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Global firms are realizing the value of efficient personnel management, which has increased demand for advanced HRMS systems. The industry's transition to cloud-based HRMS platforms is one notable trend. With the agility, adaptability, and accessibility that cloud technology provides, businesses may effectively streamline their HR procedures. This tendency has accelerated as companies look for ways to support a distributed workforce and accept remote work more and more. Integrating machine learning and artificial intelligence into HRMS software is another noteworthy trend. With the help of these tools, businesses can automate repetitive HR processes like candidate matching and resume screening, freeing up HR staff members to work on primarily strategic and valuable projects.
AI-driven analytics facilitates decision-making by offering insights on worker performance, engagement, and retention. This trend improves productivity and helps create HR strategies that are more data-driven and informed. Moreover, data security and compliance have taken center stage in HRMS trends. Organizations are placing a higher priority on HRMS solutions that guarantee privacy law compliance and secure sensitive employee data due to the introduction of strict data protection rules worldwide.
In response, suppliers in the HRMS industry are addressing the increasing worries about confidentiality and safety of data by integrating compliance features and cutting-edge security measures into their software. HRMS systems are becoming more customizable and modularized in the market, enabling businesses to customize the software to meet their specific requirements. This trend offers freedom in deciding on and implementing only the features that are necessary for each firm, acknowledging the varied requirements of various industries and company sizes. With customizable HRMS solutions, companies may adjust to new situations and develop HR procedures without having to completely rebuild their systems. Equality and inclusion capabilities have been an increasing need in HRMS software as businesses attempt to establish more welcoming workplaces. These elements support diversity metrics tracking, inclusive culture development, and diversity program monitoring and promotion.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Market Opportunities | Growing number of companies globally |
| Market Dynamics | Rising adoption of automation and digitization of HR operations Improvements in modern technologies such as Machine Learning (ML), and Artificial Intelligence (AI) |
Human Resources Management Software Market Highlights:
Human Resources Management Software Market Overview
Human Resources Management (HRM) Software Market Size was valued at USD 13.3 billion in 2021. The Human Resources Management 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 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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