HRM systems (global market)

2024: How digital technology is changing the world's personnel. 5 Top Trends

Organizational culture and strategic workforce planning are among the top trends and priorities for human resources managers in 2025. This is stated in the material Gartner, published at the end of October 2024.

In producing the report, analysts surveyed over 1,400 HR managers in more than 60 countries and all major industries to identify and assess top trends and expected challenges. In the emerging macroeconomic environment, organizations face new challenges. In addition, digital technologies, including artificial intelligence, have a significant impact on the situation with personnel in the world. Gartner highlights five key trends that will impact HR strategies.

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1. Efficiency of managers

According to the survey, 75% of HR managers report that managers feel overwhelmed by the expansion of their responsibilities. Traditional approaches to developing leadership abilities, often focused on one-off workshops and traditional content, are ineffective. Companies, according to Gartner, should prioritize long-term development strategies, which include collaboration, workplace training and regular common ground, rather than individual activities. To help managers cope with their functions, organizations need to reduce the burden on them by revising their responsibilities.

2. Organizational culture

While nearly 97% of human resources departments leaders express a desire to change some aspects of their organization's culture, the challenge is bringing these aspirations to life. Many companies have difficulty implementing innovations in their daily workflow, leading to inconsistencies between management vision and employee activities. Poorly managed cultural initiatives have a significant impact on business, negatively affecting employee engagement, productivity, personnel retention, and even customer satisfaction.

3. Strategic Human Resources Planning

As the business environment becomes increasingly volatile, the importance of strategic workforce planning becomes important. However, 66% of HR managers admit that their actions in this area are often limited to assessing the number of personnel, which does not fully meet the future needs for qualified employees. With the workforce transforming rapidly due to factors such as AI and automation, HR teams must adopt a new, comprehensive approach to planning.

4. Change Management

About 73% of executives report that employees experience fatigue from ongoing changes related to technology, operations or corporate culture. Traditional approaches to transformation management become ineffective because they do not take into account many aspects, such as the need for psychological safety and engagement during transformation. To cope with this problem, managers should implement new approaches that involve the active participation of employees in the transformation process.

5. HR technologies

55% of HR managers say their technology solutions do not cover future business needs. In such a situation, simple automation of administrative tasks is not enough - HR technologies should have a comprehensive impact by improving employee experience, optimizing work processes and using new tools such as generative AI.^[1]

2023: Why investment in HR technology is declining around the world

Venture financing of HR startups for the year (by the end of the third quarter of 2023) slowed down sharply, and the total amount of transactions amounted to less than $3.3 billion. Such data on October 25, 2023 was cited by Alexey Mironov, vice president for operational management of the personnel company Ancor.

According to him, the observed picture is due to the fact that investors do not see a systemic return on investments in the HR sector. In addition, global satisfaction with large human resources platforms is declining.

Funding for HR startups slows sharply over the year

The hype that we are used to seeing comes to naught. Startups are not becoming profitable in the moment, and the companies that buy these solutions do not say that their productivity has grown significantly due to these solutions. A certain outflow of interest in this takes place, - said Mironov.

It is noted that the average employer uses up to 80 different technologies in HR. According to forecasts of experts from the World Economic Forum (WEF), within five years (by the end of 2027), employers will transform almost a quarter of all jobs in the world (23%). The main drivers of the changes will be generative artificial intelligence, hyperautomatization of HR, AI tools for skill management, as well as a talent marketplace. The industry will be influenced by the introduction of digital technologies, the transition to clean energy and the redistribution of supply chains.

A survey conducted by the World Bank suggests that 75% of companies are going to introduce AI into their work by 2027. As a result, it is estimated that up to 26 million jobs will be reduced. First of all, this applies to employees whose activities are related to the processing and delivery of information: in 2027, the number of bank and postal clerks and cashiers in the world may halve. In addition, the list of the least sought-after specialties includes secretaries, accountants, officials, financiers, statisticians, security guards and sellers.^[2]

2022: Grand View Research predicts annual growth of 12.8%, to $56.15 billion

The global Human Resource Management (HRM) market will grow by an average of 12.8% annually and reach $56.15 billion by 2030. This forecast was made by Grand View Research analysts in September 2022.

According to experts, the main drivers of market growth will be analytical tools, cloud and mobile technologies, as well as solutions in the field of artificial intelligence and the Internet of Things. It is noted that HR analytics and its integration with HRM systems in order to make informed decisions are extremely important for the development of the industry.

The global HRM market is predicted to grow by 12.8% annually

In the talent management system (TMS) segment, annual revenue growth of more than 14% is expected, which is facilitated by the desire of companies to solve the problem of effective recruitment. By 2025, sales of such solutions on a global scale will exceed $24 billion, Grand View Research predicts. Experts believe that the TMS software category will undergo a number of changes due to various factors, including a decrease in the level of employment in the world as a whole, a change in the working environment, an increase in the share of freelancing and contract work, as well as globalization in the labor market.

Talent management systems are the largest segment of the HRM solutions market. In second place is the software for the process of analyzing personnel data using business intelligence and data processing methods (the so-called HR analytics). According to analysts, this segment in the period from 2022 to 2030. will show a rise of 14.3% per year and by the end of this period of time will grow to a volume of $8.59 billion. Demand for such products will drive factors such as the increasing automation of HR processes to "create flexible and efficient approaches" to human resources management.

According to experts, global spending on professional services in the field of personnel management in 2022-2030. will grow by 12.4% annually and amount to $7.47 billion by the end of this period. The growing demand for HR processes and the need to manage remote teams due to the ongoing transformation of jobs create a demand for professional HR services, the report noted.

The study also notes that the consequences of the COVID-19 coronavirus pandemic will have a positive impact on the HRM market, since some companies and institutions have retained remote work even after the epidemiological situation improves.

During the coronavirus pandemic, tools for automated optimization of personnel began to be especially popular in many industries. Such software, as a rule, using artificial intelligence algorithms, allows you to draw up employee schedules, assess changes in demand and compare the work of personnel with their work processes.

The researchers named the following companies as the largest manufacturers of personnel management systems (listed in alphabetical order):

• Accenture;
• ADP;
• Cezanne HR;
• Ceridian HCM;
• IBM;
• Kronos;
• Mercer;
• Oracle;
• PwC;
• SAP;
• Cegid;
• UKG;
• Workday.

Many of these vendors are actively investing in research and development of HRM solutions in order to offer customers products that are easy to implement and understand, and also help improve efficiency. Major manufacturers, including SAP and Oracle, have already begun offering cloud services that have one of the main advantages of not needing frequent system updates.^[3]

2021

HCM Systems Market Size Estimated at $22.3 Billion

The volume of the global human capital management systems (HCM) market in 2021 reached $22.3 billion, analysts at Reportlinker calculated, whose data was released in March 2022. Experts announced an increase in sales of software focused on competency management and solving the problems of accurate staffing, labor management and optimization of labor resources in terms of knowledge, skills and skills.

At the same time, the study does not provide comparative dynamics relative to 2020. According to experts, companies' spending on HCM systems on a global scale will increase by 7.5% annually and amount to $32 billion by 2026.

HCM Systems Market Size Estimated at $22.3 Billion

Cloud security remains a barrier to the adoption of cloud-based HCM systems among enterprise customers, especially in highly regulated industries such as finance, healthcare and power, the study said. At the same time, opportunities in related markets, such as temporary personnel management and hiring using artificial intelligence algorithms, open up new prospects for generating income for HCM manufacturers.

According to analysts, the adoption of a culture of remote work by businesses around the world due to the COVID-19 coronavirus pandemic poses new challenges for HCM software and service providers. The main problem is updating products according to the organization of workflows in a particular company.

HCM providers have already begun to supplement their software with tools that have become useful in a pandemic: tracking the health and location of employees, etc. Such functions are expected to contribute to the accelerated implementation of HCM systems. However, cost cuts and delayed projects by businesses could have a negative impact on the market, analysts warn.

HCM Systems Market Size Estimated at $22.3 Billion

The main demand for HCM solutions in 2021 came from banks, insurance companies and financial service providers, as they deal with various forms of employment, including office work, temporary labor, outsourcing, etc. The financial sector needs mechanisms to manage such workers, and it has to comply with increasingly strict regulatory requirements, so, most likely, it is this industry that will be faster than others to implement software and services for managing human capital, the researchers say.

They add that HCM platforms help banks and other financial institutions find, evaluate and develop talent, as well as manage their engagement and performance. Automation of routine HR processes, well-thought-out analytics and smart tips allow you to maintain and increase the efficiency and resilience of employees, managers and the whole business in the face of constant changes, the report noted.

The following companies were named the leaders in the global market for HCM systems by Reportlinker analysts, without specifying their shares:

• Workday;
• Oracle;
• ADP;
• SAP;
• Microsoft;
• IBM;
• Ultimate Software;
• Ceridian;
• SumTotal;
• Kronos;
• Infor;
• Talentsoft;
• EmployWise;
• PeopleStrategy;
• Cornerstone OnDemand;
• Meta4;
• Ramco Systems;
• Bamboo HR;
• Namely;
• Workforce Software;
• Zoho;
• Sage Group;
• Epicor Software;
• Zenefits;
• Paylocity;
• Gusto;
• Bitrix;
• Benefitfocus;
• WebHR;
• Talentia Software;
• PeopleFluent;
• Vibe HCM;
• Rippling;
• Ascentis;
• BizMerlinHR.^[4]

Gartner Magic Quadrant

In October 2021, the analytical company Gartner released a new magic quadrant dedicated to the global market for cloud-based human capital management systems (HCM) for large companies (more than 1000 employees). The leaders in the new study are company Workday, Oracle, UKG (with the UKG Pro solution), Ceridian and SAP. Only one company is classified as challengers - ADP. Six companies were included in the niche player group - UKG (with the UKG Ready solution), Cornerstone OnDemand, Talentsoft, Infor, Darwinbox and Cegid (Meta4).

By 2025, 60% of global midsize and large enterprises are projected by Gartner to invest in a cloud-based HCM system for human resources and personnel management. At the same time, they will still have to use other solutions to close 20-30% of their personnel requirements.

2019: Gartner Magic Quadrant

In September 2019, the analytical company Gartner released a study (the so-called magic quadrant) on the global market for human capital management systems (HCM). Experts considered the segment of cloud products used in organizations with a staff of 1,000 or more.

According to Gartner forecasts, by 2025, about 60% of medium and large companies in the world will invest in HCM complexes for human resources and administrative functions. At the same time, 20-30% of the requirements related to HCM will be met using specialized solutions, the capabilities of which are limited by certain functions.

Gartner Magic Quadrant in Cloud HCM for Big Business

According to analysts, HCM is transforming the familiar administrative functions of human resources departments (HR) - managing recruitment, training, salaries, compensation and efficiency - into opportunities to create the ground for involvement, efficiency and added value. HCM considers personnel not only in the context of business costs; it is a core business asset whose value, as well as any other asset, can be significantly increased through strategic investment and management.

HCM includes HR processes (human resources including recruitment, assignment of responsibilities and position management, compliance with generally accepted human resources standards and reporting), but is supplemented with functions related to personnel remuneration, personnel management and personnel management.

HCM also includes the term HRMS: it refers to a number of applications and other technologies that support and automate personnel processes throughout the hiring cycle.

The leaders of the HCM solutions market for companies with a staff of 1,000 or more employees in the Gartner magic quadrant in 2019 are the companies, Ultimate Software, and Workday. SAP Oracle Moreover, the latter is included in this number for several years in a row.

Gartner released a study (the so-called magic quadrant) on the global human capital management systems (HCM) market

Experts say that the overall level of customer satisfaction with the functionality of Oracle HCM Cloud solutions is above the quadrant average.

However, some users complain about the inconvenience of working and configuring the software. This problem is largely solved in the Experience Design Studio solution, but it was not widespread by October 2019.

Although Oracle is performing well in North America, the UK, India and the Asia-Pacific region, it is difficult for the company to gain a foothold in other markets.

Another negative factor for Oracle, experts call the insufficient amount of reference information for tools designed to measure the level of personnel involvement in the work and planning the career of specialists.

SAP SuccessFactors is praised for its extensive ability to customize and extend application functionality. In addition, customers note SAP's work in using new technologies, such as machine learning.

By September 2019, SuccessFactors has localizations for 98 countries, and a salary system for 43. The solution is fully available in the cloud, and with the takeover of Qualtrics, it has even more opportunities for human resources management. Overall customer satisfaction with the product improved significantly in 2018, the study said.

However, SAP also has disadvantages in the market in question. Among them are problems associated with the heterogeneity of acquired architectures. At the same time, the company's transition to a common object model for all purchased applications and large investments in integration contribute to increased customer satisfaction.^[5]

2017: Rated by Gartner

In 2017, according to forecasts of the analytical company Gartner, the global market for Human Capital Management (HCM) will grow to $11 billion from $10.4 billion a year earlier.

Experts believe that in 2017, sales of cloud solutions () SaaS will exceed revenues from the implementation of traditional licenses for ON and product support services. Large manufacturers, including SAP Oracle and that actively distribute cloud services, not only take away their share from other vendors, but also reduce their own revenue from sales software installed on computers.

Gartner Magic Quadrant in Cloud for Human Resources

The study says that many large HCM system manufacturers have accumulated a large customer base using local products, so the cloud product segment has great growth potential over three to five years. 

Experts call the leaders of the "magic quadrant" in the market of cloud HCM solutions companies, Workday, Ultimate Software Oracle and SAP. Gartner analysts attributed Meta4,,, Infor Kronos Ramco Systmes and Talentia Software to the group of niche players , and two companies were included in the group of challengers (challengers) in 2017 Ceridian : and ADP.

By May 2017, Oracle HCM Cloud product was used by more than 1,600 customers. Most of them are happy with the training management capabilities and advanced personnel performance management functions. At the same time, below the average, customer satisfaction was the convenience of using the product at a professional level. Oracle HCM Cloud is well suited for international organizations that have a global HR management system deployed, Gartner notes.

Speaking about the SAP SuccessFactors cloud platform, analysts pointed to the wide functionality of the product and the global business reach of the manufacturer, as well as its work on compliance in various regions.

Gartner's Workday SaaS HCM customer base is estimated at 1,600 organizations by April 2017. The company continues to refine its software package, which was originally a simple application. Analysts attributed the disadvantages of this vendor to the rather high cost of products and the need to pay for all functions, regardless of the timing of their deployment around the world.

Manufacturers were evaluated according to the following criteria: basic technologies for HR, remuneration and salary calculation; human capital management before  and after employment; Reporting and analytics of work potential, user experience, overall level of satisfaction with the product and the supplier-client relationship.

Gartner concluded that the growing use of digital technologies by staff is spurring manufacturers to find new HR initiatives. In particular, companies are developing functions aimed at retaining workers, increasing the flexibility of remuneration and finding highly qualified personnel suitable for certain requirements.

As a result, the diversity of human resources management systems becomes more and more difficult to choose. There are no universal HCM solutions that equally satisfy the requirements of different companies and can attract new employees in any innovative way. In these conditions, small manufacturers whose products are not innovative have the opportunity to stand out from the largest players, and, as a result, they can reduce the gap with leaders and increase revenues, the report says.^[6]

Forecast to 2016

IDC analysts in February 2013 predicted that the global HCM systems market would approach $11 billion in 2016, so that its CAGR would be 8.1% in the previous five-year period. By 2017, the market will reach $13.5 billion. In general, the growth rate of the HRM market will be higher than the growth of the global ERP systems market.

According to Lisa Rowan, IDC experts, enterprises continue to actively invest in human capital, and in this regard they are most interested in tools for global control over work resources, talent management, as well as reducing costs for these items, not least through the use of cloud solutions.

IDC analysts believe that interest in investments in HCM will continue to be quite serious, and an order of magnitude superior to the interest of potential investors in other software solutions. Vendors are also seriously interested in promoting this market, as evidenced by the large M&A transactions of 2011-2012: for example, SAP acquired SuccessFactors, and Oracle acquired Taleo.

2012

According to IDC, in 2012 the global HRM systems market reached $9.2 billion, in the future its growth rate will be about 8% per year.

As of 2012, the leaders in the global HRM market were, according to IDC, SAP (21%), Oracle (18%) and ADP (Automatic Data Processing) (ADP, 14%). Other vendors accounted for more than 5% of each, so the market remained largely fragmented.

Global HRM Market Dynamics, Forecast

IDC, 2012

2011

According to Forrester Research^[7] at the beginning of 2012, the global HRM systems market is growing at a rapid pace, but the SaaS HRM segment is increasing in volume much faster.

In 2011, SaaS HRM accounted for half of the market volume: $4.7 billion out of $9.5 billion. The growth of the personnel management systems market in 2011 amounted to 8.2% compared to 2010. However, the maximum growth rate for a comparable period was recorded in the segment of talent management systems - 16.5%., In the SaaS HRM segment, revenue growth was 15%.

IDC provides slightly different estimates of the global HRM market for 2011. According to this company, the market for such applications in the indicated year amounted to $7.5 billion, which in relation to the results of 2010 corresponds to an increase of 16.6%.

HRM Market Leaders in 2011

Forrester Research, 2012

The market leaders in 2011, according to Forrester, were Workday, Oracle E-Business Suite, SAP. Oracle PeopleSoft, Oracle Fusion and ADP are located on the border between leaders and vendors with strong expertise, as well as analysts attributed Infor-Lawson, Ultimate Software and Ceridian to the latter.

Interestingly, four of the nine solutions presented in the Forrester study, namely ADP, Ceridian, Ultimate Sofware and Workday, present SaaS as the only model for using their systems, while the other five offer the SaaS model along with the traditional one (in some cases through partners).

At the same time, four main types of solution providers are distinguished among HRM vendors:

• ERP vendors who offer HRM functionality as part of their enterprise resource management platforms. Infor-Lawson, Oracle fall into this category,
• SAP и Workday. In addition to those named in the Forrester study, this also includes Epicor Sofware, IFS, Microsof Dynamics (AX and GP), Oracle JD Edwards and Sage
• Sofware.
• HRM vendors in a "pure form," for whom automation of personnel management is a key competence. Among those named in the study is Ultimate Sofware. In addition to this category, High Line, HR Access, Meta4 and NuView Systems also belong to this category.
• HR/Payroll outsourcing providers, represented in the study by ADP and Ceridian, also includes NorthgateArinso.
• Vendors of training automation and talent management systems, including SilkRoad Technology, SuccessFactors and SumTotal Systems.

2009-2010

In 2010, according to Forrester Research^[8], HRM's global market amounted to $8.7 billion, with the talent management solutions segment becoming the fastest growing market segment. The growth of the market volume compared to 2009 amounted to 8.7%. In addition, the SaaS solutions segment grew in volume much faster than on-premium.

HRM Global Market Growth Forecast, 2009-2014

Forrester Research, 2010

The above graph shows that, according to Forrester forecasts, the global market for personnel management systems will continue to grow, until 2014, the CAGR of this market will be about 8.3%, this is a fairly high indicator. At the same time, in 2011 the market can reach $9.53 billion, and by 2014 - almost $12 billion. The subscription solutions segment will have a much higher growth rate - 15% per year, so in 2011 such solutions will account for $3.7 billion, and in 2014 almost half of the market - $5.75 billion.

HRM Market Growth by Segment

Forrester Research, 2010

In 2010, HRMS remained the largest segment, accounting for 49% of the market or $4.3 billion, an increase of 8.2% compared to the previous year. Most of this segment is occupied by SAP and Oracle applications. 18% of the segment's HRMS comes from SaaS solutions.

The second largest segment in the market is the segment of solutions for labor management. It accounted for $1.5 billion in revenue (17%), an annual increase of 5.4%. The leading provider of the segment is Kronos. However, in general, this segment is quite fragmented, with a large number of subsegments, where many vendors offer specific industry solutions work. SaaS solutions accounted for 38% of the segment's revenue.

As mentioned above, the talent management solutions segment is growing fastest, although it is not the largest in volume. It accounted for 7% of the market as a whole ($640 million in monetary terms), a CAGR of 16.5%.

The learning management segment experienced a large-scale transformation in 2010, which was expressed in the transition from an on-premium model to SaaS. This segment accounted for 6% of the global HRM market or $483 million, segment growth for the year - 7.9%. At the same time, SaaS accounted for 46% of all proceeds from the sale of knowledge management solutions.

The recruitment solutions segment in 2010 amounted to $1 billion, which is 11% of the entire market, the annual growth rate was 8%. 86% of solutions sold in this segment are subscription solutions. Since the beginning of 2009, this segment has undergone a serious consolidation of vendors due to the consequences of the global financial crisis in 2008.

Compensation and bonus solutions also represent a fairly prominent segment of the human resources market. In 2010, such solutions accounted for $835 million in revenue (10% of the HCM market), the annual growth of the segment - 7%.

Global HRM Market Growth Forecast by Product Category

Forrester Research, 2010

As for the long term, according to Forrester experts, up to 2014, the proportion of segments in the global HRM market will continue: the largest segment will remain HRMS - about half of the market. Four to five times less share in relation to it will be occupied by the segments of labor management, talent management, solutions for recruiting and calculating compensation and bonuses. Knowledge management will remain the least large segment of the market.

2008

Forrester Research estimates that the global HRM/HCM market should reach $6.5 billion by the end of 2008. At the same time, its growth rate in the next 3 years will be slightly less than 9%, which is higher than in the ERP solutions market, growing by 3% -4% annually.

AMR Research researchers also note that the HRM market is growing more than 2 times faster than the industrial application market as a whole and predict that the threshold of $10 billion will be crossed within 5 years.

If we talk specifically about HRM systems, then their share in the total market for human resources automation tools, according to Forrester Research, is 58%. The remaining 42% of the turnover falls on best-of-breed solutions. The following market shares are presented, corresponding to the "niches" occupied by specialized solutions:

• recruitment automation systems, Recruitment (9%),
• labor accounting automation systems, Workforce Management (13%),
• Performance and compensation (12%),
• Learning Management (8%).

In terms of dynamics, sales as such of HRMS class systems are estimated by Forrester Research to grow by 7% annually, hiring automation systems and labor accounting automation systems by 8%, training management systems by 13%, and efficiency and compensation management systems by 17%.

According to Gartner analysts, Talent Management (development management) became one of the most popular segments in the field of human resources automation in 2008. In 2007-2008, HRM vendors showed good results, a number of significant mergers and acquisitions were completed. According to experts, the results of 2009 will be weaker, but also quite positive, the trend towards market consolidation will continue. The desire of customers to reduce costs will force them to purchase and implement Workforce Planning solutions that will help them more competently build a downsizing strategy. Probably, vendors will have to take into account the wishes of customers and also pay maximum attention to automation in this area when developing new versions of their software.

Vendor Items

Forrester Research, 2008

According to a 2008 Forrester Wave study, the leaders in the global HRM market were the solution, Oracle E-Business Suite solutions Lawson Software and. Ultimate Software Decisions SAP Oracle PeopleSoft and took borderline positions between the segment of leaders and simply strong players. Strong players were also assigned, and. Workday Ceridian ADP (Automatic Data Processing) 

See also

• Overview of HRM system in Russia
• Key trends in the Russian HRM market
• Russian HRM Market - TAdviser Estimates

Notes