Paychex (PAYX.US) is reportedly in advanced negotiations to acquire Paycor HCM (PYCR.US), a smaller competitor in the human capital management (HCM) space.

Data shows that as of Friday's close of the U.S. stock market, Paychex's market capitalization exceeded $50 billion, while Paycor HCM's market capitalization was approximately $3.3 billion.The transaction would merge two of the major players in the human resources software and services market, which is fairly fragmented. By expanding through the deal, Paychex can lower costs when bundling more services to meet the needs of clients who require payroll management, help manage benefits, and onboard new employees.The potential acquisition would be Paychex's largest deal to date. Paychex serves over 745,000 clients in the United States and Europe for human resources, employee benefits, insurance, and payroll services. Meanwhile, Paycor's cloud software automates and simplifies the human capital and payroll management needs of small and medium-sized businesses, according to its website, with over 30,000 clients in 50 U.S. states using its software.