The Core Human Resource (HR) software market is expected to grow from USD 6.47 billion in 2017 to USD 9.89 billion by 2022, at a Compound Annual Growth Rate (CAGR) of 8.8% during the forecast period. Several factors, such as rise of the cloud and mobile deployment, and increase in automation in HR processes are responsible for the growth of the core HR software market.
Verticals, such as government, manufacturing, energy and utilities, consumer goods and retail, healthcare, transportation and logistics, telecom and Information Technology (IT), Banking, Financial Services, and Insurance (BFSI), and others, including hospitality, education, and media and entertainment have boosted the core HR software market.
The core HR software market is segmented by software, service, organization size, deployment type, vertical, and region. The service component is expected to grow at the highest CAGR during the forecast period, because services help organizations to easily deploy the software on their premises or on cloud. Vendors provide a complete range of services that help companies conduct different activities necessary for the business function and provide a single point of contact for all the help and assistance required.
The cloud deployment type is expected to grow at the highest CAGR during the forecast period. It helps reduce the overall cost, while providing highly flexible and scalable access to the clients. The vendors are providing cloud-based software to reduce infrastructure cost for the clients. Security remains a critical issue that restricts its adoption; however, this issue is gradually being eradicated through rigorous security tests of highest standards by third parties. Considering the advantages, most vendors are switching from on-premises deployment mode to Software as a Service (SaaS)-based software.
The Small and Medium-Sized Enterprises (SMEs) segment is expected to grow at the highest CAGR in the core HR software market during the forecast period. Organizations with employee range between 100 and 1,000 are categorized under SMEs. SMEs face some specific challenges, such as requirement of domain-specific technical personnel and skilled workforce, budget constraint, and limited economies of scale. The increasing competition has prompted SMEs to invest in this business software and adopt go-to-market strategies to make efficient decisions for business growth. More than large enterprises, SMEs face resource crunch and require better methods to solve the complexities for better cost optimization on their assets and requirements.
Rise in Cloud and Mobile Deployment
Increase in Automation of HR Processes
Reluctance to the Adoption of Core HR Software
Increase in the Adoption of Core HR By SMES
Organizations' Inclination Toward HR Analytics
Lack of Awareness of New Technologies and Capabilities in Core HR Software