understanding of the MCPO value proposition and increasing provider maturity.
- The expanding global operations and the requirement of standardization of the payroll process drive the growth for automation across the payroll industry.
- Analytics software to help analyze historically valuable payroll data has become a must-have tool in the payroll outsourcing industry as it helps gain profound insights into business operations.
- In the emerging economies such as Brazil and Argentina, there's an increase in the requirement for payroll processing companies. Also, these countries are the preferred outsourcing destinations for developed economies.
- The complex nature of payroll processing places additional responsibility on the payroll team to ensure compliance with all regulations including payroll taxation stipulations.
- For companies processing payroll in-house, due to the risk of jeopardizing confidential data, suppliers are offering partial/hybrid payroll solutions, wherein the company can decide upon customized payroll sub-services as per the requirement.
The research methodology adopted for the report included:
- Experts with twenty years of domain experience
- Interaction with buyers
- Inputs from supply chain partners
The market share of hybrid outsourced services hold nearly 74 percent of the payroll industry and the market for MCPA contracts holds nearly 15 percent of total independent payroll services revenues. Therefore, the highest growth in the payroll outsourcing industry comes from multi-country payroll contracts and hybrid outsourced services.
The report also includes:
- Global Payroll Outsourcing Market Maturity and Industry Trends
- Growth Drivers and Constraints
- Regional Market Outlook
- Industry Outlook: Opportunities and Challenges
- Data Protection Law - Impact on Payroll
- Porter’s Five Forces Analysis: Developed and Emerging Markets
- Supply Market Outlook
- Global and Regional Suppliers List and Service Capabilities
- Major Global Suppliers Profile and SWOT
- Cost Structure Analysis
- Case Studies: Payroll Outsourcing Benefits
- Cost Components: In-House Versus Outsourced
Procurement Best Practices:
- Sourcing Models
- MCPO Technology Framework (Overview)
- Success Factors
- Sourcing Models - Comparative Analysis
- Supplier Selection Checklist
- Payroll Outsourcing Adoption Trends
- Payroll Case Study: Manufacturing and Retail
- Pricing Models
- Key Performance Indicators (KPIs) and Service Level Agreements (SLAs)
About Beroe Inc.:
Beroe is the world's leading provider of procurement intelligence and supplier compliance solutions. We provide critical market information and analysis that enables companies to make smart sourcing decisions—leading to lower costs, greater profits and reduced risk. Beroe has been providing these services for more than 13 years and currently works with more than 10,000 companies worldwide, including 400 of the Fortune 500 companies.
To learn more about Beroe Inc., please visit: http://www.beroeinc.com