Cloud-based Payroll Software Market Outlook - 2023
The global cloud-based payroll software market size was valued at $6,738 million in 2016, and is projected to reach at $10,336 million by 2023, growing at a CAGR of 6.5% from 2017 to 2023. The global market is driven by secured cloud backup of employee data, ease of system enhancements & updates, and advantages over on-premise solutions. However, regulatory compliances and synchronizing domestic HR processes with global HR standards hamper the market growth to a certain degree.
The HR department in an organization is able to track the number of hours that each employee has worked, and this data is utilized for calculating the salary compensation with the effective deployment of cloud-based payroll software. The benefits offered by cloud-based payroll software over on-premises software, such as cost-effectiveness, drive the cloud-based payroll software market growth. Similarly, unlike the on-premise solutions, the initial investments and cost of implementation are much lower for cloud-based counterpart.
Among the end users of cloud-based payroll software market, namely, retail, healthcare, manufacturing, BFSI, and others, the manufacturing sector has witnessed the highest adoption of cloud-based payroll software.
The report focuses on the growth prospects and restraints of the market based on the analysis of regional trends. The study provides Porters Five Forces analysis of the industry to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the cloud-based payroll software market growth.
Key players operating in the global cloud-based payroll software market are ADP, Sage Group, Zenefits Software, Kronos Incorporated, Ascentis HR Software, Oracle Corporation, Paycom Software Inc., Ceridian HCM, Inc.(Morneau Sheppell Inc.), FinancialForce Software, and IRIS Software Group, Ltd.
Segment Review
The global cloud-based payroll software market is segmented based on organizational size, industry vertical, and geography. Based on organizational size, it is bifurcated into large enterprises and small & medium enterprises (SMEs). Based on industry vertical, it is classified into retail; healthcare; manufacturing; banking, financial services, and insurance (BFSI); and others. Geographically, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA, including country-level analysis for each region.
Top Impacting Factors
Secured Cloud Backup of Employee Data
Cloud storage is cost-efficient in storing organizational data. Further, the payroll software vendors provide various encryption tools, including biometric authentication, password protection, and session time-outs, to provide security to the user, database, and the server. Moreover, the federal, state, and local government agencies move their data to the cloud because it provides enhanced information management along with high-speed networks and centralized data storage that enables increased productivity and better data sharing & collaboration.
Ease of System Enhancements & Updates
In case of on-premise solutions, the organization needs to re-deploy the older software version when the vendor releases an updated version of it. Further, after the re-deployment, the organization installs the newer version to avail its new functionalities, customization of which is time consuming. On the other hand, in cloud-based solutions, the vendors initiate the software updates, and initial customization is carried forward through the newer version of the software.
Advantages Over On-premise Solutions
The on-premise payroll solutions often require initial investments for hardware, servers, and power backup. Furthermore, it also necessitates experienced IT personnel for hardware maintenance and handling system functions. However, the cloud payroll infrastructure is maintained and hosted by the server, and the cost of implementation of cloud-based solutions is lower compared to on-premise solutions.
The cloud-based payroll solution operates on a pay-as-you-go subscription model, which makes the planning of payroll processes and HR policies much easier in comparison with on-premise implementation. Cloud-based implementation also enables the import and storage of huge amount of payroll data, tax, and employee details. Hence, cloud-based deployment is cost-efficient and provides a more predictable & flexible budgeting for large enterprises and SMEs.
Key Benefits of the Study:
- This study includes the analytical depiction of the global cloud-based payroll software market along with current trends and future estimations to determine the imminent investment pockets.
- The report presents information related to key drivers, restraints, and opportunities.
- The current market is quantitatively analyzed from 2016 to 2023 to highlight the financial competency of the industry.
- Porters Five Forces analysis illustrates the potency of buyers & suppliers in the global cloud-based payroll software industry.
Cloud-based Payroll Software Market Report Highlights
| Aspects | Details |
 By Organization Size |
|
 By Industry Vertical |
|
 By Geography |
|
 Key Market Players | ZENEFITS SOFTWARE, IRIS SOFTWARE GROUP, LTD., FINANCIALFORCE SOFTWARE, PAYCOM SOFTWARE, INC., ASCENTIS HR SOFTWARE, ORACLE CORPORATION, SAGE GROUP, MORNEAU SHEPELL INC. (CERIDIAN HCM, INC.), ADP, INC., KRONOS INCORPORATED |
Analyst Review
The cloud-based payroll software market comprises a wide number of companies, thus witnessing competitive rivalry. The presence of several multinational vendors is attributable to the fragmented nature of the market. Further, the cloud-based payroll software market growth is expected to remain moderate owing to the number of SMEs that have initiated deployment of cloud-based solutions.
North America has witnessed the highest adoption of this software, followed by Europe, Asia-Pacific, and LAMEA. However, Asia-Pacific is anticipated to witness higher growth rate during the forecast period. In addition, market players have adopted innovative techniques to provide advanced and pioneering offerings.
Currently, large organizations deploy cloud-based payroll software to a higher extent in comparison to small & medium enterprises. However, SMEs are increasingly adopting the software owing to its cost-effective benefits, as cloud-based software has a regular payment mode instead of a high initial investment.
The global cloud-based payroll software market is dominated by ADP, Sage Group, Zenefits Software, Kronos Incorporated, Ascentis HR Software, Oracle Corporation, Paycom Software, Inc., Ceridian HCM, Inc.(Morneau Sheppell Inc.), FinancialForce Software, and IRIS Software Group, Ltd.
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