NelsonHall’s recently published Payroll Outsourcing market analysis reveals that the Asia Pacific market is forecast to grow at 11% CAAGR to reach $1.2bn by 2020, which is approx. twice the rate of the overall market. Along with Latin America, APAC is the region seeing the highest growth, with increasing demand for outsourcing solutions in relatively immature markets. Growth is also due to demand for multi-country payroll in these regions, together with an increased focus on compliance. It’s therefore no surprise that half of all the vendors included in our market analysis are targeting clients in APAC.

APAC is typically supported from service delivery centers in Manila, India or China. China is becoming increasingly popular as a delivery location, not only for onshore clients but also for nearshore clients based out of Japan.

One of the leading vendors in the region, achieving double-digit growth, is Excelity Global, which has delivery locations in Singapore, India (Bangalore, Gurgaon, Noida, Hyderabad, Pune, Chennai, Mumbai), China (Shanghai, Beijing, Shenzhen) and the Philippines. In addition, China is also used as a nearshore center for all Japanese service delivery.

Growth in APAC is evidenced by a wealth of market activity from Excelity and several other vendors, including:

• Excelity onboarded a number of new countries including Bangladesh, Macau, Cambodia and Pakistan in 2016. Excelity will focus on expanding its presence in Malaysia, Japan and Australia
• Neeyamo provides payroll globally from six  global delivery centers including four delivery centers in India (Chennai, Pune, Gurgaon and Madurai), with an additional presence in Manila and Mexico. Its APAC clients are typically supported through the service centers in India and Manila as well as in-country presence. Neeyamo has also created a niche for itself in long tail country support. Neeyamo’s partner network enables it to support payroll services in ~100 countries
• Ramco began offering managed payroll services to China, Australia and New Zealand in 2015, and will continue to develop its presence in the ANZ market. Following recent wins in the Philippines, Ramco is expected to build a delivery center in the region
• MHR has opened legal entities in Australia to support growth in its international business in 2015/2016
• NGA HR is looking to develop its Australian market share by leveraging its onshore service center in the region
• Infosys is continuing to build its presence in the ANZ and APAC region, where it has recently won new clients
• Ceridian is looking to expand its presence in ANZ
• ADP, the leading provider in the region by revenue, has service centers including in India, Singapore, Philippines, China, and Australia
• TMF Group acquired KCS Group in 2014, a leading business services provider in Asia, significantly increasing its scale across APAC, with growth plans including China, India, and Hong Kong.

Vendors will continue to invest in developing cloud technology solutions to address the growing demand from the APAC market. For example, Excelity’s first cloud services product, Payroll on Demand, was launched in Q2 2016 – and it will be launching a fully unified regional payroll platform and SaaS capability in eight additional APAC countries in 2016, including Australia, New Zealand, Taiwan, and Japan.

With the evolution of its cloud-based payroll offering, Excelity has the chance to make further inroads into organizations needing a payroll solution initially in single country. As its experience and product offering strengthens over time, with localized client wins, Excelity is likely to gain multinational clients seeking a standardized payroll platform across the entire APAC region. Excelity’s certified partner relationship with Workday will help to accelerate its growth, particularly given Workday’s roadmap to increase its own APAC presence. Its cloud payroll offering will appeal to fast-growing companies due to its relatively low cost and quick implementation times.