The core HR software market is projected to expand at a Compound Annual Growth Rate (CAGR) of 7.0% during the forecast period, growing from USD 10.7 billion in 2023 to USD 15.1 billion by 2028. The market's growth is anticipated to be driven by the increasing demand for enhanced compliance and risk management solutions to ensure adherence to employment laws and regulations.
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By software, the personnel management segment is expected to grow at the highest CAGR during the forecast period.
Personnel management, encompassed within core HR software, constitutes a comprehensive suite of tools and functionalities aimed at efficiently managing the entire employee lifecycle within an organization. This multifaceted solution streamlines HR processes, from recruitment and onboarding to performance management, career development, and offboarding. Personnel management enables HR professionals to effectively track, organize, and analyze employee information through a unified platform, thereby enhancing workforce productivity, engagement, and strategic decision-making. The software facilitates job posting, candidate screening, interview scheduling, and offers acceptance. It centralizes candidate data, allowing HR teams to assess applicant suitability and seamlessly transition successful candidates into the onboarding phase. During onboarding, personnel management software automates paperwork, training schedules, and introductory materials, expediting the integration of new employees and contributing to a positive first impression.
By deployment type, the cloud segment holds a larger market size during the forecast period.
Adoption of cloud-based core HR software adoption has experienced remarkable growth in recent years, transforming how organizations manage their human resources. According to a study by Gartner, cloud-based HCM applications represented 60% of all HCM deployments in 2020, which is expected to increase further in the coming years. The flexibility and scalability offered by cloud solutions have driven this trend, allowing businesses to adapt quickly to changing workforce needs and scale operations seamlessly. Additionally, as per the PwC HR Tech Survey 2022, 91% of organizations stated that more employees are using core HR software on the cloud. Small and medium-sized enterprises (SMEs) have particularly embraced cloud-based HR software due to its affordability and ease of implementation. With integrated cloud HR suites gaining popularity, businesses are reaping the benefits of streamlined HR processes, data consolidation, and real-time analytics, empowering them to make data-driven decisions for talent management and strategic planning. As cloud technology continues to evolve and more organizations recognize its advantages, adopting cloud-based core HR software is poised to thrive during the study period.
By Region, Asia Pacific is expected to grow at the highest CAGR during the forecast period.
Asia Pacific countries’ core HR software market is experiencing rapid growth and expansion. The region’s diverse and dynamic business landscape and increasing technology adoption drive the demand for advanced HR solutions to streamline workforce management and improve overall HR efficiency. Asia Pacific comprises China, Japan, India, and the Rest of Asia Pacific. Being an emerging economy, Businesses of all sizes, ranging from small and medium-sized enterprises (SMEs) to large corporations, have recognized the value of these solutions in optimizing HR processes and supporting organizational growth. Integration with other business systems, such as payroll, accounting, and talent management, is a top focus for core HR software providers in the region.
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Unique Features in the Core HR Software Market
Core HR software provides a centralized platform for managing employee information, including personal details, job history, benefits, and payroll. This consolidation ensures data accuracy, accessibility, and consistency across the organization.
These solutions are equipped with tools to help businesses stay compliant with local and global labor laws and regulations. Automated updates for legal changes ensure that organizations remain aligned with evolving requirements, reducing compliance risks.
Core HR software integrates seamlessly with other enterprise systems, such as payroll, performance management, and learning management systems. This interoperability enhances workflow efficiency and minimizes data silos.
Many core HR platforms feature self-service portals, empowering employees and managers to access and update information, request time off, view pay stubs, and manage benefits without administrative intervention.
These systems offer robust reporting and analytics capabilities, providing actionable insights into workforce trends, compliance metrics, and employee engagement. Real-time dashboards simplify decision-making processes for HR professionals.
Major Highlights of the Core HR Software Market
Organizations are prioritizing compliance and risk management to adhere to complex and evolving labor laws and regulations. Core HR software solutions are becoming essential tools to streamline compliance processes and minimize legal risks.
The market is witnessing a surge in demand for automation to reduce the manual effort associated with administrative tasks such as payroll, attendance tracking, and benefits administration. Automation enhances accuracy and frees up HR professionals for strategic initiatives.
The shift toward remote and hybrid work models has driven demand for core HR software with mobile accessibility and cloud-based functionalities. These features enable seamless HR operations for distributed teams.
Core HR systems are increasingly integrating with advanced technologies like artificial intelligence (AI) and machine learning (ML). These integrations improve analytics, enable predictive insights, and enhance decision-making capabilities.
The market is seeing significant growth in self-service functionalities, which empower employees and managers to independently manage their HR-related tasks. This reduces administrative burdens and improves user satisfaction.
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Top Companies in the Core HR Software Market
Some of the key players operating in the core HR software market are - Workday (US), SAP (Germany), ADP (US), UKG (US), Oracle (US), Ceridian (US), IBM (US), Paycom (US), Paylocity (US), and Cornerstone OnDemand (US).
Workday
Workday is one of the well-established and reputable providers in the core HR software market, known for its cloud-based HCM solutions and continuous focus on innovation. Workday primarily targets medium to large-sized enterprises, spanning various industries and verticals such as banking, communications, education, energy, healthcare, hospitality, insurance, life sciences, public sector, manufacturing, retail, non-profit, technology, and media & entertainment. The company has a strong presence in multinational organizations, offering solutions that cater to complex HR needs and global workforce management. It has healthy partner relations with leading technology and service providers such as Accenture, Deloitte, IBM, ADP, Microsoft, and Adobe. Workday HCM is the core product of the company. It includes a range of HR modules, such as employee data management, payroll management, benefits administration, time and attendance tracking, and talent management. The company also offers recruiting and learning management solutions. It has offices across North America, Europe, the Middle East, Africa, Asia Pacific, and Latin America.
SAP
SAP is one of the leading multinational software companies. The company is well-known for its enterprise resource planning (ERP) solutions, including SAP S/4HANA and HCM software. SAP offers a range of products and solutions in the Core HR software market, including SAP SuccessFactors HXM Suite. The SAP SuccessFactors HXM Suite provides various cloud-based solutions, including a comprehensive human resource management system (HRMS). This suite integrates core HR and payroll, talent management, sales performance management, people analytics, and workforce planning, providing valuable support to drive business success. SAP caters to various industry verticals: retail, aerospace & defense, life sciences, oil & gas, public sector, transportation & logistics, utilities, healthcare, and BFSI. SAP has strong partner relations with leading market players such as Accenture, Deloitte, Atos, Capgemini, DXC Technology, Infosys, and NTT Data.
ADP (Automatic Data Processing):
ADP is a global leader in human capital management (HCM) solutions. The company offers a wide range of services, including payroll, talent management, time and attendance, benefits administration, and HR outsourcing. ADP serves businesses of all sizes across various industries.
UKG (Ultimate Kronos Group):
Formed by the merger of Ultimate Software and Kronos Incorporated, UKG provides comprehensive HR solutions including payroll, time and attendance, talent management, and employee engagement tools. UKG aims to help organizations manage their workforces more effectively while fostering better work experiences.
Oracle:
Oracle is a multinational corporation specializing in database software and technology, cloud engineered systems, and enterprise software products. Its Oracle HCM Cloud suite offers a comprehensive HR solution that includes modules for core HR, payroll, talent management, workforce management, and analytics.
Ceridian:
Ceridian is a global human capital management software company. Its flagship product, Dayforce, provides a range of services including HR, payroll, benefits, workforce management, and talent management, all within a single application. Ceridian focuses on providing real-time data and analytics to help organizations make better HR decisions.
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