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The global talent management software market size was valued at USD 7.09 billion in 2021. The market is projected to grow from USD 7.93 billion in 2022 to USD 17.66 billion by 2029, exhibiting a CAGR of 12.1% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with talent management software experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a rise of 9.1% in 2020 as compared to 2019.
The global talent management and HR management industry is undergoing significant technological changes mainly driven by the advent of mobile technology. The market is gaining substantial traction, supported by the constant adoption of advanced technologies and dynamic human resource practices. The need for hiring process automation and the growing need for performance management among corporations are driving the growth. Key players operating in the market are taking key initiatives to strengthen their market position.
In the scope of the study, Fortune Business Insights has considered key players, such as ABB Ltd, IBM Corporation, Cornerstone OnDemand, Workday, Inc., Learning Technologies Group plc, Applied Training Systems, Inc., Talentsoft, Oracle Corporation and others.
Pandemic-Induced Supply Chain Disruptions to Dent Industry Growth
The short-term impact of the COVID-19 pandemic on the global talent management software market size is multifaceted, depending on the distinct end-user impact. Organizations are negatively impacted by the pandemic as they have been compelled to decrease their workforce, thereby reducing hiring operations. The global adoption of talent management technologies has been hampered by these guidelines. During the COVID-19 pandemic, HR departments have faced a number of issues, including ensuring optimal business operations and monitoring employee health.
Additionally, HR teams have to provide support to allow employees to work from home and review and enforce legal changes regarding payroll and sick pay. Due to the decline in capital spending, HR's workload has increased significantly. This factor will have a negative influence on the deployment of talent management solutions for the time being.
Furthermore, organizations are projected to focus on adopting advanced technologies to advance business operations and decrease costs following the COVID-19 issue, which would likely generate profitable prospects. Furthermore, owing to several advantages, AI-enabled platforms are projected to be in high demand in the near future.
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Acceptance of Cloud-based Talent Management Solutions to Foster Growth Potentials
As a result of digitization, organizations are generating vast amounts of data, exerting pressure to exploit that data to obtain competitive advantages. To turn massive data into relevant insight, agencies are increasingly adopting cloud-based solutions. In talent management, it is proving to be a key competitive advantage for key players.
Organizations are transitioning to cloud-based software due to the flexible payment and plan options. Additionally, the availability of customized packages is based on the time of operation, the number of users, and other parameters. For Instance, In March 2021, IBM OpenPages introduced cloud-based data privacy management software which allows enterprises to solve emerging data privacy concerns.
This aspect reduces the software price and makes it more accessible to small enterprises. As a result, cloud-based solutions provide organizations with a customized model customized to their needs, including analytical functions and talent management capabilities. The emerging adoption of technologies can be considered a talent management market trend.
Streamlining Hiring Process through Technological Adoption to Boost Growth
One of the important factors driving the market's growth is the increasing penetration rate 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, as well as retaining existing personnel. A TMS can also help streamline the hiring process, reinforce workplace culture, provide flexible learning opportunities, and identify top performers. Various technical breakthroughs, such as the use of machine learning (ML) and artificial intelligence (AI), are also contributing to the expansion of the economy. For Instance, In June 2021, Trakstar, a SaaS-based employee engagement and performance management company, announced the unification of its previous modular offerings into a single Trakstar Platform. Trakstar Hire is now accessible for better hiring, Trakstar Learn is now provided for faster onboarding and employee development, and Trakstar Perform is now accessible for ongoing performance tracking and engagement.
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 Solutions among SMEs to Hinder Growth
Although data and analytics have long been used to inform business decisions, most companies still have a long way to go in order of talent analytics. A lack of understanding of the benefits of talent management software is one of the major factors hindering the talent management software market growth. Furthermore, the costs of talent management in terms of resources, time, and money can be significant. Talent management necessitates the use of tools to map out talent requirements at all levels of the organization, which can be expensive. Small and medium businesses (SMEs) find it difficult to invest in advanced technologies due to their limited resources. As a result, limited enterprise adoption of talent management technology will stifle market growth.
Solution Segment Captured Maximum Market Share with Rising Demand to Boost Productivity
By component, the market is classified into solutions and services.
The solution holds the largest talent management software market share and is projected to do so in the coming years. Companies use talent management software to improve the employee experience and enhance productivity. On the other hand, the service segment is predicted to grow at the highest rate throughout the projection period due to the demand for advisory, installation, and training services during the pre-and post-deployment of this software. Professional services include planning and strategy and software implementation for the organization's future expansion.
Solutions are categorized into performance management, talent acquisition, learning management, compensation management, and others. In 2021, talent acquisition had the largest market share and is predicted to continue to grow in the near future. Onboarding, recruiting, and sourcing are all part of the talent acquisition process. HR and recruiting teams can use a performance management dashboard to track and manage the recruitment process.
Rising Adoption of Cloud-based Software to Witness High Growth
By deployment, the market is segmented into cloud and on-premises.
Cloud is expected to have the largest market share. Cloud-based solutions are highly adopted as it offers benefits such as on-demand services, adaptability, and agility of solutions.
Regular software upgrades, improved user experience, and improved dashboard and analytics are all advantages of cloud-based services and solutions.
Growing Adoption of Performance Management Solutions among SMEs to Aid Growth
Based on enterprise size, the market has been divided into SMEs and large enterprises.
Large corporations dominated the market. Large organizations are likely to integrate their talent management systems with emerging technologies in order to provide services such as staff headcount, working hours and others. Analytical solutions are used by large organizations to handle problems such as recognizing the threat of high-potential employees leaving for different countries and important roles.
Small and mid-sized firms are predicted to be the fastest-growing sector of HR technology. As a result, market participants are forced to create economic options that produce quality and high-value outcomes. Similarly, mid-sized enterprises are projected to witness considerable growth in HR technology spending in the coming years.
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IT and Telecommunications Captures Maximum Market Share Due to Digital Competition and Unpredictable Economy
By end-user, the market has been segmented into IT and Telecommunication, BFSI, government, healthcare, education, manufacturing, and others.
The IT and telecom sector 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 higher demand for a more trained workforce, as well as advanced recruiting tactics. Talent management platforms provide complete insights and efficient business strategies in response to the demand for appropriate criteria.
The demand for management solutions across BFSI is being driven by the changing dynamics of employee relationships and the domain's rising reliance on digitalization for management. The healthcare industry's demand for skilled employees is increasing, which is likely to contribute to the development of human capital management technologies.
North America Talent Management Software Market, 2021 (USD Billion)
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By region, the market has been analyzed across five major regions, namely North America, Europe, Asia Pacific, the Middle East & Africa, and South America.
North America dominated the market and is projected to continue in the near future. According to a survey done by Cornerstone OnDemand, Inc., 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, are contributing to the growth of the market.
Asia Pacific is expected to grow at the highest CAGR. The market's growth may largely be credited to the organizations accepting innovative technologies. A major shift in organizational management technologies is driving demand across industrialized countries. Owing to active ecosystems, SMEs are projected to promote the adoption of this software in nations, including Japan, India, and Australia. On the other hand, large companies in IT and telecom, BFSI, manufacturing, education, and other sectors are predicted to generate significant revenue.
Europe is expected to develop with a significant growth rate during the forecasted period. Active government initiatives and policies related to talent management are projected to 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 at the service of Europe.
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The markets in the Middle East and Africa, as well as South America, are likely to rise steadily in the near future. IT and telecommunications, healthcare, manufacturing, and government are among its high-tech investors. As a result, it is projected that the number of potential consumers for this software will expand.
Key Players to Emphasis on Mergers and Acquisitions to Strengthen Competition
Talentsoft, IBM Corporation, Oracle Corporation, Cisco Systems, Inc., CornerStone OnDemand, Inc., and others are some of the market's major players. These companies are currently offering advanced solutions integrated with advanced technologies such as AI, cloud, and others. Additionally, the high market competition is forcing key players to focus on the acquisition strategy for strengthening their positions. For instance,
An Infographic Representation of Talent Management Software Market
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The global talent management software market research report provides an in-depth analysis of the market and focuses on key aspects such as leading companies, applications, and adoption of advanced technologies among several industry verticals depending on the organization size. Besides this, it offers insights into the key market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several key factors that have contributed to the growth of the market in recent years.
Value (USD billion)
Component, Deployment, Enterprise Size, End-User, and Geography
By Enterprise Size
According to Fortune Business Insights, the global size market is expected to reach USD 17.66 billion by 2029.
Fortune Business Insights says that the market value stood at USD 7.09 billion in 2021.
The market is expected to grow at a CAGR of 12.1% during the forecast period (2022-2029).
By component, the solution segment is expected to lead the market during the forecast period.
The increased adoption of talent management software/services is a key driver for market growth.
IBM Corporation, Cornerstone OnDemand (Saba Software, Inc.), Workday Inc., Learning Technologies Group plc, Applied Training Systems, Inc. (Trakstar), Talentsoft, Lattice BambooHR LLC, among others are the top companies in the market.
The IT and telecommunications segment holds the major market share in terms of end-user.
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