Services, Payroll, Market
Report: Payroll services on upswing
-
|
- Print |
- Email Page
The U.S. market for payroll outsourcing services is dominated by three players, which account for 44 percent of the total market, according to IDC -- ADP Employer Services, Paychex, and Ceridian Human Resource Solutions. Two other large players have been acquired by the big three in recent years.
Appian Enterprise 4, the industry’s most comprehensive business process management (BPM) suite, features knowledge management capabilities, collaborative tools, integrated analytics, and the industry’s only HTML-based process modeler. With more tools to choose from, it’s no wonder Appian Enterprise 4 is the wisest choice for BPM.Expectations that discrete payroll service providers would be absorbed into the larger human-resource BPO market have not been realized, according to new figures from IDC.
The consulting firm estimates that the market for payroll services in the United States will continue to remain strong -- and a viable, separate market -- registering growth of 6.3 percent annually through 2008, to reach US$13 billion.
"There was a view that the BPO market in general was growing at such a rate that it would eventually cut into discrete payroll-process spending," Lisa Powan, program manager for HR management and staffing services at IDC, tells NewsFactor. "However, that theory has been debunked."
Several Avenues
There has been some consolidation in the space. Currently, the U.S. market for payroll outsourcing services is dominated by three players, which account for 44 percent of the total market, according to IDC -- ADP Employer Services, Paychex, and Ceridian Human Resource Solutions. Two other large players -- ProBusiness and Advantage Payroll -- have been acquired and assimilated by the big three in recent years.
Meanwhile, the BPO market for human resources is growing at a rapid clip; at 15 percent to 16 percent CAGR by 2008, it is a pace more than twice as fast as discrete payroll processing.
However, Rowan says, there are still a number of opportunities available to discrete payroll service providers. Ironically, one of these avenues is to expand services -- mimicking in many ways their more-comprehensive BPO competitors.
Expanding Services
In short, best-of-breed providers of payroll services will need to examine and plan for how they will fit into the larger BPO market, if they want to remain best-of-breed providers.
One route, Rowan suggests, is that these vendors subcontract their services to the larger BPO providers. Other strategies include streamlining price models and better aligning themselves with BPO players, especially in the mid market.
Payroll vendors already are moving in these directions, IDC noted. Earlier this year, ADP launched its entry into the BPO space with the announcement of Comprehensive Outsourcing Services (COS) for large companies needing full-service outsourcing.
-
|
- Print |
- Email Page
Making Gainsharing WorkHow to Create, Cultivate and Maintain the Business of Innovation in an Outsourcing Arrangement14 Jul 2008 | (Thinking Point)
Service Improvement – A Shared ResponsibilityRachel Anderson of Alsbridge Europe outlines the dual responsibility of service improvement.08 Apr 2008 | (Thinking Point)
Retained Organisation – The Importance of Getting It RightRachel Anderson of Aslbridge Europe makes an argument for effectively designing your retained organisation, no matter how large or small.08 Apr 2008 | (Thinking Point)
Service Provider M&A – Change of Control Doesn’t Have to Mean Loss of ControlThe outsourcing service provider market has experienced a steady stream of mergers and acquisitions (M&As) which began to pick up in 2007. However, a solid outsourcing arrangement is structured to
anticipate...08 Apr 2008 | (Thinking Point)
