IDC - HCM Market PDF
IDC - HCM Market PDF
IDC - HCM Market PDF
IDC OPINION
The human capital management (HCM) market remained strong in 2013, but with growth that
moderated a bit from prior year-over-year growth. There was continued interest in first-time purchases
of new solutions and replacements of aging core systems. Growth remained in or near double digits in
the Americas and EMEA regions in 2013, while in Asia/Pacific, spending declined. Further:
Worldwide revenue for the human capital management applications market was $10.4 billion
in 2013, representing growth of 9.1% over 2012. The worldwide market is forecast to reach
$15.4 billion in 2018, growing at a CAGR of 8.2%.
Of the major regions, EMEA showed the highest growth in 2013 (12.2%), followed by the
Americas (9.7%) and Asia/Pacific (including Japan) (-5.4%). Out to 2018, the Americas region
posts the highest forecast CAGR at 8.4%, followed by EMEA at 8% and Asia/Pacific (including
Japan) at 6.8%.
IN THIS STUDY
This study provides a sizing of the human capital management applications market in 2013 and a
20142018 forecast for this market. Historical and forecast revenue data is shown for the total
worldwide market and by geographic region. Further, the worldwide and U.S. markets are presented
by HCM segments of core HR, workforce management, recruiting, learning, performance, and
compensation.
Methodology
See the Methodology in the Learn More section for a description of the forecasting and analysis
methodology employed in this study.
In addition, please note the following:
The information contained in this study was derived from IDC's Software Market Forecaster
database as of May 9, 2014.
For more information on IDC's software definitions and methodology, see IDC's Software
Taxonomy, 2013 (IDC #241527, June 2013).
This forecast replaces that found in Worldwide and U.S. Human Capital Management
Applications 20132017 Forecast: The Cloud Spurs Continued Growth (IDC #241032, May
2013).
Core HR
Core HR serves as the primary repository for the master employee record. Core HR also includes
those functions that are needed to manage the workforce, manage benefits administration, and feed
information needed to properly compensate the workforce.
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Workforce Management
Workforce management applications are designed to automate the deployment of the workforce
through workload planning, scheduling, time and attendance tracking, resource management, and
rules and compliance management. Increasingly, workforce management applications are being
integrated into customer relationship management applications in a contact center environment.
Recruiting
Recruiting applications are designed to automate the recruitment process through sourcing, better
tracking of applicants, screening and skills assessment, profiling and resume processing, and
identifying talent inside or outside the organization.
Learning Management
Learning management applications are designed to automate the development, tracking, and delivery
of learning content and experiences to employees with the goal of improving employee skills and
productivity. Learning content ranges from traditional classroom training to online learning objects to
mentoring. Learning management is increasingly integrated with employee performance management
to prescribe development activities to ameliorate skills gaps or gaps in performance.
Compensation Management
Compensation management applications are designed to automate the process of planning and
administering workforce compensation, providing both compensation administrators and managers
tools to rationalize and confer salary actions. This category also includes incentive management,
which involves cash and noncash incentives to employees, partners, and external users through
advanced modeling, reporting, and built-in interfacing to payroll accounting systems.
SITUATION OVERVIEW
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FUTURE OUTLOOK
TABLE 1
Worldwide Human Capital Management Applications Revenue by Region,
20132018 ($M)
2013
2014
2015
2016
2017
2018
2013
Share
(%)
Americas
6,561.9
7,121.4
7,736.2
8,396.5
9,089.7
9,833.0
63.3
64.0
8.4
EMEA
3,007.9
3,316.0
3,573.9
3,843.6
4,127.4
4,419.9
29.0
28.8
8.0
792.4
828.4
888.3
953.1
1,023.1
1,099.9
7.6
7.2
6.8
10,362.1
11,265.8
12,198.5
13,193.2
14,240.3
15,352.8
100.0
100.0
8.2
9.1
8.7
8.3
8.2
7.9
7.8
Asia/Pacific
(including Japan)
Total
Growth (%)
2018
Share
(%)
20132018
CAGR (%)
Note: See Table 4 for top 3 assumptions and Table 5 for key forecast assumptions.
Source: IDC, 2014
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TABLE 2
Worldwide Human Capital Management Applications Revenue by Segment,
20132018 ($M)
20132018
CAGR (%)
2013
2014
2015
2016
2017
2018
Core HR
5,232.9
5,677.9
6,135.8
6,623.0
7,148.6
7,691.7
8.0
Workforce management
1,575.0
1,701.1
1,829.8
1,965.8
2,107.6
2,256.9
7.5
Recruiting
1,450.7
1,565.9
1,683.4
1,807.5
1,936.7
2,088.0
7.6
Learning
829.0
912.5
1,000.3
1,095.0
1,196.2
1,297.3
9.4
Performance
797.9
878.7
963.7
1,055.5
1,153.5
1,251.3
9.4
Compensation
476.7
529.5
585.5
646.5
697.8
767.6
10.0
10,362.1
11,265.8
12,198.5
13,193.2
14,240.3
15,352.8
8.2
Total
Note: See Table 4 for top 3 assumptions and Table 5 for key forecast assumptions.
Source: IDC, 2014
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TABLE 3
U.S. Human Capital Management Applications Revenue by Segment,
20132018 ($M)
20132018
CAGR (%)
2013
2014
2015
2016
2017
2018
2,995.0
3,243.1
3,502.1
3,774.8
4,069.2
4,369.7
7.8
Workforce management
901.5
971.7
1,044.4
1,120.4
1,199.7
1,282.1
7.3
Recruiting
830.3
894.4
960.8
1,030.2
1,102.4
1,186.2
7.4
Learning
474.5
521.2
570.9
624.1
680.9
737.0
9.2
Performance
456.7
501.9
550.0
601.6
656.6
710.8
9.3
Compensation
272.8
302.4
334.2
368.5
397.2
436.1
9.8
5,930.7
6,434.8
6,962.4
7,519.4
8,106.0
8,722.0
8.0
Core HR
Total
Note: See Table 4 for top 3 assumptions and Table 5 for key forecast assumptions.
Source: IDC, 2014
Worldwide
The fastest-growing segment is compensation management, which is also the newest and smallest in
terms of spending. Spending on compensation management applications was $477 million in 2013
and is slated to reach $768 million in 2018, a CAGR of 10%. The slowest growing segment is
workforce management. Workforce management is a mature market with revenue of $1.6 billion in
2013 and is forecast to grow to $2.3 billion in 2018, a CAGR of 7.5%.
United States
Segmentation remains consistent in the U.S. market, while growth rates are slightly lower across all
segments than for worldwide. Core HR is the largest yet slower-growing market, while performance
and compensation management will grow the fastest and are the newest and smallest in terms of
spending.
Assumptions
Table 4 shows the top 3 assumptions and Table 5 shows the key forecast assumptions underlying this
worldwide and U.S. human capital management applications forecast.
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TABLE 4
Top 3 Assumptions for the Worldwide and U.S. Human Capital Management
Applications Market, 20142018
Changes to This
Assumption That
Could Affect Current
Forecast
Comments
Market Force
IDC Assumption
Significance
Economy
Should the
economy
deteriorate or GDP
targets not be hit,
employment may
not rebound,
causing HR-related
spending to
stagnate or retract.
Current economic
conditions vary
across the major
geographies, so
what may be an
accelerator in one
region may prove
an inhibitor in other
regions.
Unemployment/
job creation
Unemployment worldwide is
still hovering at high levels,
but most regions will see
gradual declines in their
jobless rates over the next two
years. In the United States,
unemployment has dropped
below 7% and the pace of job
creation seems to have
improved slightly but remains
tepid by historical standards.
Unemployment continued to
rise in some countries in
Europe in 2013, partly
because of public sector job
cuts related to austerity
measures, but is expected to
turn a corner by the end of
2014.
Many HR solution
segments are
directly related to
the size of the
workforce and
speed of job
creation. Therefore,
employment is the
most important
factor impacting
HCM solution
spending.
Should employment
rebound more
rapidly than
anticipated, certain
HR solution sectors
may see stronger
growth than
forecast.
Conversely, if
unemployment
stays at current
levels, forecast
growth may not be
realized.
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TABLE 4
Top 3 Assumptions for the Worldwide and U.S. Human Capital Management
Applications Market, 20142018
Market Force
IDC Assumption
Significance
Cloud
Changes to This
Assumption That
Could Affect Current
Forecast
A strong push to
cloud may
negatively impact
spending in HR
solutions in the
short term as the
balance will shift
from alleviating the
burden of highly
customized onpremise solutions to
less complex
engagements.
Comments
Cloud is
accelerating the
number of new
implementations but
has the longer-term
impact of lowering
engagement value.
Note: These assumptions update those found in Worldwide and U.S. Human Capital Management Applications 20132017
Forecast: The Cloud Spurs Continued Growth (IDC #241032, May 2013).
Source: IDC, 2014
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TABLE 5
Key Forecast Assumptions for the Worldwide and U.S. Human Capital
Management Applications Market, 20142018
Market Force
IDC Assumption
Impact
Accelerator/
Inhibitor/
Neutral
Certainty of
Assumption
Macroeconomics
Economy
Unemployment/job
creation
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TABLE 5
Key Forecast Assumptions for the Worldwide and U.S. Human Capital
Management Applications Market, 20142018
Market Force
IDC Assumption
Impact
Cloud
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Accelerator/
Inhibitor/
Neutral
Certainty of
Assumption
TABLE 5
Key Forecast Assumptions for the Worldwide and U.S. Human Capital
Management Applications Market, 20142018
Market Force
IDC Assumption
Impact
Convergence
Convergence is a complex
phenomenon working at many
levels: convergence of the
telephone network and the
Internet, communications and IT
technologies, consumer and
enterprise technologies, and even
storage, routing, and processing
in the datacenter. Of these,
perhaps the most overarching is
the convergence of voice, video,
and data communications. This
convergence is a permanent
phenomenon and will pick up
pace as the decade wears on.
One measure is that IDC
recorded 1.9 billion users on the
Internet and 3 billion users of the
phone network by the end of
2012. The overlap will be
significant.
Distribution of
talent
Accelerator/
Inhibitor/
Neutral
Certainty of
Assumption
Forecast: The Cloud Spurs Continued Growth (IDC #241032, May 2013).
Source: IDC, 2014
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Market Context
A five-year forecast (20132017) was last published for the human capital management applications
market in Worldwide and U.S. Human Capital Management Applications 20132017 Forecast: The
Cloud Spurs Continued Growth (IDC #241032, May 2013). Table 6 compares the forecast published in
that document with the current forecast in terms of regional revenue and worldwide annual growth
rates. Historical data (20092013) is also included in Table 6 for comparison purposes. Figure 1
displays the same data in graphical form.
The application revenue forecast shown in this study is slightly higher overall than prior forecasts due
in part to overall economic improvement.
TABLE 6
Worldwide Human Capital Management Applications Revenue, 20092018:
Comparison of May 2013 and May 2014 Forecasts ($M)
May 2014
forecast
Growth (%)
May 2013
forecast
Growth (%)
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
6,594.1
7,402.2
8,323.0
9,498.3
10,362.1
11,265.8
12,198.5
13,193.2
14,240.3
15,352.8
NA
12.3
12.4
14.1
9.1
8.7
8.3
8.2
7.9
7.8
6,499.7
7,294.5
8,160.5
9,162.7
9,964.1
10,792.3
11,652.8
12,551.4
13,489.1
NA
NA
12.2
11.9
12.3
8.7
8.3
8.0
7.7
7.5
NA
Notes:
See Worldwide and U.S. Human Capital Management Applications 20132017 Forecast: The Cloud Spurs Continued Growth (IDC
#241032, May 2013) for prior forecast.
Historical market values presented here are as published in prior IDC documents based on the market taxonomies and current U.S.
dollar exchange rates existing at the time the data was originally published. For more details, see the Methodology in the Learn More
section.
Source: IDC, 2014
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FIGURE 1
Worldwide Human Capital Management Applications Revenue, 20092018:
Comparison of May 2013 and May 2014 Forecasts
ESSENTIAL GUIDANCE
Interest and investment in human capital management solutions continue to be strong, outpacing
many other application markets. Suppliers are urged to consider the following to achieve competitive
advantage:
Focus on employee experience. Make what you offer and how you offer it shine for everyone,
not just the HR buying team. One of HR's perennial challenges is to get managers and
employees to use HCM systems. To overcome the challenge, HCM systems need to be
intuitive to use while offering some value to the user "what's in it for them." Mobile and social
will help in overcoming this challenge.
Deliver it to mobile. Mobile devices are everywhere. Industry estimates range from 50% to
80% for smartphone penetration in the United States, and tablet ownership is catching up.
According to Fast Company, 79% of smartphone users have their phone next to them for all
but two hours of the working day. Yet the HR function has made few moves to take advantage
of what is becoming the primary way of reaching the workforce. Now is the time for HR to step
up and take an active role in mobile enablement across the HR function with their suppliers'
help.
Make it social. HR executives are not yet seeing the full import social technology can offer to
HR and talent management. Also, HR is not yet leading social collaboration efforts. There are
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glimmers of a coming shift in attitudes where HR executives are now seeing some situations
where social has its place and plan to become more involved in social collaboration. Suppliers
need to get in front of HR buyers with compelling use cases (of which there are many).
LEARN MORE
Related Research
Worldwide and U.S. Human Capital Management Applications 20132017 Forecast: The
Cloud Spurs Continued Growth (IDC #241032, May 2013)
Worldwide Human Capital Management Applications 2012 Vendor Shares: Total Market, Core
HR, Workforce Management, Recruiting, Learning Management, Performance Management,
and Compensation Management (IDC #240959, May 2013)
The Promise of Integrated Talent Management: A Reality Check (IDC #243704, October 2013)
2013 Human Capital Management Survey: HCM Buyer Actions and Plans (IDC #243110,
September 2013)
Methodology
The IDC software market sizing and forecasts are presented in terms of commercial software revenue.
IDC uses the term commercial software to distinguish commercially available software from custom
software. Commercial software is programs or codesets of any type commercially available through
sale, lease, rental, or as a service. Commercial software revenue typically includes fees for initial and
continued right-to-use commercial software licenses. These fees may include, as part of the license
contract, access to product support and/or other services that are inseparable from the right-to-use
license fee structure, or this support may be priced separately. Upgrades may be included in the
continuing right of use or may be priced separately. All of these are counted by IDC as commercial
software revenue.
Commercial software revenue excludes service revenue derived from training, consulting, and system
integration that is separate (or unbundled) from the right-to-use license but does include the implicit
value of software included in a service that offers software functionality by a different pricing scheme. It
is the total commercial software revenue that is further allocated to markets, geographic areas, and
operating environments. The worldwide software market includes all commercial software revenue
across all functional markets or market aggregations. For further details, see IDC's Software
Taxonomy, 2013 (IDC #241527, June 2013).
The software revenue forecasts presented in this study represent IDC's best estimates and projections
based on the following:
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Bottom-up/company-level data collection for calendar year 2013 began in January 2014 with in-depth
vendor surveys and analysis to develop detailed 2013 company models by market, geographic region,
and operating environment. This activity will form the basis of vendor share, updated forecast, and
competitive analysis studies that will be published later in the year.
TABLE 7
Exchange Rates, 20062013 (%)
2006
2007
2008
2009
2010
2011
2012
2013
106
97
91
95
100
95
103
100
85
78
85
100
101
97
99
100
Yen
119
121
106
96
90
82
82
100
Canadian dollar
110
104
104
111
100
96
97
100
Mexican peso
86
86
87
106
99
97
103
100
Brazilian real
101
90
85
93
82
77
90
100
Euro
Pound
Note: To restate prior-year U.S. dollars, multiply historical market values by the percentage indicated in the table.
Source: IDC, January 2014
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Synopsis
This IDC study provides a sizing of the human capital management (HCM) applications market in 2013
along with a 20142018 forecast. Historical and forecast revenue data is shown for the total worldwide
market by geographic region and by HCM segment and for the United States by HCM segment.
"Interest and investment in human capital management solutions continue to be strong, outpacing
many other application markets," says Lisa Rowan, research vice president, HR, Talent and Learning
Strategies for IDC. "The market for HCM solutions is a highly competitive one. To remain competitive,
suppliers are urged to consider focusing on employee experience through the delivery of intuitive user
interfaces and effective use of social and mobile technologies."
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About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory
services, and events for the information technology, telecommunications and consumer technology
markets. IDC helps IT professionals, business executives, and the investment community make factbased decisions on technology purchases and business strategy. More than 1,100 IDC analysts
provide global, regional, and local expertise on technology and industry opportunities and trends in
over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients
achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology
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