The global Payroll Outsourcing Services market reached a value of about USD 19.9 billion in 2021. The industry is projected to grow at a CAGR of around 5% in the forecast period of 2022-2027 to reach a value of about USD 26.7 billion by 2027.
The global Payroll Outsourcing Services industry report gives a comprehensive analysis of the industry, including key segments, trends, drivers, restraints, the competitive landscape, and other essential market aspects. The market is being driven by the rising demand for payroll cost visibility. North America is the highest category spender by region that is driving the demand for the payroll outsourcing services industry.
In a firm, payroll outsourcing entails enlisting the help of a professional external third party to manage the company's complete payroll. Payroll outsourcing is commonly used to cut expenses and improve payroll accuracy. The Payroll Outsourcing Services industry report comprises segments by region (North America, Europe, Asia Pacific, the Middle East, Africa, and South America).
The North American region holds the largest share in the market due to factors such as the use of business analytics, automated sub-processes, big data, and the use of mobility and cloud delivery models by governments.
The industry is being driven by the increased demand for salary cost transparency. Contracts that provide worldwide visibility of expenses and aggregate reporting of payments, employee data, and other services are frequently sought by multinational firms driving the market growth. It also creates a stress-free environment for HR professionals to focus on driving and developing strategic activities (such as workforce planning and talent management) rather than administrative and transactional tasks, thus resulting in high demand. The system results in cost reduction or control by eliminating the employment of new employees and technology-driven costs. Hence, it is witnessing rapid growth.
However, the low-cost competition, owing to the presence of established payroll service providers, is hampering the industry's expansion.
The global Payroll Outsourcing Services industry report by Procurement Resource gives an in-depth analysis of the best buying practices followed by major global Payroll Outsourcing Services regions across the globe, such as engagement models, contract terms, and buyer and supplier negotiation levers, among others.
All activities linked to payroll processing and other payroll-related duties are included in payroll outsourcing. Maintaining personnel records, collecting employee leave, attendance, and other vital data, validating data, calculating salaries, issuing salary slips, generating payroll-related reports, and adhering to tax laws are part of payroll processing.
The industry is being propelled by the various trends in the industry, like multi-country payroll outsourcing (MCPO), owing to MNCs' increased demand for cost reduction and time efficiency. The growth of technology adoption is driven by buyers' rising interest in self-service platforms, which provide faster access to employee data and improved employee satisfaction—for instance, the adoption of cloud-based services to technologically outdo their opponents furthering the industry growth. Furthermore, the expansion of cloud-based payroll systems is fueled by government use of e-filings and digital services, further boosting the market's development. Also, Suppliers are offering partial/hybrid payroll solutions to companies that conduct payroll in-house due to the danger of revealing confidential data. As a result, the market is propelling.
The regional markets for the industry can be divided into North America, South America, Europe, the Middle East and Africa, and the Asia Pacific.
As the market for payroll outsourcing services is fragmented, providers are employing expansion techniques such as strategic partnerships to compete. To ensure simplified operations, service providers must create a strong presence and a more considerable degree of centralisation for clients due to local compliance requirements. This has prompted service providers to construct captive centres in their respective nations to reduce payroll delivery costs. Market suppliers should concentrate more on the fast-growing sectors' growth potential while retaining their positions in the slow-growing segments.
1. Executive Summary
2. Payroll Outsourcing Services Industry Snapshot
2.1. Payroll Outsourcing Services Market Outlook
2.2. Regional Overview
2.2.1. North America
2.2.3. Asia Pacific
2.2.4. Latin America
2.2.5. Middle East & Africa
3. Impact of Recent Events
4. Payroll Outsourcing Services Value Chain Analysis
5. Payroll Outsourcing Services Production Process
6. Trade Analysis
7. Major Risk Factors In Sourcing
8. Payroll Outsourcing Services Cost Structure
9. Payroll Outsourcing Services Price Analysis
10. Key Demand Indicator Analysis
11. Key Price Indicator Analysis
12. Payroll Outsourcing Services Market Dynamics
12.1. Drivers & Constraints
12.2. Industry Events
12.3. Innovations & Trends
12.4. SWOT Analysis
12.5. Porter’s Five Forces
12.5.1. Buyer Power
12.5.2. Supplier Power
12.5.3. Threat of New entrants
12.5.4. Threat of Substitutes
12.5.5. Industry Rivalry
13. Industry Best Practices
13.1. Sourcing Strategy
13.2. Procurement Model
13.3. Contract Structure
13.4. Negotiation Levers
13.5. Pricing Model
13.6. Key Factors Influencing the Quotation
14. Key Supplier Analysis
14.1. Automatic Data Processing, Inc.
14.2. Alight Solutions,
14.3. Sopra HR Software
14.4. Workday Inc.
14.5. Ramco Systems
The global Payroll Outsourcing Services market size was valued at USD 19.9 billion in 2021.
As per the trends, the integration of MCPO is anticipated to lead the market between the period 2022 – and 2027.
The significant demand for hassle-free management of salaries is one of the essential drivers of the Payroll Outsourcing Services market growth.
ADP, Inc, Alight Solutions, LLC, Sopra HR Software, Workday, Inc, and Ramco Systems Ltd. are some of the leading players in the market.
The North American region of the Payroll Outsourcing Services industry holds a significant share in the market.
The global Payroll Outsourcing Services market attained a value of USD 19.9 billion in 2021, driven by the increased demand for salary cost transparency. Aided by the growing technological advancements, like multi-country payroll outsourcing (MCPO), the adoption of cloud-based services, the expansion of cloud-based payroll systems, and partial/hybrid payroll solutions, the market is expected to witness further growth in the forecast period of 2022-2027, growing at a CAGR of 5%. The market is projected to reach USD 26.7 billion by 2027. Some of the leading players in the industry are ADP, Inc, Alight Solutions, LLC, Sopra HR Software, Workday, Inc, and Ramco Systems Ltd.
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