According to Global wire research, The global market size value of HR Software in 2019 was USD 16.01 billion. The global market value of core HR software estimates to clock USD 7.4 billion. It projects to reach a revised size of USD 38.4 billion by 2027.
The HR department is a start-to-end link for an employee's life cycle in an organization. It is the only link between the onboarding process to complete the exit formalities.
The human resource department plays a vital role in smooth operations. HR software benefits them for efficient function and increases their productivity. Human resource management software aims to attract, inspire, and retain employees.
Market Size and Growth Rate of HR software
According to Global wire research, The global market size value of HR Software in 2019 was USD 16.01 billion. The global market value of core HR software estimates to clock USD 7.4 billion. HR and Payroll Software combined estimates to clock USD 21.9 billion globally in the middle of the covid 19 crisis.
It projects to reach a revised size of USD 38.4 billion by 2027. It estimates a growth rate of 8.3% CAGR over seven years from 2020-2027. Cloud-based HR software projects to grow by 9% CAGR and reach a market size of USD 18.3 billion by 2027. While On-premises estimates to grow by 8.1% CAGR and the hybrid segment to grow by 7% CAGR.
HR management software looks after learning management, compliance management, and success planning. It also manages all confidential processes like payroll, claims, pension, and employee data.
Ongoing pandemic has impacted the economy globally. This pandemic has present and future repercussions. All the companies are trying to adapt to work from home modules. A perfect HR software will help to achieve productivity and maintain quality of work.
Key Factors and Market Trends that Push the HR Software Market
- It is easy to deploy the software on the premises or the cloud.
- Self-serve Human Resource Management Software brings all the required information by the employee at fingertips.
- Newer ways of talent acquisition have made it easier to select the right candidate.
- Collaborative and E-learning has made all-round development possible for all the employees.
- HR analytics has made the efficient use of teams possible to increase productivity and real ROI of HRMS tool .
- Cloud-based implementation and mobile deployment of the software fuels the expansion.
- Automation has helped the organization to automate the repetitive human resource task.
- Vendors provide end to end services required by the company and give a single point of contact for help.
- Integration of Artificial Intelligence and machine learning has helped to make strategic decisions.
- Real-time and accurate data analysis helps in efficient and smooth functioning.
- Real-time Feedbacks shared by the employees to the employer and vice-a-versa increases productivity.
Segmentation of HR Software
1. Benefits and Claims Management
An employer gives benefits and claims to the employee on top of their wages to balance work-life. The HR department and employee can access all the benefits and claims provided with a few clicks.
2. Personnel Management:
Best HR software helps you take anonymous employee feedback to make appropriate changes. It helps to gather, use, and maintain a happy workforce. A happy workforce will drive you towards the desired results.
3. Payroll and Compensation Management:
This feature of HR management software enables an organization to pay competitive salaries. It helps in drawing budgets and reducing costs.
4. Retirement Management:
Retirement and health benefits of the employee are at fingertips. This feature helps to create transparency between the employee and employer.
5. Learning Management:
A Learning Management system (LMS) is an eLearning module. It helps to upgrade and keep track of the employee skill sets. It helps to create training modules and tests to track employee's progress.
6. Compliance Management:
Adhering to the companies compliance is all employee's moral responsibility. To achieve and maintain high compliance is a task. Top HR software helps you to create compliance modules that inform the employees. It checks if all employees are adhering the compliance.
7. Succession Planning:
This process helps to identify high-performing potential employees who can take extra responsibilities. These employees are future leaders of the organization. HR software allows you to identify Strategies for the Future of HRMS and help them grow.
1. Maintenance and Support:
Vendors provide end to end services required by the company and give a single point of contact for help. Maintenance and support help with better products and services
2. Integration Services:
Adapt and integrate new features to your Human Resource Management Software Solution as per your business needs. The integration of AI in the HRM helps them to make strategic decisions. Hence, the integration of AI contributes to the boom of the HR market globally.
3. Consulting Services:
HR consulting services deliver all aspects of HRM externally. HR consulting services specialize in specific areas of HR. By 2020 Global market of HR consulting services expects to reach USD 50 billion.
1. Cloud-Based HRM
There are three types of cloud services available according to your business needs. You can choose from a private cloud, public cloud, and hybrid cloud as per your budget and requirement. Cloud services deliver in 3 models.
2. Infrastructure as a Service (IaaS):
The vendor manages the applications, data, and operating systems. The client handles the Servers, virtualization, storage, and networking.
3. On-premises HR software:
It keeps you in full control of the systems all the time. Data security With cloud-based HR software is most important aspect for every organization. On-premises HR software protects you from data breaches. It helps you precisely customize the HR Management Software according to your needs.
By Organization Size:
Large companies have understood and experienced the potential of HRIS Software. They are the key contributors to the market size of HR related software.
2. Small and Medium Enterprises:
SMEs are adopting digitalization after exploring the huge possibilities. They contribute toward the increase in the market size of the HR Management software.
All the verticals have adopted or are adopting digitalization in their process. Following verticals are responsible for the growth in the market size of the HR software:
- Retail and manufacturing,
- Energy and utilities,
- FMCG industry,
- Logistics and transformation,
- Information Technology and telecom,
- BFSI (Banking, financial services, and insurance)
- North America: U.S.A and Canada. (They were leading in the global HR Management System market with a market share of 36.4%)
- South America: Brazil, Mexico, and the rest of Latin America.
- Europe: France, Spain, The UK, Italy, Germany, Portugal, and the rest of east Europe. They are also one of the leading contributors to the global share of the HR software market.
- Pacific Asia: India, Japan, China, South Korea, Southeast Asia, Australia, New Zealand, and the rest of Pacific Asia. These countries project to grow with the highest CAGR during the forecast period. HR management software in India, China, and South Korea are key contributors.
- Middle East: Bahrain, Kuwait, United Arab Emirates, Oman, Saudi Arabia.
- Africa: South Africa, Seychelles, Mauritius, Egypt, and the rest of the African countries.
(According to Deloitte Global Human Capital Trends survey)
Top Contributors for the Boom in the HR Software Market are:
- Spine HR Suite.
- Nitso HRMS.
- Accent HRP.
Opportunities for Vendors in the HR Software Market:
1. Increase in Demand for Cloud-based Solutions:
Globalization has made the world a small place. Your organization can have a presence across the globe. It has enabled workable payment options. Clients can buy a yearly or monthly subscription or even pay-as-you-go or pay-per-use.
SaaS has made it cost-effective and accessible from any device. Easy upgrades with the recent advancements help to keep your organization up-to-date. Cloud-based implementation and mobile deployment of the HR related software fuels the expansion of the global market size.
2. Increase in Demand by SMEs for HR software:
SMEs have identified the potential of HR software. They are adapting to digitization. It will steer the HR software market towards the estimated results by 2027.
3. Integration of Artificial Intelligence and Machine Learning:
Artificial Intelligence helps you to examine, forecast, and enforce better strategies. Better talent acquisition is possible due to AI. AI and Robotic Process Automation in HR Management enables us to have a more interactive and energetic employee experience. Machine learning is collaborative and has visual learning for the growth of resources. Thus integration of such services contributes towards the growth of HR software.
Challenges for Vendors in the HR Software Market:
1. Security Concerns in Public Cloud hosting:
It is one of the important factors affecting the HR software market. Although various features like easy deployment, cost-effectiveness, and so on push the market. Many SMEs opt for public cloud services because of the low cost. Public cloud-based deployment increases the scope of data breaches, cyber-attacks, and so on. Thus, security concerns are the biggest challenge in the growth of the HR software market.
2. Compliance with Local Labor Laws:
Labor laws vary from place to place and industry to industry. Choosing the HR and Payroll Software that aligns with local laws can be difficult.
The global market of Best HRMS Software is transforming tremendously due to the covid-19 crisis organizations are adapting to work from home modules. It is important to track performance, give feedback, and carry the rest of the HR operations smoothly.
Integration of Automation, Artificial intelligence, and machine learning in the HR Management Software will help to achieve productivity and quality to the workforce. The migration towards cloud-based computing software enables us to perform the functions remotely. All these factors contribute to the boom in the global market of human resource management software. Thus, the global market of HR software will approximately achieve a compound annual growth rate of 8.3% by the end of 2027.