Market researcher Technavio predicts the market for global HCM technology will grow at a CAGR of more than 8 percent between 2018 and 2022.
A big driver is an obvious one, by now: The continued expansion of cloud services throughout the IT world. Technavio observed that the latest HCM solutions allow customers to cheaply store information online. In turn, this “allows the central administration to have control over all the resources and HR activities,” the company said. It also eliminates the need for users to implement and maintain their own technical infrastructure—a selling point used by vendors in industries such as telecommunications and managed services, as well as HR tech.
The report, Global Human Capital Management (HCM) Solutions Market 2018-2022, identifies automated recruitment processes as another major driver industry growth. Creating offline recruitment profiles requires manual screening and review of candidates, whereas continual advances in recruitment technology are able to do the same work more quickly, efficiently and inexpensively. “The adoption HCM software automates and streamlines the entire hiring process,” said an unnamed senior analyst at the company.
Technavio said that in 2017, technology was mostly applied to core HR functions, accounting for 47 percent of the market. The firm expects this share to shrink “to some extent” by 2022, though it will continue to see more activity than solutions recruiting and workforce management.
Geographically, the Americas were the biggest market for global HCM systems, accounting for almost half (47 percent) of the industry’s activity. Technavio expects that trend, also, to continue through 2022.
Last year, Technavio estimated the market for global compensation software would grow at a CAGR of about 9 percent through 2021. Again, streamlining management—this time of data—was a primary factor at work in the market. Software that consolidates compensation and performance data in one place are important to helping managers and executives make more informed decisions, the company said.
In that report, the company identified the leading compensation software vendors as ADP, Oracle, SAP SuccessFactors, Ultimate Software and Workday based on “market visibility, market penetration, and market momentum.”
Though the company didn’t provide details, the report on global HCM technology includes separate discussions of Ceridian HCM, Oracle, SAP, Ultimate Software and Workday.