SAAS-based Human Resource Market size is poised to reach USD 900 Billion by the end of 2036, growing at a CAGR of 13% during the forecast period, i.e., 2024-2036. In the year 2023, the industry size of SAAS-based human resources was USD 307 Billion. The reason behind the growth is impelled by the increasing adoption of SaaS-based Human Resource Management software, thereby increasing the efficiency of the HRM Division (Human Resource Management) and reducing the operational cost. According to estimates, more than 75% of organizations are using human resource management software to facilitate process efficiency and collect data.
The rising technological innovation and advancement are believed to fuel the SAAS-based human resource market growth. AI-driven HR management software is revolutionizing HR work processes and personnel management and is helping HR professionals select the best resource by doing away with prejudice and guesswork. According to a recent survey, more than 80% of HR leader professionals are planning to adopt more artificial intelligence-based HR tools to their talent management process by the end of 2026.
Growth Drivers
Challenges
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Base Year |
2023 |
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Forecast Year |
2024-2036 |
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CAGR |
~13% |
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Base Year Market Size (2023) |
~ USD 307 Billion |
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Forecast Year Market Size (2036) |
~ USD 900 Billion |
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Regional Scope |
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Type (Cloud Based, On-premise)
The cloud-based segment in the SAAS-based human resource market is estimated to gain a robust revenue share of 60% in the coming years owing to the increasing adoption of cloud-based services among organizations. For instance, about 43% of talent managers prefer cloud-based solutions to increase efficiency and productivity, and around 34% look for cloud-based systems to reduce operating costs. Cloud-based services provide easy access to data and allow real-time data sharing to multiple users with efficient management. Cloud-based SaaS HR software simplifies HR administration and offers a large number of HR management features such as including time and attendance, recruitment, performance management, training, document management, and payroll. The software is a sophisticated cloud-based HR system hosted by a separate outside vendor, which is easily customizable and scalable, making it possible to quickly adjust to changes in the organization, and provides organizations with sophisticated tools that let them keep employee data in a single, safe, and convenient location. These days, cloud-based solutions are growing in popularity as with a cloud-based HRM system, users can safely save employee records and documents in one place with restricted access, and also send out expiration date reminder messages. Moreover, cloud-based HR software increases business efficiency by providing easy scalability and customization. In addition, when compared to on-premises software applications, cloud HR SaaS is more affordable, and is a highly practical solution designed to manage all of the business's assets.
End-user (IT & Telecom, Manufacturing, Healthcare, Banking, Financial Services & Insurance, Government, Logistics)
The IT & Telecom segment in the SAAS-based human resource market is set to garner a notable share shortly. With thousands of workers, telecom is an important industry, therefore telecom firms integrate proprietary and open-source software into their technology stack to decrease human error in the process while also saving time, and also assists with employee training programs and performance management reviews, which boosts output.
Our in-depth analysis of the global SAAS-based human resource market includes the following segments:
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Organization |
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Type |
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Application |
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End-User |
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North American Market Forecast
SAAS-based human resource market in North America is predicted to the largest share of 40% by 2036 impelled by the growing number of enterprises. This has led to an increase in the adoption of HR & Payroll Software in the region. For instance, more than 33 million small firms operated in the US in 2023, accounting for around 99% of all US businesses. According to research, it was revealed that more than 3 million utilize HR management software .
In addition, the increasing efforts to adopt automation and various strategies to implement cost reduction in human resource management activities by several organizations, along with the expansion of the HRM software industry. For instance, in the United States, the number of businesses in the HR and payroll software industry grew by about 10% each year on average during 2017–2022.
APAC Market Statistics
The Asia Pacific SAAS-based human resource market is estimated to the second largest, during the forecast period, led by the presence of a constantly developing IT industry and rising economies such as India, China, Japan, and Singapore. According to estimates, the Chinese software industry is estimated to have around 39,000 software companies in 2021. Moreover, various government initiatives and rising investments are also estimated to drive SAAS-based human resource market growth in the region. According to the India Brand Equity Foundation data, about USD 11.58 billion has been allocated to India's IT and telecom sector in the Union Budget 2022–23.
Author Credits: Abhishek Verma
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