Product Code: 69587
The market for the HR analytics market is expected to register a CAGR of 11% over the forecast period (2021 - 2026) One of the biggest challenges faced by organizations around the world is the management of people and talent. An HR professional needs to keep everyone on the same page and still manage to get things expected by his/her company and managers have done, while further working on optimizing recruitment processes, employee satisfaction, payroll concerns, and retrenchment. Due to the introduction of data analytics in HR processes, the approach has become simpler than ever, proving to be a major advantage for HR in their everyday work.
- HR analytics has emerged from the old phase of measuring the sub-functions of HR, criteria effectiveness, and staffing technique to the comparative benchmarking on functional parameters of HR at the industry level, prescriptive, and predictive analysis. By using data analytics, HR departments are now able to make data-backed decisions, when it comes to managing attrition and spot areas where automation can be introduced.
- According to Metlife's employee benefits trends study, 72% of employees say that they would like unlimited time off as a benefit. However, HR analytics can help in ensuring that employees are taking enough time off, as per the company's policies. Along with this, HR analytics can help track overtime levels of each employee.
- Over the course of the last few years, there has been a trend, with the organization giving more emphasis to showcasing metrics focusing on efficiency such as the increase in productivity her hire, lower HR cost per employee, among others.
- Also, as companies realize the potential of HR analytics from being an operational partner to the strategic center of excellence as it helps them make managerial decisions driven by HR data leading to decreased retention, better hiring practices, improved employee experience, task automation, and Improved workforce planning among others. For instance, According to AmericanProgess, It would cost the employer 200% of employees' annual salary to replace an employee.
- The spread of COVID-19 will have a prolonged effect on key business processes. Moreover, companies will have to deploy advanced analytics models that leverage machine learning algorithms to identify data patterns, as companies across end-user industries, especially IT and BPOs, are focusing on the work-from-home culture for an indefinite period of time. Thus, it will be challenging for vendors to come up with solutions that are in line with the new business model that focuses on greater work-life balance.
Key Market Trends
Banking, Financial services, and Insurance To Witness Significant Share in The Market
- The financial industry faces many challenges specific to the HR department, including instances such as keeping the workforce updated to the compliance, maintaining payroll, workforce aging among others as they struggle to attract talent, engage the existing employee, and optimize the performance.
- Such organizations can leverage the potential of predictive analytics, AI, and cost-effectiveness of the cloud computing of tools such as HR analytics to acts on the HR data and other sources, including social media platforms such as Linkedin to build a digital representation of each employee to drive personalized insights.
- For instance, in February 2020, Workday Inc announced Wells Fargo & Company, multinational financial services company, chose its Workday Human Capital Management solution to help it elevate both the user experience and its HR efficiencies across the organization 260,000 employees.
- Additionally, the organizations within the banking sector are not known mainly known for hiring young talent with specialties in-demand skills such as digital technology and data science. Evidently, they fail to reskill aging workforces for the digital ages and thereby lack the tools that drive productivity and skills retention across the organization.
- Furthermore, A study conducted on Analytics by Massachusetts Institute of Technology (MIT) suggests that the top-performing organizations often employ analytics tools as much as five times more than the lower-performing organization. A tool such as HR analytic help organization to effectively deal with the competitive business environment such as BFSI both at the strategic and tactical level.
North America to Hold the Significant Share in The Market
- The adoption of HR analytics in North America has strong over the course last five years. This is due to an increase in the adoption of cloud infrastructure by the major organizations within the region and the presence of the major vendor for HR analytics, including IBM Corporation, IBM Corporation, among others.
- For instance, LinkedIn published a report stating that it has found a 3x increase in HR professionals from North America who list analytics skills and similar keywords in their profile in the last five years.
- Furthermore, the study also suggests that it has found North America' concentrated adoption of HR analytics in industries such as finances and tech-software with finance holding the highest adoption while other industries such as architecture, spectrum, and the manufacturer have a lower rate of adoption
- Additionally, the top regions within North America with a high adoption rate of HR analytics with more emphasis on benefits, productivity, compensation, and performance across various industries include New York, Washington DC, and San Francisco, among others. For instance, cities such as Washington DC, with its largest levels of scarcity is skills leverage on HR analytic tools for workforce planning.
- However, the lack of awareness and adoption of HR analytics across industries such as the public sector due to its continuum phase and the impact of recent global pandemic COVID-19 with organizations halting their recruitments in the region may hinder the growth of the market.
The HR analytics market is moderately fragmented with the presence of major vendors, including SAP SE, Oracle Corporation, and IBM Corporation. The vendors are enhancing the product line by leveraging strategic collaborative initiatives and acquisitions as a competitive advantage to expand their customer base and gain market share.
- May 2020: Oracle Corporation announced the availability of Oracle Analytics for Cloud HCM. Built on Oracle Analytics Cloud and powered by Oracle Autonomous Database, Oracle Analytics for Cloud HCM provides HR executives, analysts, and line-of-business leaders with deeper insights into workforce management, by enabling a comprehensive view into data from across the organization. The new self-service analytics capabilities help customers maximize the value of Oracle Cloud HCM.
- November 2019: Workday Inc announced that it aims to acquire Scout RFP, a cloud-based platform for sourcing and supplier engagement. This acquisition would allow both organizations to maximize their opportunity to leverage their growth and drive cost savings as they aim to provide organization source-to-pay solution that delivers better business outcomes.
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
TABLE OF CONTENTS
- 1.1 Study Deliverables and Market Definition
- 1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET INSIGHTS
- 4.1 Market Overview
- 4.2 Industry Attractiveness - Porter's Five Forces Analysis
- 4.2.1 Bargaining Power of Suppliers
- 4.2.2 Bargaining Power of Consumerss
- 4.2.3 Threat of New Entrants
- 4.2.4 Intensity of Competitive Rivalry
- 4.2.5 Threat of Substitute Products
- 4.3 Market Drivers
- 4.3.1 Increase in Trends in Cloud-based Solutions
- 4.3.2 Increase in Workforce and Need for Reduction in Attrition Rate
- 4.4 Market Challenges
- 4.4.1 Lack of Skilled Workforce
- 4.5 Assesment of the Impact of COVID-19 on the Industry
5 MARKET SEGMENTATION
- 5.1 Component
- 5.1.1 Solution
- 5.1.2 Service
- 5.2 Deployment Mode
- 5.2.1 On-Premise
- 5.2.2 Cloud
- 5.3 End-user Vertical
- 5.3.1 Telecom and IT
- 5.3.2 BFSI
- 5.3.3 Consumer Goods and Retail
- 5.3.4 Healthcare
- 5.3.5 Manufacturing
- 5.3.6 Other End-user Verticals
- 5.4 Geography
- 5.4.1 North America
- 126.96.36.199 United States
- 188.8.131.52 Canada
- 5.4.2 Europe
- 184.108.40.206 Germany
- 220.127.116.11 United Kingdom
- 18.104.22.168 France
- 22.214.171.124 Rest of Europe
- 5.4.3 Asia-Pacific
- 126.96.36.199 India
- 188.8.131.52 China
- 184.108.40.206 Japan
- 220.127.116.11 Rest of Asia-Pacific
- 5.4.4 Latin America
- 18.104.22.168 Brazil
- 22.214.171.124 Argentina
- 126.96.36.199 Rest of Latin America
- 5.4.5 Middle East and Africa
- 188.8.131.52 United Arab Emirates
- 184.108.40.206 Saudi Arabia
- 220.127.116.11 Rest of Middle East and Africa
6 COMPETITIVE LANDSCAPE
- 6.1 Company Profiles
- 6.1.1 SAP SE
- 6.1.2 Oracle Corporation
- 6.1.3 Workday Inc.
- 6.1.4 Tableau Software Inc.
- 6.1.5 IBM Corporation
- 6.1.6 Nakisa, Inc
- 6.1.7 Zoho Corporation Pvt. Ltd
- 6.1.8 Kronos Inc.
- 6.1.9 GainInsights Solutions Pvt. Ltd
7 INVESTMENT ANALYSIS
8 FUTURE OF THE MARKET