What Factors Propelled The Growth Of The Payroll Outsourcing Market In The Past?
The payroll outsourcing market has seen considerable growth due to a variety of factors.
•The market size of payroll outsourcing has witnessed robust expansion in the recent past. The market is projected to escalate from $12.01 billion in 2024 to $12.9 billion in 2025, with a compound annual growth rate (CAGR) of 7.4%.
Factors contributing to the growth during the historical period include enhanced emphasis on boosting efficiency, a surge in the requirement to limit operational expenses, expansion in the IT industry, industrialization, and an upswing in the manufacturing sector.
What Is The Projected Growth And Market Size For The Payroll Outsourcing Sector?
The payroll outsourcing market is expected to maintain its strong growth trajectory in upcoming years.
• Expectations are high for robust growth in the payroll outsourcing market over the next several years. The value of the market is projected to escalate to $17.58 billion by 2029, exhibiting a compound annual growth rate (CAGR) of 8.0%.
Factors contributing to this growth trend during the forecast period include a surge in demand for cloud-based payroll systems, increased reliance on outsourcing to eliminate the need for in-house technical staff for payroll tasks, the expanding reach of e-commerce platforms, and the growth of the banking, financial services and insurance (bfsi) sectors, as well as the rise in small-medium enterprises (smes). Noteworthy trends projected for the forecast timeframe include the incorporation of artificial intelligence and automation in payroll outsourcing services, the launch of next-generation technologies, the growth of subscription-based services, and further integration of automation into the process.
What Factors Are Driving Growth In The Payroll Outsourcing Market?
The increasing need for cloud-based payroll is predicted to fuel the expansion of the payroll outsourcing market. This system, which enables users to manage all payroll aspects online by linking a computer to the internet, enhances accessibility to payroll data, improves interaction between clients and service providers, and provides scalable and cost-effective solutions for payroll procedures. Alight Solutions, a US-based provider of integrated digital human capital and business solutions in the cloud, stated in 2023 that 40% of companies plan to upgrade their payroll systems. Furthermore, cloud-based payroll solutions are anticipated to dominate payroll delivery platforms (61%) over on-premises solutions (39%). In the preceding year, an additional quarter of companies (26%) have significantly improved their digital payroll measures, and an additional two-thirds (62%) expect to undergo a digital transition in the next two years. As such, the growing demand for cloud-based payroll is boosting the payroll outsourcing market.
What Are The Main Segments Of The Global Payroll Outsourcing Market?
The payroll outsourcing market covered in this report is segmented –
1) By Type: Fully-Managed Outsourcing, Co-Managed Outsourcing
2) By Application: Small Business, Medium Business, Large Business
3) By End Use: Banking, Financial Services And Insurance (BFSI), Consumer and Industrial Products, IT (Information Technology) And Telecommunication, Public Sector, Healthcare, Other End Users
Subsegments:
1) By Fully-Managed Outsourcing: Complete Payroll Processing, Tax Management, Compliance Management, Employee Self-Service Solutions
2) By Co-Managed Outsourcing: Shared Payroll Processing Responsibilities, Integrated HR And Payroll Services, Technology Support And Integration, Data Analytics And Reporting Assistance
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What Emerging Trends Are Influencing The Growth Of The Payroll Outsourcing Market?
The advent of product innovations has been identified as a dominant trend gaining traction in the payroll outsourcing market. Leading corporations active in the payroll outsourcing market are focusing on the production of innovative products to solidify their standing in this market. For example, in June 2023, Payroll Growth Partners (PGP), a UK-based payroll management service provider, unveiled its Next-Gen Payroll products tailored for clients patronized by enterprises within its rapidly expanding portfolio. Personnel utilizing PayBridge's platform are privy to state-of-the-art payroll services, inclusive of pay cards, live-time payroll, and preemptive access to salary.
Who Are the Key Players in the Payroll Outsourcing Market?
Major companies operating in the payroll outsourcing market include:
• Accenture plc.
• The International Business Machines Corporation
• Deloitte & Touche LLP
• KPMG International Limited
• Block Inc.
• Automatic Data Processing Inc.
• Infosys Limited
• Intuit Inc.
• CGI Group Inc.
• Xerox Corporation
• Insperity Inc.
• Workday Inc.
• TriNet Group Inc.
• Paychex Inc.
• Sage Group plc.
• Heartland Payment Systems Inc.
• Ceridian HCM Inc.
• Justworks Inc.
• Paycor HCM Inc.
• Gusto Inc.
• PrimePay LLC
• Zenefits
• Zalaris ASA
• Netchex Inc.
• Wagepoint Inc.
• MyPayrollHR
• PEO Canada
• SurePayroll Inc.
• Vision HR Inc.
• Fuse Workforce Management.
What Is The Most Dominant Region In The Payroll Outsourcing Market?
North America was the largest region in the payroll outsourcing market in 2024. The regions covered in the payroll outsourcing market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa
