Human Capital Management (HCM) & Payroll Market Size, Share, Growth, and Industry Analysis, By Type (Human Capital Management (HCM), HCM Payroll, and HCM Payroll Tax Withholding), By Application (Small and Medium small-sized Enterprises, and Large-sized Enterprises), Regional Insights, and Forecast From 2024 To 2031

Updated On: 15 April 2024

Human Capital Management (HCM) & Payroll Market Report Overview

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The global human capital management & payroll market size was 16380 million in 2021 and is expected to reach USD 29477.65 million by 2031, at a CAGR of 6.0% during the forecast period.

Human Capital Management (HCM) is an approach to managing and optimizing an organization's human resources. It encompasses various processes, strategies, and technologies that focus on effectively managing the employees throughout their lifecycle within the organization. It involves setting goals, providing regular feedback, conducting performance evaluations, and recognizing and rewarding employees' achievements.

Payroll management involves the administration of employee compensation, including wages, salaries, bonuses, and deductions. It ensures accurate and timely payment of employees based on their employment contracts, working hours, and relevant payroll regulations. It's important to note that while HCM and payroll are often interconnected, they represent different aspects of workforce management. HCM focuses on broader HR strategies and employee lifecycle management, while payroll specifically deals with compensation administration and related financial processes.

COVID-19 IMPACT: Workforce Restructuring to Boost Demand Significantly

The COVID-19 pandemic has been unprecedented and staggering, with human capital management & payroll experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels.

COVID-19 had a life changing impact globally. The thaumatin market was significantly affected. The virus had various impacts on different markets. Lockdowns were imposed in several nations. This erratic pandemic caused disruptions on all sorts of businesses. Restrictions tightened during the pandemic due to increasing number of cases. Numerous Industries were affected. However, the market for human capital management & payroll experienced an increased demand.

The pandemic's economic impact led to workforce planning challenges for organizations. Many businesses had to implement cost-saving measures, including layoffs, furloughs, or reduced work hours. HCM played a crucial role in managing workforce restructuring, ensuring compliance with labor laws, and supporting affected employees.

The pandemic forced many organizations to adopt remote work arrangements to ensure employee safety and business continuity. HCM systems and practices had to adapt to manage a dispersed workforce, including remote onboarding, virtual collaboration tools, and performance tracking in remote settings. The pandemic brought increased attention to employee well-being and mental health. HCM practices needed to evolve to include wellness programs, employee assistance initiatives, and resources to support the physical and mental well-being of employees during challenging times. The market is anticipated to boost the human capital management & payroll market share following the pandemic.

LATEST TRENDS

"Platform Integration to Broaden Market Growth"

There is a growing demand for integrated HCM platforms that provide a comprehensive suite of HR functionalities, including recruitment, onboarding, performance management, learning and development, and payroll. Integrated platforms enable organizations to manage all aspects of their workforce in a unified system, enhancing data consistency and process efficiency. HCM and payroll systems are leveraging data analytics and predictive modeling to gain insights into workforce trends, performance, and employee behavior. These insights can help organizations make data-driven decisions

Artificial Intelligence (AI) and automation technologies are being incorporated into HCM and payroll systems to streamline administrative tasks, enhance data analytics capabilities, and improve decision-making. AI-powered chatbots, for example, can assist employees with self-service inquiries related to payroll, benefits, and leave management. These latest developments are anticipated to boost the human capital management & payroll market share.

Human Capital Management (HCM) & Payroll Market Segmentation

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• By Type

Based on type, the market is divided into human capital management (HCM), HCM payroll, and HCM payroll tax withholding.

Human capital management (HCM)holds a major share of the global market.

• By Application

Based on application, the market is bifurcated into small and medium small-sized enterprises, and large-sized enterprises.

Small and medium small-sized enterprises as application holds a major share of the global market.

DRIVING FACTORS

"Workforce Efficiency to Boost Market Share"

HCM and payroll systems help organizations efficiently manage their workforce throughout the employee lifecycle, from recruitment to retirement. Automation of processes such as onboarding, performance management, leave management, and payroll calculations enables HR teams to focus on strategic initiatives and employee development. Organizations recognize that a positive employee experience and high levels of employee engagement contribute to productivity, retention, and overall business success. HCM practices, including self-service portals and personalized employee interactions

"Globalization to Boost Market Size"

The globalization of business operations and an increasingly mobile workforce require HCM and payroll systems that can support multi-country payroll processing, address varying labor laws and regulations, and handle the complexities of global workforce management. Organizations need scalable and flexible solutions to manage a diverse and geographically dispersed workforce. These factors are anticipated to drive the human capital management & payroll market share.

RESTRAINING FACTORS

"Data Security to Hamper Market Share"

HCM and payroll systems contain sensitive employee data, including personal information, compensation details, and performance records. Concerns about data security breaches, unauthorized access, or non-compliance with data privacy regulations can be a significant restraining factor. Organizations need to prioritize robust data security measures, encryption, access controls, and compliance with data protection laws to address these concerns. The factors are anticipated to hinder the growth of the human capital management & payroll market share.

Human Capital Management (HCM) & Payroll Market Regional Insights

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"North America Dominates the Human Capital Management & Payroll Market "

North America is the major shareholder for the human capital management & payroll market share. The region has one of the largest and most robust economies in the world. The region is home to numerous multinational corporations, financial institutions, and investment firms that have significant financial resources to invest in various industries. North America has a vibrant venture capital and private equity ecosystem that fosters investment and ownership in high-growth companies. These investors often play a crucial role in financing startups and driving innovation, leading to significant shareholder ownership. Europe is the second major shareholder for the human capital management & payroll market share.

KEY INDUSTRY PLAYERS

"Leading Players adopt Acquisition Strategies to Stay Competitive "

Several players in the market are using acquisition strategies to build their business portfolio and strengthen their market position. In addition, partnerships and collaborations are among the common strategies adopted by companies. Key market players are making R&D investments to bring advanced technologies and solutions to the market.

List of Market Players Profiled

• SAP [Germany]
• Automatic Data Processing (ADP) [U.S.]
• Ultimate Software Group [U.S.]
• LinkedIn [U.S.]
• Oracle [U.S.]
• Workday [U.S.]
• Ceridian HCM [U.S.]
• Kronos [U.S.]
• Infor [U.S.]
• Cornerstone OnDemand [U.S.]
• Paycom Software [U.S.]
• Sage [U.K.]
• Epicor Software [U.S.]
• Accenture [Ireland]
• WorkForce Software [U.S.]
• Zenefits [U.S.]
• Ramco Systems [India]
• EPAY Systems [U.S.]
• PeopleStrategy [U.S.]
• Paychex [U.S.]
• Microsoft [U.S.]
• Intuit [U.S.]

REPORT COVERAGE

This research profiles a report with extensive studies that take into description of the firms that exist in the market affecting the forecasting period. With detailed studies done, it also offers a comprehensive analysis by inspecting the factors like segmentation, opportunities, industrial developments, trends, growth, size, share, restraints, etc. This analysis is subject to alteration if the key players and probable analysis of market dynamics changes.