Multinationals Increasingly Outsourcing Payroll Services for Overseas Locations, According to Everest Group Study

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Multi-Country Payroll Outsourcing (MCPO) Market Saw Explosive Growth of Over 30 Percent CAGR from 2008 to 2011

Rajesh Ranjan, vice president, Everest Group

Rajesh Ranjan, vice president, Everest Group

While we expect the MCPO market growth to remain strong, we’re still in the midst of a weak economic climate that is prompting buyers to leverage a phased adoption approach.

North American companies propelled the Multi-Country Payroll Outsourcing (MCPO) market that saw explosive growth of over 30 percent CAGR growth from 2008 to 2011, a growth rate expected to be in the high 20s through the next few years, according to a new market study by Everest Group, an advisory and research firm on global services. The firm’s report, Multi-Country Payroll Outsourcing – No Longer a Pipe Dream, examines the MCPO market’s key business drivers, buyer adoption trends, solution characteristics, service provider landscape and implications for buyers and service providers.

Everest Group estimates the MCPO market at US$600 million and projects buyer adoption could boost the market up to as much as $1.3 billion by 2014.

“Multinational companies are increasingly adopting MCPO to cover their operations in the Asia Pacific and EMEA (Europe, Middle East and Africa),” said Rajesh Ranjan, vice president, Everest Group. “While we expect the MCPO market growth to remain strong, we’re still in the midst of a weak economic climate that is prompting buyers to leverage a phased adoption approach. While phased adoption offers the flexibility to implement third-party payroll in one region then expand to include another, the downside is loss of volume discounts that could be gained with a larger contract.”

The report analyzes MCPO deals that necessarily include the “payroll calculation” sub-process as part of the scope, include at least three countries in the same region or two countries but in different regions, consist of services provided to third-party clients and include all industries and geographies.

Other report insights about the MCPO market include:

  • North American- and European-headquartered companies drive the MCPO market to cover their long tails.
  • Latin America is the next frontier to be addressed from a MCPO perspective. While the buyer demand is high, there are limited robust options available in this region currently.
  • Technology is vital to the MCPO offering, thus service providers are investing heavily in various technology fronts.
  • Multiple technology models are at play. Multiple factors, including employee population distribution, influence the choice of a technology model.
  • Increased market maturity and availability of wider options may instigate some buyers to look for switching opportunities instead of auto-renewal in their second generation considerations.

The key demand drivers of the market are cost reduction, improved management control, risk management and compliance and business expansion.

Service providers covered in the analyses are ADP, Celergo, GlobalPay, HCL, Infosys, Neeyamo, NorthgateArinso, Patersons, SafeGuard World International, Talent2 and Tata Consulting Services.

“The service provider landscape continues to evolve as a result of new entrants, markets exits and mergers and acquisitions,” said Ranjan. “Partnerships remain an intrinsic part of providing MCPO services.” A detailed analysis of the MCPO service provider landscape, including the MCPO PEAK Matrix, will be published in the upcoming reports.

For more information about the report, Multi-Country Payroll Outsourcing – No Longer a Pipe Dream, or to inquire about other research services, please visit, email info(at)everestgrp(dot)com or call +1-214-451-3110.

About Everest Group
Everest Group is an advisor to business leaders on the next generation of global services with a worldwide reputation for helping Global 1000 firms dramatically improve their performance by optimizing their back- and middle-office business services. With a fact-based approach driving outcomes, Everest Group counsels organizations with complex challenges related to the use and delivery of global services in their pursuits to balance short-term needs with long-term goals. Through its practical consulting, original research and industry resource services, Everest Group helps clients maximize value from delivery strategies, talent and sourcing models, technologies and management approaches. Established in 1991, Everest Group serves users of global services, providers of services, country organizations and private equity firms, in six continents across all industry categories. For more information, please visit and

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