Human Capital Management Software Market Size

HCM Software Market Analysis

The Human Capital Management Software Market size is estimated at USD 24.92 billion in 2024, and is expected to reach USD 35.94 billion by 2029, growing at a CAGR of 7.60% during the forecast period (2024-2029).

Many companies are onboarding HCM vendors who provide robust and reliable software solutions to increase workforce productivity.

• The employee's mobile-centric internet usage patterns are persuading the enterprises to deploy a mobile application for extending the employee management functions to enhance the culture, i.e., people management, thus providing growth prospects to the HCM vendors. As several companies have had the same HR software for over seven years, which needs to be updated to stay on par with the market, such factors are expected to influence the growth of the human capital management software market.
• Human resource information systems are being invested to effectively manage HR information, better manage employees, gain insights, and improve business outcomes. Companies of all sizes, large and small, are making significant improvements in all aspects of their operations by implementing the right HR technology. The cloud, big data, and artificial intelligence technological advances are changing HR professionals' work and their organizational roles. This trend indicates the potential growth in the market studied over the forecast period.
• For example, Danish retailer Salling Group A/S, which has more than 1,400 stores across Denmark, Germany, and Poland and employs some 53,000 people, is adopting human capital management software to enable its mobile recruitment and talent processes. The company mentioned achieving a 90% reduction in time for the store manager for the administrative task and posting a position in 15 seconds, where it used to take over three days earlier.
• Data Security is a significant concern after the implementation of HCM software. The software must prevent unauthorized access to sensitive and confidential data. Multiple levels of security must be put in place, hampering the market growth.
• There has been a steady increase in people working from home for the past decade. However, the impact of COVID-19 dramatically accelerated this trend in a short period, forcing organizations of all sizes to adapt to the self-isolation measures that governments across the regions recommended. With the pandemic requiring more people to work remotely, remote workforce management software became essential for businesses, as it can efficiently manage the remote workforce. With the outbreak of COVID-19, market vendors began looking for cost-effective, flexible payroll solutions to reduce non-core spending, fueling the market growth after the pandemic.