According to new market research report "Core HR Software Market by Software (Learning Management, Payroll and Compensation Management), Service, Deployment Type (On-Premises and Cloud), Organization Size (SMEs and Large Enterprises), Vertical, and Region - Global forecast to 2022”, The core HR software market size 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.

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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.

The core HR software is being increasingly adopted by verticals, such as, government, manufacturing, BFSI, telecom and IT, and consumer goods, and retail, thereby fueling the growth of core HR software market across the globe. The government vertical holds the largest market size during the forecast period.

CORE HR SOFTWARE MARKET, BY REGION, 2022 (USD BILLION)

Source: MarketsandMarkets

Rise in cloud and mobile deployment, and increase in automation of HR processes drive the growth of core HR software market

Government

The government employs a considerable workforce size and requires software to manage the documents of employees. The government sector needs better tools to manage its budget constraint issues and changing priorities to manage the HR. Aging employees and wave of retirement are the top challenges this sector faces to manage its workforce. Software, such as pension management and succession planning can help the government in the smooth processing of its HR activities. Moreover, the outdated infrastructure is the biggest disadvantage for the government sector, the integration of new systems and solutions will help cope up with new trends and policies of the HR.

The major vendors that offer core HR software across the globe are Automatic Data Processing (ADP) (US), Ceridian HCM, Inc. (US), CoreHR (Ireland), EmployWise (India), International Business Machine (IBM) Corporation (US), Oracle Corporation (US), Paychex, Inc. (US), Paycom Software, Inc. (US), SAP SE (Germany), SumTotal Systems, LLC. (A Skillsoft Company) (US), Ultimate Software (US), and Workday, Inc. (US). These vendors have adopted different types of organic and inorganic growth strategies, such as new product launches, partnerships and collaborations, and mergers and acquisitions, to expand their offerings in the core HR software market.