“Global Artificial Intelligence In HR Market to reach a market value of USD 15.9 Billion by 2031 growing at a CAGR of 24.4%”
The Global Artificial Intelligence In HR Market size is expected to reach $15.9 billion by 2031, rising at a market growth of 24.4% CAGR during the forecast period.
AI-powered payroll systems can calculate employee salaries, taxes, and benefits in real-time, ensuring accuracy and compliance with local labor laws. This facilitates the payroll process and mitigates the risk of human errors. Large enterprises and SMEs are adopting AI-driven payroll solutions to manage complex pay structures, minimize administrative workload, and ensure timely payments. AI's ability to integrate payroll with other HR functions, such as employee record management and performance monitoring, drives its adoption, making it a vital component of modern HR systems. Thus, the payroll processing segment acquired 12% revenue share in the artificial intelligence in HR market in 2023.
The major strategies followed by the market participants are Product Launches as the key developmental strategy to keep pace with the changing demands of end users. For instance, In October, 2023, IBM Corporation and EY unveiled EY.ai Workforce, a groundbreaking HR solution that integrates AI into key HR processes. By combining IBM Watsonx Orchestrate's AI and automation with EY's HR expertise, this collaboration aims to enhance HR productivity and streamline business processes through tailored AI-driven solutions.
Based on the Analysis presented in the KBV Cardinal matrix; IBM Corporation and Oracle Corporation are the forerunners in the Artificial Intelligence In HR Market. Companies such as SAP SE, ADP, Inc., and Cornerstone OnDemand, Inc. are some of the key innovators in Artificial Intelligence In HR Market. In January, 2024, SAP SE unveiled a restructuring program to integrate more artificial intelligence (AI) into its operations. The company will focus on Business AI, streamline its operational setup to leverage synergies and AI-driven efficiencies and prepare for scalable future revenue growth.
These AI systems can monitor the progress of new hires, identify areas where they may need additional support, and even offer AI-powered virtual mentoring. Hence, as remote and hybrid work continues to evolve, AI will remain essential in optimizing workforce management, improving employee experience, and ensuring business continuity in this new era of work.
Additionally, By analyzing engagement surveys and qualitative data, AI tools can identify trends in employee morale and highlight areas that require attention. This data-driven approach allows HR professionals to implement tailored initiatives to improve workplace satisfaction, resulting in higher productivity and employee retention. Therefore, data-driven decision-making, supported by AI, is driving HR transformation and growth of the market.
Companies face the challenge of balancing adopting advanced AI tools with complying with these regulations. The complexity of integrating AI solutions into HR departments while ensuring full compliance with regional and global privacy laws can slow down the deployment of AI technologies. Hence, these concerns may hamper the growth of the market.
The leading players in the market are competing with diverse innovative offerings to remain competitive in the market. The above illustration shows the percentage of revenue shared by some of the leading companies in the market. The leading players of the market are adopting various strategies in order to cater demand coming from the different industries. The key developmental strategies in the market are Product Launches and Product Expansions.
The services segment is further segmented into implementation services, consulting services, and training & support services. The implementation services segment witnessed 53% revenue share in the market in 2023. There is a growing demand for expert support in the deployment and integration of artificial intelligence solutions into current human resource management systems, which can be attributed to this phenomenon.
On the basis of deployment mode, the market is classified into cloud and on-premise. The on-premise segment acquired 27% revenue share in the market in 2023. Large organizations and industries that require greater control over their data often prefer on-premises solutions, such as finance, healthcare, and government sectors.
By enterprise size, the market is divided into SMEs and large enterprises. The large enterprises segment recorded 67% revenue share in the market in 2023. This can be attributed to large organizations' significant financial resources and infrastructure, enabling them to invest in advanced AI technologies.
Based on application, the market is segmented into recruitment & hiring, employee onboarding & engagement, employee record management, performance management, payroll processing, and others. The employee onboarding & engagement segment procured 22% revenue share in the artificial intelligence in HR market in 2023. As organizations increasingly adopt remote and hybrid work models, AI-powered tools have become essential for onboarding new employees and keeping them engaged.
Based on component, the market is bifurcated into solution and services. The solution segment garnered 64% revenue share in the market in 2023. Virtual induction systems, workforce analytics platforms, and AI-driven recruitment tools have become indispensable for organizations that are striving to optimize their HR processes and improve operational efficiency.
The solutions segment is divided into chatbots, virtual assistants, software platforms, analytics solutions, and others. The software platforms segment acquired 42% revenue share in the market in 2023. These platforms are designed to optimize and automate recruitment, performance management, employee engagement, and training processes, providing a comprehensive solution that reduces administrative burdens.
On the basis of end use, the market is fragmented into BFSI, healthcare, IT & telecommunication, retail & eCommerce, manufacturing, education, government, and others. The IT & telecommunication segment recorded 23% revenue share in the market in 2023. This dominance is largely due to the rapid digital transformation in the tech industry, where companies adopt AI-powered HR solutions to efficiently manage large, tech-savvy workforces.
Free Valuable Insights: Global Artificial Intelligence In HR Market size to reach USD 15.9 Billion by 2031
Region-wise, the market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The Europe segment recorded 30% revenue share in the market in 2023. In order to optimize workforce management and ensure compliance with these intricate regulations, European companies are progressively implementing AI-driven HR solutions. Countries like Germany, France, and the UK are leading the adoption of AI in HR, particularly in industries like manufacturing, retail, and finance.
The Artificial Intelligence in HR market is highly competitive, driven by firms integrating AI to enhance recruitment, employee engagement, and HR analytics. Key attributes include AI's ability to automate routine tasks, improve decision-making through data analysis, and enhance candidate experience with personalized interactions. Companies like IBM, Oracle, and SAP dominate with robust AI-driven HR solutions, focusing on scalability, efficiency, and compliance. Emerging firms leverage AI advancements to offer niche solutions, intensifying competition across the HR technology landscape.
| Report Attribute | Details |
|---|---|
| Market size value in 2023 | USD 2.9 Billion |
| Market size forecast in 2031 | USD 15.9 Billion |
| Base Year | 2023 |
| Historical Period | 2020 to 2022 |
| Forecast Period | 2024 to 2031 |
| Revenue Growth Rate | CAGR of 24.4% from 2024 to 2031 |
| Number of Pages | 450 |
| Number of Tables | 783 |
| Report coverage | Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Competitive Landscape, Market Share Analysis, Porter’s 5 Forces Analysis, Company Profiling, Companies Strategic Developments, SWOT Analysis, Winning Imperatives |
| Segments covered | Component, Deployment Mode, Enterprise Size, Application, End-use, Region |
| Country scope |
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| Companies Included | IBM Corporation, Oracle Corporation, SAP SE, ADP, Inc., Cegid Group, Cornerstone OnDemand, Inc. (Clearlake Capital Group, L.P.), Eightfold AI Inc., Simpplr Inc., Beamery, Inc. and HireVue, Inc. |
By Component
By Deployment Mode
By Enterprise Size
By Application
By End Use
By Geography
This Market size is expected to reach $15.9 billion by 2031.
Rise of remote work and hybrid work models are driving the Market in coming years, however, Substantial data privacy and security concerns restraints the growth of the Market.
IBM Corporation, Oracle Corporation, SAP SE, ADP, Inc., Cegid Group, Cornerstone OnDemand, Inc. (Clearlake Capital Group, L.P.), Eightfold AI Inc., Simpplr Inc., Beamery, Inc. and HireVue, Inc.
The expected CAGR of this Market is 24.4% from 2024 to 2031.
The Cloud market is leading the Market by Deployment Mode in 2023; thereby, achieving a market value of $11.8 billion by 2031.
The North America region dominated the Market by Region in 2023, and would continue to be a dominant market till 2031; thereby, achieving a market value of $6.2 billion by 2031.
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