LONDON--(BUSINESS WIRE)--Technavio market research analysts forecast the global cloud-based payroll software market to grow at a CAGR of more than 12% during the forecast period, according to their latest report.
The market study covers the present scenario and growth prospects of the global cloud-based payroll software market for 2017-2021. The report also lists large enterprises and SMEs as the two major end-user segments, of which large enterprises accounted for 54% of the market share in 2016.
According to Amrita Choudhury, a lead analyst at Technavio for enterprise application research, “The major reason for the growth of the market is the need to streamline compensation workflows and data management in enterprises. Cloud-based payroll software consolidates compensation and performance-related data securely in one place and uses advanced analytical tools to drive and report employee reward strategies.”
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Technavio analysts highlight the following three market drivers that are contributing to the growth of the global cloud-based payroll software market:
- Reduction in TCO
- Increasing adoption of SaaS-based payroll software
- Growing demand for automated payroll management
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Reduction in TCO
For traditional on-site security software, TCO includes a high upfront software license cost and software implementation cost coupled with a high maintenance cost. In the case of cloud, cloud vendors are responsible for the implementation, maintenance, updates, and backup of software, thereby reducing the need for internal IT administration.
“In addition, the pricing model of cloud-based payroll software is based on the pay-per-use model, where customers pay according to their use of the services, as opposed to a traditional on-site model that requires a one-time substantial capital investment and ongoing operational costs. Cloud-based payroll software eliminates the need to incur connection-related expenditure because it is offered with a broad range of connection options,” says Amrita.
Increasing adoption of SaaS-based payroll software
Enterprises are deploying software-as-a-service (SaaS)-based payroll software as it is economical and improves the overall efficiency of the payroll management processes. It has made remote access to data and services easier through a web-browser without additional installation and management of application software.
The growing acceptance of SaaS-based payroll can be attributed to its advantages over the traditional payroll process like short implementation time. This reduces implementation cost and improves the returns on investment for end-users. The cloud-based payroll software enables enterprises to reduce time, cost, and errors associated with day-to-day compensation administration, management, and planning.
Growing demand for automated payroll management
The demand for automated payroll management is one of the major drivers of the market. The automation of payroll planning help enterprises to simplify processes and reduce paperwork. It also offers a centralized place for managing all tasks, which saves administration costs and time.
The implementation of cloud-based payroll software is gaining prominence among all size of enterprises because it is helping them to gain greater transparency into rewards and performance of employees. The software enables enterprises to perform total payroll analysis. With the automation of payroll process, enterprises are moving away from manual processes and dealing with cumbersome and error-prone spreadsheets. It also ensures compliance with corporate payroll policies with industry, state, and federal mandates.
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