The global human resources technology market is projected to grow from $24.04 billion in 2021 to 35.66 billion in 2038.
That’s according to a report by Fortune Business Insights, which also says the COVID-19 pandemic created unprecedented opportunities for market players in the long-term.
“Digital transformation is likely to disrupt industries post the COVID-19 crisis. The rapidly changing market dynamics of business models have forced HR teams to adopt new ways to respond to the needs of the workforce,” the report reads.
“Hence, human resource software and services, including talent management, workforce management, and payroll management, are expected to gain traction in the upcoming years.”
The report goes on to note that companies are likely to prioritize investments in AI to optimize business processes and reduce costs.
“Besides, advantages, such as live-work environment simulation, on-demand labor forces, and the effective analysis of employee performance offered by AI-enabled platforms are further expected to see high demand in the near future,” adds the report.
Organizations are moving away from back-office HR data warehouses to more advanced reporting and analytics dashboards in a bid to study sales productivity, employee retention issues, and other challenges directly affecting the bottom line.
Vendors in the market, the report continues, are integrating analytics as a core part of the software, including assessment, operational, or learning tools.
HR tech market: Geographic spotlight
The HR tech market isn’t homogeneous — it’s split into five major regions: North America, Europe, Asia Pacific, the Middle East and Africa, and South America.
According to the report, North America will be the dominant player in the global market during the forecast period.
In fact, the report adds, according to Cornerstone’s OnDemand Inc’s 2018 survey, North America is the potential customer of cloud HCM solutions — largely due to the vast presence of established vendors including Oracle, IBM and Ceridian.
North America will be followed by Europe but Asia Pacific is expected to show the fastest growth during the established time period. China, specifically, is expected to hold a major market share in the region — followed by Japan, India, and South Korea.