Merger and acquisition activity in the payroll services market was relatively quiet in 2016, with most of the leading payroll providers focusing primarily on organic growth while investing in the development of new and enhanced solutions internally rather than on making big acquisitions.

Also, vendors are continuing to establish strategic partnerships to bolster their delivery network and global reach, driven by demand for multi-country payroll, which NelsonHall's most recent market analysis estimates is growing at three times the rate of the overall market.

For Belgian headquartered SD Worx (and the Payroll Services Alliance, established in 2011 in partnership with Aditro), 2016 saw significant strengthening of its global payroll capabilities through both acquisition and strategic partnerships, as it rolled out its ‘internationalization’ strategy, stated in its 2015 annual report as being critical to the future growth of the business.

During the year, SD Worx made several key additions to its European portfolio and partnerships, including:

• In March 2016, SD Worx acquired Fidelis HR to strengthen its capability and presence in Germany. The acquisition added ~6,000 clients and revenues of €55m and moved SD Worx to 3rd in the German payroll market
• In August 2016, SD Worx acquired Ceridian’s U.K. and Ireland book of business and assets (including its delivery center in Mauritius) and extended its partnership to deliver Ceridian’s Dayforce cloud HCM to European based clients.

While SD Worx will remain the leading payroll provider in Belgium (>50k clients), these acquisitions and partnerships put it in a strong position in both the U.K. and German markets. This, combined with the partnership with Ceridian’s Dayforce cloud HCM platform, means that SD Worx is well positioned to expand its multi-country clients, leveraging its existing client base and the Payroll Services Alliance. SD Worx is also in a good position to take advantage of the growing appetite for outsourcing in other European markets including the Netherlands and France, where it will continue to expand its portfolio.

Key additions in other regions in 2016 were:

• In August 2016, Ceridian U.S. and Canada (ranked 3rd by revenue in North America) was added to the Payroll Services Alliance, providing SD Worx with a strong partner in North America and adding Ceridian’s Dayforce HCM platform to the Payroll Services Alliance network and capability
• In December 2016, SD Worx partnered with Ascender to expand its payroll services geographical reach into Asia Pacific and the Middle East. Identified by NelsonHall as one of the top payroll vendors in Asia Pacific by revenue, Ascender should drive growth for SD Worx in the region and further increase its global footprint.

In the most recent NelsonHall payroll services market analysis, SD Worx ranked 6th by total revenues. And with strategic moves such as these, SD Worx is well positioned to challenge the payroll services market leaders still further for global payroll market share.