Payroll and HR Solutions & Services Market size is poised to reach USD 110 Billion by the end of 2036, growing at a CAGR of 9% during the forecast period, i.e., 2024-2036. In the year 2023, the industry size of the payroll and HR solutions & services was USD 39 Billion, and the growth is propelled by the increasing adaptation of digitization technology by several businesses to streamline their operations and improve their efficiency, as about 89% of the companies have already adopted the digital-first in their business strategy or are either planning to do so. This acts as a surge in the growing demand for cloud-based HR solutions that offer automation, and improved accessibility for employees as well as the HR personnel.
For instance, according to a report, 91% of businesses are mainly engaged in a form of digital initiative, and about 87% of senior business leaders say digitalization is a priority for their business.
Furthermore, the modern workforce is highly diverse and has an extremely shifting expectation. HR solutions that cater to these needs, such as mobile access, and talent management tools, are in high demand. Furthermore, the rise of SMEs has created a large market segment, seeking a cost-effective and scalable HR solution.
Growth Drivers
Challenges
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Base Year |
2023 |
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Forecast Year |
2024-2036 |
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CAGR |
~ 9% |
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Base Year Market Size (2023) |
~ USD 39 Billion |
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Forecast Year Market Size (2036) |
~ USD 110 Billion |
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Regional Scope |
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Deployment (Cloud-based, On-premises, Hybrid)
Cloud-based segment in the payroll and HR solutions & services market is estimated to gain a robust revenue share of 46% in the coming years owing to the improved data protection and security for user data which is managed and stored by the software. The data is stored on secured and remote servers and can ensure greater privacy and security from data breaches and losses. According to a survey in March 2022, more than 720 IT professionals were surveyed all over the globe using online questionnaires, and about 80% of the organization's data is stored in cloud-based storage.
Enterprises (SMEs, Large Enterprises)
The small and medium enterprises segment in payroll and HR solutions & services market is set to garner a notable share shortly and is likely to remain the second largest segment in the enterprises of market as these are handled by staff with limited know-how of technical systems and processes. Cloud-based payroll and HR systems can provide solutions that are easier to use and navigate, taking away the need to invest in specialized staff with specific abilities and knowledge. This can be a significant growth driver for the market, as it provides a solution for many businesses facing the challenges of lack of expertise and resources.
Solutions (Software, Services)
The Software segment is estimated to hold a noteworthy share as it provides enhanced connectivity along with the integration of several other systems and platforms, such as accounting and financial systems. This can enable businesses to benefit from a streamlined workflow and improved data sharing. These capabilities can also reduce costs and complexity associated with data integration and exchange. Furthermore, Software-based solutions also provide a user-friendly and streamlined experience, with clear navigation and interactive features. This can lead to increased user satisfaction and adoption.
Our in-depth analysis of the global market includes the following segments:
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Deployment |
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Enterprises |
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Solutions |
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Industry |
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North American Market Forecast
The payroll and HR solutions & services market in North America is estimated to have the largest share of 41% in 2023, propelled by the increasing adoption of advanced technologies in workplace management. In the forecasted period, businesses are planning to integrate several advanced automation for about 28%, 3D printing at 26%, augmented or virtual reality at 27%, and blockchain technology at 25% to enhance efficiency, traceability, security, and data protection.
APAC Market Statistics
The Asia Pacific payroll and HR solutions & services market is estimated to be the second largest, during the forecast period led by the increase in the demand for remote work along with hybrid work cultures, in which more employees are opting for these remote jobs, and this is fueling the demand for HR solutions and services. According to a report, the global volume of job searches that use the “remote” filter on one of the leading business and employment-focused social media platforms has increased by about 60% from the start of March. Moreover, in Asia-Pacific, the applications for remote jobs are growing as well, showing the increasing demand for remote work among job seekers.
Author Credits: Abhishek Verma
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