Human Capital Management Market Size, Share and Trends 2024 to 2034

Human Capital Management Market Size and Forecast 2024 to 2034

The global human capital management market size is projected to be worth around USD 75.45 billion by 2034 from USD 31.49 billion in 2024, at a CAGR of 9.13% from 2024 to 2034. The North America human capital management market size reached USD 13.28 billion in 2023. The rising demand for unified HR solutions across the world is driving the growth of the human capital management market.

Human Capital Management Key Takeaways

• North America led the human capital management market with the highest share in 2023.
• By region, Asia Pacific is expected to attain the fastest rate of growth during the forecast period.
• By offering, the software segment held the largest share of the market in 2023.
• By offering, the solutions segment is expected to grow with the highest CAGR during the forecast period.
• By deployment, the cloud segment dominated the market in 2023.
• By deployment, the on-premises segment is expected to grow at the fastest rate during the forecast period.
• By organization size, the large enterprises segment dominated the human capital management market in 2023.
• By organization size, the small and medium enterprises segment is estimated to exhibit the fastest growth rate during the forecast period.
• By end-use industry, the IT & telecommunication segment held a significant share of the market in 2023.
• By end-use industry, the healthcare segment is expected to grow with the highest CAGR during the forecast period.

U.S. Human Capital Management Market Size and Growth 2024 to 2034

The U.S. human capital management market size was exhibited at USD 9.29 billion in 2023 and is projected to be worth around USD 24.73 billion by 2034, poised to grow at a CAGR of 9.30% from 2024 to 2034.

North America held the largest share of the human capital management market in 2023. The growth of the market in this region is mainly driven by the rising advancements in the IT sector along with increasing investment by government in countries such as the U.S and Canada for developing the AI sector.

• In April 2024, the government of the U.S. announced an investment of around US$ 30 million under the CHIPS and Science Act & Inflation Reduction Act for developing the IT industry across the country.
• The Canadian Government announced that it would make an investment of US$ 2 billion in 2024 under the AI Compute Access Fund and a Canadian AI Sovereign Compute Strategy to develop the AI sector across the region.

The growing developments in the BFSI sector along with the rise in number of business enterprises has driven the market growth. Also, the rising development in telecom sector in the U.S and Canada has increased the demand for HCM solutions, thereby driving the market growth to some extent.

Moreover, the presence of several local market players of human capital management such as Oracle, Microsoft Corporation, Ceridian HCM Inc and some others are constantly engaged in development of high-quality HCM tools and adopting several strategies such as partnerships, acquisitions, collaborations, launches and business expansions, which in turn drives the growth of the human capital management market in this region.

• In May 2024, Oracle launched Oracle Glow. Oracle Glow is an advanced HCM solution that is used for employee development and strengthening business agility by allowing companies to develop quickly, upskill, and empowering their teams for achieving better business outcomes.

Asia Pacific is expected to be the fastest growing region during the forecast period. The rising development in the human capital management industry by private and public entities along with the growing investment by government for developing the telecom sector in countries such as India, China, Japan, South Korea, Singapore and some others is expected to drive the market growth to some extent.

• The International Trade Administration in January 2024 announced that the government of Singapore will invest around US$ 7.5 billion for developing the telecommunication industry across the country.

Moreover, the increasing development in the BFSI and healthcare sector has increased the demand for advanced HCM solutions, thereby driving market growth. Additionally, the rise in the number of SMEs in China, Japan, India, South Korea, Singapore, and some others is likely to boost the market growth to some extent.

Furthermore, the presence of various local companies of human capital management such as Zoho, GreytHR, ZingHr, Beisen and some others are developing advanced HCM solutions and software across the Asia Pacific region, that in turn is expected to drive the growth of the human capital management market in this region.

• In February 2024, GreytHR launched a new brand identity in India. This launch is done with an aim to streamline HR-related operations across various industries in the country.

Market Overview

The human capital management market is a prominent industry in the technology & IT sector. This industry deals in the development and distribution of various HCM software and services across the world. This industry comprises several offerings that mainly include software and services. This software and services are mainly deployed through cloud and on-premises to perform HR-related applications in several industries such as BFSI, retail, government & public sector, transportation & logistics, manufacturing, healthcare, education, and others. The HCM solutions are mainly used in large enterprises & small and medium enterprises for managing payroll, talent acquisition, employee engagement, and some others. This industry is likely to grow significantly with the growth of the IT and software industries.

• According to the official website of Bamboo HR, the integration of several HCM tools of the company in various organisations helps in saving around $40000 every year and reducing HR cost by 40%.

Top 10 HCM Tools

• Workday
• BambooHR
• UKG
• Oracle HCM Cloud
• SAP Success Factor
• ADP Workforce Now
• PeopleSoft
• Zoho People
• Paycor
• Vantage HCM

Human Capital Management Market Growth Factors

• Rising developments related to the IT industry have led to human capital management market growth.
• There is a rise in the number of government initiatives related to the development of the IT industry across the globe.
• The trend of integrating advanced HCM controls and business performance management in HCM software.
• Rising use of HCM solutions for talent management and data protection of employees.
• The growing investments from public and private sector entities for developing the human capital management market.
• Advancements in technologies related to HCM services positively impact industrial growth.
• The growing focus on digitalization across the world has accelerated the market in a positive way.
• The increasing adoption of HCM solutions for optimizing workforce management among companies.
• There is a growing demand for smartphone-based HCM applications that are available in Play Store and App Store.
• The increasing demand for streamlining various HR operations boosts the market growth.
• The growing application of HCM tools in the BFSI sector around the world has driven the growth of the human capital management market.

How is AI shaping the Human Capital Management Industry?

The advancements in AI play a crucial role in the growth of the IT industry. Nowadays, HCM-developing companies have started integrating AI into their software to enhance HR-related operations. AI can automate several HR tasks, such as decision-making and employee development. AI-enabled HCM software ensures that all the functions of any organization operate properly and comply with government compliances and labor laws. Moreover, the applications of AI in HCM solutions can result in cost savings and provide enhanced data analytics to enhance scalability and flexibility in organizations. Thus, the integration of AI in the HCM industry is expected to shape industrial growth in a positive way.

• In October 2023, IBM announced a partnership with EY. This partnership is done to launch EY.ai Workforce that uses AI technology for automating several HR-related tasks in large businesses.

Market Scope

Market Dynamics

Driver

Growing application of HCM solutions in construction industries

The use of advanced HCM solutions is increasing rapidly in numerous industries across the world. The application of HCM solutions in construction sectors has increased in managing the payroll and attendance of labor, along with providing mobile phone access from any location. Also, the use of HCM solutions to enhance the learning and development of laborers in the construction industry is crucial for industrial growth. Thus, the rising application of HCM solutions in the construction industry is likely to drive the growth of the human capital management market during the forecast period.

• In October 2023, ADP launched ADP Workforce Now. ADP Workforce Now is a comprehensive HCM solution that finds several HR-related operations in the construction industry.

Restraint

Security issues, along with a lack of skilled workforce

The human capital management industry has gained traction due to the growing usage of HCM tools around the world. Although there are numerous applications of HCM solutions, there are several problems in this industry. Firstly, the documents of employees saved in HCM software might be misused by hackers, which causes a major security concern. Secondly, the number of skilled professionals with expertise in HCM analytics is very low. Thus, security concerns, along with a shortage of trained workforce, are likely to restrain the growth of the human capital management market during the forecast period.

Opportunity

Advancements in blockchain technology to change the future

Several developments are taking place in the technological sectors associated with HR processes. Nowadays, software developers have started integrating blockchain technology in HCM solutions tools for safeguarding employee data. By using blockchain technology, the HCM software can enhance security and credibility of HR processes. Thus, advancements in blockchain technology associated with HCM solutions is expected to create ample growth opportunities for the market players in the years to come.

• In April 2023, CSM Tech launched CSM ProofChain. CSM ProofChain is blockchain service that can enhance the hiring process in businesses.

Offering Insights

The software segment dominated the market in 2023. The growing application of core HR, talent management, and workforce management software has driven the market growth. Also, the increasing use of HCM software for streamlining HR operations is likely to boost market growth to some extent. Moreover, the upsurge in demand for HCM software for recruitment and human resource development is expected to propel the growth of the human capital management market during the forecast period.

• In April 2023, Paycom Software launched Global HCM. Global HCM is a cloud-based human capital management software that is available in 180+ countries, has 15 languages, and has the ability to cater to the needs of HR.

The solutions segment is estimated to exhibit the fastest growth rate during the forecast period. The rising trend of HCM solutions in various industries for increasing hiring speed along with developing an organization’s human capital has driven market growth. Also, the increasing usage of human capital management solutions in healthcare organizations to optimize a healthcare organization's entire workforce is likely to boost market growth to some extent. Moreover, the growing demand for HCM solutions in large enterprises to increase the productivity of workers is expected to foster the growth of the human capital management market during the forecast period.

• In October 2023, Empeon launched the Scheduling Solution. This is a comprehensive HCM solution that finds various applications in the healthcare sector.

Deployment Insights

The cloud segment held a dominant share of the market in 2023. The growing demand for cloud-based HCM solutions to enhance business performance management has driven market growth. Also, the rising trend of developing cloud-based HCM software to improve the management of employees in large organizations is likely to drive market growth to some extent. Moreover, the increasing demand for cloud-based HCM platforms for recruitment purposes, along with applicant tracking and data security, is expected to boost the growth of the human capital management market during the forecast period.

• In May 2024, Zellis launched HCM Cloud 8.0. HCM Cloud 8.0 is a cloud-based HCM platform that is aimed at enhancing the capabilities of payroll and HR-related platforms.

The on-premises segment is expected to grow with the highest CAGR during the forecast period. The growing demand for on-premises HCM solutions due to high safety and reliability compared to cloud-based HCM solutions has driven market growth. Also, the increasing application of on-premises HCM software due to high speed and low latency is likely to boost the market growth to some extent. Moreover, the rising use of on-premises HCM solutions for enhancing storage and restricting unauthorized access is expected to propel the growth of the human capital management market during the forecast period.

• In July 2023, Hitachi announced a collaboration with Microsoft. This collaboration is done to launch on-premises HCM solution for various end-user industries.

Organization Size Insights

The large enterprises segment dominated the market in 2023. The rise in the number of large enterprises around the world has increased the demand for HCM solutions to manage HR-related operations and has driven market growth. Also, the increasing application of HCM solutions in large enterprises for managing recruitment, reporting, compliance, workforce rewards, talent management, and some others is likely to boost the market growth to some extent. Moreover, the growing use of HCM solutions in large enterprises related to talent management, workforce management, and development is expected to foster the growth of the human capital management market during the forecast period.

• In November 2023, ADP launched ADP Enterprise Payroll. ADP Enterprise Payroll is a human capital management (HCM) solution designed for large companies with more than 1,000 employees across various industries.

The medium and small enterprises segment is estimated to exhibit the fastest growth rate during the forecast period. The increasing demand for HCM solutions in SMEs to enhance employee development is likely to boost market growth. Also, the growing application of SMEs to understand the employee mindset, along with reducing admin time, has propelled market growth to some extent. Moreover, the rising use of HCM solutions for increasing productivity and data-driven decision-making is expected to drive the growth of the human capital management market during the forecast period.

• In June 2024, PrimePay launched PrimePay HCM Essentials, a new HCM platform that streamlines HR operations in small organizations.

End-Use Insights

The IT & telecommunication segment held a significant share of the market in 2023. The growing demand for HCM solutions in IT & telecommunication for increasing hiring speed along with motivating employees has driven the market growth. Also, the increasing applications of advanced HCM solutions in the telecom sector for automating several HR-related operations are likely to boost the market growth to some extent. Moreover, the rising use of HCM software in the IT and telecom sector for managing freelancers and permanent employees is expected to drive the growth of the human capital management market during the forecast period.

• In August 2023, Paycor launched Embedded HCM solution. This solution is API-driven HCM software that helps in managing several HR-related tasks in telecom industry.

The healthcare segment is expected to grow at a notable rate during the forecast period. The growing application of HCM solutions in the healthcare sector for recruiting and hiring employees has driven the market growth. Also, the increasing application of HCM solutions in the healthcare industry to ensure regulatory compliance and avoid workflow disruptions is likely to boost market growth to some extent. Moreover, the rising usage of HCM software in the healthcare sector for managing payroll and performance evaluation is expected to drive the growth of the human capital management market during the forecast period.

• In September 2023, Oracle launched Oracle Fusion Cloud Human Capital Management (HCM). This new HCM solution is designed to empower employees, enhance retention, and prioritize patient care in the healthcare sector.

Human Capital Management Markets Top 14 Companies

• SAP SE
• Automatic Data Processing
• Oracle Corporation
• Microsoft Corporation
• Cornerstone OnDemand, Inc.
• Ceridian HCM, Inc.
• Infor, Inc.
• Ramco Systems Ltd.
• Workday, Inc.
• Paycom Software, Inc.
• UKG Inc
• Cegid
• Bamboo HR LLC
• Sumtotal Systems, LLC

Recent Developments

• In January 2024, PwC announced a partnership with Darwinbox. This partnership is done with the aim of delivering Darwinbox’s human capital management (HCM) platform to clients in the Middle East.
• In October 2023, Oracle launched Oracle HCM. Oracle HCM is a HCM solution that can perform various HR-related operation in medium-size companies with less than 15000 employees.
• In September 2023, PDS launched Vista. Vista is an advanced HCM tool that finds various HR-related applications, such as employee engagement, payroll management, and employee attendance.
• In June 2023, TeamLease HR Tech launched Paylief. Paylief is a HCM platform that can handle several functions such as talent acquisition, employee benefits, workforce management, and legal compliances.
• In April 2023, Pocket HRMS launched mission Bharat 2.0. This mission is launched with an aim to digitalize payroll system, HRMS, and other compliances with advanced and easy-to-use HR software in regional languages.

Segments Covered in the Report

By Offering

• Software
  • Core HR
  • Talent Management
  • Workforce Management
  • Payroll & Compensation
  • Others (Succession and Planning)
• Services

By Deployment

• Cloud
• On-premise

By Organization Size

• Large Enterprises
• Small & Medium Enterprises

By End-Use Industry

• BFSI
• IT & Telecommunication
• Government
• Retail
• Manufacturing
• Education
• Healthcare
• Others

By Geography

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