Payroll, talent management fueling HR services market growth
The global market for HR services and solutions is expected to grow at a compound annual rate of 9.6 percent, to $416 billion in 2026.
The demand for cloud-based payroll and other HR solutions – particularly talent management technology — is fueling the services market across the globe, expected to grow at a compound annual rate of 9.6 percent, to $416 billion in 2026, according to a Transparency Market Research report.
Payroll capabilities on the cloud are top priority because of the easier access they afford. “The need for an efficient management system further boosts the demand for payroll and HR solutions and services,” the authors write. “Moreover, a cloud-based service allows business outsourced payroll systems to scale up with employees joining and exiting.”
Related: HR professionals face shifting priorities, challenges and opportunities
Talent management technology is also increasing in demand, as roughly 80 percent of enterprises are planning to purchase or upgrade their solutions in a talent platform, according to the report.
“While enterprises which are using standalone software solutions continue in targeted functional areas that have unique requirements, more than half of the respondents are looking to replace former best-of-breed, highly customized or niche solutions with an integrated talent suite,” the report adds.
Based on deployment, the market is segmented into cloud, on premise and hybrid, with the cloud segment accounting for the largest market share in 2017, according to the report. Functionalities within cloud-based software include payroll and compensation management, time and attendance management, compliance management, workforce management, claims administration, employee benefits management, hire management, tax management and report generation, among other functionalities.
Geographically, North America is a major contributor to the global market fueled by the presence of a large number of HR solution providers in the region, according to the report.
“However, presence of several emerging economies such as China, India, and South Korea are expected to drive the Asia Pacific market,” the authors write. “The growth in the Asia Pacific market can be attributed to increasing government initiatives supporting the digitization of business processes and adoption of cloud-based systems.”