The payroll services and software industry is considering an upgrade.
Challenges to efficiency
According to Marketplace, the General Services Administration put out a request for federal payroll management solutions to “improve execution and cost efficiency.”
The source noted that current payroll practices can be time- and cost-intensive, and that the GSA is looking for ways to streamline the process.
“You might have a city tax, you might have a county tax, you might have a state tax. And certainly have a federal tax,” explained Michael Fauscette, chief research officer at G2 Crowd, in an interview with the source.
He estimates that the payroll software industry is worth up to $6 billion, the source noted.
“If you’re a small businessman you might spend 5 percent of your salary for the service, ” added Peter Christy, research director at 451 Research.
One solution may be a greater focus on using cloud-based programs and software, noted Tech.co. Using these programs decreases the amount of time spent manually entering repeat data, and easily supports businesses with multiple locations across the globe, helping to ensure accuracy and efficiency in payroll calculation, according to the site.
Many startups are developing cutting-edge solutions to current payroll processing issues. Workday, a Silicon Valley-based startup, provides cloud-based human resources and finance services, including payroll. The company is experiencing rapid growth, with second-quarter revenues rising 34 percent to reach $378 million, according to Silicon Angle. The company recently bought Platfora Inc., a cloud-based business intelligence software, the source noted.
Other types of technology may benefit the payroll services industry as well. A recent report on the payroll and HR software market from Transparency Market Research cited mobile applications and talent analystics as possible avenues for modernizing the industry.