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I AgreeAnalysis of Payroll Outsourcing Services Market Covering 30+ Countries Including Analysis of US, Canada, UK, Germany, France, Nordics, GCC countries, Japan, Korea and many more
The global payroll outsourcing services market was valued at US$ 17000 Million in 2022. During the 2023-2033 period of assessment, demand is expected to rise at a 6.1% value CAGR, likely to surpass a valuation of US$ 32607.5 Million by the end of the said forecast period.
Report Attributes |
Details |
Anticipated Base Year Value in 2022 |
US$ 17000 Million |
Expected Market Value (2023) |
US$ 18037 Million |
Projected Forecast Value (2033) |
US$ 32607.5 Million |
Global Growth Rate (2023-2033) |
6.1% |
Market share of North America (2023-2033) |
37% |
Anticipated share of Asia Pacific Market(2023-2033) |
31% |
Prominent Players in The Global Market |
|
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Rising penetration of big data technologies, cloud computing, and other advanced technologies have prompted payroll outsourcing providers to transform services to a whole new level. As per market research and competitive intelligence provider Fact.MR, the market for payroll application services witnessed a 4.3% CAGR from 2018 to 2022. As enterprises strive to attain a competitive edge, payroll outsourcing services are a necessity.
Consistent upgradation of payroll applications to provide a seamless user experience is the need of the hour. By incorporating avant-garde breakthroughs, service providers are not only able to reduce operational costs, but also enhance their returns on investment. Furthermore, changing compliance and governance requirements are also widening the scope of payroll outsourcing services.
In the future, as more businesses rely on digital transformation, they are continuously innovating their approaches, ushering in efficiency, enhancing quality, and improving client experience. Whether it is to migrate, transform or build, deploying the right application strategy can work miracles.
The Increasing Need for Payroll Cost Visibility Driving the Growth of Payroll Outsourcing Services Market
The increasing need for payroll cost visibility, escalating demand to reduce payroll-related costs, and increasing demand to standardize processes, technology, and governance are likely to drive market growth. Payroll outsourcing services are gaining traction across different industry verticals such as Services, Manufacturing, BFSI, Healthcare, and Retail.
Due to the time-saving and cost-effectiveness of payroll outsourcing organizations can focus on their core issue to run the business smoothly. North America and Europe are major adopters of payroll outsourcing services due to the presence of a large number of payroll outsourcing services vendors.
The Increased Adoption of Payroll Services to Drive the Market Growth
Rising penetration of big data technologies, cloud computing, and other advanced technologies have prompted payroll outsourcing to transform services to a whole new level.
The increasing adoption of payroll services in various organizations to reduce expenses is likely to drive the market during the forecast period. Finance and Accounting (F&A), Human Capital Management (HCM), and various service centers used payroll outsourcing services either for a single process or outsourcing the entire service. The growing popularity of employee self-service (ESS) and the payroll outsourcing market with human resources are driving the payroll outsourcing services.
The demand for payroll outsourcing services has increased owing to features like possessing security, functionality, scalability, easy access, and low cost. The growing trend of multi-country payroll outsourcing (MCPO), bundling payroll services, and process automation is further contributing to the market growth.
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The High Risk of Data Security May Limit the Market Growth
Although digital transformation has proven to yield major operational benefits, many enterprises are reluctant to implement it due to a variety of reasons.
The lack of awareness about payroll outsourcing services is one of the principal factors limiting the growth of the market. Also, Small enterprises are reluctant to make investments in new technology owing to the small budget and low funding thereby inhibiting the market through the assessment period.
Data breaches and cyber theft concerns are prompting businesses to not extensively adopt digitalization, as companies are very much concerned about confidential information which is limiting payroll outsourcing prospects to a significant extent.
Also, the payroll outsourcing developer is likely to face challenges in understanding the organizational technical demand and software customization based on enterprise demand. This is likely to impact the demand for payroll outsourcing services during the assessment period.
Attributes |
Payroll Outsourcing Services Market |
Growth Factor |
Growing awareness regarding hair transplant and the growing prevalence of successful hair transplant surgeries to boost the market growth. |
Opportunity |
Increased demand for standardized the process, technology, and governance are expected to provide opportunities for the growth of the market |
Attributes |
Cloud-Based Payroll Software Market |
|
Growth Factor |
Increasing applications in small and medium enterprises is likely to drive the cloud-based payroll software market. |
|
Opportunity |
Integration of AI and Analytics with cloud-based payroll software is expected to emerge as a significant opportunity during the assessment period. |
Attributes |
Payroll & HR Software Market |
|
Growth Factor |
The rising need for work efficiency, in the organization is one of the factors improving the growth of the payroll and HR software market. |
|
Opportunity |
The rising popularity of software and increasing awareness among organizations regarding the benefits of implementation of HR & payroll software are the factors fuelling the market growth in coming years. |
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Presence of a Leading Market Player in The Region to Drive the Market Growth
As per the analysis, North America is anticipated to dominate the market during the forecast period, among the U.S. is expected to make the most significant contribution to strengthening the market by exhibiting a CAGR of 5.7% from 2023 to 2033.
The high adoption of digital technology across all major verticals helps the market to grow in North America, particularly in the U.S. and Canada. Also, with the increasing adoption of cloud-based payroll software, vendors in the region are encouraging the transformation of payroll services by leveraging automated sub-processes, business analytics, big data, and the deployment of mobility and cloud delivery models to governments. With the advent of digital technologies, such cloud-based payroll software helps in executing payroll processes quickly, without any interruptions.
For instance, in November 2022, ADP announced enhancements to its award-winning Wisely® by ADP payment platform with advanced capabilities and innovative features like Earned Wage Access (EWA), designed for giving employees more control of their finances, and help employers better attract and retain talent.
Increased application in end-use industries to drive the market growth
The payroll outsourcing services industry in Europe is expected to accumulate a market share of 21% in 2023. All major small and large enterprises in BFSI, Healthcare, Retail, Oil& Energy, Public Sector are moving toward the adoption of payroll outsourcing services in the business.
The key factor driving the payroll outsourcing services market in the Europe region is the presence of leading market players. The enterprises in the region have shown keen interest in implementing the payroll outsourcing solution and are investing in advanced and new technology on the large scale. Such factors will drive the growth of payroll outsourcing services in the coming years.
Technological Advancement in The Region Drive the Market Growth
The payroll outsourcing services market in the Asia Pacific is expected to account for 31% of the market share in 2023 and is expected to accelerate during the analysis period.
The growth of the market in the region is due to the increasing influence of automated sub-processes, business analytics, big data, and the deployment of cloud delivery models to the government. Most of the organizations in the region are relying on payroll outsourcing as it enables access to data on any device at any time. Organizations are also using these services to eliminate mistakes and increased accuracy and process automation.
In the Asian market, china is expected to expand at an exponential rate. The need for payroll outsourcing services is increasing as the number of global corporations and enterprises grows. In China, the economy is a powerful motivator for outsourcing with cost reduction and cost saving being the primary concerns. Increasing demand from BFSI, Healthcare, and Retail industries is likely to spur the market to considerable development over the forecast period
Demand for the Services segment is high among other types
Based on the end user, the services segment is expected to dominate the market in the forecast period. The segment is projected to exhibit a CAGR of 23 % during the forecast period. The Services segment is expected to flourish owing to the increased accuracy of payroll outsourcing services when compared to in-house payroll management. Also, payroll outsourcing reduced the cost and risk involved in the business.
On the other hand, the manufacturing segment is projected to witness significant demand in the coming time. The growth can be attributed to the Increased business’s access to the latest technology and expertise to perform payroll functions well.
Small Size Companies Generating High Revenue
Based on customers the payroll outsourcing services market is segmented into small-size companies, mid-size companies, and large enterprises. Among all these the small-size company remains the top customer category expected to expand with a market share of 41% throughout the forecast period.
On the other hand, a market share of 37% is projected for the mid-size company segment by Fact.MR until 2033.
The start-ups in the payroll outsourcing services market are indulging in collaboration and continually making innovations in the procedures of payroll outsourcing services to further make it convenient and cost-effective for the population. Some key start-ups in the payroll outsourcing services market include – ePayslips, Hits Solution, payroll business solution, Topsy solution, and Precise Payroll among others.
Examples of some of the market participants in the global payroll outsourcing services market identified across the value chain include ADP, Gusto, Infosys Limited, International Business Machines Corporation, Intuit Quickbooks, Keka Inc., KPMG, OnPay, Papaya Global, Paychex, Sage Group plc, Square, SurePayroll, Vision H.R, Workday Inc., Zalaris ASA among others.
To achieve a substantial market share in the worldwide payroll outsourcing services market players are strengthening their position, pursuing expansion methods such as current developments, mergers and acquisitions, collaborations, and partnerships, joint ventures. Some of the development is as follows-
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By 2023, Fact.MR expected demand for payroll outsourcing services to reach a valuation of US$ 18037 Million
From 2023-2033, payroll outsourcing services demand is likely to surge at a 6.1% CAGR
By 2033, the market for payroll outsourcing services is likely to be valued at US$ 32607.5 Million
The services segment will remain the most prominent user, accounting for a market share of 23%
As of 2022, Fact.MR estimated the payroll outsourcing services market to have reached US$ 17000 Million
From 2018-2022, the payroll outsourcing services market grew at a 4.3% value CAGR