The never-ending growth in internet accessibility around the world along with numerous technological advancements comprising 5G, blockchain, cloud services, Internet of Things (IoT), and Artificial Intelligence (AI) among others have significantly boosted the economic growth in the last two decades. As of April 2021, there were more than 4.5 billion users that were actively using the internet globally. Moreover, the growth in ICT sector has significantly contributed towards GDP growth, labor productivity, and R&D spending among other transformations of economies in different nations of the globe. Furthermore, the production of goods and services in the ICT sector is also contributing to the economic growth and development. As per the statistics in the United Nations Conference on Trade and Development’s database, the ICT good exports (% of total good exports) globally grew from 10.816 in 2015 to 11.536 in 2019. In 2019, these exports in Hong Kong SAR, China amounted to 56.65%, 25.23% in East Asia & Pacific, 26.50% in China, 25.77% in Korea, Rep., 8.74% in the United States, and 35.01% in Vietnam. These are some of the important factors that are boosting the growth of the market.
Growing Workforce – Increasing demand for payroll and HR solutions and services helps to manage the workforce with automated management processes, automatic updates, reduction of errors in resolving various issues and other time-saving features. It was observed that, worldwide there were more than 3 billion employed people in 2022.
Rising Use of Artificial Intelligence (AI) powered HR Solutions – The payroll and HR functions efficiently by handling payroll data, removing the chances of errors due to human effort. It was found that, the private investment in AI accounted for more than USD 92 billion in 2021.
Increasing Employment of Machine Learning in HR Analytics – In 2019, the total funding allocated to machine learning worldwide was more than USD 28 billion.
Upsurge in the number of SMEs – Escalating the implementation of IT by SMEs and automation of HR processes through various software, solutions and services. In 2021, there were approximately 332 million SMEs worldwide.
The global payroll and HR solutions and services market is segmented and analyzed for demand and supply by deployment model into on-premises, cloud-based, hybrid. Amongst these segments, the cloud-based segment is anticipated to garner the largest revenue by the end of 2031, backed by the organizations opting for cloud-based payroll and HR solutions and services allowing management processes to be automated along with the surge in the data stored in cloud worldwide. For instance, approximately 25% of the global data was stored in cloud in 2015, which is projected to reach about 50% by 2025.
Regionally, the global payroll and HR solutions and services market is studied into five major regions including North America, Europe, Asia Pacific, Latin America and Middle East & Africa region. Amongst these markets, the market in North America is projected to hold the largest market share by the end of 2031, backed by the presence of a strong IT network in the region, as well as growing number of employees opting for remote jobs along with the rising work from home and hybrid work culture. For instance, according to the data which included responses of ~25000 Americans, more than 55% have the opportunity to work from home at least 1 day in a week with ~35% having five days a week option to work from home, in 2022.
The global payroll and HR solutions and services market is further classified on the basis of region as follows:
Oracle Corporation - launched Software as a Service (SaaS) Payroll solution that will that enables organizations to easily configure payroll to meet both local and international pay rules in a single system. It will help intergovernmental and nongovernmental organizations (IGOs and NGOs) to efficiently pay any employee, anywhere, in any currency, without being subjected to the local complex pay rules and policies.
IBM Corporation - expanded its alliance with EY and established a new Talent Center of Excellence (COE). The COE create data-driven AI and hybrid cloud solutions to provide broad talent, HR, mobility, and payroll transformation services to businesses around the world.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Ans: Rising digital transformation of businesses, services and products as well as upsurge in the number of small medium enterprises, along with growing IT industry are some of the major factors anticipated to drive the growth of the market.
Ans: The market is anticipated to attain a CAGR of ~7% over the forecast period, i.e., 2022 – 2031.
Ans: Lack of awareness about payroll and HR solutions and services, high cost involved in adoption of automated technologies are some of the factors estimated to hamper the market growth.
Ans: The market in North America is projected to hold the largest market share by the end of 2031 and provide more business opportunities in the future.
Ans: The major players in the market are Oracle Corporation, IBM Corporation, Ceridian HCM Holding, Inc., Automatic Data Processing, Inc., SAP, Paychex, Inc., TMF Group, Ramco Systems Limited, and others.
Ans: The company profiles are selected based on the revenues generated from the product segment, geographical presence of the company which determine the revenue generating capacity as well as the new products being launched into the market by the company.
Ans: The market is segmented by solution, deployment model, enterprise size, industry, and by region.
Ans: The cloud-based segment is anticipated to garner the largest market size by the end of 2031 and display significant growth opportunities.