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Different elements that shape the market's dynamics and development trajectory have a substantial impact on HRS software. The growing need for effective personnel management solutions to expedite HR procedures is one major motivator. The adoption of HRMS becomes imperative as firms realize the significance of efficiently managing their human capital. This need is especially noticeable in sectors of the economy that are rapidly going through a digital revolution, as businesses look for cutting-edge ways to improve their HR capacities. Furthermore, the demand for cloud-based HRMS systems has increased due to the increasing shift toward flexible and remote work arrangements.
The decentralized nature of HR functions has become necessary due to the move towards remote employment, and cloud-based HRMS provides the adaptability and availability needed to accommodate these developments. As companies try to adjust to the changing nature of work, this factor is anticipated to have a major impact on the growth of the HRMS market. Regulation and compliance requirements also have a major influence on the widespread implementation of HRMS. Organizations must invest in HRMS systems to ensure that they adhere to evolving legal frameworks as regulations and laws pertaining to labor change.
This includes automatic tax compliance, payroll processing, and reporting features, all of which are essential for businesses to stay out of legal hot water and continue running smoothly. One essential component of the HRIS was the electronic management and storage of personnel records. Consequently, the moment when human resources records, processes, and reporting are handled automatically by software is referred to by many HR practitioners using the acronym HRIS. As technology developed, the Human Resources Information System, also known as HRMS, became more capable than just keeping personnel records. Even now, the terms are still interchangeable when referring to the computer applications that manage the personal information of team members and expedite an organization's HR processes.
Furthermore, a key element influencing the HRMS industry is the emphasis on interface design and user experience. HRMS vendors need to create user-friendly interfaces and smooth experiences, as enterprises place a high priority on employee engagement and satisfaction. Talent retention and corporate performance are directly correlated with higher employee satisfaction and better user adoption rates provided by a well-designed HRMS. Budgetary restrictions and general economic conditions also have an impact on the HRMS market. Organizations may reevaluate their spending priorities during difficult economic times, which could influence the uptake of HRMS systems. Nonetheless, even in difficult economic times, HRMS is frequently positioned as an investment of strategic importance due to the long-term advantages of increased workforce management and HR efficiency.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Market Size Value In 2022 | USD 14.92 Billion |
| Growth Rate | 12.2% (2022-2030) |
Human Resources Management Software Market Highlights:
Human Resources Management (HRM) Software Market Overview
Human Resources Management (HRM) Software Market Size was valued at USD 13.3 billion in 2021. The Human Resources Management (HRM) Software market industry is projected to grow from USD 14.92 Billion in 2022 to USD 33.40 billion by 2030, exhibiting a compound annual growth rate (CAGR) of 12.2% during the forecast period (2024-2032). Improvements in modern technologies, growing adoption of automation, and digitization of HR operations are the key market drivers enhancing market growth.
Figure 1: Human Resources Management (HRM) Software Market Size, 2022-2030 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Human Resources Management (HRM) Software Market Trends
Remote working practices have boosted the market growth
Post-COVID-19 remote working and hybrid are among the new working norm. Major companies globally are allowing their employees to work from home once or twice a week. It was believed before the pandemic that employees working from home have a lower productivity rate. However, through surveys, the results indicate otherwise. For instance, a survey conducted by Airtasker surveyed 1,004 full-time employees, out of which 505 of whom were remote employees in the U.S. The survey results indicated that remote workers are more productive compared to their office-based counterparts. It was also noted that remote employees work an additional 1.4 more days per month compared to in-office employees, which work 17 additional workdays a year.
As the working models are becoming more flexible, the human resources departments are adopting human resources management software that is easy to handle, effective, and can support the remote working model. Moreover, large players in the market are adopting human resource management software for workforce planning, payroll, recruitment, and talent acquisition, as it is one solution for all their HR requirements. Furthermore, the growing number of firms and rising demand for HRM software are expected to boost the Human Resources Management (HRM) Software market CAGR globally in the forecast period.
However, companies in the market are investing in developing new software and launching new HRM software in the market. Such factors are bolstering the growth of the Human Resources Management (HRM) Software market revenue.
Human Resources Management (HRM) Software Market Segment Insights
Human Resources Management (HRM) Software Vertical Insights
The Human Resources Management (HRM) Software market segmentation, based on vertical, includes BFSI and Healthcare. The BFSI segment held the majority share in 2021, attributed to around ~55-60% with respect to the Human Resources Management (HRM) Software market revenue. Some of the factors contributing to the growth of this segment include high demand in the retail business, as there is a higher need for matching consumer expectations. Moreover, the growing BSFI industry and the advantages offered by HRM software to manage people, process payroll, track attendance & worked hours, and manage taxes, among others, propel the HRMS software in the BFSI industry. Furthermore, the healthcare segment is expected to grow at the fastest CAGR during the forecast period. Factors attributing to this segment's growth include the growing healthcare sector and rising investments in the development of the healthcare industry.
September 2020: Chief Secretary (CS) launched an e-Human Resource Management (e-HRM) System for employees working for J&K Government.
Human Resources Management (HRM) Software Organization Size Insights
The Human Resources Management (HRM) Software market segmentation, based on organization size, includes large enterprises and small and medium enterprises. The large enterprise segment dominated the market in 2021. This is due to the increasing digitalization of workflow in large enterprises and the rising need to manage enormous databases of employees efficiently. As the implementation of HRM software enabled decreasing the time spent on manual tasks such as performance goal tracking, payroll, feedback, and reviews, among others, the demand for HRMs is high in large enterprises and positively impacts the Human Resources Management (HRM) Software market growth. However, the small and medium enterprises segment is projected to be the faster-growing segment during the forecast period, 2022-2030, owing to the increasing need for cost-effective HRM solutions.
September 2022: European companies Recruitee, Sympa, and Gavel have acquired kiwiHR. These four entities plan on launching a Human Resources Management System for SMBs.
Human Resources Management (HRM) Software Service Insights
The Human Resources Management (HRM) Software market data has been bifurcated by integration and deployment. The deployment service segment dominated the market in 2021 in the Human Resources Management (HRM) Software market. The growing demand for solutions that help in effectively managing tasks in lesser time has led to the rising deployment of HRM software among many organizations.
Human Resources Management (HRM) Software Deployment Insights
Based on Deployments, the Human Resources Management (HRM) Software industry has been segmented into on-cloud and on-premise. The on-cloud segment held the largest segment share in 2021 and is expected to grow at the fastest CAGR during the forecast period. The primary factors contributing to the growth of this segment include the advantages offered by the on-cloud deployment, such that it allows users to access data from any place effortlessly. Moreover, there is no need for constant updating of this software s, and it has a user-friendly interface which makes it very easy to use.
Figure 2: Human Resources Management (HRM) Software Market, by Deployment, 2021 & 2030 (USD Million)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Human Resources Management (HRM) Software Regional Insights
By Region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. The North America market accounted for USD 5.8 billion in the Human Resources Management (HRM) Software market in 2021. Companies in this region have been early adopters of modern technologies. This is attributed to the growing adoption of advanced solutions owing to highly developed company infrastructure and the presence of major players such as Microsoft, Oracle, and IBM, among others, across the region.
Further, the major countries studied in the market report are: The U.S., Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil
Figure 3: HUMAN RESOURCES MANAGEMENT (HRM) SOFTWARE MARKET SHARE BY REGION 2021 (%)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Europe Human Resources Management (HRM) Software market accounts for the second-largest market share due to the growing number of companies and increasing deployment of on-cloud HRM software owing to its benefits. Further, the Germany Human Resources Management (HRM) Software market held the largest market share, and the UK Human Resources Management (HRM) Software market was the fastest-growing market in the European region.
The Asia-Pacific Human Resources Management (HRM) Software Market is anticipated to grow at the fastest CAGR from 2022 to 2030. This is due to rising investments in research and developments of cloud technology and the growing adoption of modern technologies in larger enterprises. Moreover, China Human Resources Management (HRM) Software market held the largest market share. The India Human Resources Management (HRM) Software market was the fastest-growing market in the Asia-Pacific region.
Human Resources Management (HRM) Software Key Market Players & Competitive Insights
Major market players are launching new software with several advanced features to help the Human Resources Management (HRM) Software market grow even more. Market participants are also taking initiatives that help them grow their footprint, with key market developments such as new launches, mergers & acquisitions, and rising investments. Competitors in the Human Resources Management (HRM) Software industry offer cost-effective solutions to survive in an increasingly competitive market environment.
The primary business strategy adopted by manufacturers in the Human Resources Management (HRM) Software industry is constantly upgrading their software with additional features that enable faster working and are effective in reducing working time. In recent years, Human Resources Management (HRM) Software industry has launched new software that offers several benefits. The Human Resources Management (HRM) Software market, major players such as Gusto, Microsoft, AP, IBM, and others are working on launching new products and investing in research and development activities.
Microsoft is a multinational technology company that develops software, and consumer electronics, among others. The company develops HRM software that helps in managing payroll, time and attendance tracking, employee scheduling, leave and absence programs, benefits management and administration, self-service employee portal, and recruiting. In January 2023, Microsoft invested an undisclosed size as an extension of HR software unicorn Darwinbox's Series D round.
Also, Gusto is a developer of software that help in HR management in person or remotely. The company offers services to around 200,000 businesses nationwide. In August 2021, Gusto Secures, an HR software company, secured USD 10 billion in the HR and payroll software space led by T. Rowe Price and Gusto's existing investors
Key Companies in the Human Resources Management (HRM) Software market includes
Human Resources Management (HRM) Software Industry Developments
July 2022: Omni HR an HR automation platform, closed USD 2.4 million in an oversubscribed pre-seed funding round that was co-led by Alpha JWC Ventures and Picus Capital, among other investors.
January 2022: flex, a South Korea-based human resources management platform received USD 32 million Series B round at a valuation of USD 287 million.
October 2021: Chile’s Buk a company that developed human resources management platform for Latin American companies raised USD 50 million in a Series A funding round that values the company at USD 417 million.
Human Resources Management (HRM) Software Market Segmentation
Human Resources Management (HRM) Software Vertical Outlook
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BFSI
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Healthcare
Human Resources Management (HRM) Software Organization Size Outlook
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Large Enterprises
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Small and Medium Enterprises
Human Resources Management (HRM) Software Service Outlook
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Integration
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Deployment
Human Resources Management (HRM) Software Deployment Outlook
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On-Cloud
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On-Premise
Human Resources Management (HRM) Software Regional Outlook
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North America
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US
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Canada
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Europe
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Germany
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France
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UK
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Italy
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Spain
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Rest of Europe
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Asia-Pacific
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China
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Japan
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India
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Australia
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South Korea
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Australia
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Rest of Asia-Pacific
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Rest of the World
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Middle East
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Africa
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Latin America
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