PUBLISHER: The Business Research Company | PRODUCT CODE: 1670819
PUBLISHER: The Business Research Company | PRODUCT CODE: 1670819
Payroll outsourcing involves delegating payroll management responsibilities to an external service provider, relieving enterprises of the tasks associated with payroll procedures and ensuring compliance with relevant laws. This outsourcing arrangement provides businesses with support in legal, tax, and accounting services, ensuring timely and accurate payment of employees.
The primary types of payroll outsourcing are fully-managed outsourcing and co-managed outsourcing. In fully-managed outsourcing, the service provider oversees the entire process from start to finish, reducing the need for businesses to invest significant time, effort, or attention. This approach is applicable across various business sizes, including small, medium, and large enterprises, and is utilized by diverse industries such as banking, financial services and insurance (BFSI), consumer and industrial products, information technology (IT) and telecommunications, the public sector, healthcare, and other end-users.
The payroll outsourcing research report is one of a series of new reports from The Business Research Company that provides payroll outsourcing market statistics, including the payroll outsourcing industry's global market size, regional shares, competitors with payroll outsourcing market share, detailed payroll outsourcing market segments, market trends and opportunities, and any further data you may need to thrive in the payroll outsourcing industry. This payroll outsourcing market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.
The payroll outsourcing market size has grown strongly in recent years. It will grow from $12.01 billion in 2024 to $12.9 billion in 2025 at a compound annual growth rate (CAGR) of 7.4%. The growth in the historic period can be attributed to increased focus on improving efficiency, increased demand for reducing operational costs, growth in the it sector, industrialization, growth in the manufacturing sector
The payroll outsourcing market size is expected to see strong growth in the next few years. It will grow to $17.58 billion in 2029 at a compound annual growth rate (CAGR) of 8.0%. The growth in the forecast period can be attributed to rise in demand for cloud-based payroll, increasing demand for eliminating the need for hiring technical staff for payroll services, penetration of e-commerce platforms, growing banking, financial services and insurance (bfsi) sectors, increasing number of small-medium enterprises (smes). Major trends in the forecast period include adoption of artificial intelligence and automation in payroll outsourcing services, next-generation technological launch, subscription-based services, integration of automation in the process.
The payroll outsourcing market is poised for growth, driven by an increasing demand for cloud-based payroll solutions. Cloud-based payroll allows users to manage payroll processes online, offering improved accessibility, enhanced communication between customers and service providers, and scalable and cost-effective options. For example, in 2023, Alight Solutions reports that 40% of businesses plan to update their payroll systems, with cloud-based solutions dominating payroll delivery platforms (61%) over on-premises (39%). A substantial portion of businesses (26%) has already made strides in digital payroll efforts, and a majority (62%) anticipates undergoing digital transitions in the next two years. Hence, the surge in demand for cloud-based payroll is a driving force for the payroll outsourcing market.
The anticipated growth in employment is expected to drive the expansion of the payroll outsourcing market in the future. Employment signifies the condition of being engaged in paid work or holding a job, where individuals offer their skills, time, and effort to an employer or business entity in return for compensation, such as wages or salaries. An increase in employment can generate a demand for more advanced and scalable payroll solutions, making payroll outsourcing an appealing option for companies aiming to manage the complexities of a larger workforce while enhancing operational efficiency and compliance. For example, in January 2024, the World Economic Forum, a Switzerland-based international organization for public-private cooperation, projected that by 2030, global digital jobs could rise by about 25%, totaling more than 90 million positions. Consequently, the growth in employment is fueling the expansion of the payroll outsourcing market.
Innovations in products are emerging as a prominent trend in the payroll outsourcing market, with major companies focusing on creating innovative solutions to fortify their market position. For instance, Payroll Growth Partners (PGP), a UK-based provider of payroll management services, introduced Next-Gen Payroll products in June 2023. These innovative payroll services, available to employees using PayBridge's platform, include features such as pay cards, real-time payroll, and early access to pay.
Major companies in the payroll outsourcing market are introducing new solutions, such as cloud technology, to enhance their profitability. Cloud technology in payroll outsourcing offers a modern, flexible, and efficient approach to managing payroll processes. Immedis, an Ireland-based payroll solution provider, launched One View in November 2022. This platform replaces manual processes with a secure and efficient system, providing real-time reporting and analytics on a global scale. With a commitment to innovation, One View empowers users to access curated analytics and tailor payroll processes based on individual country needs.
In September 2024, Voly Group, a UK-based software development firm, acquired Voyonic Group for an undisclosed sum. This acquisition is intended to strengthen Voly Group's ability to offer comprehensive financial management and operational solutions for the maritime sector by leveraging Voyonic Group's expertise in human resource management and compliance for seafarers. Voyonic Group is a human resources services company based in Guernsey.
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.
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
The countries covered in the payroll outsourcing market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Italy, Spain, Canada.
The payroll outsourcing market includes revenues earned by entities through the administration of employee benefits, tax withholding, wage computation and salary management, and computing statutory leaves. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
Payroll Outsourcing Global Market Report 2025 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on payroll outsourcing market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for payroll outsourcing ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward? The payroll outsourcing market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
The forecasts are made after considering the major factors currently impacting the market. These include the Russia-Ukraine war, rising inflation, higher interest rates, and the legacy of the COVID-19 pandemic.