IDC Forecasts U.S. Spending on Discrete Payroll Services Will Reach $13 Billion in 2008

FRAMINGHAM, MA – November 23, 2004 – The market for payroll services in the United States is mature and robust, with several clear leaders in terms of market share. Despite competitive pressures coming from all corners, IDC forecasts the market for discrete payroll services to stay strong with growth of 6.3% annually through 2008.

"The U.S. market for payroll services has rebounded nicely from the doldrums of 2002 and is currently experiencing moderate growth, although the market has seen some consolidation," said Lisa Rowan, program manager for HR Management and Staffing Services at IDC. "Payroll service providers have an opportunity to grow their businesses through the pursuit of several strategies, including offering a broader array of services and convincing their clients to adopt their newer technology platforms. They also should look to the possibility of offshoring transaction processing to lower their costs."

The drive to outsource payroll will continue to grow across organizations of all sizes as in-house systems become more expensive to maintain. However, IDC expects growth in HR business processing outsourcing (BPO) will have an impact on discrete HR-related functional outsourcing through 2008, especially with midmarket and large clients. Best-of-breed providers of payroll services will need to examine and plan for how they will fit into the newer BPO market.

IDC's new report, U.S. Payroll Services 2004-2008 Forecast and Analysis (IDC #32204), examines the competitive landscape and provides a five-year forecast for the U.S. market for payroll services. The document presents key market drivers, macroeconomic factors and risks and opportunities in the payroll services market. The study concludes with recommended strategies for taking advantage of these opportunities.

To purchase this document, call IDC's sales hotline at 508-988-7988 or email

About IDC

IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

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