The global human capital management (HCM) market is expected at USD 24.34 billion in 2024 and USD 33.66 billion by 2029, growing at an expansion rate (CAGR) of 6.7% in during the conjecture period.
Human capital management software (HCM), an enterprise application solution, has been a necessity in every business as it automates the heavy administrative tasks related to employee data, payroll, and benefits management. Also, the expansion of the HCM software market is credited to the opportunities developed by the demand for SMEs across the globe.
Employee-driven internet usage patterns persuade companies to implement mobile apps that extend employee management functions to improve culture, that is, people management, offering growth prospects to HCM suppliers. Since several companies had the same human resource software for more than seven years, which must be updated to keep up with the market, these factors should influence the growth of the human capital management software market.
Data security has become a major concern since the implementation of HCM software. The software must prevent unauthorized access to confidential and confidential data. Several levels of security must be established, which hampers market growth.
The wealth of functionality, ease of use, and data capacity features of cloud-based applications led to the adoption of the cloud in all enterprise application solutions, of which CRM and HCM were the first to be introduced to the cloud.
Cloud-based HCM solutions enable companies to create effective employee engagement tools that leverage the integration of social media and other APIs to learn, train, and recruit tools that disrupt the market.
In 2018, Oracle predicted that almost half of production workloads would migrate to the cloud by the end of 2020.
Anticipating the growth of cloud adoption in enterprises, HCM providers also offer cloud-based solutions while continuing their on-premise offerings, but with less emphasis on innovation than based solutions on the cloud.
The increasing adoption of software to manage the entire employee lifecycle and the growing need to comply with government regulations are some of the critical factors responsible for the development of this market during the prognosis period. Factors such as the growing need to manage a diverse workforce, increase employee productivity, and comply with regulations are some of the factors responsible for this strong growth.
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REPORT METRIC |
DETAILS |
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Market Size Available |
2023 to 2029 |
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Base Year |
2023 |
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Forecast Period |
2024 to 2029 |
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CAGR |
6.7% |
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Segments Covered |
By Components, Deployment Mode, Vertical, and Region. |
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Various Analyses Covered |
Global, Regional & Country Level Analysis, Segment-Level Analysis, DROC, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview on Investment Opportunities |
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Regions Covered |
North America, Europe, APAC, Latin America, Middle East & Africa |
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Market Leaders Profiled |
ADP LLC, Cornerstone, Epicor Software Corporation, IBM Corporation, Infor, Kronos, Inc., Oracle Corporation, SAP SE, SumTotal Systems, LLC Ultimate Software Group, Inc., and Others. |
The market is divided into software and services. It is estimated that the software component will have a larger market size during the forecast period.
The market is classified in the cloud and on-site. The cloud segment is foreseen to dominate the worldwide market in the coming years.
The market is divided into banking, insurance and financial services (BFSI), retail, IT and telecommunications, healthcare, hospitality, government, manufacturing, and others.
North America generated the highest revenue in the world market in 2016 due to the growing need to automate human resource processes such as talent management, performance management, compensation management, and high ICT spending. Additionally, Asia Pacific is expected to grow at the highest CAGR due to the increased adoption of mobility and cloud computing trends in countries such as China, Australia, Singapore, and Japan. According to the Asia-Pacific Economic Cooperation, small and medium-sized enterprises (SMEs) represent more than 90% of all companies in the APEC region and employ between 60 and 80% of the workforce. Therefore, the trend should continue in the future with the increase in population.
APAC is expected to grow at the fastest rate due to the increase in adoption of this technology. According to the International Labor Organization, unemployment was low by international standards, around 4.2% in 2018, while the number of people employed in the region increased by around 23 million (or 1.2%). Workers in China are moving from agriculture and manufacturing to services due to an aging population.
The main players in the global HCM market are ADP LLC, Cornerstone, Epicor Software Corporation, IBM Corporation, Infor, Kronos, Inc., Oracle Corporation, SAP SE, SumTotal Systems, LLC, and Ultimate Software Group, Inc. These players have expanded their presence in the market by adopting various business strategies, such as acquisition, geographic expansion, product development, strategic alliance, and collaboration.
By Component
By Deployment Mode
By Vertical
By Region
Frequently Asked Questions
The growth of the global HCM market is driven by several factors including the increasing adoption of cloud-based solutions, the growing need for workforce analytics, the rising demand for mobile applications in HR processes, and the focus on enhancing employee experience. Additionally, the ongoing digital transformation in organizations and the need for compliance with changing labor regulations are significant drivers.
The largest adopters of HCM solutions include industries such as IT and telecommunications, healthcare, financial services, retail, and manufacturing. These industries often have large, diverse workforces and require sophisticated HR management systems to handle complex HR functions and regulatory requirements.
Artificial intelligence (AI) plays a crucial role in HCM by enhancing various HR processes such as recruitment, performance management, employee engagement, and predictive analytics. AI-driven tools can automate repetitive tasks, provide insights through data analysis, improve decision-making, and create more personalized employee experiences.
Future trends in the HCM market include the increased use of AI and machine learning for advanced analytics and decision support, the integration of employee wellness and engagement tools, the growth of self-service platforms, and the emphasis on diversity and inclusion initiatives. Additionally, the rise of gig economy management solutions and the continuous evolution of cloud-based technologies will shape the future landscape of HCM.
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