Human Capital Management Market with COVID-19 Impact Analysis, by Component, Software (Core HR, Applicant Tracking System, HR Analytics, & Workforce Management), Services, Deployment Model, Organization Size, Vertical, Region and forecast till 2027.

Human Capital Management Market with COVID-19 Impact Analysis, by Component, Software (Core HR, Applicant Tracking System, HR Analytics, & Workforce Management), Services, Deployment Model, Organization Size, Vertical, Region and forecast till 2027.

Human Capital Management Market

The global Human Capital Management (HCM) market is expected to grow at a compound annual growth rate (CAGR) of 7.5 percent from USD 22.3 billion in 2021 to USD 32.0 billion by 2026. Integration of emerging technologies, such as Artificial Intelligence (AI) and Machine Learning (ML), with HCM software has emerged as one of the most powerful factors influencing HCM software and service adoption across regions. Rising cloud adoption among small and medium-sized businesses to effectively manage field and office personnel is expected to create numerous opportunities for HCM vendors. Human capital management (HCM) is the process of hiring the right people, effectively managing workforces, and increasing productivity. It has progressed from a primarily administrative function to a critical business Values.

Drivers: AI and machine learning (ML) integration in HCM suites

The majority of businesses across verticals are facing a shortage of highly skilled workers as business operations become more complex as new technologies and innovations are adopted. As a result, HR managers around the world are having difficulty hiring the right people for the right jobs. HCM suites can assist HR managers in finding skilled workers by utilising Artificial Intelligence (AI) and Machine Learning (ML) technologies. AI and machine learning can help to automate the recruitment process and provide more filters to help find the right person.

Restraints: Concerns about cloud-based deployment security

Enterprises are concerned about security because the majority of HCM software is hosted in the cloud and managed by a third party. The majority of vendors are offering HCM software in the cloud to take advantage of cloud technology benefits such as security, scalability, and cost reduction in IT infrastructure. Cloud-based software frequently includes robust security features. This eliminates the risk of hacking or data breaches. Nonetheless, many businesses are often hesitant to move HR files and systems, which typically contain sensitive employee information, to the cloud. As a result, enterprises are not ready to move their employee data, payroll, and administrative information to the cloud.

Impact of COVID-19

Because of the COVID-19 pandemic, businesses around the world are adopting a remote work culture, posing new challenges for HCM software and service providers. The main challenge is keeping offerings up to date with changing organisational cultures. During this pandemic, HCM providers can advance their software by adding new capabilities, such as tracking employee health and location. This is expected to increase the uptake of HCM software. However, cost cutting and project delays by enterprises may limit the adoption of HCM software. Segmentation By Component:

The HCM market is divided into two components: software and services. During the forecast period, the service component is expected to have a larger market share. Increasing software adoption to manage the entire employee lifecycle, as well as the growing need to comply with government regulations, are some of the critical factors driving the software segment to have the highest market share during the forecast period.

Segmentation By Deployment Mode:

Based On the deployment mode the market is segmented into On-Premises and Cloud. According to the deployment model, the cloud segment will have a larger market share in the HCM market during the forecast period. Cloud adoption of HCM software is currently high, and the same trend is expected to continue, with the majority of end users having their software on premises, as it provides greater data security and helps enterprises comply with various regulations.

Segmentation By Organization sizes:

Based on the organization sizes the market is segmented into small & medium enterprises and large-scale enterprises. SMEs are expected to hold the majority of the market share during the forecast period, based on organisation size. Large enterprises have traditionally deployed HCM software. However, this trend has now shifted to SMEs. It is expected to be there within the next five years, with SMEs contributing the most to the HCM market. Some of the factors responsible for this rapid growth include the growing need to manage a diverse workforce, increase employee productivity, and comply with regulations.

Segmentation By Vertical:

Based on the vertical segmentation the market is segmented into Banking, Financial Services and Insurance, Government, Telecom & IT, Manufacturing, Consumer Goods and retails, Healthcare & Lifesciences, Energy and Utilities, Transportation and Logistics and Other Verticals.

Segmentation by Region

Based on region, the NGS services market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. During the forecast period, Asia Pacific will account for the largest market share.

The global HCM market is divided into five major geographical regions: North America, Asia Pacific (APAC), Europe, the Middle East and Africa (MEA), and Latin America. Due to the presence of a large number of HCM vendors and increasing adoption of cloud-native technologies, Asia Pacific is expected to account for the largest market size during the forecast period. The major countries, such as China and Japan, are witnessing massive investments in verticals such as BFSI, retail, healthcare, manufacturing, telecommunications, and IT, which has resulted in development and economic growth in APAC countries.

Competitive Landscape:

The major vendors offering HCM software and services globally are Workday (US), Oracle (US), ADP (US), SAP (UK), and Microsoft (US).

Industrial Development:

Workday announced in September 2021 that Google LLC had subscribed to additional products to support its global workforce, including Workday Adaptive Planning, Workday Extend, Workday Prism Analytics, and Workday Strategic Sourcing. Google will also expand its current use of Workday HCM as part of its ongoing investment in talent management strategies, adding new applications to deliver enhanced employee experiences and recruiting to support its global workforce.

Workday and Microsoft announced a partnership in May 2020. The goal of this collaboration is to expand cloud-based enterprise planning software by running workday adaptive planning on the Microsoft Azure cloud.

Ultimate Software launched Employee File Management in July 2019, allowing HR professionals to easily share documents with third parties regardless of their location.

Market taxonomy

Based on Component:

Software

• Core HR
• Applicant Tracking System
• HR Analytics
• Workforce Management

Services

• Integration and Implementation
• Training and Education
• Support and Maintenance
• Consulting

Based on deployment model:

On-premises

Cloud

Based on organization size

Small and Medium-sized Enterprises (SMEs)

Large Enterprises

Based on vertical:

Banking, Financial Services, and Insurance (BFSI)

Government

Manufacturing

Telecom and IT

Consumer Goods and Retail

Healthcare and Life Sciences

Energy and Utilities

Transportation and Logistics

Others (Hospitality, Education, and Media and Entertainment)

By Region

North America

Europe

Asia Pacific

Latin America

Middle East & Africa