Payroll Outsourcing: On A Growth Spree

The global payroll outsourcing industry is poised to grow from $17.4 bn in 2016 to $21.8 bn by 2020, the growth comes in as enterprises of all scales continue to outsource non-core processes to improve on their profit margins

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Payroll outsourcing has emerged as one among the fastest-growing segments of the global human resource outsourcing (HRO) industry. Businesses, in a bid to shrink operational expenditures, are outsourcing entire payroll services to enhance their existing operations.


Organisations which leverage an in-house team for payroll, time and attendance almost spend 20 per cent more on their Operational Expenditures as compared to organisations that outsource the same processes.

Here is a detailed analysis of the top trends fuelling the growth of Payroll Outsourcing sector-:

The Rise of Multi-Country Payroll Outsourcing (MCPO)

Multi-country payroll outsourcing (MCPO) enables businesses to utilize platforms for managing payroll processes across different countries. The MCPO solution comes as a viable option for enterprises with significant overseas operations as it offers cloud-based payroll operations by a service provider to manage payroll irrespective of an employee's location.

As SMBs expand their operations into other potential markets, the demand for MCPO is set to witness a surge in the coming years.


Another major trend contributing to the unprecedented growth of the Payroll Outsourcing sector is automation. Automated payroll services enable service providers to enhance efficiency and cut on their operational expenditures. A large number of payroll outsourcing players are now leveraging scalable delivery platforms driven by automation for the deduction, record keeping and payment calculation with minimal human involvement.

Employee Self-Service (ESS)

Employee self-service (ESS) is gaining rapid traction in the HR and payroll management segment. ESS involves empowering employees with direct access to their HR and payroll data via mobile applications and software.

Employees can access and download payroll-related forms, keep track of their holidays etc. This results in a more productive and efficient HR and Payroll operations resulting in a win-win proposition.

Real-Time Analytics In Payroll

The data analysis of Payroll enables a deeper understanding of business operations including staffing, team management and profits.

A significant number of enterprises and organizations leverage payroll analytics to formulate business strategies focused on training, tax liabilities and team management across their business landscape.

Constructive payroll analytics, therefore, is expected to be in major demand in payroll outsourcing services.

Data Security

Data security comes as a crucial factor for businesses which can make or break a contract. Any an organisation which is outsourcing its payroll operations to a third party the vendor would expect the personal information of its employees to be stored in a secure and encrypted environment.

It is therefore quintessential for payroll outsourcing providers to strengthen their approach in ensuring an end to end data security for not only payroll processes but also for HR, tax, finance and other key functions. It would not be an exaggeration to say that a vendor with the best security mechanism in place will make to the list of top payroll outsourcing service providers in coming years.

Integrated Platforms For Optimised Management

The usage of integrated payroll platforms has emerged as a dominating trend in the payroll outsourcing market. These platforms enable employers and their workforce to seamlessly access their personalised payroll data and instantly communicate and manage salaries, insurances, commissions, taxes and more. This results in a more transparent environment inside an organisation ensuring employee satisfaction and stability.

An increasing number of future-ready businesses have either outsourced their end to end payroll services or are in advanced conversations to do so in the near future. While no "one strategy' makes business sense for every enterprise, outsourcing payroll cuts on your operational expenditures, and empowers you to zero in on your core revenue-generating processes. Outsourcing payroll services will not only enable you to secure your data but also avail specialised services for your talented professionals.