Human Capital Management Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2023-2028

Abstract

The global human capital management market size reached US$ 22.7 Billion in 2022. Looking forward, IMARC Group expects the market to reach US$ 37.0 Billion by 2028, exhibiting a growth rate (CAGR) of 8.48% during 2022-2028. The rapid technological advancements, increasing globalization of businesses, growing demand for automation, rising trend of remote work, growing demand for HCM to gain real-time insights into workforce performance, and escalating emphasis on employee engagement and satisfaction are some of the major factors propelling the market.

Human capital management (HCM) refers to a critical function in organizations, focusing on the recruitment, management, development, and optimization of an organization's human resources. It comprises talent acquisition, learning and development, performance management, compensation planning, and workforce planning. HCM finds extensive applications in recruitment, onboarding, training, career development, succession planning, time tracking, employee scheduling, payroll, benefits administration, and compliance management. It aids in increasing productivity, enhancing employee engagement, fostering a collaborative environment, reducing administrative costs, providing real-time insights, promoting compliance, and supporting strategic planning.

The rising trend of remote work, which necessitates tools that can effectively manage and engage employees across different locations, is propelling the market growth. Furthermore, the widespread adoption of HCM to ensure compliance with labor laws and employee benefits regulations is driving the market growth. Apart from this, the escalating emphasis on employee engagement and satisfaction is facilitating the demand for HCM as it offers personalized and continuous feedback. Besides this, the growing demand for HCM to gain real-time insights into workforce performance and make data-driven decisions is positively influencing the market growth. Moreover, the rising adoption of HCM to align human resources with organizational goals is contributing to the market growth. Along with this, the increasing utilization of HCM by small and medium enterprises (SMEs) is acting as another growth-inducing factor.

Human Capital Management Market Trends/Drivers:

The rapid technological advancements

The integration of technologies, including artificial intelligence (AI), machine learning (ML), and cloud computing, is revolutionizing the HCM market. In line with this, AI and ML offer predictive analytics, personalized learning paths, and intelligent automation, which aids in enhancing efficiency and decision-making. Furthermore, cloud-based solutions enable accessibility and collaboration across various geographical locations, ensuring a uniform and seamless experience. This not only supports global operations but also provides scalability to adapt to varying business needs. Additionally, the technology is creating platforms that are more user-friendly, allowing a wider array of users to interact without intensive training. Moreover, the real-time analysis and insights provided by these advanced technologies assist HR professionals in predicting trends, identifying potential issues, and making informed actions. Apart from this, the increasing adoption of automation to minimize manual errors, save valuable time, and optimize processes is positively influencing the market growth.

The increasing globalization of businesses

The increasing complexity of managing businesses due to a global and diverse workforce is driving the market growth. In line with this, HCM systems are essential in ensuring consistency in HR practices, complying with various local labor laws, and providing effective communication across different cultures and time zones. Additionally, HCM tools provide the necessary automation, integration, and flexibility to handle various currencies, languages, regulations, and cultural nuances, making manual management less cumbersome and error-free. Moreover, they allow for the creation of global talent pools, standardize recruitment, onboarding, and training procedures, and ensure that compensation and benefits are aligned with local standards. Apart from this, the need for real-time collaboration and communication across different locations is facilitating the demand for cloud-based HCM solutions, as they can foster a unified organizational culture, facilitate global talent management, and ensure legal compliance.

The growing demand for automation

The increasing demand for automation in HR functions is a prominent factor in the growth of the HCM market. Automation in areas, such as recruitment, payroll processing, performance tracking, and benefits administration eliminates repetitive and time-consuming tasks, allowing HR professionals to focus on more strategic roles. Furthermore, automated recruitment tools can scan thousands of applications to shortlist candidates based on predefined criteria, reducing bias and accelerating the hiring process. Additionally, payroll automation ensures accuracy and compliance with tax regulations, thus minimizing potential legal issues. Apart from this, automation in performance management enables continuous feedback and real-time adjustments, creating a more agile and responsive workforce. Moreover, automated reporting and analytics provide insights that facilitate better planning and decision-making. As a result, automation not only enhances efficiency but also improves the employee experience by offering personalized and timely interactions.

Human Capital Management Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global human capital management market report, along with forecasts at the global, regional and country levels from 2023-2028. Our report has categorized the market based on component, deployment type and industry verticals.

Breakup by Component:

Software

Core HR

Recruiting

Workforce Management

Compensation and Payroll

Others

Service

Managed Service

Professional

Software dominates the market

The report has provided a detailed breakup and analysis of the market based on the component. This includes software (core HR, recruiting, workforce management, compensation and payroll, and others) and service (managed service and professional). According to the report, software represented the largest segment.

Software is dominating the market as it offers scalability to accommodate the changing size and complexity of businesses. It allows organizations to tailor functionalities to their specific needs, providing both growth and flexibility in various HR functions. Furthermore, the software automates repetitive tasks, such as payroll processing, recruitment, and benefits administration, which leads to improved efficiency, accuracy, and time savings, allowing HR professionals to focus on more strategic roles. Apart from this, it enables organizations to gather insights from vast amounts of employee data, facilitating better decision-making and strategic planning. Moreover, the software offers seamless integration with other business tools and systems, leading to a more unified and streamlined workflow. Along with this, it provides constant updates to reflect changes in regulations and laws. This ensures that organizations maintain compliance with local and international labor laws, thus minimizing legal risks.

Breakup by Deployment Type:

Cloud-based

On-premises

Cloud-based dominates the market

The report has provided a detailed breakup and analysis of the market based on the deployment type. This includes cloud-based and on-premises. According to the report, cloud-based represented the largest segment.

Cloud-based HCM solutions provide access from anywhere with an internet connection, facilitating collaboration among employees across different locations. Furthermore, it offers the ability to scale resources up or down based on the organization's needs. This flexibility makes it suitable for companies of all sizes, including rapidly growing businesses. Additionally, cloud-based HCM reduces capital expenditure by utilizing shared resources and eliminating the need for physical infrastructure. Apart from this, it allows easy integration with other business applications and can often be customized to fit specific organizational needs, providing a cohesive and tailored solution. Moreover, cloud-based solutions enable automatic updates and upgrades without interrupting the user experience, thus ensuring that organizations are always utilizing the latest features and complying with the most recent regulations.

Breakup by Industry Verticals:

BFSI

Retail

IT and Telecommunication

Healthcare

Hospitality

Government

Manufacturing

Others

IT and telecommunication dominate the market

The report has provided a detailed breakup and analysis of the market based on the industry verticals. This includes BFSI, retail, IT and telecommunication, healthcare, hospitality, government, manufacturing, and others. According to the report, IT and telecommunication represented the largest market segment.

IT and telecommunication are fields characterized by constant technological innovation and evolution. This demands a highly skilled and adaptable workforce, necessitating the use of advanced HCM solutions for talent acquisition, training, and development. Furthermore, they operate on a global scale, requiring the management of diverse teams spread across various regions. In line with this, HCM solutions facilitate seamless communication, collaboration, and compliance with varying regional regulations. Additionally, the IT and telecommunication sectors are known for intense competition for top talent. HCM tools enable effective recruitment, retention, and development strategies, providing a competitive edge in retaining the best professionals. Moreover, they embrace remote and flexible working arrangements, which requires HCM solutions to enable effective management, collaboration, and engagement of remote teams.

Breakup by Region:

North America

United States

Canada

Asia-Pacific

China

Japan

India

South Korea

Australia

Indonesia

Others

Europe

Germany

France

United Kingdom

Italy

Spain

Russia

Others

Latin America

Brazil

Mexico

Others

Middle East and Africa

North America exhibits a clear dominance in the market, accounting for the largest human capital management market share

The report has also provided a comprehensive analysis of all the major regional markets, which includes North America (the United States and Canada); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (Germany, France, the United Kingdom, Italy, Spain, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, North America represented the largest market segment.

North America is a hub for technological innovation owing to the presence of leading tech companies, along with a conducive environment for research and development (R&D) that has spurred advancements in AI, cloud computing, and other technologies that underpin modern HCM systems. Furthermore, the region's businesses have a longstanding emphasis on strategic human resource management, talent optimization, and employee engagement, which aligns well with the capabilities of HCM solutions. In addition, the implementation of strict labor laws and regulations related to employee benefits, diversity, and inclusion is facilitating the demand for robust HCM systems to ensure compliance. Apart from this, North America's strong economy encourages business growth and development, leading to an increase in workforce management needs and thereby propelling the demand for HCM solutions.

Competitive Landscape:

The leading HCM companies are investing in machine learning (ML) algorithms, data analytics, and artificial intelligence (AI) to create sophisticated tools that cater to the multifaceted demands of modern HR management. Additionally, they are engaging in strategic mergers, acquisitions, and partnerships, which enables them to broaden their product offerings, reach new markets, and combine expertise to create more robust solutions. Furthermore, leading market players are focusing on expanding their geographic reach, targeting emerging markets and sectors where HCM solutions are still underutilized, such as healthcare, retail, and small-to-medium-sized enterprises. Apart from this, top companies are designing intuitive interfaces, personalized dashboards, and seamless integrations that enhance usability for both HR professionals and employees. Moreover, they are fortifying their solutions with advanced security measures and compliance management tools.

The report has provided a comprehensive analysis of the competitive landscape in the global human capital management market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:

Automatic Data Processing Inc.

Ceridian HCM Inc.

Infor Inc. (Koch Industries Inc.)

International Business Machines Corporation

Microsoft Corporation

Oracle Corporation

PeopleFluent Inc. (Learning Technologies Group plc)

Ramco Systems Limited

SAP SE

SumTotal Systems LLC (Skillsoft Limited)

UKG Inc.

Workday Inc.

Recent Developments:

In September 2022, Workday Inc. introduced a next-generation skills technology that allows organizations to gain deeper insight into workforce skills and deliver more personalized employee experiences.

In October 2022, Automatic Data Processing Inc. launched "Voice of the Employee," which will allow employers to collect feedback and sentiment throughout the employee lifecycle.

In December 2021, Ceridian HCM Inc. acquired ADAM HCM, a leading payroll and human capital management company, to expand its presence globally.

Key Questions Answered in This Report

• 1. What was the size of the global human capital management market in 2022?
• 2. What is the expected growth rate of the global human capital management market during 2023-2028?
• 3. What are the key factors driving the global human capital management market?
• 4. What has been the impact of COVID-19 on the global human capital management market?
• 5. What is the breakup of the global human capital management market based on the component?
• 6. What is the breakup of the global human capital management market based on the deployment type?
• 7. What is the breakup of the global human capital management market based on the industry verticals?
• 8. What are the key regions in the global human capital management market?
• 9. Who are the key players/companies in the global human capital management market?