Human Capital Management Market Statistics: 2031
The global human capital management market size was valued at $21.8 billion in 2021, and is projected to reach $51.3 billion by 2031, growing at a CAGR of 9% from 2022 to 2031.
Human capital management is a practice that organizations use to attract, recruit, train, develop, and retain best employees to achieve short- and long-term objectives. The system allows companies to invest in their employees to allow them to contribute at the highest level to achieve business goals. Human capital management sees employees as valuable resources that must be harnessed to fulfill their potential.
Advent of cloud-based HR management software has allowed HR departments to move their work schedules to the cloud while they work remotely, this factor aided in propelling the growth of the global human capital management market during the forecast period. Moreover, the simplification of HR operations and increase in need for integrated HR suites during the period has positively impacted the need for the human capital management industry. However, the need to comply with government regulations hamper the human capital management market forecast. On the contrary, increase in adoption of workforce analytics solutions and rise in adoption of digital HR technologies is expected to offer remunerative opportunities for the expansion of the HCM market during the forecast period. The human capital management market is segmented into Industry Vertical, Component, Deployment Mode and Enterprise Size.
Segment Review
The global human capital market is segmented on the basis of component, deployment mode, industry vertical, and region. On the basis of component, the market is segmented into solution and service. Moreover, on the basis of solution, it is segmented into HR, workforce management, recruiting, compensation & payroll, and others. Furthermore, on the basis of services, it is segmented into professional services and managed services. On the basis of deployment mode, the market is segmented into on-premise and cloud. By industry vertical, the market is segmented into BFSI, retail, healthcare, IT & telecom, government, manufacturing, hospitality, and others. On the basis of region, the HCM market is segmented into North America, Europe, Asia-Pacific and LAMEA.
By Component
The services segment is anticipated to grow at a significant rate during the period owing to rise in need of professional services for cloud based HCM Solutions.
By component, the solutions segment dominated the human capital management market share in 2021, and is expected to maintain its dominance in the coming years. Adoption of AI technology and use of cloud-based HCM solutions drive growth of the solutions segment. However, the services segment is expected to witness highest growth rate during the forecast period, owing to rise in adoption of HCM services among end users such as BFSI and manufacturing as they ensure effective functioning of solutions and platforms throughout the HCM process.
By Region
Asia-Pacific countries are expected to adopt a high rate due to ongoing digital and economic transformation of the region.
Region wise, the human capital management market was dominated by North America in 2021, and is expected to retain its position during the forecast period. This is attributed to a number of factors such as adoption of human capital management among various verticals such as retail and BFSI in the region. In addition, presence of growing number of human capital management vendors across the U.S. and Canada is expected to provide lucrative opportunities for the market. However, Asia-Pacific is expected to witness significant growth during the forecast period, owing to wide presence of small-and medium-scale organizations, which are turning toward human capital management solutions to efficiently manage their human resources system, particularly in developing countries such as China, India, and South Korea.
COVID-19 Impact Analysis
The COVID-19 impact has prompted every company and business to shift their business operations toward a remote work environment. Moreover, due to strict guidelines issued by government authorities, people were forced to be in-house. This led to adoption of human capital management by enterprises globally. So, the COVID-19 had positive impact on the human capital management market. Moreover, human capital management is becoming increasingly important, especially as work evolves related to COVID-19. With more employees working remotely and increased demand for specialized skills and workforce data, HCM teams and managers can offer comprehensive support across an organization and bring out the best in everyone. For instance, according to a report published by Glassdoor, in December 2020, more than 51% job seekers relied on online platforms for new opportunities. Similar trends were being noticed across the world, which supported growth of the global HCM market during the period.
Top Impacting Factors
Rise in Adoption of Cloud based HCM Software
Over the recent years, cloud-based software is witnessing an augmented trend, owing to its enhanced features such as automatic updates, unlimited capacity upgrades, built-in disaster recovery, and universal remote access capabilities. In addition, several industry verticals are adopting cloud services at a rapid pace owing to its benefits. Further, increase in usage of smart devices at workplace for better connectivity between departments supports growth for mobile HCM solutions. Further, advent of cloud-based solutions has made deployment easier for end users as these apps can be accessed over the web for a per-user subscription fee.
Increase in Automation of HR Operations
The future of HCM solution depends on powerful and robust integration. HCM solution that can effortlessly integrate with other software or tools is essential in evolving business environment, presently. Furthermore, the HR payroll industry is focused on advanced technologies such as artificial intelligence (AI) and blockchain to streamline business processes, which drives the human capital management industry.
For instance, in October 2020, TCS launched TCS Workforce Analytics, an AI-based unified system of engagement, insights & foresight for employees, managers and CXOs designed to enhance productivity and workforce experience. The new solution is designed to help enterprises deal with talent management challenges of the digital era. Such advanced developments drive the human capital management market growth.
Key Benefits for Stakeholders:
- The study provides an in-depth analysis of the global human capital management market forecast along with current & future trends to explain the imminent investment pockets.
- Information about key drivers, restraints, & opportunities and their impact analysis on global human capital management market trends is provided in the report.
- Porter’s five forces analysis illustrates the potency of the buyers and suppliers operating in the industry.
- The quantitative analysis of the market from 2022 to 2031 is provided to determine the HCM market potential.
Human Capital Management Market Report Highlights
| Aspects | Details |
 Market Size By 2031 | USD 51.3 billion |
 Growth Rate | CAGR of 9% |
 Forecast period | 2021 - 2031 |
 Report Pages | 309 |
 By Industry Vertical |
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 By Component |
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 By Deployment Mode |
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 By Enterprise Size |
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 By Region |
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 Key Market Players | Sumtotal Systems, Llc, SAP SE, Adp, inc., Cornerstone, Oracle, IBM Corporation, Epicor Software Corporation, WORKDAY INC., Infor, UKG INC |
Analyst Review
According to CXOs of leading companies, the human capital management market is projected to witness a healthy growth rate in the future. This is attributed to the increase in popularity of cloud-based HCM solution and increased awareness among end users about benefits of unified HCM solutions.
In addition, the global human capital management market is projected to witness prominent growth, especially in Asia-Pacific and North America. This growth is attributed to increased investments by key players for human capital management and adoption of cloud-based HCM solutions. In addition, technological advancements such as artificial intelligence (AI) and machine learning (ML) provide ample growth opportunities for the human capital management market.
Moreover, HCM software supports various HR functions such as recruitment and talent management, payroll, and benefits management. These integrated modules contain organizational features to manage complete employee experience. In addition, HCM software can be run and accessed in cloud at company premises or on-premise. By using cloud-based HCM software, businesses can significantly reduce maintenance costs, increase accessibility, improve employee experience, and increase security of employee records. In addition, HCM software manages employee data in a database and leading cloud HCM software providers offer advanced analytics to help employers gain insight into how best to manage their workforce.
Furthermore, enterprises make significant investments in mergers and acquisitions to enhance their existing solutions and deliver new solutions as well as develop automation technologies. For instance, in January 2020, Cornerstone OnDemand completed the acquisition of Clustree, a technology company.
The acquisition aimed to fasten development of the world’s biggest skills engine to aid organizations in detecting, developing, and implementing their talent for the positions needed today and in the future. Prominent market players explore new technologies and platforms to meet increase in customer demands. Product launches, partnerships, and product development are expected to enable them to expand their product portfolios and penetrate different regions. For instance, in September 2021, Oracle released Oracle Payroll Core, an adaptable payroll management solution. The solution is a part of Oracle Fusion Cloud Human Capital Management (HCM) and would aid both intergovernmental and non-governmental organizations in steering through complicated pay rules and policies to optimally pay any employee, anywhere, in any currency.
Human Capital Management Market is Expected to Reach $51.29 Billion by 2031
Simplification of HR operations and increase in need for integrated HR suites are the major drivers for the market growth.
The North America is the largest market for the Human Capital Management Market.
The key growth strategies for Human Capital Management Market include product portfolio expansion, acquisition, partnership, merger, and collaboration.
Oracle Corporation, SAP SE, IBM Corporation, INFOR, and Workday, Inc.
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