Human Resource Management Software Market | Insights & Analysis

Global Human Resource Management Software Market Overview

Human Resource Management Software Market size is projected to reach USD 48.76 Billion by 2032 from USD 19.53 Billion in 2023, at a CAGR of 10.70% globally.

HR software is a business software or digital solution that assists to manage employee information and daily task related to HR. This software manages the manual tasks manually and keeps information orderly. In 1987, the first HR software is established by Oracle. The name of this software was PeopleSoft and this was a client-server-based human capital management system. This software saves labor time for managers and HR staff by operating all work automatically. The HR software offers several functions such as securely storing the employee data, creating workflows, and tracking approvals, following the employee training for development and compliance, self-service time tracking, performance management, goal tracking, and monitoring all data changes with an audit trail. These beneficial factors supported the growth of the market for human resource management software.

Market Dynamics And Factors Of Human Resource Management Software Market

Drivers:

Growing the Adoption of Cloud-Based Software Solutions

• The increasing utilization of cloud-based software among the various industries is a key factor driving the growth of the human resource management software market. For instance, according to Statista, about 81% of companies use at least one cloud application in 2020. The cloud-based software offers several advantages such as being cost-effective, easy to use, and high speed in work, improving collaboration, enhancing data security, providing great flexibility, updating the software automatically, and declining the carbon footprint for a better environment. In addition to this, cloud-based software provides a single consolidated platform thus the cloud-based platform providers need distributed business units globally. The cloud-based services are adopted in various sectors such as manufacturing, healthcare, BFSI, IT, and the government sector. These all factors propel the growth of the human resource management software market in the forecast year.

Restraints:

High Initial Cost and Risk of Unpredictability

• The human resource management software includes expensive programs is a key factor that hinders the market growth. The high cost required for installation, setup, and consulting. It is not affordable for small and medium enterprises. In addition to this, there is a risk in investing in human resource programs because top management is required for the successful implementation of HR management software but in absence of top management, it may not yield the expected results. These factors restrict the growth of human resource management software in the forecast year.

Opportunity:

Advancement and Innovation in Technologies

• The development of technology of HR management software offers a remunerative opportunity for the human resource management software market. With the development and introduction of artificial intelligence (AI) and machine learning (ML), HR professionals’ technology changed employee habits, and improve their skills.  According to IEEE global study, 66% of world business leaders and analysts agree that artificial intelligence and machine learning will drive technological changes in every industry over the upcoming year that will help to manage the all work of HR. For instance, a senior employer brand strategist at exaqueo, Mark Hornung trusted in AI and ML will assist HR managers to reduce their workload and increase the productivity of their businesses in 2022. Thus, the development of technology used in HR management that provides a lucrative opportunity for the human resource management software market in the upcoming year.

Segmentation Analysis Of Human Resource Management Software Market

• By Type, the Core HR segment is expected to have the maximum share human resource management software market. The growing number of employees in various organizations around the world is generating the demand for managing the workforce of the company efficiently which helps to increase the need for software for core HR activities. Core HR software help organizations by tracking the history of salary, also tracking employee incidents and milestones, and reviewing employee performance. This software is adopted in manufacturing, healthcare, transportation, logistics, BFSI, government, and IT sectors. These factors propel the growth of the segment core HR which boots the market of human resource management software.
• By Application, the IT & telecom segment is projected to have high market growth in the human resource management software. This is owing to an increase in the requirement of candidates have knowledge and proficiency in the IT sectors to feed the need of IT companies in the world. Also, the telecommunication sector witnessed high growth due to their reach on a global scale. Apart from this, changing the employee preference people want work in IT sectors supported the growth of IT sectors that boosts the market.

Regional Analysis Of Human Resource Management Software Market

• North America is dominating region in the human resource management software market.  This is owing to rising the adoption of advanced technology, automation, and cloud-based services.  In North America, the US is the dominating country in the HR management software market. It is a technologically developed country, thus a high rate of adoption of advanced technology. Most of the organizations in this region utilize cloud-based solutions. High investment in research and developments in cloud technology. The high number of industry players present in this region such as ADP, IBM, and Oracle. These all factors contribute to the growth of the human resource management software in this region.
• The Asia Pacific is the second dominant region in the human resource management software market. South Korea, China, and India are the countries that have the maximum market share in human resource management software. The adoption of advanced technology such as Machine Learning (ML), predictive analytics, and Artificial Intelligence (AI) is high in this region. With the growing digitalization among the industries, several start-up companies engaged in the development of various mobile applications, and collaboration software and provide to employers, and employees. Additionally, the rising government support for digitalization and adoption of cloud-based services. These factors support the growth of the region in the human resource management software market.
• Europe has notable growth in the human resource management software market. This is owing to an increase in the digitalization and automation of HR operations among the companies in this region. In addition to this, the growing awareness about the software of human resource management among the company in this region supported the growth of the market. The rising demand for cloud-based services in the various sectors such as hospitals, manufacturing, BFSI, and IT sectors. For instance, according to Cloud Industry Forum (CIF), 78% of organizations in the UK country using cloud-based services. Several companies in this region increase their investment in HR management software for different HR activities containing compensation, organization development, safety, performance management, benefits, recruitment, communication, policy administration, employee motivation, wellness, and training are automated and minimize the human efforts. These all support the growth of the market for HR management software in the analysis year.
• The Middle East and Africa have measurable growth in human resource management software.  The growing penetration rate of advanced technology among the various sectors such as IT, healthcare, manufacturing, and BFSI sectors. The government of MEA focuses on the development of new technology, so they increasing their investment in research and development of advanced technology. These factors propel the growth of the market of human resource management software in the MEA region.

Covid 19 Impact Analysis On Human Resource Management Software Market

• COVID-19 began in Wuhan (China) in December 2019 and has since rapidly grown throughout the globe. In terms of confirmed cases and reported deaths, the US, India, Brazil, Russia, France, the UK, Turkey, Italy, and Spain are among the countries that have been most severely impacted. Due to lockdowns, travel restrictions, and business closures, COVID-19 has had an impact on the businesses and industries of numerous nations. Digital transportation is disturbed due to the covid-19 crisis but adoption of HR management software increases because of work-from-home facilities. The human resource software and services contain talent management, workforce management, and payroll management has maximum share during the pandemic year.   

Top Key Players Of The Human Resource Management Software Market

• ADP LLC (US)
• Workday (California)
• Oracle Corporation (US)
• Kronos (US)
• Ultimate Software (US)
• SAP SE. (Germany)
• Accenture PLC (Ireland)
• Automatic Data Processing, Inc. (US)
• Ceridian HCM Holding Inc.(US)
• Cezanne HR Limited (UK)
• Harri (US) and other major players.

Key Industry Development In The Human Resource Management Software Market

• In October 2023, ADP, Inc. unveiled a new version of ADP Workforce Now, tailored specifically for the construction industry. This specialized software facilitates accurate payroll processing, efficient HR management, and improves recruitment and worker development within the construction sector.
• In October 2023, EY partnered with IBM to launch EY.ai Workforce, an innovative HR solution that enables businesses to integrate AI into their core HR processes. This marks a significant milestone in their ongoing collaboration, showcasing the potential of AI to boost productivity within HR functions.
• In October 2023, Oracle enhanced its Oracle Fusion Cloud Human Capital Management (HCM) with generative AI-driven features. Powered by Oracle Cloud Infrastructure (OCI), these new capabilities integrate seamlessly into existing HR workflows to accelerate business value, improve productivity, elevate both candidate and employee experiences, and optimize overall HR operations.
• In September 2023, Accenture and Workday, Inc. expanded their partnership to help organizations transform their finance functions to be more agile, data-driven, and customer-centric. The collaboration aims to develop composable, data-centric finance solutions that can be adapted to meet the evolving needs of clients in industries like software, technology, retail, and media.
• In September 2023, Workday, Inc. introduced new features to its Workday Human Capital Management (HCM) software, designed to enhance the managerial experience. These updates equip managers with the tools they need to lead more efficiently, streamlining their responsibilities within human resources.