Artificial Intelligence in HR Market Size, Share, and Trends 2024 to 2033

Artificial Intelligence in HR Market Size and Growth

The global artificial intelligence in HR market size was USD 6.03 billion in 2023, estimated at USD 7.01 billion in 2024 and is projected to hit around USD 27.30 billion by 2033, expanding at a CAGR of 16.30% from 2024 to 2033. The artificial intelligence in HR market is driven by the growing interest in making decisions based on data in multiple firms, especially in developed countries.

Artificial Intelligence in HR Market Key Takeaways

• The North America artificial intelligence in HR market size accounted for USD 2.35 billion in 2023 and is predicted to cross around USD 10.78 billion by 2033, at a CAGR of 16.45% from 2024 to 2033.
• North America dominated artificial intelligence in HR market in 2023.
• Asia- Pacific is the fastest growing in artificial intelligence in HR market during the forecast period.
• By type, the services segment held the significant share of the market in 2023.
• By technology, the machine learning segment led the market in 2023.
• By technology, the virtual assistance segment is observed to grow at a notable rate in the artificial intelligence in HR market during the forecast period.
• By enterprise size, the large enterprises segment dominated artificial intelligence in HR market in 2023.
• By application, the recruitment and hiring segment dominated artificial intelligence in HR market in 2023.
• By industry, the IT and telecom segment dominated artificial intelligence in HR market in 2023.
• By industry, the BFSI is observed fastest growing segment in artificial intelligence in HR market during forecast period.

U.S. Artificial Intelligence in HR Market Size and Growth 2024 to 2033

The U.S. artificial intelligence in HR market size was valued at USD 1.65 billion in 2023 and is expected to be worth around USD 7.60 billion by 2033 with a CAGR of 16.50% from 2024 to 2033.

North America dominated the artificial intelligence in HR market in 2023. AI businesses are financed by a thriving venture capital ecosystem in North America, especially in the United States. AI businesses specializing in HR solutions have received significant investment from Sequoia Capital, Andreessen Horowitz, and Accel Partners. Federal and state governments encourage innovation in the HR industry by offering grants and subsidies for AI research and businesses.

Asia- Pacific is observed to be the fastest growing in the artificial intelligence in HR market during the forecast period. Asia-Pacific nations boast some of the world's largest populations, contributing to a diverse labor force. Sophisticated HR solutions are needed to manage this workforce effectively. AI solutions assist local businesses in effectively managing personnel acquisition, employee engagement, and retention. These solutions offer data-driven insights, predictive analytics, and tailored experiences to manage massive amounts of HR data.

Artificial Intelligence in HR Market Overview

In the HR industry, artificial intelligence (AI) refers to the application of AI technology to human resources operations to improve and expedite workforce management, recruitment, employee engagement, training, and performance evaluation procedures. Artificial intelligence (AI) may automate tedious processes like resume screening, allowing HR personnel to concentrate on key projects. This efficiency might result in significant cost reductions in hiring procedures and day-to-day HR duties. AI in HR can support fairness and diversity in hiring and performance reviews by standardizing candidate evaluation criteria and reducing human bias in decision-making processes.

Artificial Intelligence in HR Market Growth Factors

• AI frees HR staff to focus on strategic work by automating processes like scheduling and resume screening.  
• AI can improve employee experience, tailor career development, and enhance well-being programs. This is the driving factor for the growth of artificial intelligence in HR market.
• AI can lessen the danger of hiring bias and help guarantee compliance with labor rules.
• AI facilitates the identification of suitable applicants, enhances the hiring procedure, and customizes the work environment.
• HR can use a wealth of data to inform better hiring, training, and retention decisions.

Artificial Intelligence in HR Market Scope

Artificial Intelligence in HR Market Dynamics

Driver

Enhanced recruitment processes

AI-powered hiring procedures can improve candidates' experiences by responding more quickly, facilitating individualized conversations, and maintaining constant contact throughout the hiring process. Artificial intelligence (AI)-powered chatbots can quickly and effectively respond to candidate inquiries, guaranteeing a seamless and satisfying experience essential for company branding. AI dramatically lowers hiring expenses by increasing productivity and automating monotonous jobs. Businesses can allocate resources more efficiently by concentrating on the strategic elements of hiring and employee engagement instead of administrative duties.

Restraint

Cost of implementation

For AI systems to work well, a strong infrastructure is needed. This could entail modernizing networking infrastructure, servers, and storage systems to meet the processing demands of artificial intelligence algorithms. It could be difficult for small to mid-sized businesses to justify or finance these infrastructural expenditures. Implementing AI carries some inherent risks, like the possibility of algorithm biases, data breaches, or problems with regulatory compliance. The entire cost of AI adoption in HR is increased by the need to spend on cybersecurity safeguards, auditing procedures, and legal advice to mitigate these risks. This limits the growth of artificial intelligence in HR market.

Opportunities

Automation of routine tasks

AI systems can forecast future patterns in employee engagement, performance, and attrition using historical data. HR departments can improve organizational stability and retain top people by taking proactive initiatives to anticipate possible issues before they arise. AI may help with administrative duties including payroll processing, benefits administration, compliance monitoring, recruiting, and talent management. While these tasks are vital, they are frequently resource-intensive; automation lowers errors and frees HR specialists to work on more important tasks.

Improved employee engagement

AI can analyze enormous volumes of employee data to comprehend work habits, career goals, and personal preferences. This enables HR departments to better fit everyone with experiences like job assignments, career growth pathways, and training programs. Artificial Intelligence improves employee engagement and happiness by personalizing these experiences. This opens an opportunity for the rise of artificial intelligence in HR market.

Offering Insights 

The services segment held the significant share of the artificial intelligence in HR market in 2023.

HR AI has an enormous effect on an organization's strategy. Service providers provide consulting services to assist firms in creating and implementing a strategy plan for the use of AI in HR. A change in organizational culture is necessary to incorporate AI in HR. Service providers aid with change management, guiding businesses through the shift and winning over stakeholders. AI-powered HR solutions must expand to accommodate the company's expansion. Service providers guarantee long-term viability and efficacy by providing scalable solutions that can expand with the company. 

Technology Insights

The machine learning segment led the artificial intelligence in HR market in 2023.

The entire employee experience can be improved by machine learning by enabling the personalization of HR services. Employees' abilities, career objectives, and performance data can all be used to develop personalized learning paths for them, resulting in more efficient and interesting training sessions. ML can track indicators of employee well-being, which can also recommend resources or interventions to promote work-life balance and mental health.

By examining the abilities, responsibilities, and career pathways of others, machine learning techniques can assist staff members in understanding possible career paths inside the company. The virtual assistance segment is observed to grow at a notable rate in the artificial intelligence in HR market during the forecast period.  As remote work becomes more common, virtual assistants are becoming increasingly important in ensuring that remote workers receive smooth support and communication.

Virtual assistants can assist recently hired remote workers with onboarding, ensuring they have access to all the tools and information they need. Keeping employees engaged in a remote work environment can be difficult, but virtual assistants can help by helping, feedback, and regular check-ins.

Enterprise Size Insights

The large enterprises segment dominated artificial intelligence in HR market in 2023.   Regarding financial resources, large companies have a lot more than small and medium-sized businesses (SMBs). Their strong financial position enables them to invest significantly in AI technology, such as advanced HR software. They can cover the initial expenditures of implementing AI systems and continuing maintenance, updates, and training charges. Over time, these investments strengthen their capacity to save operating expenses, increase efficiency, and streamline HR procedures. Large businesses place a high premium on improving the employee experience. 

Artificial Intelligence (AI) in HR may make a big difference by offering individualized help via chatbots, virtual assistants, and self-service portals. These systems increase employee happiness and engagement by managing employee inquiries, helping with onboarding, and facilitating anytime access to HR services.

Application Insights

The recruitment and hiring segment dominated the artificial intelligence in HR market in 2023. Recruiters can spend less time assessing resumes by using AI solutions to automate this process. Natural language processing (NLP) is a technique automated systems use to comprehend and assess resumes to select the best applicants for additional review. Using predictive analytics, artificial intelligence (AI) tools evaluate candidates' probable future performance and cultural fit with the organization. This leads to greater workforce quality overall and increased retention rates by assisting recruiters in making more educated judgments.

Industry Insights

The IT and telecom segment dominated the artificial intelligence in HR market in 2023. With AI-powered recruitment tools, these businesses can effectively sort through many applications, find the best candidates using machine learning and predictive analytics solutions, gain insight into employee engagement and satisfaction, and proactively address issues that may cause turnover. AI technologies may expand as a firm grows, effectively managing growing quantities of HR activities. AI-driven HR solutions can be customized to handle problems unique to a certain business, such overseeing distant workers or guaranteeing adherence to international legal requirements.

The BFSI segment is observed to be the fastest growing in artificial intelligence in HR market during the forecast period. BFSI organizations use AI solutions in HR to analyze employee data and obtain insights into employee engagement and satisfaction levels. Predictive analytics can identify at-risk individuals and provide interventions to keep top talent on board. AI-powered personalized training and development plans adapted to each employee's unique needs result in reduced employee turnover and increased job satisfaction.

Since the BFSI industry is heavily regulated, following the law is crucial. By automating compliance monitoring and reporting, AI-powered HR solutions contribute to maintaining compliance with internal policies and labor laws. AI solutions can monitor regulation changes and update HR procedures, lowering the risk of non-compliance and the fines that come with it.

Artificial Intelligence in HR Market Companies

• IBM Corporation
• Oracle Corporation
• SAP SE
• Automatic Data Processing Inc
• Cegid Group
• Cornerstone OnDemand Inc
• Job Teaser
• Phenom People Inc
• Eightfold AI
• Simpplr
• Beamery Inc
• HireVue Inc
• Jobvite Inc
• EdCast Inc
• Harver B.V.
• Smart Recruiters
• Gloat
• Textio
• Cezanne HR Limited
• Brazen Technologies Inc.
• Pymetrics Inc
• Aisera
• PageUp People Pty
• JobAdder Operations Pty Ltd
• Entelo Inc

Recent Developments

In May 2023, With the recent announcement of SAP and Microsoft's extended relationship, the dream of enterprise-ready generative AI that can improve worker productivity and development is becoming closer to reality. By combining SAP SuccessFactors solutions with Copilot in Viva Learning and Microsoft 365 Copilot, enterprises will be able to better retain, upskill, and hire workers to close skills shortages.

Segments Covered in the Report

By Offering

• Hardware
• Software
• Services

By Technology

• Virtual Assistants
• Metaverse
• AI Chatbot
• People Analytics
• Machine Learning
• Computer Vision
• Natural Language Processing

By Enterprise Size

• Small and Medium Enterprises
• Large Enterprises

By Application

• Workforce Management
• Talent Management
• Payroll Management
• Performance Management
• Recruitment and Hiring

By Industry

• Academic
• Banking Financial Services and Insurance (BFSI)
• Government
• Healthcare
• Information Technology (IT) and Telecom
• Manufacturing
• Retail

By Geography

• North America 
• Europe 
• Asia Pacific 
• Latin America 
• Middle East and Africa