Pune: The market size of Core HR Software Market is expected to grow from USD 6.47 billion in 2017 to USD 9.89 billion by 2022, at a Compound Annual Growth Rate (CAGR) of 8.8% during the forecast period, as per a new market research report "Core HR Software Market by Component (Software and Services), Deployment Type (On-Premises and Cloud), Organization Size (SMEs and Large Enterprises), Vertical, and Region - Global forecast to 2022", published by Markets and Markets.
Rise of the cloud and mobile deployment, and increase in automation in HR processes have led to the increased adoption of core HR software. With the increase in the adoption rate of core HR software among the Small and Medium-Sized Enterprises (SMEs), the Core HR Software Market is expected to gain major traction during the forecast period.
Rapid adoption of core HR software due to a strong and well-established economy makes North America the largest region in terms of global share. North America is expected to have the largest market share and is expected to dominate the market from 2017 to 2022, because of the adoption of new technologies, such as increased use of smartphones and cloud platform. The start-ups and emerging players in the region offer differentiated, customized, and flexible products to meet the need of HR professionals.
The government sector is expected to contribute to the largest market size during the forecast period. The government employs a considerable workforce size and requires software to manage documents of an employee. The government sector needs better tools to manage its budget constraint issues and changing priorities to manage the HR. Aging employees and wave of retirement are the top challenges that this sector is facing to manage its workforce. Software, such as pension management and succession planning can help the government in the smooth processing of its HR activities. Moreover, outdated infrastructure is the biggest disadvantage for governments to integrate new systems and solutions that would help cope up with this challenge.
The SMEs' segment is expected to grow at the highest CAGR in the Core HR Software Market during the forecast period. Organizations with employee range between 100 and 1,000 are categorized under SMEs. SMEs face some specific challenges, such as requirement of domain-specific technical personnel and skilled workforce, budget constraint, and limited economies of scale. Increasing competition has prompted SMEs to invest in this business software and adopt go-to-market strategies to make efficient decisions for business growth. More than large enterprises, SMEs face resource crunch and require better methods to solve the complexities for better cost optimization on their assets and requirements.