Payroll Outsourcing Services Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Every organization and its procurement team look forward to negotiating the best deal while procuring a set of products or subscribing to services. Rate benchmarking involves price/cost comparison of more than one set of products/services to analyze the most efficient combination that can potentially help the procurement team in getting the optimum rate.

Gusto, a prominent payroll outsourcing service provider, charges a base price of USD 39.5 per month, and an additional monthly fee of USD 5.9 per employee. Paychex, another leading payroll outsourcing service provider, charges a base price of USD 38.5 per month, and a variable additional fee based on size and needs of the buyer.

In another instance, Rippling, a leading payroll outsourcing service provider, charges a base monthly fee of USD 34.5, and an additional monthly fee of USD 7.9 per employee. Justworks, a prominent payroll solutions provider for small businesses, charges a fixed fee of up to USD 98.5 per month for up to 48 employees, and a fixed fee of up to USD 88.5 per month for over 49 employees.

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Labor cost is one of the key components of the total incurred costs while offering a product or service. Therefore, an organization must decide on whether the focus category should be retained in-house or outsourced if the organization is providing its products or services at competitive prices. If the organization decides in favor of outsourcing, it must understand the difference in the salary structures of suppliers before selecting a supplier and formulating a negotiation strategy.

According to our research, Payroll Manager working in the western coast (such as San Fransico, San Deigo) of the U.S. receives a 5% - 10% higher base salary compared to the salary received by Payroll Manager working in the eastern coast (such as New York, Boston) of the U.S. However, the year-on-year increment rate in all these companies majorly depends on the Key Result Areas (KRAs).

Organizations may find it cumbersome to continuously track all the latest developments in their supplier landscape. Outsourcing the activities related to gathering intelligence allows organizations to focus on their core offerings. At this juncture, our newsletter service can help organizations stay updated with the latest developments and innovations and subsequently assist in preventing disruptions in the supply chain. We have identified the following developments within the Payroll Outsourcing Services category over the last two years:

In November 2023, RSM CZ a.s. announced the acquisition of Alfa Software. This acquisition will provide RSM with Alfa’s extensive client base of over 1,999 clients and will support it in entering new segments. In addition, the acquisition will turn RSM a stronger player in HR & payroll management space, serving the Czech’s market and expanding its portfolio covering public authorities, hospitals, preschools, and schools.

In August 2023, ADP, Inc. announced acquisition of Honu HR, Inc. DBA Sora (Sora). The acquisition is helping ADP in automating complex HR processes and turning it simpler. ADP can now help its clients in decreasing the amount of time they spend on manual processes and give them insights that will drive business outcomes and give their workers meaningful experiences by combining Sora's user-friendly platform with ADP's complete HCM solutions and data expertise.  

In April 2023, Payroll Software & Services Group Limited (PSSG) announced the acquisition of direct payroll business of Essential Payroll. With this acquisition, PSSG can now expand its outsourcing services and serve a larger market while also improving its product offering. In addition, the company has effectively increased the size of its clientele as well.