The Global Human Capital Management Market size is expected to reach $36 billion by 2028, rising at a market growth of 7.6% CAGR during the forecast period.
Human Capital Management is a set of strategies for attracting, supervising, developing, refining, and maximizing the value of personnel within a business. Payroll, workforce planning, training, compliance, onboarding, compensation planning, and performance management are just a few of the basic administrative and strategic practices and activities covered. Benefits administration, time and attendance, workflow management, reporting and analytics, employee service and self-service, and retirement services are all part of the package. Organizations all over the world are now implementing HCM systems that give specialized competencies for effectively managing personnel and increasing overall productivity.
In addition, it comprises not only the hiring, job & position management, HR compliance, and reporting activities, but also workforce rewards & talent, as well as workforce management. Furthermore, cloud-based HCM is becoming increasingly popular as a result of benefits such as remote data access, unlimited storage capacity, lower costs and maintenance fees, and access via mobile & web from any place and at any time. As a result, the interest in HCM is rapidly increasing.
Incorporation of developing technologies with HCM software, such as Machine Learning (ML) and Artificial Intelligence (AI), has emerged as one of the most important variables in HCM software and service acceptance across geographies. HCM vendors are projected to benefit from factors such as growing cloud adoption among small and medium businesses to better manage field and office staff.
HCM solutions include a variety of features that assist businesses in attracting, developing, retaining, and engaging their staff. Along with that, through workflow routing and notifications, HCM helps to boost overall organizational productivity while ensuring data integrity. Due to benefits such as remote access to data, infinite storing capacity, cheaper cost & maintenance charges, and access via web and mobile from any location and at any time, cloud-based HCM use is on the rise.
Due to the COVID-19 pandemic, businesses around the world are adopting a remote work culture, posing new problems for HCM software and service providers. The main problem is keeping offers up to date with changing organizational cultures. During the pandemic, HCM providers can improve their software by introducing additional features, such as tracking employee health and location. This is expected to increase HCM software adoption. Cost-cutting and project delays by businesses, on the other hand, may limit the use of HCM software. Due to the distributed workforce and the COVID-19 pandemic, the demand for performance management and workforce management solutions is likely to increase.
Since business operations are becoming increasingly complicated as a result of the adoption of new technologies and innovations, the majority of organizations across verticals are experiencing a scarcity of highly trained workers. As a result, HR managers around the world are having difficulty finding the appropriate people for the right jobs. HCM suites can assist HR managers in discovering skilled workers by utilizing Artificial Intelligence (AI) and Machine Learning (ML) technology. AI and machine learning can help to automate the recruitment process and provide more filters to help locate the ideal candidate.
The use of robotic process automation (RPA) improves the efficiency and effectiveness of human capital management. Compensation management, onboarding new staff, payroll management, and compliance reporting are just a few of the repetitive HR operational chores that robotic process automation may help with. RPA improves data management and processing accuracy and speed while lowering IT costs associated with manual and repetitive processes. RPA technology is used by businesses to automate processes and boost employee satisfaction in HR. To meet the needs of clients, market participants are delivering RPA integrated products.
Since most HCM software is hosted in the cloud and controlled by a third party, businesses are concerned about security. The majority of manufacturers are now selling HCM software in the cloud to take advantage of cloud technology benefits like security, scalability, and lower IT infrastructure costs. Security protections are frequently built-in to cloud-based software. This eliminates the risk of data leaks or hackers. Despite this, many firms are apprehensive to migrate HR data and systems to the cloud, which typically contain sensitive employee information. As a result, businesses are hesitant to shift their personnel data, payroll, and administrative data to the cloud.
Based on Component, the market is segmented into Software and Services. Based on Software Type, the market is segmented into Core HR, HR Analytics, Workforce Management, and Applicant Tracking System. The services segment obtained a significant revenue share in the human capital management market in 2021. This is due to the growing diversity of the workforce; it is necessary for an HR professional to keep track of employees in order to manage the workforce, and as a result, the use of HCM services is increasing.
Based on Deployment Mode, the market is segmented into On-premise and Cloud. The on-premises segment acquired the highest revenue share in the human capital management market in 2021. HCM software adoption is now high, and this trend is projected to continue, with the majority of end-users having their software on-premises, as it provides greater data protection and helps businesses comply with numerous requirements. Due to security rules, current hardware concerns, and upgrade requirements, on-premise solutions are anticipated to witness moderate growth. The advantages of an on-premise deployment strategy, such as security and maximum customization are what makes this mode of deployment a safe and reliable choice. On-premise deployment is used in high-regulatory businesses since it provides more security than cloud deployment because it does not require the use of the internet. The data is stored on private servers and not on public clouds.
Based on Organization size, the market is segmented into Large Enterprises and Small & Medium-sized Enterprises (SMEs). The SMEs segment observed a substantial revenue share in the human capital management market in 2021. HCM is likely to gain more widespread adoption by SMEs with the popularization of the cloud mode of deployment. SMEs operate on a tight budget and hence human capital management services on cloud is likely to appeal to them due to very low initial costs involved.
Based on Vertical, the market is segmented into BFSI, Manufacturing, Government, Telecom & IT, Consumer Goods & Retail, Healthcare & Life Sciences, Energy & Utilities, Transportation & Logistics, and Others. The telecom and IT segment acquired a promising revenue share in the human capital management market in 2021. During the forecast period, core HR, talent management, and workforce management solutions are expected to be widely adopted in IT and telecommunications. HR software is being used by businesses of all sizes to successfully administer employee benefits and manage HR operations.
| Report Attribute | Details |
|---|---|
| Market size value in 2021 | USD 20.8 Billion |
| Market size forecast in 2028 | USD 36 Billion |
| Base Year | 2021 |
| Historical Period | 2018 to 2020 |
| Forecast Period | 2022 to 2028 |
| Revenue Growth Rate | CAGR of 7.6% from 2022 to 2028 |
| Number of Pages | 347 |
| Number of Tables | 574 |
| Report coverage | Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Competitive Landscape, Companies Strategic Developments, Company Profiling |
| Segments covered | Component, Deployment Model, Organization Size, Vertical, Region |
| Country scope | US, Canada, Mexico, Germany, UK, France, Russia, Spain, Italy, China, Japan, India, South Korea, Singapore, Malaysia, Brazil, Argentina, UAE, Saudi Arabia, South Africa, Nigeria |
| Growth Drivers |
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| Restraints |
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Based on Regions, the market is segmented into North America, Europe, Asia Pacific, and Latin America, Middle East & Africa. The Asia-Pacific region observed a significant revenue share in the human capital management market in 2021. Due to the existence of a large number of HCM suppliers and the increasing acceptance of cloud-native technologies, Asia Pacific is estimated to account for the maximum revenue share in the market during the forecast period. Large investments in verticals such as BFSI, manufacturing, retail, healthcare, telecommunications, and IT are being made in key countries such as China and Japan, resulting in the development and economic expansion in APAC countries.
Free Valuable Insights: Global Human Capital Management Market size to reach USD 36 Billion by 2028
The major strategies followed by the market participants are Partnerships. Based on the Analysis presented in the Cardinal matrix; Oracle Corporation are the forerunners in the Human Capital Management Market. Companies such as IBM Corporation, SAP SE and ADP, Inc. are some of the key innovators in Human Capital Management Market.
The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include ADP, Inc., Cornerstone OnDemand, Inc. (Clearlake Capital Group), Epicor Software Corporation, IBM Corporation, Infor, Inc., Workday, Inc., Oracle Corporation, SAP SE, Sumtotal Systems, LLC (Skillsoft), and UKG, Inc.
By Component
By Deployment Mode
By Organization size
By Vertical
By Geography
The global human capital management market size is expected to reach $36 billion by 2028.
The amalgamation of Robot Process Automation (RPA) with HR Tools are driving the market in coming years, however, threats of Security Breaches and Data Leaks on Cloud-Based Deployment growth of the market.
ADP, Inc., Cornerstone OnDemand, Inc. (Clearlake Capital Group), Epicor Software Corporation, IBM Corporation, Infor, Inc., Workday, Inc., Oracle Corporation, SAP SE, Sumtotal Systems, LLC (Skillsoft), and UKG, Inc.
The Software segment acquired the maximum revenue share in the Global Human Capital Management Market by Component in 2021, thereby, achieving a market value of $22.2 billion by 2028.
The BFSI market dominated the Global Human Capital Management Market by Vertical in 2021, and would continue to be a dominant market till 2028.
The North America is fastest growing region in the Global Human Capital Management Market by Region in 2021, and would continue to be a dominant market till 2028.
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