Introduction

Multi-Country Payroll Outsourcing (MCPO) is a fast growing segment within payroll outsourcing with a growth rate of over 30% to reach US$0.6 billion in annualized spend. It is a highly oligopolistic market and is currently dominated by only a handful of service providers. However, due to the rapidly growing market, providers are beginning to adopt new strategies to gain market share. While technology and partnerships continue to play an important role, providers are coming up with innovative solutions to maximize their process and geographic coverage. In such a scenario, buyers need to carefully match their own requirements with the providers’ solutions to create an effective and successful engagement. Value-added services, such as mobility, analytics, time & attendance, expatriate payroll, and treasury services, are also gaining importance. Hence, buyers need to look at the provider’s offering spectrum in its entirety to drive maximum cost and business impact for their organization.

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

• MCPO market overview
• MCPO PEAK Matrix 2012
• Key insights on PEAK dimensions
• Areas of differentiation
• Implications for buyers and service providers

Scope of analysis

• Deals that necessarily include “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
• All industries and geographies

Content

This report gives an overview of the market and analyzes the areas in which service providers differentiate themselves. Based on comprehensive Everest Group PEAK Matrix, each of the 10 MCPO service providers are segmented into Leaders, Major Contenders, and Emerging Players. Additionally, this report provides key insights on individual PEAK dimensions and implications for buyers and service providers. Some of the findings in this report are:

• The service provider landscape continues to evolve as a result of new entrants, market exits, and mergers & acquisitions
• Everest Group classifies 10 MCPO service providers on the Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix into the three categories of Leaders, Major Contenders, and Emerging Players
• Although all service providers leverage offshoring to optimize cost, top quartile performers (within delivery footprint dimension) have a better “physical” presence
• Each service provider has a unique sweet spot in terms of its target employee distribution across countries
• MCPO providers continue to leverage different partnership models to provide a global MCPO solution