Introduction

Multi-Country Payroll Outsourcing (MCPO) is a fast growing segment within payroll outsourcing with a growth rate of over 30%. Today, an increasing number of multi-nationals realize that an integrated approach, across multiple countries of operations, has the potential to provide better management insight and control. At the same time, it helps achieve cost reduction beyond single-country payroll outsourcing due to vendor consolidation and “volume discounts”. With the market in the rapid growth phase, it presents significant opportunity for value creation. However, both buyers and service providers need to address inherent complexities to capture the value.

In this research, we analyze the global MCPO across the following dimensions:

• Market overview and key business drivers
• Buyer adoption trends
• Solution characteristics
• Service provider landscape
• Implications for buyers and service providers

Scope of analysis

• Deals that necessarily include the “payroll calculation” subprocess as part of the scope
• Deals including at least three countries in the same region or two countries but in different regions
• Deals wherein services are provided to third-party clients
• All industries and geographies

Content

This report provides a comprehensive coverage of the MCPO market and analyzes it across various dimensions such as market overview and key business drivers, buyer adoption trends, solution characteristics, and service provider landscape. It also provides implications for both buyers and service providers. Some of the findings in this report are:

• Multi-country payroll outsourcing is a fast growing segment within payroll outsourcing. It witnessed an explosive growth of over 30% (CAGR 2008 to 2011) to reach US$0.6 billion in 2011
• North American- and European-headquartered companies drive the MCPO market to cover their long tail
• Buyers typically start regionally and expand over the course of the relationship
• Technology is vital to the MCPO offering. Service providers are investing heavily in various technology fronts
• Increased market maturity and availability of wider options may instigate buyers to look for switching opportunities instead of auto-renewal
• The service provider landscape continues to evolve as a result of new entrants, market exits, and mergers & acquisitions
• Partnerships remain an intrinsic part of providing MCPO services