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Outlook on the HR and Payroll Software in the US Industry Market

Outlook on the HR and Payroll Software in the US Industry Market

by Joseph ShaheenAugust 21, 2014

Over the five years to 2014, the HR and Payroll Software industry has experienced robust growth according to business research company IBIS World. The industry has benefited from increased private investment in software and the need for businesses to cut costs as a result of the slow recovery following the recession. According to IBISWorld Industry Analyst Leah Goddard, “more companies are now performing back-office duties in-house, including HR and payroll services.” While higher corporate profit will enable companies to outsource more HR and payroll services in 2014, growth in the number of businesses and the level of software investment will continue to bolster industry demand. For these reasons, industry revenue is forecast to increase in 2014.

The industry generates revenue through the sale of new software, software license updates and subscription fees for online applications. Businesses use the software to automate administrative processes, while reducing the risk of litigation and other compliance issues. Companies also use the software to control labor costs, minimize risk and manage personnel. Large software companies rely on acquisitions to fine-tune their product portfolios. Software companies have increasingly acquired smaller, niche operators to fill gaps in their product portfolios. For instance, in 2012, both SAP SE and Oracle Corporation expanded their market share through the respective acquisitions of SuccessFactors and Taleo Corporation. Nevertheless, more software companies are continuing to enter the market through cloud computing to take advantage of rapidly rising demand for HR and payroll software.

Over the five years to 2019, revenue for the HR and Payroll Software industry is forecast to increase. The industry will benefit from increasing investment in software and widespread adoption of the software as a service (SaaS) business model. Using cloud computing, providers license their applications to customers on a subscription basis. “Some companies will return to outsourced HR and payroll providers as corporate profit increases,” says Goddard. Nevertheless, a rise in the volume of administrative work, resulting from improvements in the labor market, will increase industry demand over the next five years.

About The Author
Joseph Shaheen
Editor-in-Chief of the Human Talent Network. Email me news, tips, and questions to [email protected] I blog at, write news and editorials all over the web. HTN is always looking for contributors and talented writers. Reach out to me using the contact form or start your application process right away at

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