While the respondent population is diverse, one of the consistent and overarching trends our survey shows is the transition from outsourced payroll services to in-house operations. Since our last survey in 2015, the percentage of surveyed companies indicating that their payroll organization is currently serviced in house has risen eight points, from 30% in 2015 to 38% today. At the same time, the number of companies with fully outsourced payroll service models has decreased by seven percentage points, from 26% in 2015 to 19% today. While generally consistent to previous years, it is important to note that despite a shift in-house, the largest segment of respondents still opt to balance operations across a combination of internal and external resources.
Looking at the division of in-house versus outsourced services, it appears that organizations are moving toward a model of commoditization of payroll services, with core data and administrative services staying inside, while post-payroll processing and payroll system maintenance are left for third parties to manage.
As companies shift their operations and service delivery models, they are seeing new benefits emerge. At the same time however, standardization of global payroll delivery has become a growing concern. Only 32% of organizations believe that their payroll processes are fully or very highly standardized globally, versus 68% in 2013.