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Multi-country Payroll Outsourcing is Growing|
- By CXOtoday Staff, May 25, 2009 1733 hrs IST
- Tags : Everest Research, MCPO, HR,
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According to Everest Research Institute, multi-country payroll outsourcing (MCPO) is ahead of other, standalone multi-country HR processes outsourcing markets on the maturity curve. The research said that MCPO has registered a growth of 49%
A new study HRO Market Update: Multi-Country Payroll Outsourcing (MCPO): A New Approach to an Old Problem by the Everest Research Institute said that multi-country payroll outsourcing (MCPO) is fast emerging, ahead of other, standalone multi-country HR process outsourcing markets on the maturity curve.
MCPO grew from $91.5 million to $202.9million, registering a 49% growth. By comparison, multi-country HRO grew only 12% during the same period, up from $1055.3 million to $1313.2 million. The study analyzed 84 multi-country payroll deals signed as of December 2008, where 3,000 employees or more were covered.
According to the study, the key business drivers leading to increasing adoption of MCPO among MNCs included cost reduction, compliance, improving management control & insight, vendor consolidation, expansion into newer geographies and technology rationalization.
While there are suppliers who cover more than one market, only a few have adequate country coverage across all regions. We have seen more and more suppliers creating partnerships with ERP providers to offer single platform-based MCPO in a pay-as-you-go pricing model, said Gaurav Gupta, principal & country head of Everest Group.
We have witnessed entry of offshore-led suppliers like Infosys, TCS, and Caliber Point, to offer a combination of ERP capabilities along with a global sourcing delivery model. In 2009, we expect to see more such suppliers to enter the market, said Gupta.
According to the study, suppliers can use any of the three outsourcing models for payroll that include technology, selective and comprehensive or a combination thereof.
MCPO helps buyers gain control and visibility into their regional payroll cost and headcount information at a palatable cost, said Rajesh Ranjan, research director (HRO) of Everest Research Institute.
Buyers in manufacturing and financial services sector remain the leading adopters of MCPO.
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