Top 10 Payroll Outsourcing Services Trends to Watch in 2019

Payroll outsourcing services

Payroll outsourcing services are being widely adopted across the globe by businesses of all sizes. These services can complete payroll tasks more efficiently and cost-effectively, allowing human resource staff to be more productive and focus on other important jobs. With the continuous development of payroll technologies, it is believed that more businesses will outsource their payroll operations in aims of becoming more efficient and well-organized. Due to these factors, the global payroll outsourcing services market is expected to continue its steady growth led by 10 trends which are expected to drive this growth through 2021 and beyond.

Global Payroll Outsourcing Services Market Overview

Due to the various of benefits of outsourcing payroll operations, such as its efficiency, cost-effectiveness, integration of resources, and low risk, payroll outsourcing services are gaining increasing popularity among businesses and government organizations from all over the world. According to our latest market research report, the global payroll outsourcing services market size surpassed USD 35 billion in 2018 and market growth is forecast to maintain a strong CAGR of 6% through 2021. The rising demand to reduce payroll-related costs is one of the primary growth factors for this market, as in-house payroll management costs more for hiring staff and adopting the latest technologies.

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Top 10 Payroll Outsourcing Services Trends to Watch in 2019

Rising Demand for Multi-Country Payroll Outsourcing (MCPO)

Multi-country payroll outsourcing (MCPO) allows businesses to use software to manage employee payroll operations across different countries. MCPO software has been considered as the best solution for companies with many oversea employees, as it will provide cloud-based payroll services from a third-party service provider to management payroll regardless of an employee’s locations. As more small and medium sized companies are now doing business globally, the demand of multi-country payroll outsourcing (MCPO) is expected to have a strong growth over the next few years.

Hybrid Outsourcing Model Continues its Dominance

The hybrid outsourcing model is currently largest segment in the global payroll outsourcing services market and is expected to continue its market dominance throughout 2019. This model combines the advantages of a captive structure with an external outsourcing structure. Additionally, the hybrid payroll outsourcing model allows organizations to maintain competence in terms of processes and quality, while reducing costs and also simultaneously supporting labor arbitrage. It is forecast that hybrid outsourcing model will remain as the one of the best options for companies looking for payroll outsourcing services in the near future.

Automation in Payroll Services

Another trend gaining traction in the global payroll outsourcing market is the implementation of automation. Automated payroll operations allow service providers to improve their sustainability in the market by reducing the wastage of time and keeping track of costs. Growing number of payroll outsourcing companies are nowadays focusing on building reusable service delivery platforms with scalability and automation by using new software tools for automatic payment calculations, deduction calculations, and record keeping.

Cloud-Based Payroll Software Becomes More Popular

Cloud-based payroll solutions are witnessing increasing adoption due to its advantages in scalability, functionality, security, easy access, and low costs. Cloud-based payroll outsourcing software can help businesses manage their employees’ reductions and raises with more accuracy. It enables employees with self-service options to manage their payroll operations without having too much hassle. Cloud-based payroll software also includes automatic and routine software updates and data backups, as well as keeping companies on track with tax compliance and other regulations. Several industry surveys show that companies are increasingly willing to move to cloud-based payroll software as the global payroll outsourcing services market continues to boom.

Employee Self-Service (ESS) for Outsourced Payroll Service

Employee self-service (ESS) is an increasingly popular trend within the human resources and payroll management markets. ESS in payroll is normally provided through software or mobile apps, which allows employees to have direct access to their HR and payroll records. With ESS, employees can view and download payroll related forms, manage payroll information, and request or keep track of holidays. Such service eliminates unnecessary admin work for HR, whilst effectively reducing costs, also enables HR and payroll to be more efficient and productive.

Robotics for Payroll Processing

Robotic process automation (RPA) is a way to automate repetitive and rules-based processes. RPA works via automated scripts, software agents, and bots conducting activities at an exceptional rate of accuracy and speeds, therefore has been increasingly adopted in payroll processing. RPA in payroll operation can effectively avoid common human errors and mistakes, as well as increase accuracy. Additionally, RPA is relatively more cost-effective and simpler to implement, therefore becoming increasingly popular among payroll outsourcing services providers.

Integrated Platforms for Better Management

As modern payroll requirements are becoming more fragmented, the use of integrated payroll platforms is now becoming a rising trend within the payroll market. With these integrated platforms, both employees and employers can easily access and log into their personalized payroll account. This enables them to instantly manage their salaries, commissions, insurances, pensions, records, taxes and more, allowing them to stay updated about the income they receive, amount of taxes they are entitled to pay, and increasing their awareness towards their financial situations.

Real-Time Payroll Analytics for Better Decision Making

The latest development in business practices has acknowledged the importance of payroll data analysis. Payroll data analysis can reveal various of aspects of business operations such as profit, staffing deployment, and team management. Many enterprises and organizations use payroll analytics to make business strategies based on costs for compensation, training, tax liabilities, or even team communication across time zones. Therefore, effective payroll analytics are expected to be increasingly required from payroll outsourcing services.

Cost Reductions

The cost of payroll outsourcing services is expected to be further reduced in the coming years, due to the increasing implementation of cloud computing technologies and the constant payroll service innovations. Newer payroll outsourcing services and products are being launched, making the global payroll outsourcing market more competitive than ever before. This will also further increase the efficiency of the products while reducing the costs associated with processing and administering works in payroll operations.

Better Data Security

Keeping data secure has never been more important for any businesses around the world. Any companies outsourcing their payroll to a dedicated provider would demand all employees’ personal information is held in a secure, encrypted system. Therefore, payroll outsourcing service providers are required to have better insights into data security that impact not only payroll systems, but also systems that service HR, finance, tax, and other key functions. The demand for better data security and a more effective approach to cybersecurity threats is expected to be stronger in the coming years.


For more information about the global payroll outsourcing services market, check this following report: