IBISWorld, the nation’s largest publisher of industry market research, estimates that revenue from the
The industry generates revenue through the sale of new software, software license updates and subscription fees for online applications. Businesses use the software to automate administrative processes, while reducing the risk of litigation and other compliance issues. Companies also use the software to control labor costs, minimize risk and manage personnel.
Despite overall growth, the industry has consolidated, which is a common trend across the entire software publishing sector. With average profit margins of 20.2%, large software companies rely on acquisitions to fine-tune their product portfolios. Software companies have increasingly acquired smaller, niche firms to fill in gaps in their product portfolio. IBISWorld estimates that the number of industry establishments has fallen by 2.9% annually to 106 in the five years to 2011.
In the five years to 2016, revenue for the
Some companies will return to outsourced HR and payroll providers as corporate profit increases. Nevertheless, a rise in the volume of administrative work, necessitated by improvements in the labor market, will increase industry demand over the next five years.
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