As the unemployment rate declines and businesses increase hiring, demand for payroll services will rise.
Los Angeles, CA (PRWEB) June 21, 2014
Payroll services have a buyer power score of 4.0 out of 5, indicating higher buyer negotiating power. This score largely reflects a highly competitive market with low volatility, benefiting buyers. In the three years to 2014, this market's average price of services is expected to increase. This marginal price increase is largely the result of slow improvement in the labor market tempered by persistent competition among market players. “Prices are projected to rise at a slightly faster rate in the three years to 2017 as the unemployment rate continues to decline and business formation increases,” says IBISWorld business research analyst Pierre Dessertenne. Nevertheless, buyers are not encouraged to rush into agreements because market prices are forecast to rise during the three years to 2017.
Payroll service providers have low barriers to entry and few capital costs. Consequently, there are a large number of vendors in the market, which benefits buyers because they can shop around for a company that fits their budget and service needs. Price competition reduces prices; however, the profit margin for payroll service providers is lower than that of most companies in the professional, scientific and technical services sector. “Ultimately, this factor reduces bargaining power when it comes to negotiating rates, so buyers might have better luck bargaining for value-added services rather than lower rates, such as tax-filing and time-keeping services,” says Dessertenne. Another factor that reduces bargaining power is the low availability of substitute goods. This factor reduces buyer negotiating power as buyers' only other alternative is to bring payroll responsibilities in house or opt for a more costly professional employer organization (PEO) arrangement. Major vendors include Adams Keegan Inc., Automatic Data Processing Inc., Ceridian Corporation and G&A Partners. For more information, visit IBISWorld’s Payroll Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of payroll services. Companies that provide payroll services collect information on hours worked, pay rates, deductions and other payroll-related data from buyers. The collected information is used to generate paychecks, payroll reports and tax filings. Although companies that offer payroll services do not specialize in providing auditing and tax preparation, basic bookkeeping services are also included. This report does not include companies that offer standalone payroll software.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.