LONDON--(BUSINESS WIRE)--Technavio market research analysts forecast the global payroll outsourcing services market to grow at a CAGR of close to 6% during the forecast period, according to their latest report.
The market study covers the present scenario and growth prospects of the global payroll outsourcing services market for 2017-2021. The report also lists hybrid and fully outsourced as the two major product segments, of which the hybrid segment accounted for more than 72% of the market share in 2016.
According to Abhishek Sharma, a lead analyst at Technavio for IT professional services research, “Establishing an efficient and streamlined payroll system within an organization requires high upfront investment. Therefore, companies are outsourcing payroll services to focus on their core product offerings and remain competitive in the market.”
Looking for more information on this market? Request a free sample report
Technavio’s sample reports are free of charge and contain multiple sections of the report including the market size and forecast, drivers, challenges, trends, and more.
Technavio analysts highlight the following three market drivers that are contributing to the growth of the global payroll outsourcing services market:
- Growing need for payroll cost visibility
- Escalating demand to reduce payroll-related costs
- Growing adoption of integrated sourcing strategies
Growing need for payroll cost visibility
Economic and cultural globalization, the extension of manufacturing processes across geographies, and the widespread use of lean methodologies are driving demand for payroll cost visibility. Transnational organizations often seek contracts that confer global visibility of costs and aggregate reporting of payments, employee data, and other services. Multi-country contracts provide flexibility and scalability that helps operators to venture into virgin markets.
Clients typically opt for vendors with domain expertise and those that conform to strict service level agreements. The primary focus includes providing a hassle-free environment for HR professionals to drive and develop strategic activities such as workforce planning and talent management, rather than spending time on administration and transactional duties. Therefore, payroll outsourcing service providers are developing solutions that promote self-service by employees in a bid to reduce administrative workloads.
Escalating demand to reduce payroll-related costs
Payroll outsourcing service providers manage all the processes involved in paying employees. Organizations typically prefer outsourcing their services overseas to countries that can offer low costs and greater return on investment. In-house payroll management incurs comparatively more costs for hiring staff and adopting the latest technologies. Vendors are offering solutions with low costs to generate more revenue from businesses and enabling greater scope of control.
“Companies are also concerned about the costs associated with technology acquisitions as well as the support and maintenance of internal IT teams. Payroll outsourcing eliminates these associated costs to deliver a consistent performance to companies,” says Abhishek.
Growing adoption of integrated sourcing strategies
Many companies are integrating their business and technology solutions in a bid to improve productivity and innovation while keeping costs in control. Neo-sourcing, an evolution of the BPO models, is the integration of IT with payroll outsourcing. Neo-sourcing combines management of back office operations and technology to create process re-engineering for business transformation and optimization. Its benefits include process optimization, cost reduction, reduced cycle time, access to best global practices, and improved productivity. The integrated outsourcing strategy will help vendors remain competitive in the market owing to the increase in the number of HRO contracts focusing on payroll services.
Browse Related Reports:
- Global Recruitment Process Outsourcing Market 2017-2021
- Global Software Testing Market 2017-2021
- Global Voice Recognition Biometrics Market 2017-2021
Become a Technavio Insights member and access all three of these reports for a fraction of their original cost. As a Technavio Insights member, you will have immediate access to new reports as they’re published in addition to all 6,000+ existing reports covering segments like IT hardware, cloud computing, and product lifecycle management. This subscription nets you thousands in savings, while staying connected to Technavio’s constant transforming research library, helping you make informed business decisions more efficiently.
About Technavio
Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.
Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
If you are interested in more information, please contact our media team at media@technavio.com.
