Russian HR-tech market

• Enterprise Software (Russian Market)

2023

Results of 2022, situation in 2023 and further prospects - TAdviser data

Market estimates

The market for automation of human resource development and management functions, HR-tech (Human Resources Technologies), is relatively young, not only on a Russian, but also on a global scale. In the world, its rapid development began in the mid-2010s. At least, experts from the American research and consulting company Gartner note that 40% of the software products that are now used by the personnel services of companies were created no earlier than 5 years ago.

According to their estimates, on average, companies in the world use 80 technology products to automate various business processes in the HR sector. And despite this, according to Gartner, the product offer still looks scattered. There are many solutions for automating some HR functions, and there is practically no choice of products for others. The lack of comprehensive solutions in the HR-tech market is a global trend identified by Gartner.

According to TAdviser, the Russian HR-tech market, which includes integrated HRM/HCM systems, separate tools for automating the selection, assessment and development of personnel, as well as services for the implementation and support of such solutions, increased by 10% in 2022 and reached 29.2 billion rubles. According to analysts, the market will show similar dynamics at the end of 2023. Thus, its volume, according to TAdviser, will reach 32.1 billion rubles.

In addition to the above solutions, some experts additionally include a number of segments in the HR-tech market structure, including solutions for creating educational content, conducting staff surveys, HR analytics systems, jobboards, etc.

We estimate the mastered HR-tech market at 60.7 billion rubles. The market assessment is based on the companies' official revenue reports, open ratings and public reporting of market leaders: Smart Ranking, SAP annual report, HeadHunter Group report on financial results for the IV quarter and full 2022, TAdviser data. We take into account in market estimates the revenue of jobboards, solutions in the categories of selection and adaptation of employees, solutions for assessing efficiency and surveys, solutions of the Core-HR segment (HR systems that provide automation of basic, key things: employee accounting and payroll), training (LMS systems) and educational content for employees, as well as market indicators integrators and HR consultants, − explains Sergey Akhmetov, General Director of HR-tech-company "Stream."

No matter how this or that company segments the market and no matter how different market participants assess its volume, experts who took part in the preparation of the review agreed that the Russian HR-tech market is alive, growing and has high potential, which will increase as the digital transformation accelerates.

Largest participants

The new rating of HR-tech companies, prepared by TAdviser based on revenue from the implementation of projects in this area, includes 30 companies. Mirapolis became the leader again. It increased revenue by almost 15% to 739 million rubles. The top five also included Molga Consulting, Potok, Websoft and Equio.

The largest HR-tech solution providers in Russia *

№	Company		Total revenue from the implementation of HRM projects for 2022, million rubles. Including VAT	Total revenue from the implementation of HRM projects for 2021, million rubles. including VAT	Dina- mika, 2022/2021	What HRM systems is the company developing	What third-party HRM systems the company is implementing	Number of employees engaged in development, implementation and support of HRM systems	Number of partners at the vendor	The largest HRM projects in Russia
1	Mirapolis	Vendor	739	643	14.9	Mirapolis HCM	-	180 + Russian Post	Moscow Government|, Russian Railways, Gazprom, Inter RAO, Pipe Metallurgical Company
2	Molga Consulting	Integrator	636	952	-33.2	- SAP| |, Mirapolis, RosTalants, Pulse	120	- Sberbank	PJSC, PJSC Bank Otkritie FC, OOO LUKOIL TECHNOLOGIES, JSC ALFA-BANK, SIBUR
3	Stream (1)	Vendor	630	450	40.0	Stream	-	n/a	n/a	n/a
4	Websoft	Vendor	536	537	-0.2	Websoft HCM, eStaff	-	65	MAGNIT, ROSNEFT, MOESK, Transneft, Rostelecom
5	Equio	Vendor	514	375	37.2	Equio	-	80 +	n/a
6	Huntflow (2)	Vendor	422.8	359.2	17.7	Huntflow	-	n/a	n/a	n/a
7	Timebuk (3)	Vendor	404.5	129.8	211.6	Timebook	-	n/a	n/a	n/a
8	Skillaz (4)	Vendor	402.4	337.9	19.1	Skillaz	-	N/A	N/A	N/A
9	HRLink (5)	Vendor	358.3	93.6	282.8	HRlink	-	n/a	n/a	n/a
10	Knomary	Vendor	342	256	33.6	Knomary TMS, Leenda	-	110	EVRAZ, Cherkizovo, Pepsico, RusHydro, UMMC
11	KORUS Consulting|Integrator	325	311	4.5	Corporation Portal K-Team	Bitrix24, SAP, 1S:ZUP	[[Gazprom International (Korus Consulting: K-Team)	-	Gazprom International]] Limited, BFT-Holding, TransLom, AlmacorGroup, We-On Group
12	Instrucbase (6)	Vendor	273.7	144.1	89.9	Instrucbase	-	N/A	N/A	N/A
VK Tech Lukoil	Вендор	270	н/д	н/д	VK People Hub, VK HR Tek	-	120	8	, VK, Gulliver, Nexign, Askona
14	Witte Consulting	Integrator	251	n/a	n/a	[[1C Joint Stock Company	SAP]] HCM, 1C: ZUP	70	n/a
15	Verme (7)	Vendor	247.2	190.8	29.5	Verme	-	n/a	n/a	n/a
16	GMCS	Integrator	141	134	5.2	-	BOSS-Human Resources, WebSoft HCM, HR-Link	n/a	n/a
17	Motive (Play!) (8)	Vendor	113.3	90.4	25.3	Motive	-	n/a	n/a	n/a
18	FriendWork (9)	Vendor	101.1	128.9	-21.6	FriendWork	-	n/a	n/a	n/a
19	MONOLIT-INFO	Vendor	80	60	33.3	MONOLIT Personnel	-	15	no	Baltika Brewery Company LLC, MPBK Ochakovo
20	Extyl	Integrator	78	56	39.3	-	Bitrix	32	-	HOFF, Accounts Chamber, Otkritie, USC, Zetta
21	Yuztech Group of Companies	Vendor	72	90	-20.3	TealHR	-	n/a	n/a	n/a
22	Proaction (10)	Vendor	63.1	52.3	20.7	Proaction.pro	-	n/a	n/a	n/a
23	Sitronics Group	Integrator	61	62	-2.1	-	n/a	n/a	n/a
24	RDN Group	Integrator	60	n/a	n/a	-	n/a	n/a	n/a
25	1C-KSU	Integrator	54	64	-15.6	-	1C: Payroll and HR Management	34	-	Russian Post, Gazprom Bank, Russian Social Fund, Gazprom Neft
26	HRBOX (Oscar)	Vendor	49	21	133.3	HRBOX		14	n/a	YNAO, RTK Solar, Ecoculture, Delimobil, Miel, GC Tradition
27	Protection Technologies (11)	Vendor	37.1	28.2	31.6	Gingerbread	-	n/a	n/a	n/a
28	Wone IT	Integrator	37	64	-42.2	-	Verme, VK HR Tech, ELMA, Equio	10|n/a	UNILEVER RUS LLC, BALTIKA BREWERY COMPANY LLC, Home Credit Bank
29	Nord Clan	Vendor	36	23	56.5	KitBot	-	6	Nissan, PSB, tutu.ru, STD Petrovich, Tricolor
30	Professionals 4.0 (Gazprom Neft)	Vendor	33	7	393.4	Professionals 4.0	-	n/a	n/a	n/a

* - Data collected based on company questionnaires unless otherwise specified

TAdviser 2023

^{(1) As estimated by Tadviser
(2) The revenue of Huntflow LLC from the financial statements for 2021-2022. Excluding VAT
(3) Revenue of Taimbuk LLC from the financial statements for 2021-2022. Excluding VAT
(4) Revenue of Skilaz LLC from the financial statements for 2021-2022. Excluding VAT
(5) Revenue of Innovation in Human Resources Management LLC from the financial statements for 2021-2022. Excluding VAT
(6) Revenue of Internet School LLC from the financial statements for 2021-2022. Excluding VAT
(7) Revenue of Verme LLC from the financial statements for 2021-2022. Excluding VAT
(8) Revenue of Play! LLC from the financial statements for 2021-2022. Excluding VAT
(9) Revenue of LLC "Frandwork" from the financial statements for 2021-2022. Excluding VAT
(10) Proaction LLC revenue from the financial statements for 2021-2022. Excluding VAT
(11) Revenue of LLC "Technologies of Protection" from the financial statements for 2021-2022. Excluding VAT}

According to representatives of companies from the HR-tech sphere, starting from June-July 2022, the Russian market for the digitalization of HR processes and functions has returned to positive dynamics. Russian customers, especially large ones, who lost part of their highly qualified employees after the start of SVO, and then partial mobilization, and lost the opportunity to use the usual information systems and cloud services of Western suppliers, showed interest in domestic HR-tech solutions.

The departure of Western players from the Russian market has become an incentive for the development of domestic HR-tech. Against the background of lower costs, enterprises drew attention to affordable and often more suitable domestic programs, − said Evgeny Kuchik, Deputy Director of BOSS, Sl Soft.

However, according to Dmitry Sysoev, director of the management consulting department of Norbit (part of the Lanit group), due to their narrow specialization, they still could not close all the needs of the business.

What requests were most often made by customers? Anton Bobrov, Director of the Corporate Services Department of Korus Consulting Group, calls the introduction of corporate portals, services for staff adaptation, corporate training and HR analytics.

And Sergey Safonov, director of complex HR solutions of the HR solutions directorate of GMCS, notes that in 2022 its clients were in demand for support and development services for current HR systems and services, as well as integration projects of various orientations.

Some Russian vendors of automation systems for personnel development and management functions initially developed software products and solutions, aiming to "replace" imported ones.

We can say that Nexign was somehow ahead of events in terms of import substitution, having developed the Neon portal for employees, − says Valeria Tenyaeva, Director of Human Resources at Nexign. − Since it has shown its effectiveness in an internal audience and is independent of foreign software, we offered it to the market. And the first major customer in this direction was the Megafon company. We saw high demand for Neon among large and medium-sized Russian companies. This confirmed our findings that systems are in demand on the market that can support key aspects of the entire employee life cycle.

Others, faced with a flurry of customer requests, were able, taking them as a basis, to set a new vector of their development.

We have begun to create an HCM system that should ensure end-to-end digitalization of key human capital management processes and provide all employees with a single workspace. The project received support from the Russian Information Technology Development Fund (RFRIT), − says Evgeny Kuchik (Sl Soft).

The turn of many Russian customers to face domestic manufacturers of automation and digitalization of HR processes ensured the growth of the latter's business in 2022.

So, according to Aleksei Vagin, CEO of Equio, its revenue for this year increased by 37.2% to 514 million rubles. The business of the Russian software developer in the field of HR, Websoft, grew by 75%. Revenue from HR implementations in 1C-Corporate Management Systems increased by 35%. The revenue of GMCS, according to the results of this period, turned out to be 10.7% higher than a year earlier, − 141.6 million rubles. Compared to 2021, the growth in sales of Korus Consulting in the HR-Tech direction amounted to 79%.

In 2022, we showed strong revenue growth year-on-year (+ 40% according to SmartRanking) and by the end of the year reached the largest revenue indicators in the history of the company. Analysts estimate Potok's revenue in 2022 at 630 million rubles, − said Sergei Akhmetov, general director of the HR-tech company Potok.

What factors have had a decisive impact on the market? Roman Shchapov, commercial director of Goodt, answers this question as follows: "There are four obvious factors - SVO, the departure of foreign vendors and large consulting companies, import substitution and the acquisition by large players of a share (or whole buyout) of Russian vendors in HR-tech."

Features of 2023

In 2022, consolidation began on the domestic market for digitalization of personnel management processes. In the fall, TAdviser learned that 1C bought the share of Softline Venture Partners in Mirapolis, a company specializing in creating IT solutions for managing human capital development and digital transformation of HR processes in medium and large businesses. In December of the same year, VimpelCom became a minority shareholder of Knomary, a developer of training management systems, LMS, from Belarus. That same month, Avito's online job search platform and employees. The work acquired a controlling stake in the Kazakh service for automating the recruitment and adaptation of HR Messenger personnel.

These processes continued in 2023. So, in mid-October, it was announced that VK acquired from the LANIT group 25% of the developer of solutions for automation of HR-function for talent management - Goodt. Around the same time, the Astra group of companies announced the acquisition of Knomary.

Market consolidation was not the only trend that switched from 2022 to 2023. Valeria Tenyaeva, director of human resources at Nexign, names several more.

The first is import substitution. Small and medium-sized companies are ready to use cloud solutions, and large businesses are looking for a replacement for the products of departed foreign vendors, "she says. - The second trend is an increase in business demand for comprehensive HR-tech solutions that would cover the entire life cycle of an employee in the company.

Another trend, according to the expert, is the shift in the focus of companies from hiring new employees to retaining existing ones.

These two trends are confirmed by Kirill Dyakov, managing partner of Mirapolis:

{{quote 'The research period and the period when companies closed the most critical gaps in connection with the departure of foreign providers, in 2023 more or less ended, the demand for import substitution began to be realized in the HR Tech market. The market generally began to come to life after the shock 2022, the demand for HR Tech has recovered not only in the import substitution segment, but in the segment of companies that are introducing solutions for human capital management for the first time. We also see an increase in the need for HR Tech products among companies in the small and medium-sized businesses segment. Due to a number of factors, one of which is the lack of qualified personnel, more companies are investing in the development and retention of their employees, which is reflected in the HR Tech market. }}

One of the main drivers of the HR Tech market in the past two years has been growth in the segment of personnel electronic document management, CEDO, including due to changes in the labor code of the Russian Federation. According to Mikhail Yuriev, Director of HR Services Development at VK Tech, KEDO significantly reduces the burden on employees of the personnel department, accelerates the preparation, coordination and signature of documents, and reduces business costs.

We at VK implemented our own KEDO − VK HR Tek, − which we reduced the speed of operations by an HR specialist by 80% compared to paper format. Now VK HR Tek is already helping hundreds of companies to optimize work with personnel documents and reduce the cost of them, − the expert says.

If we talk about market trends that clearly manifested themselves in 2023, then one of the most important of them is an increase in the degree of care and attention of companies about employees. To achieve it, companies are ready to use a variety of digital technologies and tools.

Attention to the human factor and the transition from HR technologies to WorkTech, a broader concept that combines productivity, training, career issues, networking and employee well-being, − this is both a trend and a driver of further development, − Evgeny Kuchik is convinced.

According to him, there was a shift in focus towards improving the experience of employees and increasing their productivity.

At the same time, customer companies have formed a demand for combining all means of digitalization of HR processes in one solution.

Companies want to get the entire HR cycle in a single platform: from hiring, recruiting, adapting and training staff, to building educational trajectories, evaluating employees, performing a review and exit interviews, − notes Aleksei Vagin.

According to the expert, Russian vendors of software for the digitalization of HR processes and functions that have identified this trend have begun to position themselves as ecosystems.

Those who used to engage in a separate highly specialized functionality today quickly finalize their decisions or conclude partnership agreements with other manufacturers, − says Aleksei Vagin and adds that quality can sometimes suffer because of this.

And since there are not enough complex solutions in the field of digitalization of human resources processes from Russian manufacturers on the market, large customers begin to develop them on their own or with the involvement of external product teams.

This is an extremely interesting trend, − comments Roman Shchapov, commercial director of Goodt. - We will all watch him enthusiastically in the next 3-4 years.

The expert considers this phenomenon positive, since it will lead to an increase in the overall maturity of the HR-tech sphere - in terms of both market processes and product development.

This belief is not shared by Sergei Safonov. He considers the attempts of customer companies to conduct large projects on their own not always justified and leading to a general slowdown in market growth.

In 2023, the composition of players in the Russian HR-tech market changed. New large domestic vendors appeared on it. As an example of one of them, Dmitry Sysoev, director of the management consulting department of NORBIT (part of the LANIT group), quotes Pulse from Sberbank.

Well-known domestic manufacturers of HR automation software in this segment continued to develop their popular products and offered the market new ones. Thus, the same NORBIT company, relying on the expertise of implementations and the accumulated competencies of the team, created its own HRM solution based on the low-code bpm platform BPMSoft.

This year we see a large number of startups for automation of personnel growth and development systems, online interviews, ATS (Applicable tasking system, candidate management - ed.) Systems, − Says Leonid Brodsky, Director of 1C-Corporate Management Systems.

Thus, in 2023, the Russian HR-tech market has complex platforms from large software developers, and separate startup services for the tasks of individual clients.

On the one hand, this drives the development of technologies and functionality of solutions, − notes Mikhail Yuriev, − on the other hand, − creates a software zoo for the customer, which complicates work and slows down business development.

Each market participant contributes to the expansion of the range of available domestic software products for the automation and digitalization of HR functions and is gradually drawn into the competition with colleagues, primarily for large customers.

Шаблон:Quote 'The sphere becomes very competitive. There are many products, they are in varying degrees of readiness and maturity, but it is obvious that by 2024 the struggle for the client will grow, − notes Dmitry Sysoev.

The customers themselves only benefit from this.

Client companies have a choice, so they can test platforms at a calm pace, − says Leonid Butakov, sales director of Equio.

Sergey Akhmetov, General Director of HR-tech-company "Potok," believes that today the Russian market for digitalization of HR functions is distinguished by high segmentation, consolidation of best of breed expertise (best in its field) solutions capable of integration with each other, as well as an open niche of complex solutions.

According to Maxim Kornienko, Development Director of HR Tech of the company-developer of domestic software NOTA (Holding T1), less and less Western software remains on the market. And according to the company's forecasts, in 5-7 years there will be practically no players who use the solutions of foreign suppliers.

There are certain temporal trends in the HR process automation market. Thus, the client sets an average budget for the development of HR platforms for the next 3-5 years, for recruiting systems for automation of selection - for 3 years. In 2023, a large number of large companies began to change contractors - it is probably in 2023 that the very time periods of budgeting ended. The change of contractors occurs if there are more disadvantages for customers in the experience of using past systems than advantages, adds Maxim Kornienko.

Growth challenges

A number of problems hinder the further deepening of automation of HR processes and functions. Some of them require a review of the attitude towards the role of human resources on the part of customer companies themselves. Others are solved by the manufacturers of software products and HR-tech solutions themselves. There are also still others, to overcome which it is necessary to unite the efforts of all market participants.

Many experts consider a significant barrier to the lack of funds that the business is ready to direct to in-depth automation of processes in HR.

While we are at a stage when the business is ready to invest mainly in what brings it money and gives a quick result, − states the Dmitry Makhlin development director. HRlink− This, of course, will change at some point - the applicant's market in Russia will require employers to pay more attention to corporate culture.

According to him, due to the fact that the share of managers who are trying to save on HR is still significant, startups do not receive revenue, lose investment attractiveness, do not increase capital, which means that the number of people wishing to invest in the development of solutions is reduced.

As a result, there are significantly fewer products on the HR-tech market than it could be, − the expert concludes.

In addition, even realizing the need to sooner or later, switch to domestic software products, customers are in no hurry.

Many large companies have foreign licenses that will be valid for the next 2-3 years, − notes Valeria Tenyaeva and adds that tightening the requirements for IT infrastructure can accelerate the transition to Russian solutions.

Leonid Butakov agrees with her:

Although SAP has withdrawn from the market, it has left behind support for solutions already in operation in many companies, and the exit process has dragged on, − he says.

To spend on domestic solutions such budgets as on SAP, customers are not ready and for the most part choose what is cheaper, or try to experiment with their own development. At the same time, all experts agree that today it is impossible to completely replace SAP and platform solutions of other global suppliers with Russian software products.

According to Anton Bobrov, some companies fear the difficulties associated with the introduction of Russian IT solutions. They may be concerned about the lack of support from the software provider, insufficient and ill-conceived functionality of the IT product, as well as changes in workflows and corporate culture that the transition to domestic systems may entail.

In addition, the migration process itself is a difficult task, especially in such a critical area of ​ ​ automation as HR, Evgeny Kuchik recalls.

Among Russian customers, there are few who are ready to experiment and thereby help developers improve their products. In Europe, the role of Early Adapters is often played by small and medium-sized businesses that are flexible and susceptible to innovation.

There are few such customers in Russia, and they have a very small budget, − complains Sergei Akhmetov.

After February 2022, large customers, when choosing domestic solutions, became more demanding for the information security of software products and solutions, as well as the protection of personal data, notes Leonid Brodsky. And this also significantly restrains the growth of the market, since this issue is poorly worked out among Russian players in the HR-tech market.

According to Dmitry Sysoev, very few domestic manufacturers have passed the appropriate certifications, as they are used to working with medium-sized businesses that considered this area uncritical. Now solutions are also being scaled to large companies for which the security of personal data is in focus, so you need to work with this. And this is one of the most important tasks of every player in the HR-tech market.

Other tasks in this series are to improve products and skills to communicate with customers and meet their needs, as well as comply with SLA and provide them with the necessary technical support. This group of calls also includes the need to form an ecosystem of partners and their software products - a variety of web and mobile applications.

Ekaterina Khudobko, HR Director of the System Integrator, named the barrier that requires combining the efforts of the community of software developers to automate and digitalize HR processes. Navicon

Among the barriers are a large number of business areas in which there are unique requirements for solving HR problems, and the lack of uniform standards for the industry. The requirements for IT products in different HR segments vary greatly, and it is technically very difficult to take them all into account within one product, − she notes.

The development of standards in any industry is the task of the professional community, and it can be assumed that HR-tech market participants will eventually create a non-profit organization to solve it.

Motivating Motives

Positive dynamics, which, despite all the above problems, is observed on the market due to the motivation of Russian manufacturers of in-depth automation and digitalization of HR processes and functions.

Many experts who took part in the preparation of this material call the first motive the departure from the Russian market of foreign suppliers, such as, for example, as. SAP Large companies that were clients of global vendors have come to the understanding that the validity of existing licenses will expire earlier or later, which means that at a certain moment they will have to transfer personnel business processes and − functions to domestic products.

In turn, Russian manufacturers of such software products saw a wide niche, vacated after the departure of suppliers, in which there is still room for several companies. The task is to bring your HRM or HCM systems to the level of products of foreign colleagues, without being afraid of the height of the bar they set in terms of functionality, performance, flexibility, etc.

For many years, a peculiar balance remained in the Russian market for corporate HRM systems - about half of the implementations were in Western systems, and the other was shared by large manufacturers of Russian solutions for personnel management. Today, this balance is fundamentally changing: the outflow of foreign vendors has pushed migration processes to domestic solutions. In turn, this stimulated the development of automation programs themselves - there are high requirements for functionality and UX/UI design of replacement national HCM systems, and human capital accounting and management processes are now increasingly presented in a related process on the basis of a single HRM + HCM system, − notes Evgeny Kuchik.

Customers with their own development teams are trying to replace foreign systems through internal development. But this, experts say, is quite expensive, since it requires a lot of working time for highly paid specialists and distracting them from other digitalization tasks.

The second motive can be conventionally called regulatory.

Today there are certain government requirements for state-owned companies and institutions to replace software with domestic software, − recalls Leonid Brodsky. − This is necessary so as not to lose access to documents, reporting and other data, not to face problems in simply expanding user licenses, and then - in passing critical reporting and infrastructure development.

In addition, Russian legislation in the field of personnel is developing, and this development is aimed at automating more and more new business processes, Tatyana Khudobko notes.

There is also a third motive that encourages large companies to look for new, Russian suppliers of systems and solutions for the digitalization of HR functions. Lack of personnel associated with low birth rates. Kirill Morozov considers the demographic hole in which Russia finds itself as a driver for the introduction of domestic HR systems.

For another 10-15 years, the situation will deteriorate. Whoever does not have time to jump into the boat of a normal HR brand will multiply increase the cost of PHY and will still be left without employees. There will be no more people, − he says.

The expert's conclusion reflects the situation in the country's personnel market. People are lacking not only in manufacturing enterprises, but also in construction and trade, as well as in medical institutions and in education. There are data from the НН.ru personnel portal, according to which the number of vacancies, compared to the same period in 2021, this 2023 increased by 76%, and the number of resumes - only by 15%.

HR specialists are faced with a critical load, as they need to find employees in difficult conditions in a very short time and help them quickly adapt, − said Evgeny Kuchik.

In the struggle for the best candidates, digital tools are of great help, this is all the more true when it comes to hiring representatives of the generation of "zoomers." In these conditions, enterprises and companies are simply forced to become more digital and mobile in order to be convenient and understandable for their employees, notes Sergey Safonov.

Expected results

For the most part, agreeing with all the growth drivers listed above, experts representing different categories of players in the HR-tech market - developers of HRM/HCM systems, software tools for digitalizing individual processes and functions, as well as system integrators are quite optimistic: they expect continued growth.

Optimism is based on the successful development of new products, the start of large migration projects from foreign systems to domestic ones, as well as the growth of competitions and pilots in the second half of 2023.

If we talk about products, then this summer the BOSS company. Personnel systems informed the market that they had begun the second stage of development of the BOSS-HCM HR platform, supported by RFRIT (Russian Information Technology Development Fund).

Today, there is a platform for developing and maintaining, in fact, any functionality in the field of HR-tech, an integration bus with various master systems that conduct personnel accounting and settlements with personnel, as well as a large block of ready-to-use functionality in the field of organizational management, profiling positions and positions, processes for assessing and developing personnel, carrying out any HR measures taking into account the configuration of their routes. Now we are working on functions to manage the motivation and efficiency of workers, supporting an established process approach, − says Evgeny Kuchik.

If about pilot projects, then this is how Equio used this tool.

In 2023, we invested in the development of several projects to see what would work out of them. After summing up the results, it will be clear which directions will be priority for us next year, − says Aleksei Vagin.

The range of forecasts of the growth rates of the Russian HR-tech market at the end of 2023, which were given by experts, is quite wide. The lowest estimate is 9% owned by Potok. No higher than 10-15% predict growth in Equio. In the region of 30% - the forecast of Korus Consulting, and 1C-Corporate Management Systems "expects that by the end of 2023 the Russian HR-tech market will grow by at least 25%.

Experts have high expectations from the year 2024. Sergey Akhmetov predicts the growth of the Russian market in the coming year by 17%. In addition, by its beginning, the CEO of Potok believes that the share of SAP will be replaced by Russian companies.

In 2024, there will be more complex solutions that cover as many HR needs as possible. Employers will closely monitor the state of employees and work to retain valuable personnel, including through HR-Tech technologies, − said Kirill Morozov.

NOTA expects a rapid development of personnel electronic document management (CEDO) services, assuming that in the next few years certain categories of enterprises will be obliged to switch to CEDO. Also, representatives of the company believe that the development of artificial intelligence and tools for managing an employee's career track will continue. Moreover, AI will be introduced into a variety of processes: from managing the well-being of employees to training and developing personnel.

{{quote 'In 2024, the core of leaders-developers of global HCM platforms will probably be formed. In the field of recruiting, 8-9 solutions will compete. In general, we expect that the role of HR will change - it will become not only about people, but also about business results, - adds Maxim Kornienko, Development Director of HR Tech at the company-developer of domestic software NOTA (Holding T1).}}

The new year will bring the Russian HR-tech market the continuation of mergers and acquisitions, since for large customers complex solutions are more interesting than niche offers from startups.

And the stabilization of the market for automation and digitalization of HR processes and functions may come in 2025, Roman Shchapov is convinced. By this time, another wave of acquisitions and associations will pass, and as a result of these processes, customers will have a clear picture of the options for technological choice for the implementation of HR-tech solutions.

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2022

Results of 2021 and the situation in 2022 - TAdviser data

The global human resources automation market is growing year on year. Open sources contain data from Grand View Research from the United States, according to which the global HRM market will exceed 56 billion dollars by 2030, and the average annual growth from 2022 to 2030 will be 12.8% ^[1] Thus, the global trend of deepening automation and digitalization of the entire sphere of employers' relations with their current and potential employees will continue to operate.

As for the Russian market for solutions and technologies for the digitalization of personnel management processes, there is also a positive trend. Most domestic vendors and integrators of such products, the indicators of which TAdviser has, at the end of 2021 showed an increase in revenues. The total volume of the Russian HR-tech market, which includes systems/ HRM, HCM as well as tools for automating the selection, assessment and development of personnel, at the end of 2021 is estimated by TAdviser at 26.5 billion rubles, an increase in relation to 2020 amounted to 13%.

The results of 2022, according to preliminary estimates by TAdviser, will also be positive in general. The market will continue to grow, but its dynamics may decrease to 9%. The departed foreign vendors, as well as integrators previously focused on foreign personnel management systems, will pull down. At the same time, the dynamics of domestic developers for the most part will be higher than the average market.

Growth factors

To illustrate the activity of demand from large companies for HRM/HCM systems, the results of studying the audience's interest in HR-related terms in the framework of an annual market study conducted following the results of the first half of 2021 by the HR & ED-tech venture fund: "HR-Tech in Russia: is there a unicorn?" Thus, the growth of requests for the keyword "HR platform" from the first half of 2021 to the same period in 2020 amounted to 243%, according to "HR Automation" − 69%, "HR Process Automation" respectively 57%. Also, the number of requests for a combination of the words "talent management" increased by 34%.

That potential customers wanted to receive from vendor of HRM- and HCM systems Aleksei Dmitriyev, the director of development of HR - tech - projects of VK told Digital technologies in an interview of TAdviser so: "The main objectives are an automation of services, forming of internal communications and management of talents. The demand for the product approach has grown: now it is important for companies that the technologies they use help employees - they predicted burnout, were a convenient tool for communication and interaction. "

In the Russian market in 2021, foreign suppliers of multifunctional but expensive solutions represented by SAP and Oracle, Russian developers of personnel automation tools with a history of 1C, BOSS competed for customers . Human resources systems, "slightly younger WebSoft, Mirapolis and some others, as well as their market colleagues, formerly successful startups such as HRBox, Equio, ServiceGuru, etc.

As around the world, the coronavirus pandemic, or rather, the restrictions imposed to minimize its consequences, gave an impetus to the growth in demand of Russian companies for solutions for the digitalization of HR processes. According to Mikhail Gusev, Deputy General Director of BOSS. Personnel systems, "she made adjustments to the development of the situation in the HR automation market: a mass culture of remote work began to form in Russia.

An important role here was played by modern comprehensive personnel management systems, in which tools for remote interaction with employees are built in, providing the opportunity for direct participation of employees in the HR business processes of companies, - explains Mikhail Gusev.

He recalls that the state itself has actively stimulated the transfer of labor relations to digital tracks. Under the influence of state legislative initiatives, it has now become possible to completely transform basic HR processes into a digital form.

The pandemic forced companies to actively use online services and tools in their work with personnel - from recruiting to payroll. And for this, companies are required to increase the level of automation of these processes.

In order to meet the requirements of the time, companies are forced to allocate resources for the development of human resources management systems - for updating versions of existing ones (for example, switching to 1C: Payroll and HR Management 3.1) and for the implementation of new systems that take into account industry features and regulatory requirements, for example, software products such as "AXIOMA: Salary and personnel management of the NFO. Supplement to 1S:ZUP "and" AXIOMA: Salaries and Personnel Management of Banks. Addition to 1C: Payroll and HR Management, "says Evgeny Orekhov, manager of Axioma-Soft.

In addition, on November 22, 2021, the President of the country V.V. Putin signed Federal Law No. 377-FZ "On Amendments to the Labor Code of the Russian Federation." This regulatory act defines electronic document management in the field of labor relations, lists the types of documents of the organization that can be kept by it in electronic form, and also defines the types of documents in respect of which the norms of Federal Law No. 377 do not apply. According to Mikhail Nelkin the general director of the company "," Philosophy.IT a partner, the Digital Economy Leagues adoption of this law was another factor that influenced the development of the market and accelerated the digitalization of personnel workflow.

The Digital Economy League employs more than 5500 employees, and we have successfully automated the signing of personnel documents for ourselves, and also offer appropriate solutions to our customers. In addition to directly signing personnel documents, automation of all kinds of HR services is in demand: from ordering business trips to receiving certificates, benefits, registration of medical insurance, etc., − says Mikhail Nelkin.

However, explaining the increase in demand for solutions in the field of digitalization of personnel services in Russian companies, one should not discount the fact that it is much easier for representatives of the generation of digital natives who have already entered the labor market to remotely resolve issues with the employer in their personal account on the personnel portal or in the self-service system than in direct communication with him or with the HR manager.

All these factors together led to the fact that last 2021 ended for developers and integrators of systems and solutions for automation of human resources in companies with revenue growth and with a certain margin of leads, that is, potential customers who showed interest in their development. This helped them enter 2022 with confidence and survive several difficult months at the turn of winter-spring.

Major HR-tech Solution Providers

The new TAdviser rating, which brought together Russian integrators and HRMHCM vendors/systems, as well as tools for automating the selection, assessment and development of personnel, includes 30 companies. Their total revenue from the implementation of HR-tech projects exceeded 5.6 billion rubles.

The leader of the rating was the developer of solutions for the digital transformation of HR processes Mirapolis. Its revenue at the end of 2021 reached 643 million rubles, growth for the year - 20%. The second line was taken by another domestic vendor Websoft, the third - the integrator Evola, previously specializing mainly in SAP solutions.

Major HR-tech * Solution Providers

№	Company		Revenue from HR-tech projects in Russia for 2021, million rubles. including VAT	Revenue from HR-tech projects in Russia for 2020, RUB million, incl. VAT	Dynamics 2021/2020	Largest customers in 2021
1	Mirapolis	Vendor	643	536	20 Russian Post| |, Russian Railways, Moscow DIT, Department of Economic Policy and Property Relations of Moscow, Inter RAO, Pipe Metallurgical Company
2	Websoft	Vendor	536.8	398.6	34.7	Rusal, Rostelecom Kh5, VTB Post Bank Magnit,,, Alfa-Bank, OMK
3	Evola	Integrator	519	495	4.8	LLC Metalloinvest Management Company, PJSC MMC Norilsk Nickel, Gazprom neft M.VideoMegaphone PJSC PJSC SIBUR Holding, OOO Severstal, PJSC Rosneft Transneft Technologies, OOO Network Svyaznoy, OOO Rusagro, OOO NJSC, PJSC Novolipetsky Combine, United LUKOIL OIL Plant, Concern Sberbank
4	TalentTech (1)	Vendor	n/a	n/a|Severstal, Beeline, Lenta, DNS
5	Equio	Vendor	374.6	218.3	71.6	Coca-Cola HBC, Kärcher, Sisley, Mondelēz, Ingosstrakh, MEDIA 1, Ozon, Megafon, MTS, Nestle, Ingosstrakh, Roscosmos, KlyuchAvto
6	VK Tech	Vendor	367.5	407.4	-9.8	OOO LUKOIL TECHNOLOGIES, PJSC SIBUR HOLDING , Rosatom State Corporation, Ministry of Digital Development, Communications and Mass Media of the Russian Federation (Ministry of Digital Media of Russia), PJSC Rosseti
7	Digital Economy League	Integrator	364	144	152.8 VimpelCom| |, Sber, Gazprom, VTB Capital, RusHydro Polyus, Cherkizovo, SIBUR
8	Huntflow (2)	Vendor	359.2	180.6	98.9	n/a
9	Skillaz (3)	Vendor	337.9	346.6	-2.5	n/a
10	Korus Consulting	Integrator	311.4	n/a	n/a	n/a
11	Instrucbase (4)	Vendor	144.1	114.5	n/a
12	GMCS	Integrator	134	117	14.5	ALROSA, RUSAL, Accounts Chamber, Russian Football Union, Yam Restaurants Rasha
13	Borlas Group	Integrator	129.7	116.6	11.2	n/a
14	FriendWork (5)	Vendor	128.9	37.3	245.6	n/a
15	1C-Corporate Management Systems	Integrator	100	85	17.6	Gazprom Bank JSC, Russian Post JSC, Pension Fund of the Russian Federation, Moscow Department of Information Technology, Federal Treasury of the Russian Federation
16	HRLink (6)	Vendor	93.6	6.8	1276.5	n/a
17	Portal-Yug	Integrator	91	37	145.9	National Research University Higher School of Economics, JSC Agrocomplex named after N.I. Tkacheva, Gazprom Burenie LLC
18	Motive (7)	Vendor	90.4	70.9	27.5	n/a
19	Usetech	Integrator	90	n/a	n/a	TealHR
20	Simple Communications		63.5	19.7	221.5	CORPORATE CENTER IKS 5 LLC, HSE
21	Proaction (8)	Vendor	52.3	45.3	15.5	n/a
22	MONOLIT-INFO	Vendor	45	38	18.4	Baltika Brewery
23	"First Bit" Office Sports	Integrator	41	33	24.2	Rubex Group of Companies, Railway Trading Company JSC
24	IT Dialogue	Integrator	39.5	43	-8.1	n/a
25	Axioma-Soft	Vendor and Integrator	30	15	100	NPF Blagosostoyanie, PJSC Pharmacy Chain 36.6, Telekontakt! LLC, STOCKMANN JSC, IC Ingosstrakh-M, SG Spasskiye Vorota
26	Protection Technologies (Gingerbread) (9)	Vendor	28.2	21.3	32.4	n/a
27	HRBOX	Vendor	21	3.7	467.6	RTK Solar, MIEL, Delimobil, MGCOM, Netology
28	InformTrend	Integrator	18	5	260	n/a
29	Coderline	Integrator	12	6	100	n/a
30	AMBER	Vendor and Integrator	6.2	8.1	-23.6	BID Group, Hephaestus, Reliable Support, EnergosbyT Plus, Olympus Pro, Start, Eichar, Sons & Partners
	Total		5622

* - Data collected based on company questionnaires unless otherwise specified

TAdviser 2022

^{(1) As estimated by Tadviser
(2) The revenue of Huntflow LLC from the financial statements for 2020-2021. Excluding VAT
(3) Revenue of Skilaz LLC from the financial statements for 2020-2021. Excluding VAT
(4) Revenue of Internet School LLC from the financial statements for 2020-2021. Excluding VAT
(5) Revenue of LLC "Frandwork" from the financial statements for 2020-2021. Excluding VAT
(6) Revenue of Innovation in Human Resources Management LLC from the financial statements for 2020-2021. Excluding VAT
(7) Revenue of Play! LLC from the accounting statements for 2020-2021. Excluding VAT
(8) Proaction LLC revenue from the accounting statements for 2020-2021. Excluding VAT
(9) Revenue of LLC "Technologies of Protection" from the financial statements for 2020-2021. Excluding VAT}

Import substitution as a market engine

At the beginning of 2022, the market fully developed due to the completion of long-term projects for the implementation of HRM systems in large companies, as well as due to the start-ups of new projects planned in advance and agreed by customers. At the same time, some market participants faced the fact that in March, due to sanctions imposed against a number of Russian companies and citizens by unfriendly countries, and announcements by most global hardware and software suppliers about leaving the Russian market, individual customers suspended projects to introduce HRM systems until the situation was clarified.

Around the same time, some of the foreign corporations that announced their departure from the Russian market took care of the fate of the most valuable specialists, providing for their relocation.

The relocation programs were very attractive, − recalls Aleksei Dmitriyev, − especially for IT specialists, whose work, as a rule, is not tied to an office or even to a specific city. The previous two-year period of remote work in a pandemic has strengthened their confidence in their abilities and made it possible to develop the necessary experience of remote work. So in the conditions of more than tempting offers from foreign companies, the Russian labor market began to massively leave the most qualified and demanded specialists.

In order to stop the outflow of specialists accredited in the field of IT companies, the state took a number of timely measures. And in other cases, this task fell on the shoulders of employers and forced them to take care of the digitization of communications in companies between employees and the staff service, the introduction of solutions for involving all employed people in HR processes, and the automation of talent management.

The trend noted by the experts of Portal-Yug Company deserves a special mention, − the increased need to solve personnel management problems at military-industrial complex enterprises that came to the fore with the start of the SVO.

So, starting in mid-April, customer interest in automation of human resources began to grow. This time, the main driver of growth turned out to be common for everyone - the search for replacement of products from global suppliers that have left the Russian market, primarily cloud solutions and services for automating business processes in HR.

Companies with cloud versions of foreign products were in a particularly difficult situation, − says Roman Kungurov, project manager for the implementation of HRM systems at NORBIT (part of the LANIT group). − They have no other options than to switch to alternative software.

According to the expert, for companies that used foreign products according to the on-premium model, the problem was not so acute: solutions will continue to work with them. Difficulties: system obsolescence, lack of updates and vendor support will not − be critical. Russian integrators, including NORBIT, continue to support such solutions. And the problem of modernization of foreign HRM systems, taking into account Russian specifics, can be solved in the mode of refinement by consultants or internal specialists.

Anton Bobrov, director of the corporate services department at Korus Consulting, disagrees that the lack of support from the vendor is not critical for companies using its software products.

Those who continue to work with foreign HRM systems are faced with the inability to renew and buy additional licenses, receive updates from the vendor, because of this, the likelihood of information security problems increases significantly, and the ability to develop and scale the platform disappears. 16% of Russian users declare problems when working with SAP services, 7% with Microsoft, − he argues his position.

The expert sees one way out - to migrate to Russian solutions with similar functionality. According to him, about 30% of companies plan to do this in the near future.

However, since the development of foreign software products in a number of large Russian companies took place more than one year, and its result was the refinement and restructuring of business processes, it is impossible to transfer such solutions to a completely different software product while maintaining the usual functionality, notes Olga Klimenko, leading analyst of the corporate projects department No. 1 "First Bit" office "Sportivnaya." So consumers of such systems are forced to make decisions about the volume of transfer of historical data, about the amount of functionality that can be finalized/developed in a short time, about the priority of tasks and about the sources of financing projects.

In some cases, such an emergency and forced replacement of a software product allows businesses to take a fresh look at their business processes and update them, − the expert believes.

The clear risks of demonstrative blocking of Western software, its forced stop, loss of the possibility of obtaining qualified support push large companies using foreign programs to transfer business processes to Russian software. The topic of "import substitution" has again become one of the hottest on the agenda. And many experts are already talking about "import independence" as the ultimate goal, − says Mikhail Gusev.

The expert recalled that HR systems are critical for any enterprise. All operations in them must clearly comply with Russian law and quickly take into account any changes in it. So only Russian companies can promptly provide qualified technical support for such systems.

[1] It is too late to think about the import substitution of HR systems - now we need to act: allocate budgets, appoint responsible ones, prescribe specific deadlines. Moreover, Russian software is fully functional and is able to cover all the needs for automation of HR processes. So the market in the wake of "import independence" will grow, − he added.

Recall that the company "BOSS. Personnel systems "joined the import substitution process back in 2016, and at the moment it offers various options for solutions to protect consumers of foreign HRM systems from sanctions risks.

Where to see customers?

Companies that automate human resources management and employee engagement processes with HRM solutions from global vendors, such as SAP SuccessFactor, have several opportunities to get out of this situation. We wrote about one thing - the search for import-substituting systems and migrations to them above. Two others: internal development of solutions "for yourself" and a temporary decrease in the level of automation - look less effective.

It is not surprising that by the fall of this year, some companies began to defrost budgets, study proposals on the Russian market, consult with experts, and also look at projects already implemented by developers and solution providers.

The good news is that in our market it is quite possible to choose a domestic alternative to foreign solutions, − says Mikhail Nelkin.

Over the years of the pandemic, Russian developers of platforms and systems for automating business tasks in the field of personnel management, payroll, HR analytics have developed functionality in the direction of digitalization of selection processes, including integration with recruiting Internet portals, personnel development and assessment, motivation and involvement of employees, as well as organizing self-service services for them, etc. Thanks to their efforts, today there are several systems of the HCM, Human Capital Management class on the market that automate all customer business processes related to personnel, fully comply with the requirements of Russian law and can flexibly adapt to their changes.

And here, as Kirill Dyakov, managing partner of Mirapolis, notes, import-independent developers and suppliers of HR-Tech solutions, who, in addition to the functional readiness of the products themselves, took into account the trends of past years and customer requirements for increased information security, work with an open technology stack and have experience in deliveries for large projects.

As an example, we can also cite a new import-independent solution - BOSS-HCM from BOSS. Human resources systems, "providing automated support for personnel management, involving all company personnel in HR business processes and providing unlimited opportunities for mobile and remote work of company employees in such processes, including electronic personnel document management. In conjunction with the basic BOSS-Personnel system, the new solution completely replaces the functionality of foreign solutions and significantly reduces operating costs, the developers say.

In accordance with modern trends, Russian HRM systems have a modular architecture, so that upon request and under the task of the customer, the functionality he needs is assembled from modules, that is, an easy customization of the solution is provided. So, according to Alexei Dmitriev, Rosatom uses the social and service modules of the VK People Hub system. In addition to the social module, Lukoil operates a personnel efficiency management system based on VK People Hub, and Rosseti develops a corporate mobile application based on it.

Two more Russian vendors of HCM systems are Mirapolis and Websoft. At the end of September, the founders of the first of them included 1C, which bought out the share of the Softline Venture Partners fund. The press release issued on the occasion quotes the words of 1C Director Boris Nuraliev: "As a vendor of corporate systems, we set ourselves the task of helping companies manage the recruitment and development of their employees, and we want to quickly strengthen these competencies both through our own developments and through investments... We decided on cooperation with Mirapolis, because the company offers solutions with advanced functionality, has a positive reputation among corporate clients, and equally importantly, shares our principles of operation. "

The deal should strengthen the already good position of 1C in the personnel automation market. According to Andrei Berbek, CEO of Coderline, some large consumers of foreign HRM systems are now switching to its software products. Also, the growth in sales of systems of this vendor, according to experts, will be facilitated by the approaching termination of the company's support for the previous version of the 1C: Payroll and HR Management KORP 2.5 system and the transfer of consumers to the new one - 1C: Payroll and HR Management KORP 3.1. "

As a rule, 95% of the functionality of the same SAP SF is covered by domestic HCMs in full. Everything that does not overlap can be finalized by iterations of 2-2.5 months, − says Kirill Dyakov.

In short, companies interested in migrating their HRM/HCM systems from foreign cloud platforms to Russian ones can choose from four to five domestic suppliers the one whose software products most fully correspond to today's tasks and strategic plans for the future.

In short, the market for solutions for translating "to digital" business processes related to personnel is in the growth phase. Developers and suppliers are ready to help large companies-users of Western systems migrate to Russian platforms. Moreover, they have reached such a level of technological and product maturity that allows them to move to the digitalization of personnel processes in medium-sized companies, that is, they are moving towards a more massive segment.

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2020 - 2021

Market Development Features

In 2020, the pandemic has adjusted the usual way of work of most companies. The forced transition to remote work revealed problems with the organization of a remote labor regime. Many organizations were technically not ready for the new format of work.

Large enterprises were in a better situation, where initially close attention was paid to automation issues, says the CEO of BOSS. Personnel systems "Evgeny Kuchik. Developed technology companies managed to quickly rebuild and, in the shortest possible time, establish activities in a new format for themselves.

An important contribution was made here by modern comprehensive personnel management systems, which have built-in tools for interacting with employees, providing the opportunity for direct participation of employees in processes. In this case, forced work from home did not in any way affect the course of routine personnel processes in the organization. Employees of such companies were able not only to continue to fulfill their official duties, but also got, in fact, the opportunity to work around the clock from anywhere due to the online availability of corporate information resources, - explains Evgeny Kuchik.

Experts believe that the pandemic has become a kind of catalyst for the demand for solutions that allow you to manage remote employees and provide a digital working environment for them. The conclusions drawn after the first restrictions of the pandemic fueled the market, as a result, in 2021, experts record an active increase in demand for HRM class systems. Moreover, cloud solutions are most in demand.

Now many companies have begun to use a hybrid mode of operation, when some of the employees work in the office, and some remotely. It is possible to cope with such a task and organize an effective convenient place of work for everyone only using cloud technologies, so this segment of the HRM market is now developing especially actively, "says Alexey Petunin, Executive Director of SAP CIS.

Remote operation has already ceased to be a privilege, now this is an already established norm. Therefore, as Yulia Filatkina, head of the department for the implementation of human resources management systems at Norbit (part of the Lanit group) notes, there is a pronounced request for mobile solutions that allow you to work from anywhere in the world. The request for the integration of systems with various online communication services also became obvious: ip-telephony, video calls, voice robots, etc.

In addition, the trends for digitalization and import substitution announced at the state level continue to dominate. This led to the launch of projects to develop Russian solutions that can replace existing foreign information systems. Interest has also grown in solutions that provide electronic document management within companies.

As for the future, the opinions of experts differ somewhat. For example, Equio believes that now there are all the prerequisites for the multiple growth of the personnel management systems market in the near future.

As confirmation of this forecast, the company cites an example of a large-scale study of the Russian HR-tech market, conducted in the fall of 2021 by the HR & ED-tech investment fund. According to him, in 2021, a nine-fold increase in investments in this area was recorded. In January-August 2021, 11 investment transactions in the HR-tech segment were recorded at once. In less than three quarters, more than $26.12 million was invested. In 2020, the total number of investments in this area amounted to $2.82 million.

Indeed, we see that the market is growing, onboarding technologies, automation of HR processes are becoming more and more in demand. Our financial results for the first three quarters of 2021 were higher than we planned. We assumed that annual growth would be 50-60%, but as of early December, revenue grew by about 75%, "said Lana Brazhnik, head of the Equio press service.

According to representatives of Equio, now the most promising areas of HRM remain the automation of personnel selection and employee development.

These areas will be in demand for another 3-5 years. However, already now there is a noticeable shift towards ecosystem solutions that combine business processes of management and development of employees in one platform, the company says.

Andrey Zaripov, General Director of the National Platform (part of the Group of company Systematica), believes that in the horizon of five years, the current demand for recruiting systems will decrease due to the maturity achieved, while the need for talent management platforms will begin to grow.

One of the central tasks of personnel departments for the coming years is the formation of an intellectual fund, training and development of employees, their retention. Systems for adaptation and training, assessment of efficiency and potential, personnel succession planning will help to cope with these tasks, says Andrey Zaripov.

Market Segmentation

Experts of the domestic HRM market interviewed by TAdviser spoke about the existence of several parallel classifications of HRM systems.

Andrei Zaripov, General Director of the National Platform (part of the Group of company Systematica), noted that one classification is related to the functionality of solutions that can be divided into two large sectors. The first applies to accounting and settlement functions (calculation of wages, vacations and business trips, bonuses and compensation) and personnel workflow. The second - to improve the efficiency of personnel, includes systems for managing personnel selection and talent management. Sectors have varying degrees of maturity: the first part of the market has long been formed, while the second is gaining growth, primarily due to the first implementations.

Another classification is related to freestanding best of breed solutions or being part of a large ERP system. In 2021, customers who create holistic HRM systems often implemented several private HR solutions, creating HRM literally piecemeal, which is determined by segmented demand aimed at solving specific problems.

In 2021, we observed the implementation of up to 20 separate solutions in one company to automate various HR functions, which are ideally covered by a single HRM system. The next step on the path of technological evolution is to scale functions and create related solutions. Therefore, for companies, the initial choice of a platform is extremely important, which will allow you to develop and scale the system - even if at the moment companies need to automate only one or more functions. We recommend selecting systems with maximum coverage of target processes. It can be either HRM as part of ERP, or a best-of-breed solution with a large number of standard interfaces with the most common accounting systems and covering most of the HRM functions (unfortunately, there are very few such Russian systems), - says the general director of the "National Platform."

SAP CIS divides the HRM market into the following segments:

• Solutions for personnel accounting, organizational management of payroll, the so-called Core HR. They are used as the basis for the digital transformation of all human resources management in the company. An example here is Rusagro, which in 2021 completed a large-scale transformation of HR processes for 20 thousand employees based on SAP SuccessFactors. And 67% of them are production personnel, i.e. employees who work at geographically distributed sites.
• Talent Management solutions for talent management (selection and adaptation, motivation, development, training). For example, Fosagro has integrated the entire talent management cycle and creates an integrated system, as well as a single channel to inform employees about the possibilities of additional training, career development and performance management. Everyone will have a personal account, with the help of which he will receive certificates, salary information, study, participate in the personnel reserve program, exchange experience with colleagues and undergo an assessment.
• Employee Experience Management solutions called Experience Management. Perhaps, for this segment, the pandemic became a special impulse, since there was a need to analyze engagement, collect feedback from remote employees, and understand the psychological mood of the team. With EX, surveys are carried out and the condition of the personnel is assessed. For example, Kaspersky Lab conducts such surveys regularly in order to improve business efficiency.
• Analytics and Planning Solutions in HR - Analytics and Planning.
• Solutions for creating corporate portals and organizing a digital work environment - Portal and Workplace. Such solutions are used not only by HR managers, but also by internal communications specialists. On corporate portals, it is convenient to make announcements to a large audience, broadcast events, create working groups, look for like-minded people within the company by interest, and much more.

Alexey Petunin, Executive Director of SAP CIS, notes that in 2021 the largest growth is shown by the Experience Management and Portal and Workplace segments.

Now companies are less focused simply on automating their processes. Yes, the integrated solution for HR and talent management is still relevant, but now it is rather the minimum for a full-fledged business. The real focus is on engagement and creating an effective and comfortable working environment and environment for employees, "he explains.

Yulia Filatkina, Head of Implementation of Norbit Human Resources Systems, believes that the trend is shifting towards talent management processes. In her opinion, the labor market is overheated, so it is important to select the best candidates, keep the most promising employees and be ready to leave the key ones: be it moving within the company or dismissal. There is also a request to create in companies a "personal account" of an employee in which access to the services of the company is open, an internal social network.

Its need is due to the large number of disparate systems. "Personal account" acts for an employee as a single window with an intuitive interface, with a branded design and with elements of gamification. This increases the loyalty of employees and involves them in the life of the company, says the Norbit expert.

In addition, in a rapidly changing world, quick management decision-making is important, so the introduction of analytics systems seems relevant. They accumulate data from different systems on a daily basis. And on the basis of these data, you can monitor important indicators for the company and visualize them on dashboards for operational monitoring, as well as generate analytical reports with complex logic, which help to significantly reduce decision-making time.

The largest IT providers of HRM systems

9 representatives of this market took part in the ranking of IT suppliers of HR systems. The leader was Mirapolis, the developer of the Mirapolis HCM human capital management system. Among its clients are Russian Post, Russian Railways, DIT of Moscow, Inter RAO and other customers. Indicators of other participants are presented in the table below. Their total revenue at the end of 2020 amounted to more than 1.8 billion rubles, which is 45% more than in 2019.

Revenue of Russian companies from HRM projects in 2019-2020

№	Company	Status	Revenue from HRM projects for 2020, million rubles, incl. VAT	Revenue from HRM projects for 2019, million rubles, incl. VAT	Dynamics 2020/2019,%	Forecast of revenue from HRM projects for 2021, million rubles, incl. VAT '	Key customers
1	Mirapolis	vendor	536	445	20.4	n/a	Russian Post, Russian Railways, DIT of Moscow, Department of Economic Policy and Property Relations of Moscow, Inter RAO, Pipe Metallurgical Company
2	Norbitol	integrator	432.5	173	150.0	n/a NLMK| |, MITSUBISHI CORPORATION
3	Goodt Group	| 228	64	256.3	Lukoil 550	, Gazpromenergoholding, ALROSA, RIGLA, Russian Post, Pyaterochka, Magnit, Rusagro, Philip Sibur Maurice,, Efes, MTS Lenta,
4	Equio	| 218.3	175.7	24.2	370	Coca-Cola HBC, Kärcher, Sisley, Mondelēz, Ingosstrakh, MEDIA 1, Ozon, Megafon, MTS, Nestle, Ingosstrakh, Roscosmos, KlyuchAvto
5	Digital Economy League	| 144	138	4.3	n/a	Rosseti, MUEC, Rostelecom, VimpelCom, Sberbank
6	GMCS	| 117	125.0	-6.4	ALROSA, Yam Restaurants Rasha, RUSAL, Accounts Chamber, Russian Football Union
7	Borlas Group	| 116.6	93.9	24.2	n/a	n/a
8	MONOLIT-INFO	Vendor	38	32	18.8	42	Baltika Brewery
9	Gandiva	| 37.99	40.9	-7.1	70.6	INC, GC Saxes, TD AGAT, Composite Factory, Parus, Aquanica, Maksavit
		| 1868 ||1288 ||45.1

	TAdviser 2021
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Industry distribution of HRM projects

As of December 2021, the TAdviser database contains information on 3.4 thousand. HRM projects. According to these data, most often such projects are implemented in trade, finance, construction and mechanical engineering. These four industries account for approximately a third of all known TAdviser projects.

HRM vendors, leading in the Russian market in terms of the number of projects implemented

If we consider the TAdviser project base from the point of view of HRM system vendors, we can note that 1C is the undisputed leader in this area. TAdviser is aware of 1,093 projects implemented using HR solutions from this developer. Other leading vendors in this indicator can be found using the diagram below.

2018 - 2019

Market situation

According to the results of 2018, the Russian market for personnel management systems showed positive dynamics at the level of 9%. According to TAdviser, the market volume increased to 19.4 billion rubles.

The results of the activities of market participants who disclosed to TAdviser the proceeds from HRM projects, as well as the comments of experts in general confirm the direction of the market. At the same time, representatives of companies - vendors and integrators of HRM systems - disagree about the activity of market growth and its reasons.

The market is in a state of slow growth. The excitement with HRTech startups and new technologies is beginning to pass, some new solutions are gradually beginning to be applied in wide practice, - said Alexey Korolkov, CEO of Websoft.

In recent years, we have seen a steady rise in the HRM systems market. We believe this is due to the need of companies to get an effective solution that best meets the specifics of the business and the organization of work of employees. In the face of increased requirements for specialists, information systems (in particular HRM systems), due to convenient and easy-to-use services, remove the share of the load of HR specialists and make it possible to use human resources as efficiently as possible, "says Alexey Zhigulev, Commercial Director of Monolit-Info.

Kirill Dyakov, managing partner of Mirapolis, recalls that the HRM market is divided into two large parts. The first is related to accounting and settlement functions (calculation of wages, vacations and business trips, bonuses and compensation), as well as the maintenance of personnel workflow. The second relates to improving the efficiency of personnel and covers processes such as the management of personnel selection, adaptation and training, evaluation of efficiency and capacity, planning of personnel succession and development of personnel potential, organizational design and planning of headcount. These market areas have different degrees of maturity, development trends and volumes.

If we talk about the second part of the market related to the automation of personnel management processes, then, according to Kirill Dyakov, in 2018 and 2019 there is an increase primarily due to the first implementations and replacement of previously used disparate solutions with complex ones that allow and optimize processes, and receive previously inaccessible data arising at the junctions of different processes.

This market is in the stage of active growth, every year the number of projects being implemented is growing. We can say with confidence that this market will demonstrate good growth indicators every year for at least 5-6 years. At the same time, the increase will be achieved due to the first implementations, and not substitutions previously introduced, - the Mirapolis expert believes.

According to Andrei Filatov, CEO of SAP CIS, a twofold situation has developed in the Russian HR market. On the one hand, HR data management practices and quality HR processes are becoming increasingly important. Companies no longer perceive HR systems as a means of automating specific processes and move to their application to improve the quality of the HR system as a whole. This trend is generating demand for integrated cloud-based talent management systems.

At the same time, Talent Management systems existing in companies do not always provide the necessary quality of feedback, involvement and motivation of employees, says Maxim Ryabov, CEO of Goodt.

In this regard, customers feel dissatisfied with talent management. Today, managers need automated systems that provide forecasts of employee care, professional development recommendations and career paths, he adds.

On the other hand, according to Andrei Filatov, companies are increasingly aware and understanding of services and applications using artificial intelligence, big data and new interfaces (chatbots, etc.).

Most of these systems that promised a radical revolution in HR, alas, have not yet shown the promised results. At the same time, large corporations are now adopting the most promising technologies and turning them into full-fledged products with understandable functionality. In particular, the process of consolidating the HRM tools and services market, which is attended by large local players, is associated with this, says the CEO of SAP CIS.

Another important factor that will continue to influence this market is the import substitution of foreign software in state corporations, government agencies and companies with state participation.

Under the influence of policy in this area and for a number of other reasons, they will migrate from foreign software to Russian solutions or their own developments. A number of the largest state-owned companies have already begun preparations for the migration of part of the previously introduced functionality for managing personnel efficiency from Western software, says Kirill Dyakov.

Evgeny Kuchik, CEO of BOSS. Human resources systems, "adds that in the event of a replacement for a previously implemented HR system, customers are counting on broader functionality.

The needs of customers in such a situation have become much grander. None wants to lose at least something in the new system that was in the old one, but expects to receive a lot of added values. And this trend will only grow, he said.

It is also worth noting that over the past year, the market has clearly seen a sharp increase in interest in integrated cloud talent management systems from medium and small businesses, including in the regions. This trend is noticed, in particular, in SAP.

At the same time, Molga Consulting notes that thanks to the clouds, the cost of implementation has decreased, and SMB companies have now become available for these solutions.

Cloud solutions for personnel management in the near future will occupy a large market share, - believes Evgeny Vasiliev, senior partner of Molga Consulting.

Revenue from market participants and largest customers

Revenue of Russian companies from HRM projects in 2017-2018 and revenue forecast for 2019

№	Company	Status	Revenue from HRM projects for 2017, RUB million, incl. VAT	including from the sale of licenses	incl. Implementation and Support Services	Revenue from HRM projects for 2018, RUB million, incl. VAT	including from the sale of licenses	incl. Implementation and Support Services	Dynamics 2018/2017,%	Revenue forecast for 2019	Projected dynamics in 2019,%
1	Molga Consulting	Integrator	1 108	-	1 108	'1 114	5	1 109	n/a	n/a
2	Evola	Integrator	316	-	316	'379	-	379	20	408	7.5
[[ABC Solutions (A.C. Solutions)	ГК ABC (Solutions)	вендор	198	33	165	' 375	125	250	89,4	459	22,4]]
[[Mirapolis	Mirapolis	вендор	257	76	181	' 368	136	232	43	470	27,7]]
5	Norbit	Integrator	108	48.6	59.4	'132	59.4	72.6	22	270	104.5
6	MONOLIT-INFO	Vendor	40	8	32	'44	6	38	10	52	18.2

	TAdviser 2019
' '

The largest clients/projects of Russian companies in the direction of HRM in 2017-2019

Company	Largest clients/projects in 2017-2019
Молга Консалтинг	Rosatom, Transneft, Sberbank, Norilsk Nickel, Rosneft
Эвола	Novolipetsk Steel Mill, Norilsk Nickel, Gazpromneft, M.Video, Metalloinvest, Sibur
ГК ABC (Solutions)	Alfa-Bank,, Leroy Merlin,, Yves Rocher,, Sportmaster, Samsonite Shell METRO Cash&Carry MTS Retail Chain,,, (Sberbank Beeline Rostelecom), VimpelCom (Lego, Inventive Retail Group Nike, Street Beat, UNOde50, Centre,, re Sony : Store), Samsung 24,,, Ostin VTB ,,, Russian Post Magnet Lukoil Aeroexpress train
Mirapolis	Russian Post, FGC UES, Russian Railways, Cherkizovo Group, X5 Group
Норбит	Sberbank, Polyus Gold, NLMK, UCL, Russian Post
Монолит-Инфо	Baltika Brewing Company
SAP CIS	Megapolis, OMK, EVRAZ, Inventive Retail Group, PhosAgro, Decathlon [[Decathlon	Decathlon]], AUCHAN, Kaspersky Lab, NLMK, Sberbank, Eyekraft, Velesstroy, Otkritie Bank, Rusagro GC, VTB, Deloitte, Splat
Websoft	Rostelecom, VTB Group, Rosneft, Rosatom, CBR, Alfa-Bank, X5, Gazprombank, Otkritie Bank

	TAdviser 2019
' '

Drivers and barriers

Drivers

One of the main drivers of the Russian HRM market is the task of improving the efficiency of personnel management processes. This, according to Kirill Dyakov, managing partner of Mirapolis, will continue to stimulate companies to introduce systems that allow them to approach the issue of automation of HR processes as comprehensively as possible.

Anton Chekhonin, General Director of Norbit, adds that Russian business wants to increase staff productivity, reduce the cost of maintaining it, as well as ensure corporate compliance, including correct work with personal data, drawing up a code of corporate ethics, the validity of terminating labor contracts, transparency of movement on grades, etc.

Another important driving factor is the trend towards digitalization in all areas, including personnel management.

Most HR representatives are well aware that it is impossible to build modern, efficient and competitive human resources management processes without an automation system that meets modern requirements. The younger generation of employees imposes new high requirements on corporate systems, which cannot be ignored when launching HR automation projects, - notes Kirill Dyakov.

According to Alexei Zhigulev, Commercial Director of Monolit-Info, the accelerated development of technologies also serves as a generator for the development of HRM systems, opening up new opportunities for further improvement of the properties and qualities of systems.

In addition, the constant development of HRM systems, the expansion of their functionality and the emergence of new services are influenced by frequent changes in federal laws in matters of personnel workflow, tax legislation, the introduction of electronic services into the work of government agencies and other areas

Maxim Ryabov lists several more factors in the development of the market:

• shortage of human resources;
• growing demand for skilled personnel;
• the need to create its own personnel training centers, since university training does not always cope with the task;
• the process of training in connection with the growth of technologies becomes continuous, because there is a strong obsolescence of positions.

Barriers

The barriers of the market include the insufficient maturity of business processes in the field of human resources management. Often, the management of companies pays maximum attention and funds to the development of the main production areas, and the functions considered "providing" for them, including HR, develop according to the residual principle.

For example, there are fundamentally no separate processes for talent management as an object of automation, - notes Anton Chekhonin, General Director of Norbit.

He also refers to the barriers as a low level of IT literacy of employees of Russian enterprises, especially in the regions.

There are still employees in Russian companies who prefer to work "in the old fashioned way": they print out paper resumes, do not immerse themselves in the context of modern digital culture ("likes," chat bots, telegram channels, self-service services) and have a negative attitude towards it in general, - says the general director of Norbit.

Evgeny Vasiliev, senior partner of Molga Consulting, has a similar opinion. He believes that the barriers are mostly psychological, since a business that has not embarked on the path of digitalization can perceive innovations with hostility.

Kirill Dyakov, Managing Partner of Mirapolis, refers to the overall economic situation and the lack of significant economic growth as restraining the volume of investments of companies in solutions for automating those processes that have a non-obvious impact on financial performance and have a deferred economic effect.

An additional barrier is "patchwork" automation. Most often, Russian companies do not have a comprehensive strategy for the digital development of the HR direction or a budget for the implementation of such a strategy.

It turns out that the functions of managing the selection, assessment, personnel reserve are implemented outside the target strategy, as separate elements using different platforms and at different time periods. This sharply reduces the effectiveness of using the HRM system as a holistic product, says Anton Chekhonin.

In addition, the relatively small volume of the local HR systems market and the difficult access of Russian companies to foreign investments does not allow domestic developers to create next-generation cloud HRM solutions, especially when it comes to digitalizing talent management processes, says Andrey Filatov, CEO of SAP CIS.

For the same reasons (relatively small size and relative closeness), most international manufacturers of HRM solutions do not make strategic investments in the Russian market. SAP, in this case, is an exception to this rule and plans to develop and invest in the Russian market and further, he adds.

At the same time, import substitution, mandatory for many solvent companies, greatly limits the choice of solutions for automation.

Unlike ERP, CRM and BPM solutions, where domestic developments are on a par with foreign ones. Russian HR solutions, for example, from 1C, emphasize personnel administration and, in part, personnel training, and there are practically no full-fledged analogues for talent management, goal-setting and evaluation of personnel and HR analytics, "says Anton Chekhonin.

The obstacles to the development of the market include the complex, and sometimes outdated UI system design.

Top management and middle managers have difficulty getting involved in systems with outdated interfaces. In HR systems built on the basis of accounting systems existing in the company, work, as a rule, takes a lot of time: in order to make one operation, you need to enter several screens, enter some data, etc. Modern solutions should provide role-playing jobs (for managers, HR employees, top management), where all the information and analytics he needs are consolidated, - explains the head of Norbit.

Innovations in HRM systems

In August-September 2019, TAdviser conducted a survey of participants in the Russian HRM system market and found out what innovations appear or may appear in such solutions in the near future. Experts have already talked about some of these innovations several years ago. However, now such technologies are receiving greater development and wider areas of application.

Robotization of HR processes

So, according to experts, recently a lot of attention has been paid to the robotization of various processes (RPA, Robotic Process Automation).

In recruiting, more and more are starting to use robots to call candidates and conduct video interviews, so that without the participation of the recruiter, make the primary selection according to different criteria and at the exit process only those who are suitable and ready to work on the terms offered by the company, - says Kirill Dyakov, Managing Partner of Mirapolis.

Anton Chekhonin, General Director of Norbit (Lanit Group of Companies), adds that RPA technology is also used in intelligent search and automatic selection of resumes, as well as for conducting interviews during dismissal.

Evgeny Kuchik, CEO of BOSS. Personnel systems, "believes that the robotization of HR processes is very important.

If the system can fully take over the functions of a personnel officer - initiate, ensure, control the correctness and speed of execution, enter the final data at the end of the processes in the accounting registers, form, publish and send the required documents along the course and outcome of the HR process - then in such an environment a personnel officer is not needed at all, - he notes.

Artificial intelligence

Technologies related to artificial intelligence, according to Kirill Dyakov, begin to be used in recruitment, when recruitment systems train to determine the most suitable candidates for further search in semi-autonomous mode. In addition, the first attempts are being made to use artificial intelligence in the field of training so that systems allow you to determine the most effective development paths and find the profiles of the most effective employees.

Anton Chekhonin adds that as part of adaptive training, the system can analyze indicators of an employee's ability to learn and offer educational material in an adapted individual format. Next, we analyze the effectiveness of the employee in terms of competencies that need to be developed in terms of training programs and, taking into account this, form training programs for other employees.

According to Evgeny Kuchik, artificial intelligence in HR work may be widely in demand, but later, when the maturity of such products is achieved, it is for the HR segment. Now, according to him, the stage of experimental search for really demanded tasks is underway.

Voice and chatbots

Companies are beginning to implement voice and chat bots for internal services. You can order a certificate, copies of documents, organize a business trip without communicating with a living employee, all this is done through a robot.

In the future, the tendency to replace humans with robots in understandable, algorithmizable operations will only intensify, "says Kirill Dyakov.

Big Data Analysis and Predictive Analytics

Another innovation is related to the accumulation of a large amount of data on employees and their further use in solving problems in the field of human capital management based on predictive models. These models are built using machine learning and statistical methods on the collected volumes of historical data, identifying hidden dependencies and patterns of personnel behavior.

That is, the systems make it possible to predict future events in the field of personnel and their impact on the company's performance. For example, such systems will help predict the loss of staff productivity due to loss of loyalty and burnout, identify burnout employees and prevent this process. They will help find employees most at risk of care and take timely measures to retain, increase their involvement and satisfaction, "says Kirill Dyakov, Managing Partner of Mirapolis.

According to the general director of Norbit Anton Chekhonin, big data analysis and predictive analytics are widely used in the processes of determining the likelihood of layoffs, forecasts of staff turnover, solving problems of improving the accuracy of setting goals, etc.

Gamification

The new approaches to motivation and involvement are largely dictated by the peculiarities of the perception of information by the new generation.

Generation Z not only does not perceive information from Excel, but also does not perceive what is simply not interesting. The new generation will not "rent themselves out" for the duration of their work, doing things they don't like. Therefore, the most important task of the employer is to motivate and involve employees by translating work tasks from the language of strict rules and Excel into the language of gamification and attractive intuitive interfaces, - believes Maxim Ryabov, CEO of Goodt.

As noted by Anton Chekhonin, gamification includes game methods aimed at increasing the involvement and efficiency of employees, and contribute to effective team formation.

Most often, such applications are intended for employees no more than 35 years old who are ready to perceive information in a gaming form. Today, this technology is widely used in companies with mass personnel - large retail chains, banks and insurance companies. The most popular HR area where gamification is used is motivation management, says the expert.

Market statistics

As of September 2018, the TAdviser database contains information on 2,832 HRM implementation projects. More than a third of them are the implementation of HR systems 1C, mainly solutions "1C: Payroll and HR Management" and "1C: Payroll and personnel of a budgetary institution." The five vendors whose HRM systems for the entire TAdviser observation period were most often implemented also include Compass, Galactica, SAP and BOSS. Personnel systems. " The share of their solutions exceeds 76% in the total volume of HRM projects of the TAdviser base.

If we consider the statistics of TAdviser database projects in recent years, then the distribution here is slightly different. In 2017-2019, solutions 1C (1C: Salary and Human Resources), SAP (SAP HCM and SAP SuccessFactors), Antegra Consulting (Antegra: Salary and Personnel Management of Credit Institutions) and WebSoft (Websoft HCM (formerly WebTutor)) were implemented more often than others.

2016 - 2017

Market Assessment - TAdviser Data

According to TAdviser, the volume of the Russian market for personnel management systems (software and services) at the end of 2016 approached 16.5 billion rubles, showing a slight growth trend. In 2017, there was a certain revival in the market of participants both in the field of basic personnel processes and in the field of personnel efficiency management processes and employee/manager service tools. Despite this, there was no serious increase in dynamics at the end of 2017 - the market volume, according to preliminary estimates by TAdviser, did not exceed 17 billion rubles. 2018 can be more interesting and dynamic.

Experts interviewed by TAdviser also notice a movement with a '+' sign. However, they are more optimistic in their estimates and forecasts. For example, Alexander Shishilov, head of the EAE-Consult Center for Automation of Personnel Management Systems, noting the growth of the market and the emergence of many new proposals in 2016-2017, adds that by the end of 2016 the dynamics reached about 15-20%, and in 2017 it is estimated at 7-10%.

Sergey Nikitin, partner at MOLGA Consulting, also says that 2016 and 2017 are years of growth in demand for HRM systems, both in classic and innovative products. At the same time, in his opinion, the average annual growth dynamics in 2016 amounted to about 15%, in 2017 - the dynamics are similar or slightly higher.

This optimism can be explained by the growth in revenue of EAE-Consult and Molga Consulting from HRM projects in 2016. The indicators of the first increased by 16.8%, the second - by 20.9%.

According to Mikhail Kuzminov, director of HR consulting at Korus Consulting Group, growth will continue in the market, and the dynamics of sales of modern HR solutions will only increase, primarily due to modern solutions - WFM and talent management systems.

According to Alexander Shishilov, in terms of basic processes, the start of projects postponed in 2014-2015. on the rollout of created solutions, on the development of functionality (for example, planning PHY and VSH, improving the quality of reporting, ensuring compliance with new legislative requirements for tax reporting). In connection with the new 6-NDFL requirements, the issues of replacing deeply customized payroll tools and generating tax reports for standard solutions supported centrally by the vendor are also quite acute.

In addition, in terms of personnel performance management and self-service tools, he notes an interest in using ready-made solutions, for example, such as SAP SuccessFactors. Customers consider as value and a prerequisite for choosing a product - a good level of user experience provided by the vendor in the basic delivery, as well as ready-made process implementation options, says Shishilov.

Sergey Nikitin believes that the HRM systems market is experiencing rapid growth, there is a great demand for both classic solutions and innovative ones, for example, cloud ones.

Russia enters the period of a potential demographic hole, therefore, the search, retention of talents, the development of employees become priority tasks for any company. A generation is also changing, more and more young people born in the Internet era are coming to the company, and, as a result, the demand for light, affordable, easily adaptable technologies is growing, he notes.

Victor Nikitin, the product director, Bpium believes the market is at a stage "both managed and did."

Large business human resources departments work according to systems of the times of the USSR. Such systems are built on heavy software and a library of regulations, for which not personnel are responsible, but the Soviet-style IT department. The modern way is the services of candidate search sites, but they are primitive. These are more assistants in the account's personal account, and not independent systems. Eichar enthusiasts have to create their own information environments based on the exel. There is no system that will completely streamline the information flows of the HR department. The attention of developers, marketers and business coaches is focused on sales and management. Eichar is an outsider for them. Personnel officers have come to terms with this state of affairs, everything suits them, "he said.

Evgeny Kuchik, CEO of BOSS. Personnel Systems, "in an interview with TAdviser shared the forecast for 2018:

It seems to me that 2018 will not be a year of boom, but at least growth - all the tightness of the market, which took place in recent years, will still begin to subside. Of course, there is no need to wait for manna from heaven, our market is still busy, all enterprises have some kind of automation means. But now, it seems, many companies are finally starting to look - to look for a better solution than they have. And, importantly, there is a feeling that this search is not academic, companies aggregate procurement budgets. Of course, it will not be just because now any sale-purchase cycle is long and difficult, and there will be no other, as in the old days. Customers choose consciously, very carefully, assess the decision comprehensively, no one will change the "awl for soap." Criterion one - the real return on the change of systems. I think that 2018 will be much more interesting and dynamic.

Drivers and barriers

Drivers

The main driver of the HRM market is the global task of improving the efficiency of personnel, which, in the current market situation, according to Artem Akopov, partner of Molga Consulting, faces most Russian companies.

The second important driver, in his opinion, is to improve the level of qualification of the HR services themselves, for which the HRM system becomes a tool for solving increasingly complex and extraordinary problems.

Maxim Uvarov, head of the HRM department of Informcontact (Alfa System), believes that the market driver is an awareness of the role of HR in increasing the company's efficiency, and, as a result, the relevant requirements for IT systems.

Now it is no longer enough to keep "posthumous" records, tools for organizing production activities are needed. Labor management, both in terms of competencies and in terms of labor organization, up to the workshop level, is the basis of the personnel systems of tomorrow. But, alas, in order to move to new models of work, organizational changes are needed, and this requires a lot of effort, he says.

Alexander Shishilov, head of the Center for Automation of Personnel Management Systems at EAE-Consult, notes that in terms of efficiency management processes and self-service tools for employees and managers, the driver is an objective need for organizations to use the wide potential of modern tools. At the same time, in terms of basic personnel management processes, the main driver of development, according to him, is the strengthening and complication of legal requirements, as well as the needs of organizations to optimize labor costs for the execution of operational HR processes.

According to Mikhail Kuzminov, director of HR consulting at Korus Consulting Group, the drivers follow to some extent from the fact that the market is being formed.

There are not so many competitors, and the interest of customers is growing, so recently young companies have been showing interest in the HR systems market, he says.

Victor Nikitin, product director, Bpium the main driver titles as "No Experience."

The situation is similar to the mobile market of the 90s. Then there was nothing in Russia: the technology began to develop immediately on the most advanced technologies and hardware. Therefore, now mobile communications have such a high degree of penetration in our country. In Europe, on the contrary: the old infrastructure was, but its expensive upgrade slowed down development. In HRM, the same thing: a lack of experience allows you to implement advanced solutions, he said.

Barriers

Among the barriers, market experts include the level of awareness of decision makers, the maturity of the corporate culture of organizations, as well as readiness for transformation.

According to Alexander Shishilov, an additional barrier is the sanctions policy, which creates undesirable risks in the event of the application of cloud solutions and foreign technologies in general.

Mikhail Kuzminov from Korus Consulting believes that it is difficult for foreign players to work in Russia, and domestic solutions are not enough yet.

The developers did not consider it as promising, and therefore there are not many truly high-quality and mature solutions. We can say that this market is just being formed, "he says.

Artem Akopov, partner at Molga Consulting, calls the low readiness of information security services to switch to cloud or widely integrated HRM systems due to fear of losing personal data strictly protected by Russian law.

Viktor Nikitin sees the main barrier of the HRM market in the lack of an opportunity for customers to compare the situation in the company before and after using the solution.

Without user experience, it is difficult for entrepreneurs to make a before/after comparison. But the barrier will break as experience builds, business speaker feedback and media references. It will take a year - two, - the expert believes.

How the Russian HRM market will change over the next 5 years

Russian HRM market experts believe that cloud solutions will take a large market share in the coming years. They also expect to expand the line of Russian systems and the wide development of forecast models based on BigData.

The introduction of cloud solutions will help reduce the cost of introducing HR systems, as well as the time required for such a project, says Mikhail Kuzminov, director of HR consulting at Korus Group. Consulting In his opinion, the world is moving towards being everywhere agile and everyone needs to change quickly in order to manage in a competitive race.

Artem Akopov, partner at Molga Consulting, believes that cloud HRM solutions will win a large percentage of the market in the next 5 years. At the same time, they will include not only processes related to the search, development and retention of personnel, but also processes strictly regulated by law, such as personnel accounting and payroll.

Alexander Shishilov, head of the EAE-Consult Center for Automation of Personnel Management Systems, expects to reduce barriers to the use of cloud tools, both psychological and sanctions.

Mikhail Kuzminov adds that along with the clouds, robotization and digital transformation will have a very big impact on the market. All these processes, in his opinion, will greatly reduce the work of specialists and the number of template tasks for employees.

Many companies are beginning to understand that it is very important to competently manage personnel, including with the help of IT solutions. Russia is waiting for a number of changes, such as a demographic pit. In this case, the need to find effective employees increases very much, "he explains.

Along with the growing popularity of cloud solutions, the construction of predictive models of human behavior based on the collection of data from various BigData sources (browsers, social networks, trackers, etc.) will be widely developed, Artem Akopov is sure.

Thus, the data that has traditionally been used by marketing services to analyze audiences and customize advertising will be in the service of HR departments to analyze employee data and effectively manage personnel, he said.

Alexander Shishilov, in addition to reducing barriers to the use of clouds, hopes to develop a line of Russian solutions that will compete with Western counterparts. In addition, he believes that the Russian market in the next 5 years expects standardization and complication of automation tools for basic processes, respectively, a lot of projects in this area will be completed.

Viktor Nikitin, Bpium Product Director, answering the question "how the Russian HRM market will change over the next 5 years," noted that "there will be no HRM market."

The business does not need HRM, but the levers of control, increasing profits and reducing costs. There will be a market for professional BI consulting, where agencies offer customized solutions for business. The solutions themselves will be built on the experience of the agency and the software of different vendors. At the same time, those vendors who have solutions in the portfolio not only for HRM, but also for marketing, sales, management and PR will benefit, he believes.

What are the developers of HRM systems striving for and what innovations are waiting for customers

Developers are striving to improve the perception of the HRM system by an ordinary user, ensure compliance with legislative requirements and facilitate the process of implementation and work with the solution.

Artem Akopov, partner at Molga Consulting, believes that, first of all, the developers are focused on usability and improving the user's perception of the system, since the focus of the development of HRM systems themselves has moved from their use by purely professional users to every employee of the organization, who is important for ease of work and availability from any device.

Alexander Shishilov, head of the Center for Automation of Human Resources Management Systems at EAE-Consult, notes that in terms of basic processes, HRM system developers strive to ensure compliance with legal requirements at maximum speed.

This is an adequate response to customer expectations that want to submit regular reporting without stress and with minimal risks, he says.

As for the developers of HRM systems of advanced functionality, in his opinion, they strive to provide the customer with a ready-made solution without the need for months of study of technical tasks.

According to Maxim Uvarov, head of the HRM direction of Informcontact (Alfa System), everyone is interested in reducing the total cost of ownership, since no one wants to make a huge number of settings "for themselves," and then get a "suitcase without a handle" - a system that is too expensive to accompany, but it's a pity to quit.

We need high-tech solutions with ready-made management models that can easily adapt to changing conditions and grow behind the enterprise. Despite the fact that such solutions are an order of magnitude more difficult to develop, their maintenance is actually cheaper, he explains.

Mikhail Kuzminov, director of HR consulting at Korus Consulting Group, adds that the developers of HRM systems are striving to go into the cloud format, as this helps to standardize the system and get away from heavy monolithic solutions.

In other words, vendors would like to release standardized solutions so that customers adjust their processes to them, he notes.

Evgeny Kuchik, CEO of BOSS. Human resources systems, "adds that large distributed organizations place orders for the automation of individual HR processes with an emphasis on the total involvement of all personnel in them.

Often these are some specific processes for the client, but in general it is clear that the market is moving in this direction, - he explains.

In addition, according to him, a vector of interest appeared separately related to the tasks of BMS - Bonus Management System, automation of motivation management.

For many today, this is becoming a vital necessity, because the effectiveness of the company is always associated with motivation. In large organizations, the processes of managing bonus plans and compensation schemes are extremely difficult and time-consuming. Obviously, there is a market request for BMS functionality, "says Evgeny Kuchik.

Viktor Nikitin, Bpium product director, believes that the developers of HRM systems are stuck in the interfaces of the 90s and personnel regulations of the USSR.

Modern business needs a simple, mobile, cloud service that will close the routine tasks of HR. Each business needs accounting: the base of candidates, resumes, stages of conduct from the status of "candidate" to the status of "employee." We need to take into account the merits and advanced training. Therefore, the market is waiting for massive light solutions, and not heavy software, with complex infrastructure, hardware and IT specialists, - said Nikitin.

As for customers, they are interested in light, fast solutions for installation, the implementation of which does not take a year or more. In addition, they expect high-quality user design, quick effect from implementation, quick reconfiguration, etc. Products focused on speed and effectiveness are usually a priority.

Top 5 Vendors and Top 10 HRM Contractors

As of December 2017, the TAdviser database includes information on almost 2.8 thousand. HRM projects. About a third of them fall on the implementation of HRM systems 1C, first of all, these are "1C: Payroll and HR Management" and "1C: Payroll and personnel of a budgetary institution."

According to the TAdviser database, in addition to 1C, the five vendors whose HRM systems are most often implemented also include Compass, Galactica, SAP and BOSS. Personnel systems. "

The solutions of these five companies are used in about 75% of all HRM projects located in the TAdviser database.

As for the contractors of HRM systems, in the top ten companies in terms of the number of projects, four positions belong to partners. 1C According to the TAdviser database, they account for almost half of all implementations from the Top 10.

2013

According to TAdviser's own data, the Russian market for HRM systems and related services for their implementation in 2013 did not show significant growth dynamics, having recorded in volume at the level of the previous year - about 15-16 billion rubles. The overall picture in the HRM system market was quite stable, without a minus sign, but also at the same time without any significant progress forward.

* 2014 data represents forecast

The same trend is reflected in the filling of its own database of TAdviser implementation projects. Although only public and largest implementation projects are entered into it, the base filling reflects the dynamics of the market quite well. And if in a year and a half by March-April 2013 the base of implementations increased 2.5 times to 1.8 thousand projects, then a year later, by April 2014, only by 16.5% to 2097 projects. Of these, 402 projects belong to 2012, 145 to 2013.

There are a number of reasons for such stagnation. Of the various classes of business software, HRM systems in terms of payroll and personnel accounting have one of the highest penetration in the Russian business and public sector. In the large business segment, according to TAdviser estimates, 100% of companies use such systems, and in the medium business segment - up to 80%, among small businesses, every third company uses automated payroll.

Thus, the HRM market has actually exhausted its opportunities for extensive growth, and for intensive growth it has not yet accumulated the proper potential. In the medium and especially small business segment, heavy industrial HRM systems that are offered on the market (SAP, Oracle, Galactica, Compass and others) do not find demand due to excessive functionality and relative high cost. The most budgetary demand could satisfy HRM from the cloud, but it will take two years or more before this segment matures in Russia.

On the other hand, large vendors offering powerful HRM platforms could implement deeper and more complex projects for the implementation of HRM systems that go beyond the framework of settlements with employees and personnel accounting, closer to the methodology of human capital management (human capital management, HCM - although often used as a synonym for HRM, but still essentially a broader concept), but the demand for such projects is still very low: no more than 3-5% of all potential customers are ready to invest in human capital.

According to TAdviser estimates, SAP and 1C remain the largest vendors of HRM systems on the Russian market in monetary terms, in total they account for at least 50% of the Russian HRM market (including partner revenues from system implementation and consulting). In quantitative terms, 1C remains the absolute leader in the number of implementations: in total, up to 137 thousand projects have been implemented in Russia on the basis of various solutions and platforms developed by the company, and about 90 thousand implementations have been implemented separately on the 8th platform. In 2012, 1C franchisees implemented 23.9 thousand implementation projects based on HRM systems from 1C (1C: Payroll and HR Management 8, 1C: Payroll and HR Management 8 KORP and others), in 2013 - 18.6 thousand projects.

As for the share of vendors in the Russian HRM market, there are traditional difficulties in determining it, since many installations of HRM solutions are part of ERP projects and are accordingly taken into account in the TAdviser project database. Nevertheless, the analysis of the base over the entire history of observations allows us to unambiguously name the HRM platforms with the largest weight in Russia: "1C: Payroll and HR Management 8," "Compass: Human Resources Management," "Galaktika ERP: Human Resources Management Loop," "BOSS-Human Resources" and SAP ERP HCM.

Among the system integrators in terms of the number of projects in 2012-2013, 1C franchisees are noticeably distinguished, including First BIT, 1C-Rarus, VDGB and others. In terms of revenue from HRM projects, IBS, Molga Consulting, Borlas, Evola, Galaktika Corporation, EAE-Consult, Norbit and others are leading in the Russian market.

Revenues of system integrators in the HRM market in Russia, 2012-2013, thousand rubles

№	Company	Revenues 2013, thousand rubles	Revenues 2012, thousand rubles	Revenue growth 2012-2013,%
1 |IBS*	830 800	670 000	24%
2	Molga Consuting	350 074	393 045	-10,9%
3	Borlas	263 606	260 833	1%
4	EVOLA	220 433	201 309	9,5%
5	Galaxy Corporation	189 800	186 199	2%
6	EAE-Consult	164 855	140 125	17,6%
7	Norbitol	122 300	48 500	252,2%
8	SoftBalance	26 000	25 000	4%
9	Compass	20 000	19 175	4,3%
	Total	2 177 868	1 944 186

* According to TAdviser's own data
TAdviser, 2014

The TAdvoser forecast for the Russian HRM systems market for 2014 is moderate. The market will grow very slowly as it faces a serious coming of age. At the end of the year, the market volume will not exceed 16 billion rubles.

Market participants also agree with this point of view. "We

associate our main expectations with the" growing up "of the market: in fact, all enterprises with more than 1000 people have accounting systems, and the next question is to comprehend what these systems with their data can give for business and increase its efficiency. As a result, there is an understanding that the use of only accounting programs that provide "posthumous" accounting for changes no longer meets the real needs of the business: now we need higher-level solutions that allow planning and management, "said Maxim Uvarov, Deputy Head of the Corporate Projects Department" Informcontact. "

This opinion is shared by the head of one of the offices "First BIT" Pavel Baskir. According to him, the growing interest of enterprises in HRM is not accompanied by rapid decision-making on the purchase of such systems: Western systems are still expensive both in terms of software and in terms of the cost of consulting and implementation work, and the introduction of domestic ones often also entails consulting costs. "

Now customers are waiting for the release of the new version of 3.0 1S:ZUP KORP, which is implemented on the 1C: Enterprise 8.3 platform and must meet the modern requirements of large organizations both for HR functionality and mobility, provide the ability to deploy" in the cloud, "etc.," - he believes.

Competition between Western and Russian vendors is now moving into the field of strategic processes, mobile technologies, means of communication with employees, believes Alexander Shishilov, head of the automation department of personnel management processes at EAE-Consult.

"Russian vendors (BOSS-Personnel, 1C, Compass) seem to have proven their best fitness in terms of quality, detail and speed of working out the requirements of Russian legislation. At the same time, the largest Western vendors, for example, SAP, focus on integrating basic processes with the so-called personnel development processes. Given the shift in the general interest of the market in favor of strategic processes, we can expect in the near future that Russian vendors will be forced to offer options for portal solutions that complement the basic supply, "he said.

2012

According to TAdviser's own estimates, in 2012 the market volume of HRM systems in Russia reached $500 million (about 15 billion rubles). Recall that in 2010 its volume amounted to $380 million, that is, over two years the market increased by almost a third - by $120 million. In the year and a half since the release of the previous study, the number of HRM projects in the TAdviser database has grown almost 2.5 times (from 760 to more than 1800 projects). At the same time, according to TAdviser analysts, no more than 10% of projects implemented in the field of personnel management automation over the past two years are concentrated in the portal database.

Firstly, part of HRM projects is one of the stages of deploying large ERP platforms, so that such projects are marked by vendors as ERP projects, they are accordingly registered in the portal database. Also, projects with the number of licenses from 1 to 10 practically do not fall into the database due to their significant number.

Big players

For example, franchisees of one of the largest players in the domestic market for automation of personnel accounting, 1C, in 2011 alone implemented a total of 13.3 thousand projects based on 1C: Payroll and HR Management 8, in 2012 - 10.7 thousand such projects. According to TAdviser estimates, the decrease in the number of projects is due to the gradual "washing out" of 1C by other vendors from the upper border of the mid-sized business segment and the large business segment. However, the company remains the absolute leader in the lower price segment, in the small business segment. According to TAdviser estimates, in 2011 the volume of projects based on various HRM configurations from 1C exceeded 1 billion rubles, in 2012 - amounted to more than 800 million rubles (together with consulting).

Large by the number of HRM implementation licenses in Russia 2011-2012

№	Customer	Industry	Integrator	System	Number of Licenses	Details
1	Far Eastern Generating Company (DGC)	Power	Novy Atlant	Galaktika ERP: Human Resources Framework	2848	Project Description
2	RusHydro	Power	A-Energy Systems |SAP ERP HCM	2600	Project Description
3	Rosatom	Government agencies	MOLGA Consulting |SAP ERP HCM	700	Project Description
3	Tatneft-Neftekhim	Neftegas	1C-Rarus	1C: Payroll and HR Management 8 KORP	700	Project Description
4	Baltika	FMCG	MONOLIT-INFO	Monolith: Personnel	600	Project Description
5	Transneft	Neftegas	1C: First BIT	1C: Payroll and HR Management 8 KORP	521	Project Description
6	Prokopyevskugol	Extractive	Financial Technology	Galaktika ERP: Human Resources Framework	472	Project Description
7	Altayvagon	Mechanical Engineering	Financial Technology	Galaktika ERP: Human Resources Framework	462	Project Description
8	Salek	Extractive	Financial Technology	Galaktika ERP: Human Resources Framework	442	Project Description
9	Ugra State University	Education	Galaxy Corporation	Galaktika ERP: Human Resources Framework	400	Project Description
10	AVC	Trading	Galaxy Corporation	Galaktika ERP: Human Resources Framework	351	Project Description

* Based on project data placed in the TAdviser database

The above does not mean that 1C solutions are not used by large companies. For example, the top 10 largest HRM projects in terms of the number of licenses implemented in 2011-2012 included two projects based on 1C: Payroll and HR Management 8 KORP in Tatneft-Neftekhim and Transneft with the number of licenses 700 and 521, respectively. Also, in the industrial sector, where the largest projects are being implemented, Galaktika ERP systems are leading: Human Resources Loop, Monolith: Personnel, Compass: Human Resources and the Western SAP ERP HCM system.

Domestic vendors still hold the HRM systems market quite firmly, although partners of Western companies are becoming more and more active from year to year. SAP CIS (SAP CIS) partners, for example, IBS and Ai-Teko, are especially noticeable in this regard. They contrast the strong expertise of local developers with innovative solutions and successful business practices that distinguish Western vendor platforms from domestic systems. Indirectly, the activation of SAP in the Russian HRM system market is also confirmed by the TAdviser database data. In 2011, the SAP ERP HCM platform ranked fifth in terms of implementation frequency, in 2012 - third.

TAdviser, 2013

Andrey Li, Director of Human Resources Systems at I-Teco Business Consulting, told TAdviser that SAP has taken a "huge step" towards localizing the solution for Russia, which allows increasing the speed of implementation with each completed project. Now, when implementing SAP ERP HCM, the big bang method is more often used: a comprehensive version is being developed for all enterprises at once, replicated as soon as possible. A good example is the project at Severstal: it was implemented in just two years, provided that the implemented system processes data of more than 80 thousand employees every day, the expert noted.

Leading Integrators

As for integrators, there are more than 150 companies in the HRM implementation market, including the vendors themselves, who are also engaged in system deployment and related consulting on their own. According to TAdviser, the most active integrators in terms of the number of implementations in 2011-2012 were First Bit, BOSS. Human Resources, Galaxy Corporation, ECM Systems EOS, VDGB, as well as MOLGA Consulting and Financial Technologies. IBS and Ai-Teko should also be allocated in terms of revenue.

Revenues of system integrators in the HRM market in Russia, 2010-2012, thousand rubles

№	Company	Revenues 2011, thousand rubles	Revenues 2010, thousand rubles	Revenue forecast 2012, thousand rubles	Revenue growth 2010-2011,%
1 |IBS*	667 000	318 100	670 000	109,7
2	Ai-Teko	553 000	607 400	-	-9,1
3	Molga Consuting	206 210	168 315	300 000	22,5
4	EVOLA	193 566	119 782	-	61,7
5	Galaxy Corporation	156 000	138 830	186 200	12,4
6	AiT Soft	29 700	28 700	28 000	3,5%
	Total	1 805 476	1 381 127

TAdviser, 2013 (* - according to TAdviser's own data)

Key trends

In terms of technological trends, the Russian HRM system market, although with some delay in the depth of adaptation of certain new solutions, follows the global market. So, already in 2011 it became clear that talent management and recruiting came to the fore in relation to the primary functions of HRM, already universally implemented, such as payroll and personnel accounting. In 2012, this trend took hold and will only grow. According to Sergey Nikitin, partner of MOLGA Consulting, the share of projects for managing efficiency, talent, recruitment increased from 10-20% to 40%.

Vice President Diasoft"" Mikhail Lebedev believes that the relevance of recruitment through social networks is increasing, as well as integration with Internet resources, the development of internal recruiting, the use of online tools for centralized assessment, personnel testing and talent management. Most experts surveyed by TAdviser also highlight the growing interest in SaaS HRM and mobile solutions in this area. "At the technological level, in the next two to three years there will be a certain movement towards working with cloud services, primarily related to distance learning, testing and staff assessment," said Igor Gubanov IBS, director of practice at the HR solutions department.

At the same time, according to TAdviser estimates, the Russian HRM market has already reached a certain degree of maturity. A significant increase in the number of projects and income of integrators fell on 2011, and already in 2012 it slowed down somewhat. For example, in its own TAdviser database, the number of HRM projects implemented in 2011 is 478, and already in 2012 - 24% less, only 365.

The data on the number of implemented projects based on the main 1C configurations were presented above: here in 2012 the reduction in the number of projects compared to 2011 amounted to 19.5%. The "flywheel" of the HRM systems market in Russia was launched in the crisis and post-crisis periods. In 2010, the personnel management systems segment showed the largest growth. At the end of 2011, the total HRM coverage actually reached its limit: for the most part, the large corporate sector has already implemented payroll and personnel accounting systems, "confirmed Kirill Burlyuk, director of business applications at Sitronics IT.

In the short term, a decrease in the number of implementations will not affect the growth of revenue of vendors and integrators, according to TAdviser, since the projects of the "second wave" of HRM automation for talent and recruitment management are much more expensive than the projects for introducing payroll circuits, including by including a significant share of consulting. However, in the long term, the Russian HRM market, including under the influence of the popularization of inexpensive "cloud" services, may go into a plateau state.

2010-2011

As in 2009, in 2010, difficulties arose with determining the volume of the human resources management systems market in Russia for the same reasons: first of all, these are difficulties with isolating the HRM component from the "large" ERP projects. Most ERP vendors have HRM functionality implemented directly in the accounting system, and there are quite a few such systems on the Russian market.

It is very difficult to estimate the number of ERP projects that included automation of personnel management. And since the market volume consists not only of the cost of the licenses sold, but also of system implementation services, then again it is impossible to separate the cost of implementing the HRM unit separately from ERP for system integrators.

This explains the inconsistency in estimates given by various experts to the Russian HRM market. So, according to IDC Russia, in 2010 in the terminology of the company the Russian market Human Capital Management (HCM, human capital management) amounted to about $40 million. However, it is obvious that the concept of HCM does not include simple functionality for calculating wages and accounting for the state, and most of these projects have been implemented on the Russian market.

The vice president Diasoft of '"Mikhail Lebedev"' "" estimates the Russian HRM market at the end of 2011, taking into account licenses and services at about $150 million. TAdviser's own estimate, taking into account the results of 2009 ($350 million) - $380 million in 2010, an increase compared to 2009 - 8.5%.

In TAdviser terminology, the HRM market includes both the introduction of the simplest payroll systems and integrated HRM systems that implement human capital management functionality, HRM modules as part of ERP systems, as well as specialized software products that cover certain narrow areas, such as recruiting.

Main players

In the Russian HRM market, suppliers of the largest ERP platforms are distinguished by the number of implementations, and this seems quite logical. It is easiest for companies to automate both financial accounting and payroll and human resources management on a single platform. In terms of HRM implementations, the undisputed leader in the Russian market is 1C, which offers several products of this class. The number of implementations of these products is in the thousands, and here, of course, the distribution of the main ERP system "1C: Enterprise" plays a decisive role.

Also, the number of HRM implementations by companies, SAP, Oracle"" and Compass also due to the deep penetration of ERP platforms on the Russian market that these companies offer. As for specialized systems, among them stand out "" BOSS-personnel officer(developer BOSS. HR Systems""), Diasoft FA Balance (""), Diasoft"" and Personnel (EOS) a number of other products.

TAdviser, November 2011

According to TAdviser's own data, at the moment, taking into account all projects implemented in recent years, Compass: Human Resources the platform is the leader in terms of the number of implementations: it accounts for 194 projects out of 761 available in the TAdviser database, or 25.5%. In second place in terms of the number of implementations is the "" system . 1C: Salary and Human Resources 8 However, a substantial reservation is required here. 1With HRM is not just the leader, but the undisputed leader of the Russian market. According to the company's own database of implementations, 1C at the moment franchisees of the company have implemented more than 40 thousand implementations of personnel management systems based on various solutions. Of these, 85.5% of implementations (more than 34.3 thousand projects) fall on the configuration mentioned above. Minor shares are also occupied by other systems and industry solutions: "Fireplace: Payroll 8," "Salary and personnel of a budgetary institution 8," "Personnel assessment 8" and "Salary and personnel management KORP 8." For obvious reasons, you cannot take into account all these implementations in the TAdviser database. 

It is also difficult to isolate from ERP projects those implementations in which HRM functionality was installed. So the data on the number of HRM implementations in Russia to a certain extent are conditional. 

TAdviser, November 2011

As for the largest integrators, the picture here is also not entirely certain. According to TAdviser, the largest number of projects implemented  by Compass is 170 projects. The top five also includes  BOSS. Personnel systems,   VDGB, Datex Software (Datex Software) and Diasoft. However, if we take into account ERP projects, which include HRM, then the balance of power could be different. There is no data on such projects implemented by partners of SAP, Oracle, Galaxy Corporation and MONOLIT-INFO. Do not forget about 1C franchisees implementing HRM implementations .

According to Irina Shchukina,' Sales Director of Compass, the Russian HRM systems market is approaching saturation. "It is no longer possible to find a company in which personnel accounting and payroll are not automated. And the main trends are a reflection of this situation. Companies are developing installed systems and introducing previously not mastered functionality. And if the system cannot develop or scale for the tasks of the enterprise replace it, "she commented.

With the beginning of the 2008 crisis, many companies froze HRM projects or postponed their start for a more favorable time, thereby creating pent-up demand. It was these companies that created the main demand in 2011. Obviously, this trend will continue in 2012.

Top trends

The most important qualitative trend of the Russian HRM market is the shift in the paradigm of automation of human resources management: an increasing number of Russian enterprises are experiencing the need to automate HRM functions beyond payroll and personnel accounting, that is, directly human resources management tools. According to Mikhail Lebedev, vice president of Diasoft, a sufficient number of HRM systems have been purchased and implemented in Russia, now it is up to them to use and optimize internal processes. "By optimization, I mean the processes for calculating the efficiency of using the HRM system and finding ways to increase this efficiency," the expert explained.

Dmitry Shekhodanov, Head of SAP HCM at EVOLA, also considers personnel performance management to be one of the main trends. This function includes processes such as assessing employees' competencies, setting and assessing the achievement of employees' goals (KPIs), multifactorial calculation of remuneration based on the implementation of personal activity plans, the overall work of the division and the company, and the achievement of qualitative and quantitative goals, he explained.

This function, says Dmitry Shekhodanov, has become especially relevant recently due to the fact that the management of the companies has realized: such aspects can be considered and made transparent to employees. Thus, the self-motivation of employees increases: they can calculate the future bonus in advance based on the fulfillment or failure to fulfill the set goals. "Motivation processes are very individual across industries and even within the industry and are not standardized. Many enterprises have the task of introducing such systems, but additional methodological study of internal business processes is required, so this trend will be postponed to next year, "the expert concluded.

Maria Ivanova,' architect of projects in the field of HR Sitronics IT, believes that the main emphasis in the development of HR systems will be placed on managing the organizational and staff structure of the enterprise, automation of budget management. Companies that have moved to a deeper level of HR systems development will actively invest in optimizing motivation schemes for personnel development based on KPI.

2009

According to TAdviser, at the end of 2009, the market for HRM systems (Human Resource Management) and services for their implementation in Russia amounted to 350 million dollars, which is 16% more than a year earlier (300 million dollars).

In determining the size of the market, researchers faced several obstacles that noticeably make it difficult to calculate. Firstly, even the largest suppliers do not share the sold ERP systems licenses and the sold HRM licenses (as part of the ERP system). These functions are also often implemented in accounting programs. In addition, there are separate products for automating the activities of the personnel service, which are sometimes developed under the customer, although their market share is not large.

Another obstacle in determining the sales volume in the segment is that the turnover of large integrators is not easy to divide into ERP and HRM implementation services - as part of ERP implementation services. There is also a problem with the classification of HRM systems, which gives ambiguity in the assignment of a particular system to this class. Nevertheless, the majority of TAdviser respondents, market participants, agree with the estimate of the total sales volume at the end of 2009.

In the segment of automation of personnel management in Russia in 2008-2009, a unique situation developed when, as a result, factors formed from negative crisis phenomena that gave the market positive dynamics.

From minus to plus

Over the period from the beginning of 2008 to the present, the dynamics of the Russian segment of HRM systems has not been uniform, and the nature of the main trends has also changed. If the period until October-November 2008 (the beginning of the crisis) was characterized by an optimistic view of the future for all major players, then by the beginning of 2009 the number of contracts for the installation of new systems had sharply decreased.

In addition, many large HRM projects were suspended and frozen, which had already been launched by the beginning of the crisis. As in all other industries, this was caused primarily by the widespread desire of companies to reduce operating costs and costs. "The mood towards the future during this period went into a negative area. Staff were shrinking en masse. The main principle is "to leave only those without whom you cannot survive." The costs were minimized by enterprises due to the wage fund, training and retraining programs for personnel, and other budget items. IT budgets also fell under the cut, "said Mikhail Koshelev, Deputy General Director of Alekta.

However, the period of decline in the HRM market did not become protracted. When the services of HR enterprises that have experienced significant reductions came under attack, the question arose of how it is possible to effectively establish the implementation of the functions of these services in the context of a lack of human resources, commented Andrei Shabanov, General Director of UCMS Group CIS. Under the influence of the urgent need to optimize the personnel management process, the issue of automating this area of ​ ​ business processes returned to the agenda in a new capacity. Having survived the most acute period of the crisis, the companies began to search for budget and functional HRM systems. "The shake-up that the companies have experienced has led to a rethinking by many managers of the attitude towards personnel and, accordingly, HRM systems as a tool for improving the efficiency (survival) of the enterprise," he is sure.

"Among the first after the crisis, the market for personnel management systems begins to resume," the CEO confirmed. IBS Sergey Matsotsky According to him, now companies need to resuscitate business and withdraw staff from depression, and not least this is a task for IT systems. According to most players in the Russian personnel management automation market, at the end of 2009 - the beginning of 2010, there was a revival of the market, which allows us to cautiously make the first optimistic forecasts. As the economy stabilizes, pent-up demand begins to be felt in the market.

Key trends

Significant trends that will continue to influence the Russian human resources automation market in the foreseeable future are primarily the increasing interest in HRM solutions as a result of the increased workload and quality requirements. According to Mikhail Koshelev, the greatest demand for this kind of products still comes from large enterprises. "It is difficult to expect a change in this trend so far," he says.

In addition, the largest vendors, such as SAP and 1C, will continue to strengthen their positions by refusing enterprises to independently develop HRM products for internal use, the expert said. In the large business segment, the demand for HRM systems is also formed by the consolidation of enterprises, says Natalya Sidorova, regional director of Epicor in Russia and the CIS countries. In its slovam¸, such consolidation requires companies to work more systematically with personnel, and, as a result, gradually creates demand for full-fledged HRM systems.

One of the current trends remains the formation and development of the HRM-solutions market provided according to the SaaS (soft as a service - software as a service) model, says Andrey Shabanov. Despite the fact that HRM solutions using the model of remote access to the system are still new to the Russian market, at the moment they recognize good prospects for them. First of all, such solutions are interested in large companies, banks that have quite high requirements for information privacy, says Shabanov. With regard to the medium and small enterprises segment, the overall approach to economy also generates interest in such systems. "There are a large number of people who want to try the SaaS approach. There is great interest in automating personnel management functions in general, "he said.

The position of outsourcing companies in the HRM market also continues to strengthen, as many enterprises transfer their functions on payroll and personnel accounting to external suppliers. As a result, in the future, the competition of outsourcing solutions and traditional systems will intensify. The demand for outsourcing of HR functions will remain stable due to the desire of companies to save IT budgets.

Forecasts

Participants and analysts of the Russian market of HRM systems agree that in 2010 it will maintain positive dynamics, however, its growth will not be avalanche-like, but, on the contrary, very smooth and cautious. "The crisis negatively affected the companies' plans for the implementation of HRM systems in 2010. I think it will take some time before we can talk about a significant increase in demand for HRM systems. At the same time, many customers who planned to implement iScala HRM, but were forced to freeze budgets in 2008, began implementation by the end of 2009. So there is a positive trend and, I hope, will continue, "says Sidorova.

The demand for HRM systems will be strengthened as business managers realize that this type of solution has a significant impact on staff performance. All trends that manifested in 2009 will continue to influence the market: these include both strengthening demand from large companies, strengthening the position of large vendors, and the development of outsourcing personnel management segments and the transfer of personnel management to the regime. SaaS Be that as it may, the market will maintain great potential for growth, which may manifest itself when more favorable macroeconomic conditions arise, since it is still far from saturated.

See also

• Overview of HRM system in Russia
• Key trends in the Russian HRM market
• HRM systems (global market)