Human Resource (HR) Technology Market Size, Share & COVID-19 Impact Analysis, By Type (Talent Management, Workforce Management, Recruitment, Payroll Management, Performance Management, and Others), By Deployment (Cloud and On-premise), By Enterprise Size (SMEs and Large Enterprises), By Industry (BFSI, IT and Telecommunication, Government, Manufacturing, Retail, Healthcare, and Others), and Regional Forecast, 2022-2029

The global human resource (HR) technology market size was valued at USD 22.90 billion in 2021 and is projected to grow from USD 23.98 billion in 2022 to USD 39.90 billion by 2029, exhibiting a CAGR of 7.5% during the forecast period. Based on our analysis, the global market exhibited an average growth of 3.4% in 2020 as compared to 2019.

In the market study, we have considered various HR technology solutions offered by the market players such as Cornerstone OnDemand's human capital management software suite including talent management, recruiting software, and others along with Workday Inc.‘s human capital management software suite, among others. In addition, our study also covers Oracle Corporation’s Oracle Fusion cloud HCM suite and SAP SE’s Success factors and SAP HR.

The human resource (HR) technology market growth can be attributed to several key factors, such as rising employment opportunities due to rapid adoption of technologies across enterprises. In addition, the rising demand for automation across the human resource management operations creates ample opportunities for market growth.

COVID-19 IMPACT

COVID-19 to Create Unprecedented Opportunities for Market Players for a Long Term

The rapid shift in market dynamics of working models has enforced human resource teams and departments to embrace new ways to react to the demands of the employee or workforce. Hence, human resource technology solutions, including workforce management, talent management, recruitment, and payroll management are expected to fuel the demand post COVID-19.

Shifting to remote work culture and virtual collaboration is one of the most substantial developments that organizations have implemented to tackle the complexities of public health and economic disaster. The software helped professionals to manage employee-management communication and handle payroll functions efficiently. During pandemic, the prominent market players focused on partnerships, collaborations, and research & development to assist organizations for managing workforce. For instance,

• In August 2020, SAP SE partnered with a Germany-based IT company, Bechtle AG, to implement SAP SuccessFactors solutions across the organization. Through this partnership, SAP HR solution will help to unify and consolidate human resource processes of Bechtle. The company aims to provide digital experience to its employees with a data-driven human resource model.

Further, post COVID-19, enterprises are expected to prioritize investments in technologies such as cloud, artificial intelligence, and machine learning to streamline business processes and reduce cost, which is projected to provide significant opportunities for HR technology vendors. In addition, market players were focused on launching new features to existing products, or completely new products to address the growing demand of recruiting, performance management, capital management and payroll, compensation and other talent management solutions. For instance,

• In April 2022, Oracle Corporation launched Oracle ME, an employee experience platform. The platform will help organizations improve employee engagement. The platform is part of Oracle Fusion Cloud Human Capital Management (HCM) that enables recruiters to update communications across the enterprise, enhance productivity by managing employees, and improve talent retention.

LATEST TRENDS

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Integration of Robot Process Automation (RPA) to be the Key Trend for Organizations

Robot Process Automation technology plays a vital role in delivering efficiency and innovation within the human resource management solutions and enables organizations to deliver enhanced talent strategies. Companies are looking for new ways to hire talent and deliver new services at lower costs. RPA capabilities embedded with Artificial Intelligence (AI) and machine learning enable enterprises to standardize operations by eliminating additional IT costs. Market players offer advanced tools integrated with RPA to address the requirement of end-users.

For example, Oracle Corporation offers Oracle Digital Assistant, an human resource chatbot that enables employees to get immediate answers to their queries and seamlessly complete transactions through text or voice. Oracle Digital Assistant supports more than 90 prebuilt transactions and also offers support to solutions with new requirements or processes.

Attributed to the positive results of RPA integrated with human resource tools, market players are likely to integrate RPA with HR tools, including recruitment software and application tracking system across human resource departments.

DRIVING FACTORS

Increased Adoption of Artificial Intelligence and Machine Learning to Drive the Market

The adoption of AI and ML algorithms across the human resource (HR) technology software enables to optimize the recruitment process. Integration of artificial intelligence applications such as bots and virtual assistants helps to automate recruitment processes such as interview scheduling, interview performance analyzing, and answering basic questions. The bot utilizes the logic to recognize user requests and communicate with business systems to get the desired results. For instance,

• In March 2022, HeyJobs, a HR technology startup, raised USD 47 million funding. The company aims to leverage the funding to accelerate the integration of AI technology in talent acquisition solutions as well as expand its business across Germany.


• In June 2021, ActivePayroll, the payroll solution provider, partnered with Cornerstone OnDemand, Inc. The partnership aims to integrate Cornerstone’s comprehensive suite of these resource services including personalized learning, recruiting, performance management, and human resource planning with ActivePayroll’s solution.

Similarly, rapid adoption of AI technology by the recruiters to perform recruitment tasks is projected to create new market opportunities in the coming years. For instance, according to the 2021 Recruiter Nation Report, conducted by Jobvite, AI was used by recruiters across recruitment processes more than they used in 2020. In 2021, 39% of respondents stated that they used AI for job recommendations on career sites and 34% of the recruiters used the AI technology for job description recommendations.

RESTRAINING FACTORS

Limitations of Data Integration and Threat to Data Privacy to Impede the Market Growth

Human resource management solutions offer efficient digital management of employee data. Human resource management teams can monitor payrolls, leaves, and respective employee performance with a few clicks on the system. During these distressing times of COVID-19, social distancing has played a critical role in shifting businesses from conventional ways of communication and collaboration to digital infrastructure.

Remote work culture has proved to be a successful way to isolate people from society. Moving from the workplace to work from home has given companies a monumental challenge. Additionally, data security risks are rising with remote work. Thus, it is also essential to review human resource software to ensure that it suits specific security needs of human resource management. The lack of data security and privacy may hamper the market growth.

SEGMENTATION

By Type Analysis

Talent Management Solutions to Gain Traction in Coming Years

By type, the market is divided into talent management, workforce management, recruitment, payroll management, performance management, and others. The talent management segment is expected to hold the highest market share and is likely to grow with the highest CAGR during the forecast period. It assists enterprises to manage their employee’s performance, development, progression, and rewards. In addition, the solutions help organizations to manage candidate onboarding, recruitment, and retention processes.

In March 2021, JazzHR, a recruitment software provider, partnered with Gusto to streamline the onboarding process of new joiners. The partnership allows customers to send new joiner's information directly to Gusto to create payroll records and eliminate the manual process of data entry.

Payroll management is expected to gain traction as large enterprises mainly adopt core HR solutions to drive employee experience and create more engaging interactions. HCM solutions assist in navigating the whole employee experience journey and identifying the occurrence of major friction points and stages where experience levels may fall down.

By Deployment Analysis

Cloud-based HR Technology Software to Gain Traction in the Coming Years

By deployment, the market is classified into cloud and on-premises. Cloud-based deployments are expected to witness faster growth in the coming years due to the increasing adoption of cloud technology among SMEs. The prominent market players are shifting from on-premise software toward cloud in response to rise in demand for cost-effective cloud-based solutions across industries.

According to Lloyd Adams, SAP North America Senior Vice President and Managing Director of East Region, stated the cloud market in North America is expected to double in size between 2022 and 2025, and 2022 will be a turning point. 

Similarly, COVID-19 pandemic has forced companies to shift from on-premise solutions to cloud. These factors are expected to propel the cloud deployment during the forecast period.

By Enterprise Size Analysis

SMEs to Lead due to Surge in Investment to Expand their Geographical Presence and Product Portfolio

By enterprise size, the market is classified into SMEs and large enterprises. SMEs are expected to grow with the highest CAGR owing to growing investment and funding led by leading organizations. The growth is predominantly due to the rising demand for cloud solutions and increased investment among the SMEs and startups. For instance,

In May 2022, Hono, a HR technology startup raised USD 5 million funding. The company aims to leverage the corpus of funds to increase its footprint across India, Southeast Asia, and the Middle East, and expand the product offerings.

The large enterprises segment will hold major market share during the forecast period. Human resource technology will gain traction across large enterprises owing to the need to manage large workforce’s payroll, recruitment, and performance efficiently.

By Industry Analysis

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Healthcare Sector to Grow Rapidly Stoked by Need to Hire More Employees

Based on industry, the global market is divided into BFSI, IT & telecommunication, government, manufacturing, retail, healthcare, and others.

The healthcare industry is projected to fuel the adoption of human resource management solutions attributed to the surge in demand to hire the right talent and manage a large workforce. In January 2022, according to Monster Employment Index, the need for healthcare professionals increased in December 2021, with 6% month-on-month growth.

The demand for skilled professionals across human resource and admin, finance and accounts, software, hardware, telecom, and senior management accelerated due to the spread of coronavirus. Hence, healthcare providers are more likely to adopt human resource management software to recruit and manage the workforce.

The rapid adoption of Industry 4.0 transformed the manufacturing sector digitally. The increased demand for workforce management in manufacturing companies is expected to create significant market opportunities for growth.

REGIONAL INSIGHTS

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Geographically, the market is divided into five major regions such as North America, South America, Europe, the Middle East & Africa, and Asia Pacific.

North America held the maximum market share in the global market in 2021 due to the presence of headquarters of major human resource technology solution vendors such as Oracle Corporation, Ceridian HCM Holding Inc., Automatic Data Processing (ADP), Inc., Cornerstone OnDemand, Inc., and Workday, Inc. The surge in employment opportunities across the U.S. and Canada creates demand for talent management, recruitment, and performance management HR solutions. For instance,

In September 2021, the U.S. Bureau of Labor Statistics stated that total employment opportunities are anticipated to grow from 153.5 million to 165.4 million during 2020-2030. These factors contribute to the market's expansion across the region.

Europe is anticipated to show remarkable market growth during the projected period. The region is expected to exhibit growing demand for workforce automation solutions to automate and improve workforce management. For instance, in April 2022, according to Eurostat, the overall employment rate in the European Union reached up to 73.1% in 2021 from 71.7% in 2020, an increase by 1.4%. This shows that the region exhibits substantial opportunities to implement HR technology solutions across the sectors in the region. Healthcare and manufacturing industries are expected to be the potential customers of human resource software in the region. The growing employment and adoption of human resource management tools across the sector fuels the market growth.

Asia Pacific is expected to witness the highest growth during the forecast period. The surge in partnerships, funding, and investments will further expand the presence of small and medium-sized businesses, which is expected to drive growth of the market in this region. For instance, in January 2021, Salesforce, Inc. invested USD 15 million in India-based HR technology platform, Darwinbox. The enterprise aims to further accelerate business growth in the country and expand business in the Southeast Asian market. Similarly, the increasing adoption of technologies, such as cloud, AI, and ML, is expected to fuel the demand for human resource software in this region. For instance, according to the NASSCOM survey 2022, 63% of large enterprises, 39% of medium enterprises, and 38% small enterprises increased cloud adoption in 2021.

The Middle East & Africa region is anticipated to hold lucrative market opportunities. The growing mobility of workforces, employment in SMEs, and adoption of technologies contribute to the growth of the region.

According to the Turkish Statistics Institute, in November 2021, Turkey’s employment rate increased to 46.6% from 46.3% in October 2021. Thus, growing employment rate across the country will surge the demand for human resource technology for talent acquisition, employee retention, and recruiting talent.

South America is expected to witness steady growth owing to lack of skilled professionals. As per the Organization for Economic Co-operation and Development 2020, in Brazil, SMEs play a vital role for social inclusion and economic growth. SMEs account for 62% of total employment in Brazil and 50% national value added.

The COVID-19 pandemic has accelerated the adoption of digital technology and funding to human resource tech startups in South America, which is projected to foster the market growth. For instance, In October 2021, Buk, a Chile-based human resource management platform, raised USD 50 million in Series A funding round. The platform has around 4,000+ clients in South America and it manages the payroll for more than 400,000 employees.

KEY INDUSTRY PLAYERS

Key Players to Adopt Merger and Acquisition Strategies to Expand Market Share

Prominent players operating in the global market are focusing on expanding their global presence and market share by the merger and acquisition strategy. These companies are aiming to acquire small and local firms to expand their business presence.

List of Key Companies Profiled:

• SAP SE (Germany)


• Oracle Corporation (U.S.)


• Automatic Data Processing (ADP), Inc. (U.S.)


• Cornerstone OnDemand, Inc. (U.S.)


• Ceridian HCM Holding Inc. (U.S.)


• Workday, Inc. (U.S.)


• Infor, Inc. (U.S.)


• Cegid Group (France)


• Hi bob Inc. (U.K.)


• The Access Group (U.K.)

KEY INDUSTRY DEVELOPMENTS:

• March 2022 - The Access Group acquired a cloud-based recruitment platform, FastTrack. The platform aims to help staffing enterprises to streamline and grow. Through the addition of FastTrack’s integrated software for payroll, billing, and timesheets, it will support Access Recruitment’s suite of software. Further, the acquisition will significantly expand the Access Group’s international reach.


• November 2021 - Workday Inc. launched its latest workforce management advancements, including Labor Optimization and Workday Scheduling. It is a smart employee-first scheduling solution that matches workforce demands with workforce preferences. With this technology, employers can better optimize shift patterns and provide frontline workers more flexibility and control over when and how they work.


• April 2021 - Oracle launched a new platform for Oracle Fusion Cloud Human Capital Management (HCM) to provide a greater intuitive, tailored, and streamlined employee experience. Oracle Journeys would enable businesses to provide employees with a one-stop-shop to navigate all areas of their jobs and complete challenging tasks.


• April 2021 – Cegid established a partnership with Visier, Inc., specializing in people analytics and planning. This partnership integrates Visier's people analytics capabilities into Cegid customers via Cegid HR Insights' new product.


• July 2020 - Infor Inc. launched a new Payroll module under Global HR. It offers in-house payroll along with wage garnishments, employment tax filing, wage payments, and other value-added services. The cloud-based payroll solution also supports the remote workforce.

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The global human resource technology market research report provides a detailed analysis of the market. It focuses on key aspects such as leading companies, software types, and leading applications of the software and services. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market in recent years.

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