What is Driving The Steady Growth of The Global Payroll Market?
According to a new study, the answer is increased automation and the rise in demand for AI-powered solutions. Or, in other words, areas in which Papaya Global excels.
Rivka Abramson| Sep 07, 2023
- The global payroll market, currently estimated at USD 98.5 billion, is projected to reach USD 133.69 billion by 2028.
- One of the key growth drivers is the increasing automation of HR processes, which streamlines operations, reduces manual efforts, and enhances overall efficiency.
- The proliferation of AI-powered solutions is another area of growth, as businesses seek innovative ways to optimize their payroll and payments processes.
For the longest time, most companies viewed payroll as a purely administrative process – a tedious task that involves much manual work, nothing more. In recent years, though, market sentiment has changed. Enterprises are beginning to see global payroll for what it really is: an intricate operation that requires the highest level of precision – and the only aspect of business that impacts all workers regularly and in a meaningful, even intimate way.
This change in attitude is reflected in the numbers. According to a new report by Research and Markets, the global payroll market, currently estimated at USD 98.5 billion, is projected to reach USD 133.69 billion by 2028, growing at a CAGR of 6.3%.
Multiple factors are shaping the global payroll market’s trajectory. The first growth driver, notes the report, is automation. “Payroll automation is more than just a software program that calculates gross to net payroll,” said Kimberly Wise, Senior Manager of Global Payroll Operations at Lockheed Martin, a global security and aerospace company. “It is about optimizing payroll delivery through end-to-end process threads that eliminate unnecessary handoffs, enable seamless transfer of data, and minimize manual effort.”
The ultimate connector
Papaya Global, the world’s leading payroll and payments platform, embodies the spirit of optimization via automation. It starts with our HCM cloud connector. Many global companies prefer to avoid payroll migrations because integrating HR data is a long, frustrating process that often fails. That’s why we built a universal HCM connector that allows you to integrate data from any system in an hour (!) and connect it all under one dashboard, which functions as the heart of your payroll operations.
Our numbers speak louder than words:
- 90% decrease in data implementation processing time
- 30% reduction in payroll processing time
- 95% decrease in manual data syncs
- 45% increase in cycle efficiency
Once the data is integrated and consolidated, Papaya’s automated accuracy engine comes into play. It sends alerts when salary updates are due, if there’s missing information, before the payroll cutoff date; runs audits in no time; catches errors at the earliest possible point; and, perhaps most importantly, provides peace of mind, knowing that your global payroll will always be complete, accurate, and consistent.
Completing the automation picture is Papaya’s unique PayTech. When payroll payments are outsourced, as is the custom among payroll providers, the payroll process can never be fully automated end-to-end. There is always a manual handover – data needs to be transferred and reconciled – between the payroll provider and the payment service provider. Papaya OS, the first global payroll technology with embedded payments, is the only platform that ensures end-to-end automation.
Pay the AI way
The second major growth driver, according to the ”Global Payroll Market (2023-2028)” report, is the rise in demand for AI-powered solutions. Using AI is particularly prevalent in the payments space. Some of the main use cases of AI in PayTech are services related to cross-border payments, such as Know Your Customer (KYC), Anti Money Laundering (AML), and other fraud detection processes.
Papaya Global was one of the first payroll and payments companies to jump on the AI train. Papaya’s platform leverages AI to perform KYC and AML processes for each new client and each worker being paid via our system. In addition, we run rigorous screenings for every payment, every cycle, to keep employees’ data and clients’ funds safe.
Another risk to clients’ funds is the foreign exchange market. In a corporate treasury risk management survey conducted by HSBC, 57% of CFOs (rising to 77% in EMEA) reported a drop in earnings due to unhedged FX risk. The past couple of years, characterized by geopolitical tension and rising inflation, added volatility to the global FX markets. It should come as no surprise, then, that according to Deloitte’s 2022 Global Corporate Treasury Survey, FX volatility remains a top 5 challenge for organizations.
Thankfully, AI-driven tools are rapidly transforming FX risk management. The FX market produces large amounts of data, such as price changes, economic indicators, and news events’ impact. AI algorithms can analyze this data, spot patterns, trends, and correlations invisible to the human eye, and accurately predict FX rates.
That’s precisely how Papaya’s transfer processing algorithm works. And since our PayTech relies on payroll-dedicated rails that ensure speedy delivery, payments are made at the last possible moment, giving the transfer processing algorithm maximum time to generate a prediction that reduces currency conversion costs to a minimum. With solutions like this, no wonder the global payroll market is booming. To learn more from our experts, schedule a demo and we will answer all your questions.