Expanding Horizons: Why US Payroll and PEO Companies are Embracing Global Solutions to Stay Competitive

Expanding Horizons: Why US Payroll and PEO Companies are Embracing Global Solutions to Stay Competitive

In today’s rapidly evolving business landscape, the demand for global payroll, human capital management (HCM), and employer of record (EOR) services is surging. The global EOR market, with an estimated Total Addressable Market (TAM) of $100 billion, presents a golden opportunity for US-centric payroll, HCM, and PEO companies to expand their horizons and meet this increasing demand. Experts suggest that only 20% of this market is even aware that EOR services exist, highlighting a vast untapped potential for growth and revenue.

The Global EOR Opportunity: $100 Billion TAM Awaits

The global EOR market's staggering $100 billion TAM is a testament to the growing need for international employment solutions. Yet, the majority of businesses remain unaware of the benefits and existence of EOR services. This knowledge gap offers US payroll, HCM, and PEO companies an unprecedented chance to differentiate themselves and capture significant market share by integrating global solutions into their offerings.

For HR leaders, CEOs, and CFOs, the implications are profound. Embracing global mobility and remote work can streamline operations, reduce costs, and attract top talent from around the world. Startups and entrepreneurs, in particular, stand to benefit from the agility and flexibility that global EOR solutions provide.

Case Studies: US Companies Leading the Global Charge

Several US-based companies are already capitalizing on this trend. Namely, a prominent player in the HR software market, recently expanded its partner program to include global payroll support. Jonathan Wall, Namely’s Senior Vice President of Strategic Partnerships, stated, “Two-thirds of Namely clients have international employees, with India, Great Britain, Canada, Australia, and China topping the list." With roughly 1,800 clients, this means approximately 1,200 clients had a global need that was previously unmet. By partnering with global providers, Namely can potentially retain these clients and significantly boost revenue through rev share agreements, even if they capture just 25% of this demand.

Similarly, Paylocity’s acquisition of Blue Marble Payroll and ADP’s expanded collaboration with Globalization Partners showcase how strategic partnerships and acquisitions can enhance global service capabilities. These moves are not just about expanding service offerings but also about staying competitive in a market where clients are increasingly seeking global solutions.

For PEOs and HCM companies, these examples illustrate the importance of adapting to the needs of a global workforce. Providing comprehensive global payroll and EOR solutions can mitigate the risk of losing clients to competitors who already offer these services.

The Strategic Imperative: Building or Partnering for Global Solutions

For US payroll, HCM companies, and PEOs, the call to action is clear: either build your own global solutions or partner with established global providers. This strategy will not only meet the growing demand for global services but also protect against the risk of losing clients to competitors who already offer comprehensive global solutions.

The future is global, and the opportunity is immense. By embracing strategic partnerships and expanding their service offerings, US payroll, HCM companies, and PEOs can ensure they remain relevant, competitive, and poised for growth in the global market.

Call to Action

To remain competitive and meet the growing demand for global solutions, US payroll, HCM companies, and PEOs must either develop their own global services or partner with experienced global providers. The potential for growth and revenue in the global EOR market is too significant to ignore.

In conclusion, the trend is clear: US-centric companies must expand their horizons and embrace global solutions to stay ahead in the competitive landscape. The time to act is now.