Human Capital Management Market by Offering (Software (Core HR, ATS, HR Analytics, and Workforce Management) and Services), Deployment Model, Organization Size, Vertical (BFSI, Manufacturing, IT & Telecom, Government) & Region - Global Forecast to 2029

Human Capital Management Market by Offering (Software (Core HR, ATS, HR Analytics, and Workforce Management) and Services), Deployment Model, Organization Size, Vertical (BFSI, Manufacturing, IT & Telecom, Government) & Region - Global Forecast to 2029

The HCM market is expected to grow from USD 27.5 billion in 2024 to USD 41.3 billion by 2029 at a Compound Annual Growth Rate (CAGR) of 8.5% during the forecast period. The HCM market is undergoing a rapid evolution spurred by several key factors. Technological advancements have revolutionized traditional HR practices, with cloud-based solutions, AI, and analytics driving efficiency and insight. In addition, globalization has necessitated the need for scalable and adaptable HCM platforms that can support diverse workforces across various geographical locations. Moreover, the growing emphasis on talent management, employee engagement, and workforce optimization has reshaped the priorities within the HCM landscape, prompting a shift towards more holistic and integrated solutions.

""As per the organization size, SMEs are expected to grow at the second highest CAGR during the forecast period. ""

The employee count of SMEs generally ranges between 1 and 1,000. Small capital, less complex environment, and low integration with advanced technologies affect the adoption of HCM in SMEs. SMEs face specific challenges, such as domain-specific personnel and skilled workforce requirements, budget constraints, and limited economies of scale. Tier 2 and tier 3 HCM providers mainly serve them. To make well-informed decisions for their business growth, SMEs have been forced to invest in HCM software and adopt go-to-market strategies due to increased attrition rates, expensive recruitment expenses, and a competitive market. Because of their budget constraints and requirement for scalable, practical solutions, small and medium-sized enterprises (SMEs) face particular HR issues. HCM providers catering to SMEs provide comprehensive HR software tailored to their needs. These solutions streamline essential HR processes such as payroll, recruitment, attendance tracking, and performance management, enabling SMEs to manage their workforce effectively. By leveraging HCM software, SMEs can enhance employee engagement, ensure compliance with labor regulations, and drive business growth. Providers like HROne and CBIZ offer customizable and cost-effective HCM solutions to help SMEs optimize their HR operations and foster organizational success.

""As per the software, CoreHR is expected to hold the highest market share during the forecast period. ""

CoreHR software forms the foundational element of HCM systems, encompassing essential HR functions and processes. This software typically includes features such as employee data management, payroll processing, benefits administration, and compliance management. It is a centralized repository for critical HR information, enabling organizations to efficiently manage employee records, track personnel movements, and administer compensation and benefits packages. CoreHR software streamlines routine HR tasks, enhances data accuracy and ensures compliance with regulatory requirements. Moreover, it facilitates seamless communication between HR departments and employees, enabling self-service functionalities such as accessing pay stubs, updating personal information, and requesting time off. As the backbone of HCM systems, CoreHR software lays the groundwork for effective talent management, workforce planning, and strategic decision-making, contributing to overall operational excellence and employee satisfaction.

""As per vertical, the healthcare & life sciences vertical will grow at the second highest CAGR in 2024. ""

In Healthcare and Life Sciences, HCM encompasses strategies and processes to effectively manage and optimize the workforce for optimal patient care and organizational success. Verisys is a leading provider contributing to HCM in Healthcare and Life Sciences by offering advanced compliance and data management solutions. Their suite of services, including FACIS® for Compliance and Safety and credentialing and provider data management, ensures regulatory compliance, streamlines onboarding processes, and enhances workforce efficiency across diverse healthcare markets. Oracle is another notable Healthcare and Life Sciences provider, offering comprehensive HCM solutions tailored to industry-specific needs. With features like Oracle Recruiting and Oracle Journeys, Oracle enables organizations to find specialized talent efficiently, enhance employee engagement, and align people plans with product lifecycles. Their advanced HCM controls ensure data security and compliance, empowering healthcare organizations to optimize workforce management and drive organizational success.

The breakup of the profiles of the primary participants is below:

By Company: Tier I: 48%, Tier II: 37%, and Tier III: 15%

By Designation: C-Level Executives: 40%, Director Level: 34%, and Others: 26%

By Region: North America: 42%, Europe: 31%, Asia Pacific: 16%, Rest of World: 11%

Note: Others include sales managers, marketing managers, and product managers

Note: The rest of the World consists of the Middle East & Africa, and Latin America

Note: Tier 1 companies have revenues of more than USD 100 million; tier 2 companies' revenue ranges from USD 10 million to USD 100 million; and tier 3 companies' revenue is less than 10 million

Source: Secondary Literature, Expert Interviews, and MarketsandMarkets Analysis

Some of the significant vendors offering HCM software across the globe include.

Workday (US), UKG (US), Oracle (US), SAP (Germany), Dayforce (US), ADP (US), Paylocity (US), Paycom (US), Cornerstone (US), and Microsoft (US).

Research coverage:

The HCM market is covered by the market study in all its segments. This study evaluates the market's size and growth potential in various market segments, including offering, deployment model, organization size, vertical, and geography. It contains a thorough competition analysis of the major market participants, company biographies, important insights regarding their business and product offerings, new developments, and crucial market strategies.

Reasons to buy this report:

With information on the most accurate estimates of revenue figures for the entire HCM market and its subsegments, the research will benefit market leaders and recent newcomers. This report will help stakeholders understand the competitive landscape and gain more insights to position their businesses better and plan suitable go-to-market strategies. The report also helps stakeholders understand the market pulse and provides information on key market drivers, restraints, challenges, and opportunities.

The report provides insights on the following pointers:

Analysis of key drivers (as companies engage in the ongoing ""war for talent,"" HCM solutions emerge as essential tools, offering streamlined recruitment processes, comprehensive workforce management, and personalized employee engagement strategies), restraints (security concerns over cloud-based deployment), opportunities (integration of AI-driven analytics into HCM systems heralds a new era of workforce optimization and strategic talent management), and challenges (presence of multiple generations with distinct work styles and communication preferences necessitates adaptable HCM systems to ensure equitable treatment and collaborative efficiency).

Product Development/Innovation: Detailed insights on upcoming technologies, research & development activities, and new product & service launches in the HCM market.

Market Development: Comprehensive information about lucrative markets – the report analyses the HCM market across varied regions.

Market Diversification: Exhaustive information about new products and services, untapped geographies, recent developments, and investments in the HCM market.

Competitive Assessment: In-depth assessment of market shares, growth strategies, and business processes offered in HCM of leading players like Workday (US), UKG (US), Oracle (US), SAP (Germany), Dayforce (US), among others in the HCM market.