Payroll Outsourcing on the Rise: What’s Behind Its Growth?

Payroll, in theory, is simple. You pay the employees on time and it’s a job well done. But a good business leader knows that payroll is a string of complex processes that needs experience and expertise at different stages. With all the challenges that come with working on paychecks, companies are finding cost-efficient solutions in payroll outsourcing, which is now a rapidly growing market projected to reach $22.8 billion by 2027.   

There are several factors that drive the payroll outsourcing market’s growth spree, but we can trace its root to a couple of things: First, the continuous effort to reduce operational costs and enhance existing processes. Second, the rise of new innovations brought about by the aggressive digitization of business, especially when the COVID-19 pandemic forced many companies to adopt remote and hybrid work arrangements. 



By outsourcing payroll, many companies have been able to get the focus they need for core business functions while leveraging certified professionals from a global talent pool at just a fraction of the cost. Outsourcing to experienced providers also makes companies flexible and agile enough to adapt to fast-changing trends in the industry. And when it comes to trends, there is a handful of them that directly boosts the growth of the payroll outsourcing market.


Several factors that drive the payroll outsourcing market’s growth spree

AI and automation

Many businesses are slowly but steadily integrating artificial intelligence and automation in their processes as the technology becomes more and more viable, and payroll processing functions are not exempt from this innovation. Automated payroll has been a cost-efficient solution for companies, but it has given rise to a new breed of high-value roles and skills that one cannot easily find in their region, forcing them to look at the global talent pool through outsourcing. 


Multi-state payroll outsourcing   

The rise of new technologies allowed industries to go global. With companies now operating in different countries, the need for multi-state payroll solutions arose, and the outsourcing industry was quick to respond. Multi-country payroll outsourcing services give companies access to professionals from different countries, who are adept at local payroll dynamics and regulations. An outsourced payroll team also gives companies the luxury of having professionals who can keep track of regulation changes. 


Real-time analytics

Businesses are starting to appreciate the value of leveraging payroll analytics in their growth. Insights from payroll data allow companies to create sound strategies for financial decisions, staff training, tax liabilities, and more. But an in-house payroll team can’t efficiently do analytics alone, which is why companies are now looking at outsourcing payroll analytics for privileged access to additional practitioners, information, and constructive insight from industry experts. 


Data security   

The level of data security can provide is only as good as the technology it uses. But the best data security system often comes at a cost. Outsourcing payroll has allowed companies to access robust IT security technologies to secure sensitive business data, which comes as a part of the package when they create an outsourced team. The need for enterprise-grade data security systems has been a key driver of growth in the payroll outsourcing market. 


Integrated management platforms  

Among the recent innovations in payroll are integrated management platforms, which allow employers and employees to seamless communicate, manage salaries, request or approve adjustments, and more. The peace of mind that comes with the transparency of integrated management platforms reduces payroll issues and improves employee satisfaction. Integrated management platforms are among the technologies companies get when they outsource payroll functions. 


Outsourcing to the right payroll outsourcing provider

Outsourcing payroll has more benefits than you can imagine, but in order for it to work, you got to drill down all your needs and requirements and find the right partner that can provide the best solutions for your specific problems. Are you outsourcing mainly to reduce overhead costs or are you outsourcing mainly to meet surging demands? The level of detail you put in sharing your pain points will reflect the efficiency of solutions you get.   

When looking for a provider, you may want to start with the top outsourcing destinations. The Philippines, for example, has a talent pool deep enough to support any business no matter the size. Providers in the Philippines also follow modern outsourcing models that allow a company to get customized services and solutions to suit their needs. Compared to other markets, the Filipino workforce is widely perceived as the best when it comes to communication and adaptability.


READ MORE: Outsourcing in the Philippines: A Guide for Businesses


outsourcing to the right payroll outsourcing provider


If you are interested in payroll outsourcing, we made this list of reasons why most companies tap the help of providers. If you think you have similar reasons in mind, then now is most likely the time to consult an outsourcing partner. 


Emapta is an Australian-owned and managed offshore staffing platform operating across the Philippines, Singapore, Sri Lanka, Malaysia, and Vietnam. We provide customizable business staffing solutions to solve the specific pain points of our clients. With over a decade of experience in the industry, we also have access to a wide range of highly skilled professionals that can help your company grow and compete in the market.