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HRTech for the 2020 Workforce
SHRM defines small businesses as those with less than 350 employees. For these small businesses with an “HR Department of One” the need for HR Services beyond payroll includes most commonly human capital management, labor costing reporting and financial management, eRecruiting and employee screening, time tracking, WFM (workforce management), and expense management.
To meet the demands of the 2020 workforce, HR platforms must evolve to include:
The market for HR Technology in North America is approximately 110,000 middle market companies ($10 million to $250 million, with 50 to 10,000 employees), more than one (1) million small businesses (SMBs with <$10 million, and <100 employees), plus the enterprise market, and plus government entities. And annually, more than 200,000 small businesses change their payroll provider based on public company customer churn / loss turnover analysis. W
The goal of HR technology has evolved to include automating and standardizing personnel administration, coordinating the human aspects, and measuring and analyzing it all. To satisfy customer demand, payroll and staffing providers must move beyond basic payroll services to offer HCM (Social,eLearning, etc. )and HRMS technology as well as both HRO services and FAO (Finance & Administration) outsourcing services (primarily time tracking, scheduling, and expense management). In summary, a shift has occurred from historically only managing “employee transactions” to greater return on investment.
While the payroll market for small businesses with less than 50 employees is highly competitive (“red ocean”) between several different vendor types; there are approximately 175 payroll outsourcing players with significant, meaningful revenues ($10M or greater annual recurring non “pass-through / non-reseller revenues) in North America. For multinationals and global organizations there are more than a dozen global payroll service providers with North American operations. Regional and industry specific providers do exist.
In addition to local accounting firms, insurance, and banks, which are increasingly choosing to be referral sources and turn to private-label partners for payroll services, the landscape can be categorized into the following primary buckets of competitive players:
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