Human Resource (HR) Technology Market Size By Deployment Mode (Cloud-Based, On-Premise), Application (Payroll Management, Performance Management, Talent Management), End-User Industry (Telecom & IT, Retail, BFSI), Enterprise Type (Small and Medium-Sized Enterprises, Large Enterprises), & Region for 2024-2031

Human Resource (HR) Technology Market Valuation – 2024-2031

The integrated applicant tracking system streamlines the hiring process by posting openings, locating qualified individuals, and managing interviews. Onboarding, training, and benefits administration may be completed with a few clicks. Thus, the easy and quick applicant tracking system makes the work easier for HR and is driving the market size to surpass USD 237.51 Million in 2024 to reach a valuation of around USD 365.07 Million by 2031.

HR technology makes it easy to manage scheduling, time approvals, and PTO requests. HR technology enables better staff oversight, customer service, and efficient decision-making. Thus, efficiency and decision making is enabling the HR technology market to grow at a CAGR of 6.09% from 2024 to 2031.

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Human Resource (HR) Technology Market: Definition/ Overview

Human resource (HR) technology, HR tech, refers to software and, in some cases, hardware that helps to streamline and automate HR department functions. It’s simply a collection of digital solutions designed to streamline critical HR operations. HR Technology, also known as Human Resource Information Systems (HRIS), encompasses IT-driven solutions utilized across various. HR functions include recruitment and selection, compensation management, payroll, performance management, training and development, and HR administration.

This technology serves multiple stakeholders including managers, employees, and HR professionals. Its accessibility can vary, and it facilitates swift information gathering, collation, and communication with employees. Moreover, HR Technology can alleviate administrative tasks, empowering HR departments to concentrate on more impactful HR activities, while also providing managers with the necessary tools for informed decision-making.

Big Data is one of the trends driving HR technology in recent times. This helps HR professionals to understand their clients, target audience, and market. It also provides a forum for customer communication. Big Data can also be connected with other technologies to provide in-depth knowledge and assist HR professionals to make timely, effective decisions. Big Data also provides a full image of the entire workforce and helps with analytical decision-making. Not all firms require a sophisticated system, and numerous vendors in the marketplace provide every size and type of product imaginable. Some concerns for corporations include cost, the number of employees, the degree of efficiency, and the company’s existing gear and software.

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How the Increasing Productivity and Efficiency of HR by Technology is Driving the Growth of the Human Resource (HR) Technology Market?

Automated systems and technologies have reduced tiresome administrative duties like paperwork and data entry, allowing HR professionals to refocus their efforts on more strategic projects. This has resulted in increased productivity and a decrease in manual errors. In addition, modern communication technologies such as cloud-based platforms have allowed HR staff to effortlessly interact and cooperate with employees and candidates, reducing reaction time and keeping everyone informed.

Digital HR systems enable HR managers to rapidly and conveniently store and access employee data, removing the need for paper-based systems that are prone to errors and inconsistencies. This ensures that employee information, such as personal details, job history, and performance statistics, is always correct and up to date. Furthermore, digital systems offer a safe platform for sensitive employee data, preventing unwanted access or exploitation.

Automating HR procedures, such as payroll systems, can speed up the preparation of accurate paychecks and tax forms, removing the need for manual computations and minimizing the chance of errors. Similarly, recruitment software may automate job posting, resume screening, and applicant monitoring, thereby speeding up and streamlining the recruitment process.

HR analytics solutions enable HR teams to collect and analyze vast amounts of employee data, including as performance reviews, attendance records, and survey replies. This information can be utilized to analyze patterns and trends, as well as assess the efficacy of HR policies and programs. Using this data, HR professionals may make better-informed decisions about employee engagement, performance management, and workforce planning. For example, by examining employee feedback data, HR teams can identify areas where employees may require further support or training and make informed decisions about how to address these concerns.

Employees may easily access crucial information, such as pay stubs, benefits information, and business policies, thanks to digital tools and platforms like HR portals and mobile apps. Improved accessibility and openness can make employees feel more educated and engaged at work. Furthermore, digital learning systems can give employees access to online training and development tools, allowing them to take control of their professional development.

How the High Cost Associated with the Implementation of HR Technology is Hampering the Growth of the Human Resource (HR) Technology Market?

Technology has many advantages for HR administration, but its deployment can be expensive, thus, small and medium-sized enterprises may not be able to afford the HR tech, and this acts as a limiting factor for the human resource (HR) technology market. These costs may include purchasing software licensing, upgrading technology, and providing employee training. Furthermore, certain technology solutions demand ongoing maintenance and support, which raises costs. As a result, HR professionals must carefully consider the costs and benefits of implementing new technology, ensuring that expenditures are aligned with the organization’s goals and budget restrictions.

As digital tools and platforms grow more common, there is a greater risk of sensitive employee information, such as personal data and performance reports, becoming compromised. To alleviate these concerns, HR professionals should work together with their IT counterparts to ensure the deployment of strong security measures. This could include implementing strong password processes, encrypting data, frequently backing up data to avoid loss or damage, and raising staff understanding of security safeguards.

Deploying new technology for HR management is critical to evaluate how it will integrate with existing HR systems and processes. This requires ensuring that the new tools and platforms work effectively with existing HR systems like as payroll, benefits, and performance management. This method helps to eliminate duplicate data entering and reduces the possibility of errors or conflicts. Furthermore, integration enables secure data interchange between several systems, resulting in a comprehensive view of personnel information. HR professionals should work with their IT counterparts to ensure that new technology solutions are seamlessly integrated into existing HR systems and processes.

Category-Wise Acumens

Will Cloud-based Systems Help the Human Resource (HR) Technology Market Grow?

The Cloud-based segment is experiencing significant growth in the HR technology market and is expected to continue its growth throughout the forecast period. The cloud-driven technologies are accessing documents and other prominent files effortlessly, which is driving the growth of the cloud-based segment in the market. Centralizing data streamlines workflows and operations across the enterprise, resulting in enhanced efficiency. Cloud solutions positively impact several facets of operations, including product development, workforce management, and business integration.

In addition, cloud-based software aids companies in saving money in various ways. Unlike traditional systems, cloud-based solutions don’t entail high initial investment or maintenance fees. According to verified research, 51% of professionals utilize cloud-based HR systems for cost savings. Additionally, cloud-based platforms offer robust reporting and analytics capabilities. Artificial intelligence integrated into HR systems can track employee performance and make decisions to address productivity issues.

Cloud-based systems are compatible with HR professionals, allowing them to operate the system from smartphones, providing convenience and flexibility. This level of adaptability enables employees to promptly address and resolve issues, thereby enhancing productivity and efficiency. The mobile-friendly user interface facilitates quick and effortless adjustment to cloud-based HR programs. According to a 2022 report by PwC HR Tech, companies not utilizing cloud-based HR programs are four times more likely to encounter barriers in improving user experience.

How Talent Management is Driving the Growth of the  Human Resource (HR) Technology Market?

The talent management segment is significantly dominating the HR technology market. Talent management ensures that each employee’s specific skills and talents are matched with the right job and that job compensation is fair. It also transparently outlines future career paths, serving as a motivating factor for improved job opportunities both within and outside the organization. This comprehensive approach offers employees a clearer perspective on their roles and facilitates the organization in hiring the most suitable candidates. Consequently, talent management plays a pivotal role in driving growth within the HR technology market.

In addition, talent management encompasses a range of processes aimed at identifying, deploying, and effectively managing individuals to execute the organization’s business strategy. It serves as a structured framework to nurture and advance the progress of highly talented and skilled individuals within the organization, utilizing predefined guidelines, resources, policies, and processes.

Also, talent management equips managers with the necessary processes and tools to support and empower their teams. This fosters clarity regarding expectations from employees, thereby enhancing working relationships. Consequently, investing in talent management not only yields a high return on investment but also cultivates a diverse pool of talent within the organization.

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Country/Region-wise Acumens

Will North America Prove Opportunistic for Human Resource (HR) Technology Market?

North America holds the leading position in the human resource (HR) technology market and is projected to continue its growth throughout the forecast period. The region is driven by the advanced technology and the presence of major market players in the region. The constant initiative was taken by the key players in the region such as Oracle, Microsoft, UKG Inc, Workday, SumTotal Systems, Ceridian, IBM, etc. For instance,

• In March 2024 Oracle announced new generative AI capabilities within the Oracle Fusion Cloud Application Suite to enhance the employee and customer experience. These most recent AI additions include new generative AI capabilities embedded in existing business workflows across finance, supply chain, HR, sales, marketing, and services.
• In August 2023, Oracle announced that Oracle ME an employee experience platform within the Oracle Fusion Cloud Human Capital Management (HCM) has been announced as the 2023 top HR product of the year.

The adoption of advanced technology such as artificial intelligence (AI) in the region is accelerating the market growth in the region. Companies are using AI to save the working hours of HR, for instance, Microsoft’s HR team with the help of AI saves 20,000 hours per year. The major players in the region are contributing to the market growth through partnership, collaboration, and acquisition. For instance,

• In May 2023, UKG announced the partnership with Google Cloud to bring the Google Cloud Generative (AI) capabilities into the UKG human capital management (HCM) suite.

Competitive Landscape

The HR technology market is a dynamic and competitive space. Success hinges on offering a feature-rich, user-friendly, and innovative solution that caters to the evolving needs of HR departments and the modern workforce. The market is a mix of well-established, comprehensive HR technology suites offered by companies alongside niche players specializing in specific HR functions like talent acquisition (Greenhouse, iCIMS) or learning and development (Cornerstone OnDemand, Udemy for Business).

The organizations are focusing on innovating their product line to serve the vast population in diverse regions. Some of the prominent players operating in the human resource (HR) technology market include:

• SAP SE
• ADP
• Oracle
• Microsoft
• UKG Inc
• Workday
• SumTotal Systems
• Ceridian
• IBM
• Cegid

Latest Developments

• In February 2024, Workday announced a strategic partnership with Insperity, Inc. to jointly develop a brand market and sell a preeminent HR solution for small and middle-size businesses.
• In May 2023, Workday announced a new vendor management system (VMS) designed to help employers manage external workers, including contractors, and full-time employees.
• In October 2020, Cegid announced the launch of Cegid Talent Plug and Play Edition to facilitate professionals in the field of Accounting, Tax, Payroll, and Human Resources. Cegid Talent Plug & Play is preconfigured for rapid and easy deployment in customer companies. It allows you to streamline your recruitment, training, and employee performance management processes in record time.
• In September 2019, Cegid announced the acquisition of Meta4 a Spanish Payroll and HR Cloud solution publisher. This acquisition to deliver a comprehensive range of Payroll and Human Resources software to firms of all sizes in the French market, while also opening up new international expansion potential.

Report Scope

Human Resource (HR) Technology Market, By Category

Deployment Mode:

• Cloud-Based
• On-Premise

Application:

• Payroll Management
• Performance Management
• Talent Management
• Recruitment
• Workforce Management

End-User Industry:

• Telecom & IT
• Retail
• Banking, Financial Services & Insurance (BFSI)
• Healthcare
• Government

Enterprise Type

• Small and Medium-Sized Enterprises
• Large Enterprises

Region:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

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