Payroll Outsourcing Market Segments - by Type (Full-managed Outsourcing and Co-managed Outsourcing), Application (National, Multinational, and Mid-market), End-user (IT & Telecommunication, BFSI, Consumer & Industrial Products, Healthcare, Public Sector, and Others), and Region (Asia Pacific, North America, Latin America, Europe, and Middle East & Africa) - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast 2023 – 2031
The global payroll outsourcing market size was valued at around USD 9.98 Billion in 2022 and is estimated to reach around USD 15.48 Billion by 2031, expanding at a CAGR of 5% during the forecast period, 2023-2031. The growth of the market is attributed to the increasing use of technology and cloud-based payroll services.
Payroll outsourcing assists companies in saving cost and time, reducing the need for purchasing and maintaining appropriate software packages, and in-house trained payroll staff. Outsourcing of payroll aids companies to deal with foreign tax legislation and avoid potential penalties. Additionally, the growing geographical expansion of businesses is one of the key factors contributing to the rising demand for external payroll outsourcing.
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In August 2022, Sage, a leading company in finance, accounting, HR, and payroll technology for small and medium-sized businesses (SMBs), announced the launch of Sage People Payroll in the UK and US. The solution is designed to help businesses grow, work smarter, and offer a great experience to their employees.
Companies prefer to outsource payroll services. Outsourcing payroll-related activities frees up time for the organization to focus on its core business. It eliminates the expense of training in-house payroll staff. Furthermore, it reduces the cost of maintaining and purchasing a costly payroll system. These are some of the factors which boost the demand for the market in the coming years.
The research report finds that the COVID-19 pandemic propelled the payroll outsourcing market. Several companies and organizations adopted work-from-home facilities during the pandemic situation, due to travel restrictions, which facilitated the expansion of digital payroll services. shifting inclination of companies to co-managed or hybrid payroll outsourcing models is anticipated to propel the market.
Impact of AI on the Payroll Outsourcing Market
Increasing adoption of digital services such as cloud, big data, and business analytics is expected to boost the demand for payroll outsourcing. The innovative solutions improve workflow and insights between HR and Payroll teams, which helps to decrease the burden of several enterprises. Moreover, the integration of artificial intelligence payroll outsourcing fuel the market in the coming years. For instance,
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In September 2022, Paychex, a leading provider of management solutions for human resources, benefits, payroll, and insurance services, announced a new conversational AI feature called Paychex Voice Assist for their SaaS-based HR software solution. This feature reduces the administrative workload of logging into a payroll system, as it allows users to process payroll through devices that have Google Assistant capabilities.
Advanced technology solutions help HR teams and employees to understand and handle massive data. Technology offers the necessary tools and software to perform various tasks rapidly and increase the productivity and potential of employees. Therefore, digitization, flexibility, and hybrid work stay as HR technology trends and key focus areas.
Payroll Outsourcing Market Dynamics
Major Drivers
Rising adoption of cloud-based payroll services for their benefits such as security, easy access, functionality, scalability, and low costs is anticipated to fuel the market. In addition, rising demand for employee self-service for payroll outsourcing services is anticipated to propel the market.
Increasing demand for Multi-Country Payroll Outsourcing (MCPO) services, which facilitates businesses and companies to track employee payroll processes across different countries, is anticipated to boost the payroll outsourcing market in the coming years. For instance,
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In October 2022, KPMG in India and IBSFINtech declared an alliance to provide clients with a comprehensive range of corporate treasury automation solutions. This alliance enables clients to accelerate the digitization of their treasury functions.
Existing Restraints
Issues related to the geographical transition of the standard payroll process are anticipated to restrain the market during the forecast period. Constant regulatory changes in payroll outsourcing are expected to hinder market expansion. In addition, the rising cybersecurity threat is likely to hamper the market growth during the forecast period.
Emerging Opportunities
Increasing adoption of cloud-based digital payroll services offers growth opportunities to key market players. The manual recording of every detail of the employees is rapidly decreasing, as more organizations outsource payroll from third-party providers. Cloud platform integration is increasing among SMEs worldwide, owing to cost-effectiveness and flexibility benefits, among others. In addition, the growing advances in cloud technology with AI are likely to expand opportunities in the market.
Scope of Payroll Outsourcing Market Report
The market report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics have also been included in the report.
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Attributes |
Details |
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Report Title |
Payroll Outsourcing Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast |
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Base Year |
2022 |
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Historic Data |
2016–2021 |
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Forecast Period |
2023–2031 |
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Segmentation |
Type (Full-managed Outsourcing and Co-managed Outsourcing), Application (National, Multinational, and Mid-market), and End-user (IT & Telecommunication, BFSI, Consumer & Industrial Products, Healthcare, Public Sector, and Others) |
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Regional Scope |
Asia Pacific, North America, Latin America, Europe, and Middle East & Africa |
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Report Coverage |
Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, Market Trends, and Revenue Forecast |
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Key Players Covered in the Report |
Accenture PLC; Infosys Limited; CGI Group, Inc.; International Business Machines (IBM) Corporations; Xerox Holdings Corporation; Excellerate HRO; IRIS Software Group Limited; Wipro Limited; Ramco Systems Limited; Deloitte Touche Tohmatsu Limited; Cegedim Services Resources Humaines SA; NGA Human Resources; Safeguard World International, Ltd.; Paychex, Inc.; Hewlett Packard Enterprise (HPE); Workday, Inc.; Automatic Data Processing (ADP), Inc.; and Others |
Payroll Outsourcing Market Segment Insights
Types Segment Analysis
In terms of types, the market is bifurcated into full-managed outsourcing and co-managed outsourcing. The co-managed outsourcing segment is expected to drive the market during the forecast period, due to increasing risks of data theft. Co-managed outsourcing model facilitates companies and organizations to manage the quality of the payroll process and reduces the cost of the process. It combines the captive structure and the external outsourcing structure to facilitate companies to streamline and improve their payroll process.
The full-managed outsourcing segment is projected to expand at a considerable CAGR during the forecast period, due to the growing need for payroll management from several sectors. Many companies from various sectors are recognizing the benefits of outsourcing payroll management, as it can be a costly and time-consuming process. By outsourcing, these companies are able to save valuable resources and focus on their core business activities.
Applications Segment Analysis
On the basis of applications, the market is divided into national, international, and multi-national. The multi-national segment is estimated to boost the market during the forecast period, as it aids companies and organizations in managing vast data related to their employees. Outsourcing payroll activities help large enterprises to save the information of employees to be paid, track work hours, calculate salaries, wages, and bonuses, generate payroll reports, and fulfilling taxation laws applicable in different countries.
The mid-market segment is projected to expand during the forecast period, due to increasing adoption of affordable and accessible digital outsourcing services by mid-market companies and enterprises. Different companies simplify complex workforce data by incorporating HR software and solutions. For instance,
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In November 2021, ADP, a leading online payroll and HR solutions company, acquired Integrated Design, Inc. (IDI), a prominent company in employee data integration. This acquisition is expected to help clients to access an enhanced payroll experience to scale and grow their businesses.
End-user Segment Analysis
Based on end-users, the market is segregated into IT & telecommunication, BFSI, consumer & industrial products, healthcare, public sector, and others. The IT & telecommunication segment holds a large share of the market, owing to the growing size of the IT & telecommunication sector. Payroll outsourcing aid companies and organizations to collect and manage increasing data and oversee its privacy.
The BFSI and healthcare segment accounts for a considerable market share during the forecast period. The growth for these segments is attributed to the increasing demand for outsourcing services in order to streamline operations, minimize payroll errors, and integrate data. By outsourcing payroll management, these industries can free up valuable time to focus on other important tasks.
Regional Analysis
On the basis of regions, the market is segmented into Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. The market in North America holds a large share of the global market. The increasing need for payroll management, due to the rising influence of big data, automated processes, business analytics, and cloud deployment models is propelling the market in the region. Cloud computing is becoming more popular for businesses due to government regulations. This is expected to create new opportunities for market players.
The market in Asia Pacific is expected to expand rapidly during the forecast period, as several market players are launching products in the region. Major players in the market are consistently working to standardize administrative tasks and develop the functionality of systems to ensure productivity and efficiency, which in turn fuel the market. Furthermore, the growing usage of mobile and cloud-based applications and the rising demand for real-time data access is likely to boost the market in the region.
2. Assumptions and Acronyms Used
3. Research Methodology
4. Payroll Outsourcing Market Overview
4.1. Introduction
4.1.1. Market Taxonomy
4.1.2. Market Definition
4.2. Macro-Economic Factors
4.2.1. Industry Outlook
4.3. Payroll Outsourcing Market Dynamics
4.3.1. Market Drivers
4.3.2. Market Restraints
4.3.3. Opportunity
4.3.4. Market Trends
4.4. Payroll Outsourcing Market - Supply Chain
4.5. Global Payroll Outsourcing Market Forecast
4.5.1. Payroll Outsourcing Market Size (US$ Mn) and Y-o-Y Growth
4.5.2. Payroll Outsourcing Market Size (000’ Units) and Y-o-Y Growth
4.5.3. Payroll Outsourcing Market Absolute $ Opportunity
5. Global Payroll Outsourcing Market Analysis and Forecast by Types
5.1. Market Trends
5.2. Introduction
5.2.1. Basis Point Share (BPS) Analysis by Types
5.2.2. Y-o-Y Growth Projections by Types
5.3. Payroll Outsourcing Market Size and Volume Forecast by Types
5.3.1. Full-managed Outsourcing
5.3.2. Co-managed Outsourcing
5.4. Absolute $ Opportunity Assessment by Types
5.5. Market Attractiveness/Growth Potential Analysis by Types
6. Global Payroll Outsourcing Market Analysis and Forecast by Applications
6.1. Market Trends
6.2. Introduction
6.2.1. Basis Point Share (BPS) Analysis by Applications
6.2.2. Y-o-Y Growth Projections by Applications
6.3. Payroll Outsourcing Market Size and Volume Forecast by Applications
6.3.1. National
6.3.2. Multinational
6.3.3. Mid-market
6.4. Absolute $ Opportunity Assessment by Applications
6.5. Market Attractiveness/Growth Potential Analysis by Applications
7. Global Payroll Outsourcing Market Analysis and Forecast by End Users
7.1. Market Trends
7.2. Introduction
7.2.1. Basis Point Share (BPS) Analysis by End Users
7.2.2. Y-o-Y Growth Projections by End Users
7.3. Payroll Outsourcing Market Size and Volume Forecast by End Users
7.3.1. IT & Telecommunication
7.3.2. BFSI
7.3.3. Consumer & Industrial Products
7.3.4. Healthcare
7.3.5. Public Sector
7.3.6. Others
7.4. Absolute $ Opportunity Assessment by End Users
7.5. Market Attractiveness/Growth Potential Analysis by End Users
8. Global Payroll Outsourcing Market Analysis and Forecast by Region
8.1. Market Trends
8.2. Introduction
8.2.1. Basis Point Share (BPS) Analysis by Region
8.2.2. Y-o-Y Growth Projections by Region
8.3. Payroll Outsourcing Market Size and Volume Forecast by Region
8.3.1. North America
8.3.2. Latin America
8.3.3. Europe
8.3.4. Asia Pacific
8.3.5. Middle East and Africa (MEA)
8.4. Absolute $ Opportunity Assessment by Region
8.5. Market Attractiveness/Growth Potential Analysis by Region
8.6. Global Payroll Outsourcing Demand Share Forecast, 2019-2026
9. North America Payroll Outsourcing Market Analysis and Forecast
9.1. Introduction
9.1.1. Basis Point Share (BPS) Analysis by Country
9.1.2. Y-o-Y Growth Projections by Country
9.2. North America Payroll Outsourcing Market Size and Volume Forecast by Country
9.2.1. U.S.
9.2.2. Canada
9.3. Absolute $ Opportunity Assessment by Country
9.4. North America Payroll Outsourcing Market Size and Volume Forecast by Types
9.4.1. Full-managed Outsourcing
9.4.2. Co-managed Outsourcing
9.5. Basis Point Share (BPS) Analysis by Types
9.6. Y-o-Y Growth Projections by Types
9.7. North America Payroll Outsourcing Market Size and Volume Forecast by Applications
9.7.1. National
9.7.2. Multinational
9.7.3. Mid-market
9.8. Basis Point Share (BPS) Analysis by Applications
9.9. Y-o-Y Growth Projections by Applications
9.10. North America Payroll Outsourcing Market Size and Volume Forecast by End Users
9.10.1. IT & Telecommunication
9.10.2. BFSI
9.10.3. Consumer & Industrial Products
9.10.4. Healthcare
9.10.5. Public Sector
9.10.6. Others
9.11. Basis Point Share (BPS) Analysis by End Users
9.12. Y-o-Y Growth Projections by End Users
9.13. Market Attractiveness/Growth Potential Analysis
9.13.1. By Country
9.13.2. By Product Type
9.13.3. By Application
9.14. North America Payroll Outsourcing Demand Share Forecast, 2019-2026
10. Latin America Payroll Outsourcing Market Analysis and Forecast
10.1. Introduction
10.1.1. Basis Point Share (BPS) Analysis by Country
10.1.2. Y-o-Y Growth Projections by Country
10.1.3. Latin America Average Pricing Analysis
10.2. Latin America Payroll Outsourcing Market Size and Volume Forecast by Country
10.2.1. Brazil
10.2.2. Mexico
10.2.3. Rest of Latin America
10.3. Absolute $ Opportunity Assessment by Country
10.4. Latin America Payroll Outsourcing Market Size and Volume Forecast by Types
10.4.1. Full-managed Outsourcing
10.4.2. Co-managed Outsourcing
10.5. Basis Point Share (BPS) Analysis by Types
10.6. Y-o-Y Growth Projections by Types
10.7. Latin America Payroll Outsourcing Market Size and Volume Forecast by Applications
10.7.1. National
10.7.2. Multinational
10.7.3. Mid-market
10.8. Basis Point Share (BPS) Analysis by Applications
10.9. Y-o-Y Growth Projections by Applications
10.10. Latin America Payroll Outsourcing Market Size and Volume Forecast by End Users
10.10.1. IT & Telecommunication
10.10.2. BFSI
10.10.3. Consumer & Industrial Products
10.10.4. Healthcare
10.10.5. Public Sector
10.10.6. Others
10.11. Basis Point Share (BPS) Analysis by End Users
10.12. Y-o-Y Growth Projections by End Users
10.13. Market Attractiveness/Growth Potential Analysis
10.13.1. By Country
10.13.2. By Product Type
10.13.3. By Application
10.14. Latin America Payroll Outsourcing Demand Share Forecast, 2019-2026
11. Europe Payroll Outsourcing Market Analysis and Forecast
11.1. Introduction
11.1.1. Basis Point Share (BPS) Analysis by Country
11.1.2. Y-o-Y Growth Projections by Country
11.1.3. Europe Average Pricing Analysis
11.2. Europe Payroll Outsourcing Market Size and Volume Forecast by Country
11.2.1. Germany
11.2.2. France
11.2.3. Italy
11.2.4. U.K.
11.2.5. Spain
11.2.6. Russia
11.2.7. Rest of Europe
11.3. Absolute $ Opportunity Assessment by Country
11.4. Europe Payroll Outsourcing Market Size and Volume Forecast by Types
11.4.1. Full-managed Outsourcing
11.4.2. Co-managed Outsourcing
11.5. Basis Point Share (BPS) Analysis by Types
11.6. Y-o-Y Growth Projections by Types
11.7. Europe Payroll Outsourcing Market Size and Volume Forecast by Applications
11.7.1. National
11.7.2. Multinational
11.7.3. Mid-market
11.8. Basis Point Share (BPS) Analysis by Applications
11.9. Y-o-Y Growth Projections by Applications
11.10. Europe Payroll Outsourcing Market Size and Volume Forecast by End Users
11.10.1. IT & Telecommunication
11.10.2. BFSI
11.10.3. Consumer & Industrial Products
11.10.4. Healthcare
11.10.5. Public Sector
11.10.6. Others
11.11. Basis Point Share (BPS) Analysis by End Users
11.12. Y-o-Y Growth Projections by End Users
11.13. Market Attractiveness/Growth Potential Analysis
11.13.1. By Country
11.13.2. By Product Type
11.13.3. By Application
11.14. Europe Payroll Outsourcing Demand Share Forecast, 2019-2026
12. Asia Pacific Payroll Outsourcing Market Analysis and Forecast
12.1. Introduction
12.1.1. Basis Point Share (BPS) Analysis by Country
12.1.2. Y-o-Y Growth Projections by Country
12.1.3. Asia Pacific Average Pricing Analysis
12.2. Asia Pacific Payroll Outsourcing Market Size and Volume Forecast by Country
12.2.1. China
12.2.2. Japan
12.2.3. South Korea
12.2.4. India
12.2.5. Australia
12.2.6. Rest of Asia Pacific (APAC)
12.3. Absolute $ Opportunity Assessment by Country
12.4. Asia Pacific Payroll Outsourcing Market Size and Volume Forecast by Types
12.4.1. Full-managed Outsourcing
12.4.2. Co-managed Outsourcing
12.5. Basis Point Share (BPS) Analysis by Types
12.6. Y-o-Y Growth Projections by Types
12.7. Asia Pacific Payroll Outsourcing Market Size and Volume Forecast by Applications
12.7.1. National
12.7.2. Multinational
12.7.3. Mid-market
12.8. Basis Point Share (BPS) Analysis by Applications
12.9. Y-o-Y Growth Projections by Applications
12.10. Asia Pacific Payroll Outsourcing Market Size and Volume Forecast by End Users
12.10.1. IT & Telecommunication
12.10.2. BFSI
12.10.3. Consumer & Industrial Products
12.10.4. Healthcare
12.10.5. Public Sector
12.10.6. Others
12.11. Basis Point Share (BPS) Analysis by End Users
12.12. Y-o-Y Growth Projections by End Users
12.13. Market Attractiveness/Growth Potential Analysis
12.13.1. By Country
12.13.2. By Product Type
12.13.3. By Application
12.14. Asia Pacific Payroll Outsourcing Demand Share Forecast, 2019-2026
13. Middle East & Africa Payroll Outsourcing Market Analysis and Forecast
13.1. Introduction
13.1.1. Basis Point Share (BPS) Analysis by Country
13.1.2. Y-o-Y Growth Projections by Country
13.1.3. Middle East & Africa Average Pricing Analysis
13.2. Middle East & Africa Payroll Outsourcing Market Size and Volume Forecast by Country
13.2.1. Saudi Arabia
13.2.2. South Africa
13.2.3. UAE
13.2.4. Rest of Middle East & Africa (MEA)
13.3. Absolute $ Opportunity Assessment by Country
13.4. Middle East & Africa Payroll Outsourcing Market Size and Volume Forecast by Types
13.4.1. Full-managed Outsourcing
13.4.2. Co-managed Outsourcing
13.5. Basis Point Share (BPS) Analysis by Types
13.6. Y-o-Y Growth Projections by Types
13.7. Middle East & Africa Payroll Outsourcing Market Size and Volume Forecast by Applications
13.7.1. National
13.7.2. Multinational
13.7.3. Mid-market
13.8. Basis Point Share (BPS) Analysis by Applications
13.9. Y-o-Y Growth Projections by Applications
13.10. Middle East & Africa Payroll Outsourcing Market Size and Volume Forecast by End Users
13.10.1. IT & Telecommunication
13.10.2. BFSI
13.10.3. Consumer & Industrial Products
13.10.4. Healthcare
13.10.5. Public Sector
13.10.6. Others
13.11. Basis Point Share (BPS) Analysis by End Users
13.12. Y-o-Y Growth Projections by End Users
13.13. Market Attractiveness/Growth Potential Analysis
13.13.1. By Country
13.13.2. By Product Type
13.13.3. By Application
13.14. Middle East & Africa Payroll Outsourcing Demand Share Forecast, 2019-2026
14. Competition Landscape
14.1. Global Payroll Outsourcing Market: Market Share Analysis
14.2. Payroll Outsourcing Distributors and Customers
14.3. Payroll Outsourcing Market: Competitive Dashboard
14.4. Company Profiles (Details: Overview, Financials, Developments, Strategy)
14.4.1. Accenture PLC
14.4.2. Infosys Limited
14.4.3. CGI Group, Inc.
14.4.4. International Business Machines (IBM) Corporations
14.4.5. Xerox Holdings Corporation
14.4.6. Excellerate HRO
14.4.7. IRIS Software Group Limited
14.4.8. Wipro Limited
14.4.9. Ramco Systems Limited
14.4.10. Deloitte Touche Tohmatsu Limited