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The human capital management (HCM) solutions market is estimated to grow at a CAGR of 8.45% between 2022 and 2027. The size of the market is forecast to increase by USD 11,195.8 million. The growth of the market depends on several factors, including the demand for automated recruitment processes, increasing demand for unified solutions for all HR functions, and increasing workforce diversity.
This report extensively covers market segmentation by application (core HR, talent, and workforce), component (solution and service), and geography (North America, Europe, APAC, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The increasing demand for unified solutions for all HR functions is notably driving market growth, although factors such as increasing workforce diversity may impede market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The increasing demand for unified solutions for all HR functions is notably driving market growth. With the increased adoption of digital technologies, most companies prefer unified solutions for all HR functions. HCM solutions offer software solutions that help streamline the entire HR process of an organization. They automate payroll, recruitment, performance review, onboarding, training, time and attendance management, strategic planning, and operation control processes.
HCM provides a single platform for all activities, thereby reducing the complexities of the HR process. It unifies and manages all HR functions without any glitches, as it works on a single platform. It also allows users to share information with software such as ERP, which helps in the easy management of the inventory. Furthermore, HCM solutions are even preferred by financial and banking companies, thereby making their business processes less complex. For instance, the banking, financial services, and insurance (BFSI) industry in India is using HCM solutions to decrease the complexities of HR functioning. Hence, these factors will drive the global HCM solutions market during the forecast period.
Increased demand from SMEs is an emerging trend in the market. For most SMEs, time, user adoption, and money are the major constraints. Hence, companies seek optimal HR solutions. With advances in technologies, HCM solutions of various price levels are available for SMEs. The adoption of HCM solutions and the use of advanced HR solutions help organizations increase their competitive edge. For instance, companies can hire better-quality candidates in shorter time periods than their competitors.
The major advantages of using HCM solutions for SMEs are global workforce management, staffing and hiring, payroll processing, training and education, performance management, employee self-service, and business intelligence. These benefits are expected to lift the demand for HCM solutions during the forecast period.
Increasing workforce diversity is a major challenge impeding market growth. Owing to technological developments, the preference for digital technologies has increased. Hence, various open-source software solutions are posing stiff competition for HCM solutions. Multiple companies offer on-premise and cloud-based open-source software for HCM solutions. For instance, Sapplica offers an open-source HRMS software called Sentrifugo, which can be configured to meet organizational needs. The software offers various features, such as human resource management, performance appraisal, analytics, background checks, leave management, talent acquisition, expense management, and assets management. Thus, the availability of open-source HCM software will become one of the major challenges for the global HCM solutions market during the forecast period.
Furthermore, some companies offer separate software for HR functions, such as recruitment and performance appraisal. This can become a source of severe threat to HCM solutions during the forecast period. As the cost of HCM solutions is high, several micro and small-scale enterprises prefer open-source products, which are freely available on the internet. Thus, factors like these will be a major challenge for the growth of the global market during the forecast period.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Human Capital Management (HCM) Solutions Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Asure Software Inc. - The company offers cloud-based human capital management software and services. The key offerings of the company include human capital management solutions.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the core HR segment will be significant during the forecast period. Core HR functions include employee recruitment, employee training, payroll, scheduling, benefits administration, internal relations, and safety and compliance.
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The core HR segment was valued at USD 10,553.77 million in 2017 and continued to grow until 2021. Core HR applications under HCM include basic HR responsibilities. The adoption of digital technologies in organizations, coupled with the need for cost reduction and efficient workforce management, will increase the demand for HCM solutions for core HR applications during the forecast period. Oracle Corp. (Oracle), SAP SE (SAP), and Workday Inc. (Workday) offer various HR functional software solutions, which help in managing basic information about employees and process data for future reference. These systems increase the efficiency of organizations with effective workforce management solutions and real-time problem-solving abilities. Thus, with the growth in the use of HCM solutions, more companies are expected to use HCM solutions for core HR applications during the forecast period.
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North America is estimated to contribute 34% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
North America is expected to dominate the market with the major market share during the forecast period. Growth in job opportunities and an increase in the number of job seekers due to globalization, wider penetration of social media in recruitment processes, and increased need for cost optimization are the major factors that will drive the HCM solutions market in the region.
According to The World Bank Group, the US economy has been continuously expanding since 2009, attributed to subsequent growth in sectors such as manufacturing, IT, and oil and gas. This growth has attracted further investments in fields, which also impacts the growth of digital technologies. Thus, the increasing competition in fields such as automotive and IT will compel vendors to adopt advanced HR technologies such as HCM, which will drive the market in North America during the forecast period.
The COVID-19 pandemic had a mixed impact on the growth of the HCM solutions market in 2020. Due to the pandemic, several governments in the region imposed lockdowns which lead companies across end-user industries to perform considerable trade activities online, driving the demand for HCM solutions to make strategic decisions. Furthermore, in 2021, several companies adopted the hybrid work model due to the lack of IT infrastructure in office premises and to follow social distancing norms, which somewhat increases the demand for HCM solutions. In addition, the rising prevalence of diseases and research and development in the healthcare sector led to more demand for healthcare services. Hence, to recruit and manage the workforce, healthcare providers are more likely to adopt workforce management solutions, including HCM solutions. Thus, the HCM solutions market in North America is expected to gain substantial growth during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Human Capital Management (HCM) Solutions Market Scope |
|
Report Coverage |
Details |
Page number |
164 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 8.45% |
Market growth 2023-2027 |
USD 11,195.8 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
8.05 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 34% |
Key countries |
US, India, Japan, Germany, and UK |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Asure Software Inc., Automatic Data Processing Inc., Cegid SA, Ceridian HCM Holding Inc., Cognizant Technology Solutions Corp., EmployWise, Inplenion, Koch Industries Inc., Kronos Inc., OnePoint Human Capital Management, Oracle Corp., PeopleStrategy Corp., Ramco Systems Ltd., Safeguard World International LLC, SAP SE, SolutionDot, Talentia Software Group, The Goldman Sachs Group Inc., Workday Inc., and WorkForce Software LLC |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Component
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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