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The global talent management software market size was valued at USD 8.14 billion in 2022. The market is projected to grow from USD 9.05 billion in 2023 to USD 20.59 billion by 2030, exhibiting a CAGR of 12.5% during the forecast period.
Talent management software is experiencing substantial technological modifications primarily driven by the introduction of mobile technology. The market is obtaining significant traction supported by dynamic human resource practices and the continuous implementation of innovative technologies. In addition, the increasing demand for hiring process automation and performance management among enterprises has driven the market growth. Key companies operating in the market are focusing on software enhancements to increase their market share. For instance,
Pandemic-induced Supply Chain Disruptions Dented the Talent Management Software Industry Growth
The short-term impact of the COVID-19 pandemic on the global market is multifaceted, depending on the distinct end-user impact. Organizations were negatively impacted by the pandemic as they were compelled to decrease their workforce, reducing hiring operations. These restrictions hampered the adoption of talent management software technologies globally.
Furthermore, organizations are projected to focus on adopting advanced technologies to boost business operations and decrease costs following the COVID-19 outbreak, which would likely generate profitable prospects. Furthermore, owing to several advantages, AI-enabled platforms will be in high demand shortly, boosting the market during the forecast period.
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Acceptance of Cloud-based Talent Management Solutions to Foster Market Potential
Due to digitization, organizations generate vast amounts of data, exerting pressure to exploit that data to obtain competitive advantages. Agencies are increasingly adopting cloud-based solutions to turn massive data into relevant insights. Talent management is proving to be a critical competitive advantage for key players. Furthermore, organizations are shifting to cloud-driven software, owing to flexible payment and plan options. For instance,
Therefore, cloud-based solutions provide organizations with a customized model to fit their needs, including analytical functions and talent management capabilities.
Streamlining Hiring Process through Technological Innovations to Boost Market Potential
One of the essential factors driving the talent management software market growth is the increasing penetration of cloud-based platforms as well as the use of mobile-based personnel management systems. Organizations and HR professionals are increasingly using Software-as-a-Service (SaaS) platforms to automate scouting, identifying, and recruiting new talent from talent pools, and retain existing personnel. Talent management software can also help streamline the hiring process, reinforce workplace culture, provide flexible learning opportunities, and identify top performers. Various technical breakthroughs, such as Machine Learning (ML) and Artificial Intelligence (AI), also expand the economy. For instance,
Furthermore, prominent players are introducing various talent management solutions that aid in staff management and give proper development opportunities for employees. As a result of the increased need to optimize HR operations, talent management software has become more popular among companies.
Limited Awareness of Talent Management Software Solutions among SMEs to Hinder Market Growth
Although data and analytics have long been used to make informed business decisions, most companies still have a long way to go with respect to adopting talent analytics. A lack of understanding of the benefits of talent management software is a significant factor hindering the market growth. Furthermore, the costs of talent management in terms of resources, time, and money can be significant. Talent management necessitates using tools to map out talent requirements at all levels of the organization, which can be expensive. Due to their limited resources, Small & Medium Enterprises (SMEs) find it challenging to invest in advanced technologies. As a result, limited adoption of talent management technologies across SMEs will stifle the market growth.
Talent Acquisition Captured Maximum Market Share with Rising Demand to Boost Productivity
By type, the market is classified into talent acquisition, performance management, compensation management, learning management, and others. In 2022, the talent acquisition segment held the largest market share and was predicted to continue to grow, owing to the need for smooth onboarding, recruiting, and sourcing processes.
Furthermore, recruiting and HR teams use a performance management dashboard to manage and track the recruitment process. Thus, the rising demand for performance management dashboards is estimated to fuel the segment growth throughout the forecast period.
Growing Integration of Talent Management Solutions with Emerging Technologies in Large Enterprises to Aid Growth
Based on enterprise type, the market has been divided into SMEs and large enterprises.
The large enterprises segment dominated the market. Large enterprises will likely integrate their talent management systems with emerging technologies to provide services such as staff headcount and working hours. These firms use analytical solutions to handle problems such as recognizing the threat of high-potential employees leaving for different countries and essential roles.
SMEs are predicted to be the early adopters of HR technologies. As a result, market participants are being forced to create economical options that produce quality and high-value outcomes. Similarly, mid-sized enterprises are projected to increase their HR technology spending in the coming years.
Adoption of Cloud-based Software to Rise Due to Its Beneficial Properties
By deployment, the market is segmented into cloud and on-premise.
Cloud is expected to have the largest market share. Cloud-based solutions are highly adopted as they offer benefits such as on-demand services, adaptability, and agility.
The other advantages of cloud-based services and solutions include regular software upgrades, improved user experience, and enhanced dashboards & analytics.
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IT & Telecommunications Sector to Capture Maximum Market Share Due to Digital Competition and Unpredictable Economy
By end-user, the market has been segmented into IT & telecommunication, BFSI, government, healthcare, education, manufacturing, and others.
The IT & telecommunication segment is predicted to capture a sizable market share during the forecast period. This industry is facing tremendous problems owing to digital competition, an unpredictable economy, and a new generation of customers with precise information and high demands. As a result, there is a robust need for a highly trained workforce and advanced recruiting tactics. Talent management platforms provide complete insights and efficient business strategies to respond to the demand for appropriate criteria.
The demand for talent management solutions across the BFSI segment is driven by the changing dynamics of employee relationships and the domain's rising reliance on digitalization for managing daily operations. The healthcare industry's demand for skilled employees is increasing, contributing to the development of human capital management technologies.
North America Talent Management Software Market Size, 2022 (USD Billion)
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By region, the market has been analyzed across five major regions, North America, Europe, Asia Pacific, the Middle East & Africa, and South America.
North America dominated the market and is projected to continue its dominance during the forecast period. According to a Cornerstone OnDemand, Inc. survey, North America is a potentially developed region for adopting talent management, core HR, and recruitment technologies. The presence of prominent HCM software suppliers, such as Ceridian HCM Holding Inc., Oracle Corporation, and IBM Corporation, among others, contributes to the regional market growth.
Asia Pacific is expected to record the highest CAGR. The market's growth may largely be credited to organizations’ increasing acceptance of innovative technologies. A significant shift in organizational management technologies is driving the product demand across developed countries. Due to active ecosystems, SMEs are projected to promote the adoption of this software in Japan, India, and Australia. On the other hand, large companies in IT & telecom, BFSI, manufacturing, education, and other sectors are predicted to generate significant revenue.
Europe is expected to register a significant growth rate during the forecast period. Active government initiatives and policies related to talent management may generate demand for robust talent management software for employee selection, mobility, and assessment. The European government is implementing such policies to produce a competent, skilled, adaptable, and networked workforce in the region.
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The Middle East & Africa and South America markets will likely grow steadily. IT & telecommunication, healthcare, manufacturing, and government sectors are some of the high-tech investors. As a result, it is anticipated that the number of potential consumers for this software will expand.
Key Players Focus on Acquisitions & Mergers to Expand Market Opportunities
IBM Corporation, Cisco Systems, Inc., Talentsoft, Oracle Corporation, and CornerStone OnDemand, Inc. are the market's major participants. These players provide solutions integrated with advanced technologies such as cloud and AI. Moreover, high market competition has forced major players to implement the acquisition strategy to strengthen their positions.
An Infographic Representation of Talent Management Software Market
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The report highlights the key regions across the globe for better user understanding. In addition, it provides an overview of the latest industry trends and analyzes the technologies being rapidly adopted worldwide. Furthermore, it highlights growth-stimulating factors and constraints, aiding the reader in obtaining in-depth knowledge of the market.
Value (USD billion)
CAGR of 12.5% from 2023 to 2030
By Type, Enterprise Type, Deployment, End-User, and Region
By Enterprise Type
According to Fortune Business Insights, the global market size is expected to reach USD 20.59 billion by 2030.
The market value stood at USD 8.14 billion in 2022.
The market is expected to grow at a CAGR of 12.5% during the forecast period of 2023-2030.
By type, the talent acquisition segment is expected to lead the market during the forecast period.
Streamlining the hiring process through technological innovations will boost the market growth.
IBM Corporation, Cornerstone OnDemand (Saba Software, Inc.), Workday Inc., Applied Training Systems, Inc. (Trakstar), Talentsoft, and Lattice BambooHR LLC, among others are the top companies in the market.
The IT & telecommunication segment holds a significant market share in terms of end-user.
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