- Tags : Finance | Payroll Services | Price tren | Price forecast | Procurement research | Category market forecast
Recent Price Trend - Payroll Services
In the three years to 2017, the price of payroll services has been increasing at an estimated average annual rate of 0.7%. This upturn has been facilitated by an expansion in demand for payroll services, although robust competition in the market has moderated the extent of this growth somewhat.
As the economy has continued to strengthen during the past three years, the number of employees has risen in line with a declining rate of unemployment. A growing number of employees has added to the complexity of payroll, because businesses have had to do more back end work to integrate new workers into their operations. As a result, businesses have been compelled to outsource the administration of payroll to third-party processors, strengthening demand for payroll services. Meanwhile, as low interest rates have created favorable operating conditions for new businesses to raise capital, the number of businesses has increased across the United States. This growth has bolstered demand for services because many of these new businesses have enlisted the help of a provider of payroll services. Ultimately, vendors have raised the price of payroll services to reconcile growth in demand for services, curbing buyer power.
However, high market fragmentation has tempered the magnitude of growth in the price of payroll services. The market has a large number of vendors, and the number of operators has been increasing during the past three years due to low barriers to entry. A strong degree of competition has prompted vendors to compete on price with one another to capture a share of market revenue, keeping growth in the price of payroll services minimal.
Moreover, the level of price volatility has been low during the past three years, further benefiting buyer power. Despite some fluctuations in key price drivers, strong competition between suppliers has moderated how rapidly rates for services have changed year over year. As a result, buyers have been able to budget accurately for purchases of payroll services.
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