According to recent research, the global human resources outsourcing market will reach $162 billion by the year 2015 with payroll outsourcing playing a major role in the industry. Read top article!
Global Industry Analysts released a research report on the 9th of February concerning the continuous growth in the HR outsourcing industry. The report speculates that, with the global economic downturn, cost reduction has become paramount for business with focus on smaller investments in outsourcing single processes, as well as enhancing the significance of HR outsourcing. Payroll is just one of the areas that are more commonly outsourced due to the inherent complexity of the function and the required accuracy as it is carried out.
Meanwhile, a study by PriceWaterhouseCoopers in conjunction with ADP (NASDAQ:ADP) on the 1st of February specifically focused on the true, hidden costs that can be associated with payroll and HR administration when done in-house as compared to when outsourced with ADP, or comparably, to other outsourcing companies. According to the study, organizations that retain payroll, workforce administration, time & attendance and benefits administration in-house spend on average 18% more than those that are outsourcing. With larger organizations spending 27% more than smaller-sized organizations and organizations using software vendors spending 32% more. The report further state that despite speculation stemming from significant technological advances in payroll administration software, costs for payroll services Australia administration has increased since 2003, contrary to belief.
Increase in acquisitions and partnerships among software and services providers have also been observed in the past few days. Workforce management solutions provider, Valiant, announced on the 25th of January that it has acquired payroll & consulting services provider to the restaurant and catering industries, payroll computing services in an effort to expand its presence in the hospitality industry. The company is seeking to reinforce its, “strategic commitment to expand market share on the Valiant platform of web-based Workforce Management Products (WFMP)”. Meanwhile, company Xcel HR announced on the 8th of February that it has acquired Astra HR, achieving “rock solid support” for its payroll platform. On the heels of this news is payroll, HR and benefits outsourcing solutions provider, Paychex Inc’s (NASDAQ:PAYX) completion of its acquisition of SurePayroll, a Software-as-a-Service payroll processing provider.
One country that may soon see marked increase in payroll outsourcing is outsourcing destination India. The country’s insurance regulator, the Insurance Regulatory and Development Authority (IRDA), issued guidelines early this month regarding the outsourcing of activities among insurance companies. The organization stipulated that insurers must take the necessary steps to ensure that company’s outsourcing activities should not result in internal control, business conduct, or reputation being compromised. The IRDA identified payroll services management among others as a non-core activity and, as such, will likely lead to more business from insurance companies that are complying with the IRDA and restricting outsourcing activities of core functions. read the news from http://www.theglobalrecruiter.com/news/plutus-payroll-appears-to-have-been-controlled-by-criminal-syndicate/8571
Payroll administration services will, aside from seeing increased market growth, also likely see major advancements in process as competition also increases. Likewise, with more companies choosing to adopt outsourcing over software solutions, more partnerships and acquisitions among software and solutions provides will also likely be evident. With outsourcing of non-core activities gaining popularity, the expected growth in the payroll outsourcing market may barely scratch the surface on the depth of adoption of outsourcing of these kinds of services and the class of service that outsourcers will be able to provide in the future.