Human Resource (HR) Technology Market Statistics, 2031
The global human resource technology market size was valued at $32.6 billion in 2021, and is projected to reach $76.5 billion by 2031, growing at a CAGR of 9.2% from 2022 to 2031.
Increase in automation of HR operations and surge in the trend of hybrid working models across various organizations are driving the growth of the market. In addition, rise in need for cost-effective HR technologies is fueling the growth of the human resource (HR) technology market. However, limitations of data integration and threat to data privacy hinder the market growth and malfunctions & unauthorized access and requires highly specialized skilled operators limits the growth of this market. Conversely, Surge in innovation and decentralized HR evolving new management skills and increase in the integration of Robotic Process Automation (RPA) in HR management is anticipated to provide numerous opportunities for the expansion of the human resource technology market during the forecast period.
HR technology helps HR managers and people specialists work more effectively and deliver a better employee experience. It helps in storing data in a complete and secure way, automates routine processes, and provides analytics to create management reports and insights for better business decision-making. Depending on the system, HR technology can support a range of HR functions. This includes pay, rewards, benefits, talent management, recruitment and onboarding, performance management, and employee communications.
The report focuses on growth prospects, restraints, and analysis of the global human resource technology market trends. The study provides Porter’s five forces analysis to understand the impact of various factors, such as bargaining power of suppliers, competitive intensity of competitors, the threat of new entrants, threat of substitutes, and bargaining power of buyers on the global HR technology market share.
Segment Review
The global human resource technology market is segmented into type, enterprise size, deployment mode, end user, and region. Depending on the type, the market is divided into talent management, payroll management, performance management, workforce management, and others. Based on enterprise size, it is categorized into large enterprises and SMEs. By deployment mode, it is divided into on-premises and cloud. Based on end-user, it is bifurcated into BFSI, IT & telecom, healthcare, retail, manufacturing, government, and Others. Region-wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
Depending on the deployment mode, the on-premise segment dominated the human resource technology market size in 2022 and is expected to continue this trend during the forecast period, industries verticals propels the adoption of on-premises-based HR technology solutions to ensure flexibility and scalability to streamline business operations and ensure a smooth onboarding process for new hires and helps them get settled into their new roles. However, the cloud segment is expected to witness significant growth in the upcoming years, as it contributes to making informed decisions by providing trends and patterns on employee data. Such factor acts as the catalytic to enhance cloud-based HR solutions which ultimately driving the global human resource technology market growth.
Region-wise, the HR technology market was dominated by North America in 2021 and is expected to retain its position during the forecast period, owing to rise in focus on business process improvements and enhancing HR analytics capabilities offered by human resource technologies vendors. However, Asia Pacific is expected to witness significant growth during the forecast period, With the rapidly increasing need for companies to navigate complex HR tasks including talent management, recruitment management, performance management, and administrative work, HR leaders looking for new technology solutions are finding HR SaaS an attractive option that is driving the demand for HR technologies solutions in the market.
The global human resource technology market analysis is dominated by key players such as ADP, Inc., Cegid, Ceridian HCM, Inc., Cornerstone OnDemand, Inc., Hi Bob, Inc., IBM Corporation, Infor, Oracle Corporation, SAP SE and Workday, Inc. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
Top Impacting Factors -
Increase in Automation of HR Operations
The growing automation of HR operations such as the introduction of AI and ML algorithms across the HR technology market software allows to optimization of the recruitment process. Further, the integration of artificial intelligence applications such as bots and virtual assistants helps to automate recruitment processes such as scheduling interviews, performance analysis, and answering basic inquiries. The bot utilizes the logic to recognize user requests and communicate with business systems to get the desired results. For instance, In March 2022, HeyJobs, an HR technology startup, raised USD 47 million in funding. The company aims to leverage the funding to accelerate the integration of AI technology in talent acquisition solutions as well as expand its business across Germany.
Furthermore, In June 2021, ActivePayroll, the payroll solution provider, partnered with Cornerstone OnDemand, Inc. The partnership aims to integrate Cornerstone’s comprehensive suite of these resource services including personalized learning, recruiting, performance management, and human resource planning with ActivePayroll’s solution. Similarly, the rapid adoption of AI technology by recruiters to perform recruitment tasks is projected to create new market opportunities in the coming years. For instance, according to the 2021 Recruiter Nation Report, conducted by Jobvite, AI was used by recruiters across recruitment processes more than they used in 2020. In 2021, 39% of respondents stated that they used AI for job recommendations on career sites and 34% of the recruiters used AI technology for job description recommendations.
Surge in the Trend of Hybrid Working Models Across Various Organizations
The rising adoption of hybrid working models, owing to the current uncertainty has led to increased anxiety and stress among workers, and employee mental well-being should be the focus area for HR leaders. Further, the increasing demand from small industries to large conglomerates, working from home has forced everyone to adopt the HR technology solution for better connectivity and operation. Hence, the human resource (hr) technology market players are developing advanced solution to evaluate the efficiency of work in hybrid model.
For instance, in September 2022, Visier, the globally recognized leader in people analytics and workforce solutions for people-powered business, introduced a hybrid work solution, this solution helps organizations track, measure, and report productivity, people, and workspace and provides effective teams work. This factor is accelerating the market demand during the forecast period. Moreover, for a dynamic work environment, HR technology solution helps market leaders to provide a culture of knowledge sharing among employees. And for a sustaining hybrid culture at the workplace, HR leaders are focusing to rework their strategies for long-term enhancement, which in turn drives the adoption of HR technology solutions.
Digital Capabilities
Digital integration in terms of technology both in and outside the organization and then embedding it in HR practices, to create an impact in both HR and in the business. Emerging technologies such as AI, automation, chatbots, and voice are making valuable contributions to HR. AI has found its way into talent acquisition with success stories reported in the way companies source, match and assess candidates. Organizations also are extending their use of AI into development planning, digital coaching, recognition, and wellness. While emerging technologies play a lesser role in core HR technology decisions for most organizations, these technologies are a significant part of the HR market’s innovation. We expect these technologies to become more important as vendors continue to expand their capabilities and as customers share use cases, experiences and success stories more widely.
In addition, organizations are realizing that HR technology is required to provide a more comprehensive and intuitive end-user experience. SaaS vendors are coming to this realization as well, and some leading SaaS providers are investing in case management software, knowledgebase, and portal solutions, or developing strategic partnerships with vendors that have these capabilities. Oracle has already invested in this area, Workday is building its own portal, and the recent acquisition by the technology company’s ultimate software of HR service delivery platform PeopleDoc emphasizes the complementary role of these technologies and the potential convergence of this space.
End-User Adoption
Major HR technology vendors are investing in technology to ensure that their offerings meet today’s consumer expectations. Accompanying these developments is the delivery of in-context help tools which provide on-demand, in-transaction help. This allows users to seek guidance when they need it, eliminating the need for disruptive training and allowing future joiners and movers to have the same level of support. Furthermore, end user are adopting this solution as it eliminates paper processes and transactional updates by HR becomes a practical proposition.
with the introduction of Natural Language Processing (NLP) and Machine Learning technologies that allow users to interact in a way that makes sense to them using either typed text or voice and no longer having to struggle for the correct “HR” term in order to raise a query. This advance provides end users with a digital assistant to provide the necessary process support to underpin adoption. Traditional capabilities such as basic HRIS processing, recruitment, learning, and performance remain part of the overall offerings to empower and engage employees but these have been supplemented by those which go beyond the traditional workforce and encompass external learners and even sourcing 3rd party or contingent labor.
The growing disruptions have prompted companies to accelerate the adoption of cutting-edge HR technology to build resilience and agility. Since the onset of the pandemic, HR technology has witnessed tremendous breakthrough innovations with the implementation of new methods, ideas, and technologies to optimize employee experience and capabilities to meet organizational objectives and goals. In the previous year, over $12 billion in the capital was poured into HR technology which is triple the rate of investment between 2020 and 2021. With an explosion of innovations and investments, the HR tech industry is certainly moving towards an exponential growth trajector.
Government Initiatives
Growing development in the market post covid and various technological advancement in HR industry is leading to increasing in number of users and various other developmental activities in the human resource technology market. for instance, uKnowva, a cloud-based 360-degree mobile-enabled HRMS software that helps businesses with various tasks like people management, customer servicing, invoicing and corporate collaboration, recently reported that it has added over 1.5 lakh new users during the course of the COVID-19 pandemic. Most of these users are white collared employees in the age group of 20-40 years. uKnowva announced its expansion in the KSA and partnered with 1sTalent LLC to scale its presence in the MENA region. The partnership will help uKnowva with 200-300 percent growth by end of 2022.
Furthermore, Indo-German initiative launched in December 2020 to develop 40,000 skilled workforce.by launching a technical education initiative, called ‘IGnITE’. This aims at developing highly qualified technicians based on the German Dual Vocational Educational Training (DVET) model with a focus to make them industry and future ready.
Key Benefits for Stakeholders
- The study provides an in-depth analysis of the global human resource technology 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 resource technology 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 human resource technology market potential.
Human Resource (HR) Technology Market Report Highlights
| Aspects | Details |
 Market Size By 2031 | USD 76.5 billion |
 Growth Rate | CAGR of 9.2% |
 Forecast period | 2021 - 2031 |
 Report Pages | 280 |
 By Type |
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 By Deployment Mode |
|
 By Organization Size |
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 By End-User |
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 By Region |
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 Key Market Players | Cornerstone OnDemand, Inc., Infor, Ceridian HCM, Inc., ADP, Inc., SAP SE, IBM Corporation, Oracle Corporation, Workday, Inc., Hi Bob, Inc., Cegid |
Analyst Review
Human resources (HR) technology is defined as software and hardware used for the purpose of automating and streamlining essential HR processes. HR technology is a broader term for the various digitized operations necessary in maintaining the regulatory framework of human capital in any given organization. The optimal implementation of HR technology is achieved when combining and synchronizing software unique to the needs of an organization’s HR department.
Key providers in the human resource (HR) technology market are Oracle, SAP SE and IBM CORPORATION. With the growth in demand for human resource (HR) technology services, various companies have established partnerships to increase their solutions offerings in smart solutions. For instance, in May 2022, IBM and EY entered into strategic alliance expansion through partnership to help businesses around the world address some of the most pressing workforce challenges in the wake of the COVID-19 pandemic, including employee recruiting, retention, upskilling, and the need to transform HR systems technology at speed and scale. This initiative further aims to develop AI and hybrid cloud solutions to be developed for HR service transformation, which is aiding to the market growth
Furthermore, with the surge in demand for human resource (HR) technology, various companies have expanded their current product portfolio by launching or developing existing products to achieve the rising demand in the market. For instance, in October 2022, Database and cloud infrastructure giant Oracle introduced a solution called Oracle Recruiting Booster, an upgrade to an existing HR tool at this week’s Oracle CloudWorld event in Las Vegas. This product is focusing on the importance of cloud computing’s role in hiring and retaining valuable talent. In addition, in December 2020, SAP launched the SAP® SuccessFactors Time Tracking solution. This cloud-based solution provides organizations with simple, innovative tools to record, approve and monitor the time of their workforce. Built with an intuitive user interface, SAP SuccessFactors Time Tracking enhances the employee experience and helps ensure people are paid accurately, on time and in accordance with local regulations. This strategic launch is expected to drive market growth.
The human resource technology market is estimated to grow at a CAGR of 9.2% from 2022 to 2031.
The human resource technology market is projected to reach $ 76.54 billion by 2031.
Increase in automation of HR operations, surge in the trend of hybrid working models across various organizations and rise in need for cost-effective HR technologies contribute toward the growth of the market.
The key players profiled in the report include ADP, Inc., Cegid, Ceridian HCM, Inc., Cornerstone OnDemand, Inc., Hi Bob, Inc., IBM Corporation, Infor, Oracle Corporation, SAP SE, and Workday, Inc.
The key growth strategies of human resource technology market players include product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations.
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