Human capital management (HCM) is gaining momentum, thanks to emerging technologies like AI and ML.
According to a MarketsandMarkets report, “Human Capital Management Market by Software, Service, Deployment Type, Organization Size and Region – Global Forecast to 2024", the HCM market will grow to USD 26.5 billion by 2024 from USD 6.7 billion in 2019. The increase represents a compound annual growth rate (CAGR) of 9.7%.
According to the report, AI and ML are among the emerging technologies that are driving this growth, spurring interest in adoption across all regions.
Another key trend is the pervasiveness of cloud deployment. The report expects all major HCM solutions to be deployed in the cloud. As a result, cloud deployment will outperform on-premises deployments and lead to a higher CAGR during the 2019-2024 period.
Banking, financial services, and insurance (BFSI) will continue to lead the way in HCM adoption. The industry was one of the early adopters and is expected to adopt more solutions to better manage internal and external employees.
Government regulations will be the primary motivation for BFSI adoption. Many companies in the industry have diverse workforces, from office employees, contingent workforce, third-party workforce, and others, and have to comply with increasingly strict government regulations.
While large enterprises have led the way in HCM, small and medium enterprises will drive higher adoption rates in the next five years. The chief reason is the need to manage their workforce better and retain their high-potential recruits.
APAC will have the highest CAGR during the forecast period, the report said. It noted that the APAC region has “huge potential in terms of adoption due to the presence of countries such as India, China, and Japan, growing workforce, and a huge number of small and medium enterprises.”
Photo credit: iStockphoto/estherpoon