The Payroll and HR (Human Resources) departments in organizations coordinate various functions like salary hikes, bonus payments, recruitment, benefit deductions, firing employees and vacation leaves. They also need to maintain data that is confidential in nature like employee information, home addresses, financial data and social security numbers. They need to take care that such confidential information is not accessed by unauthorized companies or individuals. The payroll and HR software is a fully integrated functionality that enables the payroll and HR department to operate, access, manage and process organization’s various payroll and HR functions. It also helps decision makers to gain a clearer insight of organization’s resources even in turbulent situations. The various modules in the software are customized depending upon the needs of organization and minimizes the amount of time spent on the administration work by the staff members. It helps manage everyday tasks more effectively, reduce duplication in work and make reorganization changes quickly and effectively.
Each organization has its own specific needs. The payroll and HR software market can be segmented depending on the size of businesses as small size, medium size and large size organizations. In small businesses, where the employee size is up to 50, every employee plays an important role in contributing to the company’s revenue. Even one unproductive employee can have a huge impact on the bottom line of the business organization. For this purpose, payroll and HR department need to be properly managed to avoid any unpredictable circumstances.
The payroll and HR management software is customized to cater to various small business functions like performance measurement, time and attendance tracking, and compensations and retirement plans among others. In medium size businesses, the employee size ranges from 50 to 500 employees. The requirements in these organizations are similar to small size businesses but the software is customized to perform additional functions like recruitment which includes hiring and retaining potential talent, and securely streamlining administrative load by simplifying payroll administration. For business organizations with employee size greater than 500, the software is customized to manage risks and contain related costs, production and distribution of pay statements and banking services.
As the global economy is improving, companies are looking for latest software solutions that can cut down costs of upgrading systems every year. New user interfaces like mobile applications which enable carrying out operations outside office premises and other features like integration with the existing systems in the organization is driving the market for payroll and HR software market. Also, the payroll and HR is a data driven function and the need to create talent analytics for taking talent related decisions and workforce planning is driving the market for payroll and HR software market. Another driver is the ability to provide customized solutions considering the current workforce dynamics. Companies prefer to invest in these customized solutions as these are affordable and improve various functions like hiring and retaining talent. However, challenges like understanding the technical requirements of organizations and integrating various modules of software to perform various functions are some constraints affecting the growth of this market.
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