Remote Work Infrastructure

Distributed workforces require new solutions for office operations, HR, payment, and more.

Overview

Not long ago, remote work was a disruptive new phenomenon of the modern working world; today, it’s a standard component of nearly every industry, and the traditional office space has been transported to anywhere in the world with access to a laptop and an internet connection. With the outbreak of the Covid-19 pandemic, the already trending remote work movement has accelerated sharply, subsequently altering the conversation around productivity best practices, team structures, workplace culture, and business models. Remote work infrastructure tools are vital for efficiently managing payroll, employment, benefits, and employee engagement in distributed teams. They ensure accurate payroll processing, handle tax compliance, and manage various employee benefits.

Industry Updates

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Market Sizing

Global market size for remote work infrastructure tools could reach USD 4.0–6.2 billion by 2028

Conservative case

USD 0.0 Bn

Base case

USD 0.0 Bn

Expansion case

USD 0.0 Bn

Market Mapping


A majority of the incumbents feature in the integrated HRM, payroll, and benefits as well as the integrated performance and engagement segments. This includes large players such as Workday, SAP, Paycom, and Paylocity. With a handful of startups in the growth stage, Oracle corporation is the only incumbent in the intranet platforms segment. The pure play payroll and benefits segment is occupied by CloudPay and Clune Technology Group and mostly includes early-stage disruptors.

Many disruptors in the integrated HRM, payroll, and benefits segment are quite mature and, therefore, a large contingent is in the growth stage. The integrated performance and engagement segment features the largest group of seed-stage companies, as the use of cloud-based employee engagement and performance software has received increased attention since the Covid-19 pandemic. Meanwhile, the EOR/PEO segment has the smallest number of startups that are primarily in the growth stage offering contingent workforce management solutions.

Incumbents
Growth
Early
Seed
Pre-Seed
Integrated HRM, Payroll, and Benefits Platforms
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EoR/ PEOs
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Integrated Performance and Engagement Platforms
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Pure Play Engagement Platforms
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Pure Play Payroll and Benefits Platforms
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Intranet Platforms
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Symmetrical.ai
Symmetrical.ai
Symmetrical.ai
Symmetrical.ai
Symmetrical.ai
Symmetrical.ai

The Disruptors


Companies in the Integrated HRM, payroll, and benefits segment account for most of the funding in the space. Established companies such as Gusto and Deel lead the segment in funding among private players with USD 746 and USD 679 million, respectively. Meanwhile, the integrated performance and engagement segment accounts for the majority of startups. Culture Amp and Personio lead the segment in terms of funding among private companies. Intranet platforms funding is led by Staffbase and LumApps. 

Moreover, addition of AI and generative AI (GenAI) features have improved digital payroll and engagement platforms by automating tasks and providing personalised insights.

Funding History

Competitive Analysis


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Product Overview
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Incumbents


The incumbent players in this space are well-established companies that have been providing human capital management (HCM) solutions for decades. All incumbents have a strong track record of establishing fully-fledged offerings. They also offer a diverse range of solutions, with a variety of customizable packages that cater to businesses of all sizes. All incumbents offer a cloud-based solution similar to those that up-and-coming startups offer. 

Incumbents like SAP, ADP, and Paychex are leading in the Remote Work Infrastructure space by offering comprehensive solutions for payroll, HR management, and employee engagement. They provide robust platforms that support remote workforces with tools for seamless communication, accurate payroll processing, and effective performance management.

In House Development
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Investment
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Notable Investors


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Market Sizing

The total global addressable market size for infrastructure tools is estimated at ~USD 21 billion

The total addressable market (TAM) refers to the total revenue opportunity available for a product or service, while the actual market is the market size based on revenue projections.
The infrastructure tools market comprises two main segments: 1) payroll/benefits platforms, and 2) analytics platforms, which have been sized separately. Our market size calculation does not include intranet platforms; adding these should provide further upside to our estimates. 
Our global TAM estimate stands at USD 21.2 billion. The total actual market size for infrastructure tools is estimated at USD 2.5 billion in 2023, implying a penetration rate of 13.5%. This is expected to grow at a compound annual growth rate (CAGR) of 15.4% through 2028 to reach USD 5.1 billion, reaching a penetration level of 24.1%.
In our scenario analysis, our conservative case assumes a reduction in work-from-home policies as economic activity rebounds and a decline in the use of external independent contractors. In this case, we expect the actual market to grow to USD 4.0 billion by 2028, implying a market penetration rate of just 19.1%.
Our expansion case assumes a CAGR of 19.9% to reach USD 6.2 billion by 2028, driving market penetration to 29.1%. This scenario is driven by a more permanent transition to project-based work and an increased focus on remote work, which could expand the earnings potential of payroll-related tools. Additionally, incorporating Generative AI features into these tools is anticipated to enhance platform offerings.
In general, we believe the market penetration rates for infrastructure tools are lower than those for remote work tools, and the 2028 penetration rates of 19.1%–29.1% are roughly half of our expectations for remote work tools. This is in part because remote work tools have been around longer—the two largest industry players have each operated for 12+ years versus 8–9 years on average for major infrastructure disruptors.
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