Reportlinker released the report “Human Capital Management Market” forecasted that the human capital management (HCM) market will grow from $17.6 billion in 2020 to $ 24.3 billion by 2025, at a Compound Annual Growth Rate (CAGR) of 6.7 percent during the forecast period. Integration of emerging technologies, such as Artificial Intelligence (AI) and Machine Learning (ML), with HCM solutions, is expected to be one of the strongest factors for HCM solution and services adoption across regions.
The adoption of remote work culture by businesses across the globe due to the COVID-19 pandemic is introducing new challenges to HCM software and service providers. The major challenge faced is updating offerings as per the working culture of organizations. HCM providers can advance their software during this pandemic by adding new capabilities, such as tracking employee health and location. This is expected to boost the adoption of HCM software.
However, cost-cutting and delay in projects by enterprises might offer a restraint in the adoption of HCM software. Cloud deployment models are expected to grow at a higher CAGR during the forecast period. Majority of HCM solutions are expected to be deployed in the cloud, and so cloud-based deployment will outperform the on-premises deployment and will have a higher CAGR during the forecast period. Enterprises are moving toward cloud-based deployment to minimize operational cost and achieve greater ease in sharing data with multiple parties.
The majority of the businesses are facing the scarcity of highly skilled workforce, as business operations are getting complex day-by-day due to the adoption of the latest technologies and innovations. Thus, HR managers are facing challenges in hiring the right personnel for the right job globally.
Using Artificial Intelligence (AI) and Machine Learning (ML) technologies, HCM suites can help HR managers in finding a skilled workforce. AI and ML can help automate the process of recruitment and provide more filters that help in finding the right person. Companies now offer AI-enabled HCM products that can even read resumes using text analytics to filter out high potential candidates. Predictive analytics using AI and ML helps HR managers by giving them more suggestions about filtering criteria, such as salary, experience, and skills, to narrow down or broaden search results.
Moreover, insights into employee feedback and opinions can be provided by performing sentiment analysis on large datasets through the use of ML algorithms and text analytics. AI-enabled intelligent systems are capable of not only understanding behavioural and competency data but also recommending the ideal team for a critical assignment. AI also helps in customizing training programs and developing revamped employee appraisal systems. Customers across the globe are demanding predictive technologies in HCM, especially in employee scheduling, hiring, retention, and compensation management.