The Human Capital Management Software market was valued at USD 16.7 billion in 2019 and is expected to reach USD 24.64 billion by 2025, at a CAGR of 6.7% over the forecast period 2020 - 2025. To increase workforce productivity, many companies are onboarding HCM vendors which provide robust and reliable software solutions.
- The employee's mobile-centric internet usage patterns are persuading the enterprises to deploy mobile application for extending the employee management functions to enhance the culture i.e., people management, thus providing growth prospects to the HCM vendors. As several companies have the same HR software for over seven years, which needs to be updated in order to stay on par with the market, such factors are expected to influence the growth of human capital management software market.
- Data Security is a major concern after implementation of HCM software. The software must prevent unauthorized access to sensitive and confidential data. Multiple levels of security must be put in place, which is hampering the market growth.
Scope of the Report
The human capital management (HCM) software, an enterprise application solution has been the need across all the enterprises as they automate the cumbersome clerical tasks related to employee data, payroll, and benefits administration. However, the growth of the HCM software market in the recent time is due to the huge opportunities arising from the growing SMEs across regions.
Key Market Trends
Cloud to Dominate the Market
- The feature-richness, ease of use, and data capacity characteristics of the cloud-based applications are driving the cloud adoption across all enterprise application solutions of which CRM and HCM were the first to be taken to the cloud.
- The cloud-based HCM solutions are enabling enterprises to make effective employee engagement tools leveraging the social media integration, and other APIs for learning, coaching and recruiting tools that disrupt the market.
- In 2018, Oracle in their cloud predictions forecasted that by 2020, 50% of production workloads in regulated industries will migrate to the cloud.
- Anticipating the growth in the cloud adoption across enterprises, the HCM vendors are also offering cloud-based solutions while continuing their on-premise offerings, but with lesser focus on innovation compared to the cloud-based solutions.
Asia-Pacific to Witness the Highest Growth
- APAC is expected to grow at the fastest rate due to increasing workforce. According to International Labor Organisation, unemployment was low by international standards, at around 4.2 % in 2018, while number of employed persons in the region grew by some 23 million (or 1.2 %) between 2017 and 2019.
- Workers in China are shifting from agricultural and manufacturing sector to sevices due to ageing population.
- According to Asia-Pacific Economic Cooperation, Small and Medium Enterprises (SMEs) account for more than 90 percent of all businesses in the APEC region and employ between 60 and 80 percent of the workforce. Thus trend is expected to continue in future as the population rises.
- The APEC SME Working Group (SMEWG) assists SMEs to become more competitive while seeking to contribute to a more open trade and investment environment. This calls for more vendors coming up with HCM software.
The market is fragmented with new vendors offering specific services over cloud like Application tracking or Employee Onbording. Legacy software giants and ERP providers are also gaining a significant market share.
- June 2019 - WorkForce Software announced a significant equity investment from affiliates of Evergreen Coast Capital Corp. (“Evergreen”), the technology-focused private equity arm of Elliott Management Corporation. With the investment, Evergreen will become equal partners with Insight Partners, which has been the majority investor in WorkForce Software since 2014.
- February 2019 - SAP AG acquired a stake in Newgen Software Technologies Limited, which provides enterprise solutions in banking, financial services, insurance, telecom and government segments. It also handles Business Process Management and Enterprise Content Management.
Reasons to Purchase this report:
- The market estimate (ME) sheet in Excel format
- Report customization as per the client's requirements
- 3 months of analyst support