Core HR Software Market Size - By Component (Software, Service), Deployment Model (Cloud, On-premises), Organization Size (SMEs, Large Enterprises), End Use, Growth Potential, Reginal Analysis & Global Forecast, 2023 – 2032

Core HR Software Market Size - By Component (Software, Service), Deployment Model (Cloud, On-premises), Organization Size (SMEs, Large Enterprises), End Use, Growth Potential, Reginal Analysis & Global Forecast, 2023 – 2032

Core HR Software Market Size

Core HR Software Market size was valued at USD 9.6 billion in 2022 and is projected to grow at a CAGR of over 6.5% between 2023 and 2032. One of the primary drivers propelling the market is the increasing need for automation and efficiency in human resource management. Organizations are increasingly turning to core HR software to automate time-consuming and error-prone HR tasks such as payroll processing & benefits administration. This not only reduces manual workloads but also enhances the overall efficiency & accuracy of HR operations. As businesses seek to streamline processes and cut costs, the automation capabilities of core HR software play a pivotal role in achieving these objectives.

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The growing trend of digital transformation is a significant factor fueling core HR software market expansion. As businesses embark on digitalization journeys, they recognize the importance of modernizing HR processes. Outdated, paper-based systems are being replaced by digital core HR software solutions to align with this transformation. These digital tools not only streamline HR operations but also contribute to broader organizational goals of agility and competitiveness, making them a crucial component of modern business strategies.

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A high initial investment in core HR software can hinder market growth by discouraging smaller organizations with limited budgets from adopting advanced solutions. The substantial costs associated with licensing, customization, and training can prohibit some businesses from adopting this solution. This cost barrier can limit core HR software market expansion and prevent organizations from accessing the efficiency & automation benefits that core HR software offers, especially if they perceive the return on investment as uncertain or distant.

COVID-19 Impact

The COVID-19 pandemic had positive impacts on the core HR software market. It accelerated the adoption of core HR software as organizations rapidly shifted to remote work arrangements. core HR software helped manage remote workforces, monitor employee well-being, and facilitate virtual collaboration. Additionally, it supported compliance with health and safety regulations. As a result, the pandemic highlighted the crucial role of core HR software in enabling flexible work environments, leading to increased investment and growth in the market.

Core HR Software Market Trends

Generative AI features in core HR software are driving lucrative growth by revolutionizing HR processes. AI-powered tools automate resume screening, enhancing talent acquisition. Chatbots provide instant employee support, improving engagement. For instance, in June 2023, Oracle unveiled its strategy to augment its business-oriented human resources software with the integration of generative Artificial Intelligence (AI) capabilities.

These new features are intended to provide support for a range of functions such as the creation of job descriptions and the establishment of employee performance objectives. These innovations boost productivity, reduce costs, and enhance the employee experience, making core HR software increasingly essential. The demand for such advanced features is fueling market growth as organizations seek efficient, data-driven HR solutions to gain a competitive edge.

Core HR Software Market Analysis

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The core HR software market from solution segment is poised to expand at a CAGR of 5.5% during the forecast period. The widespread adoption of cloud technology in core HR software product development is catalyzing significant growth in the software segment. Cloud-based HR solutions offer scalability, flexibility, and cost-efficiency, attracting organizations of all sizes.

For instance, in August 2023, Belsons Technologies introduced Belsio HRMS, an innovative cloud-based Customer Relationship Management (CRM) solution tailored for HR operations. Belsio HRMS offers a holistic platform encompassing various HRMS facets, such as recruitment, onboarding, training, visa & payroll administration, and performance evaluation as well as leave & attendance management.

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The core HR software market from large enterprises segment held over USD 6 billion revenue in 2022, due to their expansive workforce and diverse operations. Managing employee data, payroll, benefits, and compliance across multiple locations & countries requires advanced core HR software. Such software streamlines processes, reduces administrative burdens, and enhances data accuracy, enabling large enterprises to efficiently oversee their extensive employee base.

Moreover, core HR software plays a crucial role by offering tools for performance management, talent development, and succession planning. This helps large enterprises identify high-potential employees, align talent with organizational goals, and ensure a continuous pipeline of skilled professionals, all of which are essential for sustained growth & competitiveness.

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North America core HR software market accounted for 35% of revenue share in 2022, attributed to increasing investments in core HR software firms. These investments support innovation and the development of advanced HR solutions that cater to the evolving needs of businesses in the region.
 

For instance, in March 2023, Rippling, a startup specializing in HR & payment software, secured USD 500 million in a fresh funding round. Originally, this funding was aimed at assisting customers with immediate payroll needs, following the collapse of Silicon Valley Bank. These factors are driving the market growth as organizations seek to modernize their HR operations and talent management.

Core HR Software Market Share

Major companies operating in the core HR software market are

• ADP
• Ceridian
• Cornerstone ondemand
• HIBOB
• IBM
• Oracle
• Paycom
• Paylocity
• Personio
• SAP
• Sprout
• UK
• Visma
• Workday
• Zoho

Core HR Software Industry News

• In July 2023, Info-Tech Systems Integrators, a prominent Singaporean provider of cloud-based HR and accounting software, signed a Memorandum of Understanding (MOU) with Republic Polytechnic. This strategic collaboration represents a noteworthy achievement for Info-Tech and is geared toward promoting cooperation & generating valuable prospects.

This core HR software market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Million) from 2018 to 2032, for the following segments

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Market, By Component

• Software
  • Employee information management
  • Payroll management
  • Attendance and leave management
  • Employee Self-Service (ESS)
  • Others 
• Service

Market, By Deployment Model

• Cloud
• On-premises

Market, By Organization Size

• SME
• Large enterprises

Market, By End Use

• BFSI
• Healthcare & life sciences
• Retail & e-commerce
• Manufacturing
• Telecom & IT
• Government & public sector
• Media & entertainment
• Others

The above information has been provided for the following regions and countries

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Nordics
• Asia Pacific
  • China
  • Japan
  • India
  • Australia
  • Singapore
  • Indonesia 
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • South Africa
  • UAE
  • Saudi Arabia

Frequently Asked Questions (FAQ)

How big is the core HR software market?

The market size of core HR software reached USD 9.6 billion in 2022 and is set to register over 6.5% CAGR from 2023 to 2032, due to the increasing need for automation and efficiency in human resource management worldwide.

How are large enterprises contributing to core HR software industry growth?

The large enterprises segment crossed USD 6 billion revenue in 2022, on account of its high applications in managing employee data, payroll, benefits, and compliance across multiple locations.

What factors are influencing core HR software market growth in North America?

North America held over 35% of the market share in 2022, owing to the increasing investments in core HR software firms in the region.

Who are the key core HR software industry players?

ADP, Ceridian, Cornerstone ondemand, HIBOB, IBM, Oracle, Paycom, Paylocity, Personio, SAP, Sprout, UKG, Visma, Workday, and Zoho are some of the major core HR software companies worldwide.