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Human Capital Management (HCM) Market Size, Share & COVID-19 Impact Analysis, By Offering (Solution and Services), By Deployment (Cloud, and On-Premises), By Enterprise size (SMEs, and Large Enterprises), By End-use Industry (IT and Telecommunication, BFSI, Government, Retail, Healthcare, Education, Manufacturing, and Others), and Regional Forecast, 2020-2027

Region : Global | Format: PDF | Report ID: FBI100240

 

KEY MARKET INSIGHTS

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The global human capital management (HCM) market size was USD 16.24 billion in 2019 and is projected to reach USD 32.68 billion by 2027, exhibiting a highest CAGR of 9.3% during the forecast period.

COVID-19 Cover

This report covers COVID-19 impact analysis on Human Capital Management (HCM) Market

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The increasing demand for workforce management and performance management solutions due to the dispersed workforce amid COVID-19 pandemic is likely to drive the adoption of workforce management and talent management solutions. However, the global market is likely to show steady growth from 2020 to 2021.


Global Recession During COVID-19 to Impede the Demand for HCM Solutions


The unemployment rate is estimated to increase in some regions in the coming years. For instance, ADP, Inc. states that the United States private sector has lost 20 million jobs in April 2020. Whereas, the United States Congressional Budget Office estimates that 15% of people are more likely to be unemployed by the third quarter of 2020. Thus, the study reveals the outspread of the novel coronavirus is likely to restrict the adoption of human capital management solutions, in turn, hampering the market growth.


According to the International labor organization (ILO), in April 2020, nearly 47 million employers, representing around 54% of all employers globally, operate businesses in the COVID-19 hit sectors such as manufacturing, wholesale and retail trade, accommodation, and food services, real estate and business activities. The above data illustrates that employment rate is probable to witness a downturn which is likely to impede the adoption of human capital management solutions for a short time.


LATEST TRENDS


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Integration of Robot Process Automation (RPA) with HR Tools to be a Prominent Trend in HCM Transformation


Robot process automation technology plays a vital role in delivering efficiency and innovation within the HCM 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 enables the enterprises to standardize operations, by eliminating additional IT costs. Market players offer advanced tools integrated with RPA to address the requirements of the end-users. For instance, in July 2020, IBM Corporation acquired WDG Automation, a Brazilian service provider of robotic process automation (RPA). The acquisition enables IBM to provide comprehensive AI incorporated automation capabilities integrated with its Cloud Pak for multi-cloud management transforming business operations including employee management services.


Rising Focus on Talent Mobility and Cloud-Based Business Models for Workforce Planning


The increasing adoption of cloud-based business models and talent mobility is a factor expected to encourage market growth. Talent mobility enables enterprises to create a robust leadership pipeline by improving employee engagement and retention. Growing focus on talent mobility is likely to boost the demand for talent management solutions across businesses.


Cloud-based business models incorporated with HRM services are expected to demonstrate an increasing demand from end-users. For example, in March 2020, Ceridian HCM Holding, Inc. announced that Seagrass Boutique Hospitality Group, Australia has chosen Ceridian’s Dayforce, cloud software platform to engage, manage, and pay its entire workforce. These emerging trends are likely to expand the HCM market size in the coming years.


DRIVING FACTORS


Increasing Demand for Intelligent Workforce Management Solutions to Foster the Market Growth


Organizations with large workforces are looking forward to efficiently and effectively managing their employees and customers through HCM solutions. The coronavirus has impacted workforce productivity, thus impelling market players to offer intelligent workforce solutions for organizations during the COVID-19 crisis. For instance, in May 2020, Infor launched a workforce management (WFM) solution integrated with intelligent scheduling in China. The solution enables the organizations to provide efficient staff scheduling and workforce utilization.


RESTRAINING FACTORS


Growing Privacy and Security Concerns to Inhibit Market Growth


The adoption of cloud-based HR automation platforms has led to concerns about data privacy and security. The inability of market players to provide robust cloud security solutions is likely to restrict the market growth. Security risks such as salary data theft, identity theft (Espionage), violation of regulatory rules, denial of service attack (DDoS) on the HR system is likely to retard the market growth. Nonetheless, to mitigate the probability of security risks, organizations deploy multi-factor authentication (MFA) and remote wipe technology to protect the human resource data.


SEGMENTATION


By Offering Analysis


Increasing Demand for Workforce Operational Insights Resulting Maximum Market Share for HCM Solutions


Based on offerings the market is classified into solutions and services. Solutions segment includes Oracle’s cloud HCM, Workday Inc.’s (human capital management) HCM suites, and Ultimate Software’s UltiPro HCM solution among others. These solutions enable enterprises to drive meaningful business decisions by providing operational insights. Human capital management services are expected to exhibit a significant growth rate owing to the increasing adoption of these solutions.


By Solution Analysis


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Dispersed Workforce Amid COVID-19 to Surge the Need for Robust Workforce Management Solutions


The solution segment is segmented into core HR, talent management, workforce management, payroll & compensation, and others. Core HR solutions are likely to generate maximum revenue. According to the Sierra-Cedar HR System survey 2019-2020, 47% of the organizations are likely to increase spending in core HR applications by 2020. Core HR solutions enable organizations to understand their workforce and establish effective communication with the employees.


Outspread of novel coronavirus has led to a dispersed workforce globally which has surged the demand for effective workforce management solutions across the industries. Workforce management tools offer operational oversights into areas such as time & attendance, absence management, scheduling & time management. Kronos Incorporated offers Kronos D5 platform, Workforce Dimensions that provide operational insights into managing the workforce.


Similarly, talent management is likely to exhibit a significant demand from the end-users. Talent management solutions provide actionable insights into onboarding, recruiting, learning, compensating, and managing critical talent. Talent management offered by Oracle Corporation enables the organization to analyze and review talent, provide career opportunities, and plan for succession among others.


With the growing adoption of mobile payments, market players are emphasizing smart payroll and compensation solutions. For instance, in May 2019, ADP, Inc. expanded its instant pay and financial wellness solutions assisted with the launch of Wisely Now application. Wisely Now app enables the organizations to address the compliance risks by facilitating automation to instant payments such as termination pay and off-cycle pay.


By Deployment Analysis


 Increasing Demand for Data-driven Applications to Boost the Adoption of Cloud-based HCM Solutions


The solutions are categorized based on their deployment type, including cloud and on-premise. Cloud-based HCM solutions are projected to hold a major share attributed to the range of benefits including cost efficiencies, faster implementation, and improved innovation such as enhanced user experience. On-premise solutions are expected to show moderate growth owing to the upgrade requirements, security regulations, tax & existing hardware implications among others.


By Enterprise Size Analysis


Small Businesses in Advanced Economies are Likely to Limit their Spending Due to COVID-19 Pandemic


By enterprise size, the market is classified into large enterprises and small & mid-sized enterprises. Large workforces, availability of ICT infrastructure, substantial investments in advanced technologies contribute to the major share of large enterprises. It is expected that in the aftermath of the global economic crisis the number of small businesses in advanced economies are likely to limit their spending’ in the wake of COVID-19 pandemic. Moreover, it will take a considerable time interval to reinstate investments and business operations.


By End-use Industry Analysis


IT and Telecommunication, BFSI, Healthcare Industries to be the Potential Customers of HCM Solutions


By the end-use industry, the HCM market is segmented into IT and telecom, BFSI, government, retail, healthcare, education, manufacturing, and others. The healthcare industry is likely to exhibit a significant adoption of human capital management solutions in the coming years. According to the U.S. Bureau of labor statistics, employment in healthcare is estimated to grow 14% between 2018 to 2028 adding about 1.9 million new jobs. This estimated growth can be attributed to the rising prevalence of diseases, research and development in the healthcare sector that led to more demand for healthcare services. Hence, to recruit and manage the workforce, healthcare providers are more likely to adopt workforce management solutions.


BFSI industry is expected to be one of the potential customers of workforce solutions. For instance, the BFSI sector skill council of India is creating strategies and operational plans to standardize skill requirements for various job roles in the industry. These factors are likely to create lucrative opportunities for solution providers.


IT and telecommunication, government, and retail industries are likely to show a significant adoption of core HR talent management, and workforce management solutions in the coming years. HR professionals in the industries are increasingly adopting HR automation tools to administer employee benefits.


REGIONAL INSIGHTS


Asia Pacific Expected to Exhibit a Remarkable Growth Rate Owing to Rapid Globalization


The global human capital management market has been classified into five major regions including North America, Europe, Asia Pacific, the Middle East and Africa, and Latin America. The regions are further categorized into countries. North America is anticipated to hold a dominant position in the global market. Growing adoption of mobile platforms, an employee experience platform, and workforce analytics solutions are likely to spur the market growth in the region.


Asia Pacific is projected to witness a remarkable growth rate during the forecast period. Globalization, technological progress, and demographics change are reshaping the work culture across the region. New technologies such as Industry 4.0, data analytics, cloud computing are being embraced by many organizations that are likely to drive the demand for a skilled workforce in the coming years. These factors would ensure to support market growth in the region.


The Middle East and Africa is predicted to experience significant market opportunities. According to the World Bank collection of development indicators in 2018, North Africa and the Middle East and Africa reported an 85.5% literacy rate. The figure illustrates that the region poses potential job opportunities that are likely to drive the adoption of human capital management solutions across the region.


According to Eurostat, the overall employment rate in the European Union reached up to 73.2% in 2019 and is expected to grow at an increasing pace in the coming years. This shows that the region exhibits substantial opportunities to implement HCM solutions across the sectors in the region. Latin America is expected to show healthy growth. The organizations in the region are frantically working to develop educational infrastructure to prepare a potential workforce to address future opportunities in the coming years.


KEY INDUSTRY PLAYERS


Market Leaders to Enter into Strategic Mergers & Partnerships to Enhance Existing Product Portfolio


Human capital management (HCM) is a highly competitive and fragmented market. To strengthen the market position, the activities of market players such as Kronos Incorporated, Cornerstone OnDemand, Inc., Oracle Corporation, and Workday Inc. among others are adopting strategies such as mergers and acquisitions. The strategic mergers and acquisitions will enable the market players to enhance their existing product portfolio by incorporating new capabilities.


LIST OF KEY COMPANIES PROFILED:



  • Automatic Data Processing (ADP), Inc. (New Jersey, United States)

  • Ceridian HCM, Inc.  (Minnesota, United States)

  • Cezanne HR Ltd.  (London, United Kingdom)

  • Cornerstone OnDemand, Inc. (California, United States)

  • IBM Corporation (New York, United States)

  • Infor (New York, United States)

  • Kronos, Incorporated (Massachusetts, United States)

  • NetSuite, Inc. (California, United States)

  • Oracle Corporation (California, United States)

  • SAP SE (Walldorf, Germany)

  • Talentsoft (France, Europe)

  • Ultimate Software (Florida, United States)

  • Workday, Inc. (California, United States)


KEY INDUSTRY DEVELOPMENTS:



  • June 2020 – Ceridian HCM Inc., announced that IBL Group, a conglomerate based in Mauritius chose Dayforce, Ceridian’s HCM platform to modernize its HR and people processes intending to become more client-centric.

  • April 2020 – Kronos Incorporated and Ultimate software completed their merger. Through this merger, the companies intend to deliver enhanced human capital management solutions with highly complementary products combined with expertise.

  • February 2020 – Cornerstone OnDemand, Inc. acquired Saba Software to deliver a differentiated portfolio of talent experience software and people development solutions. Cornerstone OnDemand intends to leverage its existing product portfolio to accelerate product development through this acquisition.


REPORT COVERAGE


The market report highlights leading regions across the world to offer a better understanding of the user. Furthermore, the report provides insights into the latest industry trends and analyzes technologies that are being deployed at a rapid pace at the global level. The report examines various paradigm shifts associated with the transformation of human capital management software solutions. It further highlights some of the growth-stimulating factors and restraints, helping the reader to gain in-depth knowledge about the human capital management (HCM) market.


An Infographic Representation of Human Capital Management (HCM) Market

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The Human Capital Management (HCM) market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. 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, contributing to the growth of the market.


Report Scope & Segmentation














































 ATTRIBUTE



 DETAILS



Study Period



  2016-2027



Base Year



  2019



Forecast Period



  2020-2027



Historical Period



  2016-2018



Unit



  Value (USD Billion)



Segmentation



By Offering



  • Solution

    • Core HR

    • Talent Management (On Boarding, Recruiting)

    • Workforce Management

    • Payroll &Compensation

    • Others



  • Services



By Deployment



  • On-Premise

  • Cloud



By Organization Size



  • Small and medium enterprises (SMEs)

  • Large Enterprises



By Industry



  • IT & Telecom

  • BFSI

  • Government

  • Retail

  • Healthcare

  • Education

  • Manufacturing

  • Others Large Enterprises



By Geography



  • North America


    • By Offering

    • By Deployment

    • By Enterprise Size

    • By End-use Industry

    • By Country


      • The U.S.

      • Canada



  • Europe


    • By Offering

    • By Deployment

    • By Enterprise Size

    • By End-use Industry

    • By Country


      • The U.K.

      • Germany

      • France

      • Scandinavia

      • Rest of Europe



  • Asia Pacific


    • By Offering

    • By Deployment

    • By Enterprise Size

    • By End-use Industry

    • By Country


      • China

      • Japan

      • India

      • Southeast Asia

      • Rest of Asia Pacific



  • Middle East & Africa


    • By Offering

    • By Deployment

    • By Enterprise Size

    • By End-use Industry

    • By Country


      • GCC

      • South Africa

      • Rest of Middle East & Africa



  • Latin America


    • By Offering

    • By Deployment

    • By Enterprise Size

    • By End-use Industry

    • By Country


      • Mexico

      • Brazil



  • Rest of Latin America



Frequently Asked Questions

Fortune Business Insights says that the global human capital management (HCM) market size was USD 16.24 billion in 2019 and is projected to reach USD 32.68 billion by 2027.

In 2019, the North America market value stood at USD 7.86 billion.

Growing at a CAGR of 9.3%, the market will exhibit steady growth in the forecast period (2020-2027).

The solution segment is expected to be the leading segment in this market during the forecast period.

The integration of advanced technologies such as artificial intelligence, machine learning, with HR automation tools is a major factor driving the growth of the market.

Workday Inc., Cornerstone Ondemand Inc., Kronos, Incorporated, Oracle Corporation, and IBM Corporation are major players of the global market.

North America dominated the market share in 2019.

Asia Pacific is expected to exhibit the highest growth rate during the forecast period.

Human Capital Management (HCM) Market  Size, Share and Global Industry Trend Forecast till 2026
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