The Global Talent Management Software Market is at the inflection point of growth and is poised to grow at a CAGR of 16.3% to reach a Market Size of US$ 31.94 Bn in 2027 from a value of US$ 12.91 Bn in 2021. The Market is driven by factors such as Inherent benefits offered by Talent Management Software, Surging demand of highly efficient recruiting automation propels the TMS and Growing number of salaried employees across the globe will enhance the demand of TMS
- Definition / Scope
- Market Overview
- Top Market Opportunities
- Market Risks
- Market Drivers
- Market Restraints
- Industry Challenges
- Technology Trends
- Pricing Trends
- Post COVID Recovery
- Market Size and Forecast
- Market Outlook
- Technology Roadmap
- Competitive Landscape
- Competitive Factors
- Key Market Players
- Strategic Conclusion
Definition / Scope
A talent management software is a software package that covers all four aspects of talent management: recruitment, learning and development, performance management, and compensation management. All processes in the talent management sector may be automated with these platforms, and HR and the rest of the firm can easily perform workflows.
Recruiting, workforce planning, strategic plan and goal alignment, leadership development, executive coaching, diversity and inclusion, recognition programme, and engagement, as well as retention, are all essential talent management tools in the workplace.
An organization benefits from a talent management system when it improves hiring procedures, allows for learning and development, provides reliable data for better business decisions, promotes cultural linkages and employee engagement, and helps to retain top talent.
Companies are prioritizing human capital as the employment market becomes increasingly competitive to acquire skilled individuals. Because a company’s success is heavily reliant on its employees, organizations prioritize selecting and maintaining qualified applicants and top performers. A well-designed and effective talent management system can help you attract and retain top talent while also increasing productivity.
Streamlined HR operations and connectivity with core HR software for payroll, benefits, time and attendance, and other activities are two apparent advantages of talent management software. Organizations gain the following advantages by deploying talent management software:
Improve sourcing and recruiting strategies – Talent management software offers a variety of options for improving sourcing and recruiting.
Employee development is simple – A solid personnel management system incorporates learning and development possibilities for employees. It allows employees to enroll in classes, improve their abilities, and receive other basic training.
Amid the COVID-19 crisis, the global market for Talent Management Software estimated at US$12.91 Billion in the year 2021, is projected to reach a revised size of US$ 32 Billion by 2027, growing at a CAGR of 16.3% over the analysis period 2021-2027. The growing use of mobile technology around the world is driving the industry. Many businesses are partnering with TMS suppliers to provide powerful and dependable software solutions in order to boost staff efficiency.
Employees’ mobile-centric internet usage patterns are driving businesses to deploy mobile applications to extend employee management tasks in order to improve culture, i.e., people management, resulting in growth opportunities for HCM suppliers. Such considerations are predicted to influence the expansion of Talent management Software Market, as numerous organizations have been using the same HR software for over seven years and need to modernize in order to stay competitive
Following the introduction of Talent Management software, data security has become a serious problem. Unauthorized access to sensitive and secret data must be prevented by the software. Multiple degrees of security must be implemented, which slows industry expansion.
The Major Risk Factor for Market Players in the Talent Management Software is
The Global Talent Management Software Market is largely fragmented, with a number of conglomerates and medium-sized and small start-up companies accounting for the majority of global market share. Lower entry barriers, a lack of economies of scale, and fierce market competition are all factors contributing to the Global Talent Management Software Market’s fragmentation. Businesses with lower margins and higher costs will benefit from a fragmented market. When interacting with other countries, they also lack the benefit of size.
Top Market Opportunities
Advancement of technology
Various technical breakthroughs, such as the use of machine learning (ML) and artificial intelligence (AI), are also contributing to the expansion of the economy. Through transactional activity and analytical inputs, the software uses optical trackers to monitor individuals and determine market trends and patterns. Other factors, such as the increasing need to replace traditional talent management practices in order to maximize resource utilization and improve the quality of recruiting decisions, are likely to propel the industry forward.
Increasing penetration rate of cloud-based platforms
One of the important factors driving the market’s growth is the increasing penetration rate of cloud-based platforms, as well as the use of mobile-based personnel management systems. Organizations and HR professionals are increasingly using software-as-a-service (SaaS) platforms to automate scouting, identifying, and recruiting new talent from talent pools, as well as retaining existing personnel. A TMS can also help in streamlining the hiring process, reinforcing workplace culture, providing flexible learning opportunities, and identifying top performers.
Implementation of Big Data Analytics
In many ways, mobile technology has had a good impact on the world. This, together with the growing trend of big data analytics in the human resource (HR) industry, is expected to drive significant growth in the talent management software market. Enterprises may use big data analytics to develop plot trends, data-driven initiatives, and patterns, which will help them attract more money to the market. In addition, the growing requirement in the healthcare industry to improve aspects such as nursing turnover, employee productivity, and patient happiness is predicted to drive the entire market. Furthermore, the increased demand for flexible and proactive personnel sourcing has resulted in the adoption of talent management software, which will enhance market growth in the future years. The high utilization of this type of management software in hiring, developing, and retaining talented employees will boost the market.
Furthermore, cloud-based software provides a better user experience, which aids the market’s rise. In addition, talent management software’s career and success plan solutions, as well as large businesses’ use of succession management, will drive demand for this software in the coming years. In addition, rising demand from the telecommunications and IT industries would aid the market’s growth in the future years.
The Major Factors driving the growth of the Global Talent Management System Market include
Inherent benefits offered by Talent Management Software
Employee development must be a key component of business strategy in technological advancements and digital transformation to sustain the global market competition. Adapting to quick changes in technology, skills, and business models, organizational models are continually evolving. HR teams must reconsider how they now support employees due to the shifting dynamics of an agile strategy. Talent management systems assist firms and HR departments in achieving long-term (business) goals by prioritizing personnel and talent. A talent management system enables businesses and organizations to move toward an employee-centric business model by reducing the time and expenses associated with employee recruitment and onboarding. By allowing employees to engage in goal planning, receive better training, and link performance to acknowledgement, awards, and remuneration, companies that use talent management software save money on training and onboarding. Employees will be in a better position to reduce the time and hassle of onboarding and other verification processes as a result of this.
Because an organization’s quality and reputation are determined by the people it hires, the primary purpose of implementing this software is to improve employee-company connections. Furthermore, prominent players are introducing various talent management suites that aid in staff management and give proper development opportunities for employees. As a result of the increased need to optimize HR operations, talent management software has become more popular among businesses.
Surging demand of highly efficient recruiting automation propels the TMS
One of the key factors driving the growth of the Talent Management Software Market is the increasing penetration rate of cloud-based platforms, as well as the adoption of mobile-based personnel management systems. Organizations and HR professionals are increasingly using software-as-a-service (SaaS) platforms to automate scouting, identifying, and recruiting new talent from talent pools, as well as retaining existing personnel. A personnel management system can also help in streamlining the hiring process, reinforcing workplace culture, providing flexible learning opportunities, and identifying top performers. Through transactional activities and analytical inputs, the software uses optical trackers to monitor individuals and identify individual trends and patterns. Furthermore, the increasing requirement to replace traditional talent management approaches in order to maximize resource utilization and improve the quality of recruiting decisions is likely to propel the market forward throughout the forecast period.
Growing number of salaried employees across the globe will enhance the demand of TMS
In recent years, the global population has increased dramatically. This has increased the need for salaried employees to improve their economic backgrounds, thereby increasing the worldwide employment ratio. According to World Bank reports, the worldwide market has seen a significant increase in the percentage of paid employees. Salaried employee growth, for example, increased from 52 percent in 2017 to 55 percent in 2020. The demand for salaried employees across various sectors is expected to drive this growth over the forecast period. This creates a large demand for Talent Management software for a variety of enterprise applications such as recruiting, workforce planning, performance management solutions, training and education, support and maintenance, and many others, all of which are expected to drive market growth over the forecast period.
The Major Factors restraining the growth of the Global Talent Management Software Market are
Prevalent usage of Legacy Systems
The TMS market is being held back by a lack of knowledge in several sectors. Many businesses are still utilizing antiquated procedures and have not upgraded to digital solutions that would improve the process. Businesses are hesitant to invest in these software solutions, which is becoming a major impediment to talent management software adoption. With the adoption of software solutions, the industry is likely to develop even more in the approaching years.
Because it takes a long time to design and execute integrated talent management software, it is quite expensive in terms of time, resources, and money. Integrated talent management also causes a lot of friction between HR and management, which makes it difficult for businesses to implement it. The expansion of the integrated talent management industry is being stifled by such reasons.
The Prime Challenges for Market Players in the Global Talent Management Software Market is
Limited Awareness of Talent Management Software
Although data and analysis have long been used to inform business decisions, most companies still have a long way to go in terms of talent analytics. A lack of understanding about the benefits of talent management software is one of the major factors hindering market growth. Furthermore, the costs of talent management in terms of resources, time, and money can be significant. Talent management necessitates the use of tools to map out talent requirements at all levels of the organization, which can be expensive. Small and medium businesses (SMEs) find it difficult to invest in advanced technologies due to their limited resources. As a result, limited enterprise adoption of talent management technology will stifle market growth.
Technology Trends in the Global Talent Management Software Market are
AI Will Become the Guardian of Employees
The use of artificial intelligence (AI) and machine learning in talent management will also be very important next year, with 47 percent of HR leaders intending to expand their investment in it. Many firms already use AI to help with recruitment, but that role will soon be expanded to include giving HR departments totally new capabilities.
The strength of AI in HR is its ability to spot patterns and trends in data that are nearly hard for humans to see or understand. AI tools, based on that analysis, carry the promise of prediction and can provide business recommendations, offering superior lead indicators that help managers prevent problems rather than just react to them. People leaders, for example, will be able to spot individuals who are on the verge of leaving the firm, as well as areas where the organization may face a skills deficit in the near future. They can confidently change their policies with such knowledge.
Collaboration Tools Will Become the New Desktop
Collaboration weakens naturally when people are separated. We saw this during the epidemic, and corporations are starting to recognize that organizational performance is driven by teams working together rather than individuals working alone. HR will become more aggressive in supporting teamwork and collaboration in 2021. Employee evaluation and appraisal will place a greater emphasis on the ability to collaborate with others. When a project fails, the entire team will be evaluated to determine where and why the failure happened.
Maintaining collaboration in a distant working environment necessitates a technological transition as well. During lockdowns, collaboration platforms like Zoom, Teams, and Slack have proved vital in bringing colleagues together and maintaining a continual stream of communication.
The Talent Management vendors offer both freemium and paid versions, the paid versions depend on parameters such as Frequency, Number of users, Operating System and Hosting mode. The typical Talent Management Software starts at US$ 2/ month / user and can reach up to US$ 2,500 / user / month.
Post COVID-19 Recovery
The short-term impact of the COVID-19 pandemic on the global market is uneven, depending on the distinct end-user consequences. Many of the organizations severely afflicted by the pandemic have been compelled to decrease their workforce, thereby halting mandated hiring operations. The global adoption of people management technologies has been hampered by these guidelines. During the COVID-19 epidemic, HR departments are faced with a number of issues, including ensuring optimal business operations and monitoring employee health. HR departments must also help employees who wish to work from home, as well as examine and enforce regulatory changes affecting payroll and sick pay.
HR’s workload has increased significantly as a result of the decrease in capital spending, and project resources and budgets have been curtailed. This will have a negative influence on the deployment of talent management solutions for the time being. Furthermore, businesses are projected to focus on adopting sophisticated technology to improve company operations and decrease costs following the COVID-19 issue, which would likely generate attractive market prospects in the global industry. Furthermore, due to a number of advantages, Al-enabled platforms are projected to be in great demand in the near future.
Market Size and Forecast
Amid the COVID-19 crisis, the global market for Talent Management Software estimated at US$12.91 Billion in the year 2021, is projected to reach a revised size of US$ 32 Billion by 2027, growing at a CAGR of 16.3% over the analysis period 2021-2027. The growing use of mobile technology around the world is driving the industry.
After an early assessment of the pandemic’s commercial effects and the resulting economic crisis, the Workforce Planning segment’s growth is revised to a revised 16.8 percent CAGR for the next seven years.
Compensation Management to grow at the fastest rate
The sector has established a mosaic of goods and products, which may be divided into recruitment management, pay management, employee lifecycle management, learning and training management, and performance management, thanks to its numerous solutions. Employee lifecycle management has the greatest market share of these, which can be ascribed to a growing focus on employee engagement and not just mapping but also maintaining their jobs.
The compensation management area is predicted to increase the most, followed by learning and training management. Employee participation and data analysis have risen to the forefront of compensation administration in recent years, resulting in an increase in demand for these solutions.
Recruitment Management, one of the segments analyzed in the report, is projected to record a 18.1% CAGR and reach US$11 Billion by the end of the analysis period.
The U.S. Market is Estimated at $3.3 Billion, While China is Forecast to Grow at 15.6% CAGR
In the United States, the Talent Management Software industry is expected to reach US$ 4.95 billion by 2021. China, the world’s second-largest economy, is expected to reach a projected market size of US$5.5 billion by 2027, representing a CAGR of 15.6 percent from 2021 to 2027. Japan and Canada are two more important geographic markets, with forecasted growth rates of 14.5 percent and 13.9 percent, respectively, from 2021 to 2027. Germany is expected to expand at a CAGR of around 11.8 percent in Europe.
Learning & Training Management Segment to Record 15.6% CAGR
The global Learning & Training Management segment is expected to grow at a 15.4 percent CAGR, with the United States, Canada, Japan, China, and Europe leading the way. By the end of the analysis period, these regional markets, which had a combined market value of US$2.1 billion in 2021, will have grown to US$ 4.4 billion. In this group of regional markets, China will continue to be one of the fastest expanding. The Asia-Pacific market is expected to reach US$3.8 billion by 2027, led by countries like Australia, India, and South Korea.
Amid the COVID-19 crisis, the global market for Talent Management Software estimated at US$12.91 Billion in the year 2020, is projected to reach a revised size of US$32 Billion by 2027, growing at a CAGR of 16.3% over the analysis period 2021-2027. The growing use of mobile technology around the world is driving the industry.
Because of its expanding application reach in practically all human capital-centric businesses, the market is likely to rise significantly. The sector is undergoing a transformation, with several new technologies upsetting labor management in enterprises, the most prominent of which being cloud and data analytics.
The rapid move to web-based applications and digitalization is the primary driver of growing demand for software solutions, while the rate at which various industries adopt talent management tools and solutions is expected to result in an infusion of new and improved products in the marketplace.
The demand for various products is also a key factor in shaping future trends, as some businesses seek standalone capabilities such as performance management or recruitment management, whereas large businesses seek solutions that provide all of the necessary functionalities in one integrated package.
The advanced technologies such as AI, Big Data and Machine Learning are bringing about a tectonic shift in the delivery of software services and the Talent Management Software is one of the prime beneficiaries in this paradigm shift.
The Major benefits such as AI, Big Data and Machine Learning are that transactional activity and analytical inputs, the software uses optical trackers to monitor individuals and determine market trends and patterns. The industry is rapidly growing for a variety of reasons, including considerable research and development efforts, a favorable investment climate, and the growing interest of global technology corporations in industry advancements is further expected to augur well for the market.
The industry is divided in character, with both large and small businesses offering a diverse range of goods. While some businesses provide integrated solutions, others focus on a specific market or offer individual features as products or services. IBM Corporation, Oracle Corporation, SAP SE, Peoplefluent, Inc., Cornerstone OnDemand Inc., Haufe Group, Lumesse AS, DelTek Inc., Saba Software Inc., and Halogen Software Inc. are among the prominent companies.
Key Market Developments
In February 2021 – Learning Technologies Group plc has agreed to buy Bridge from Instructure Inc. in the United Kingdom. Learning Technologies Group plc made the acquisition to expand its talent and learning portfolio in the critical mid-scale enterprise market.
In November 2020, sum Total systems, Inc launched a mobile experience for a better learning experience. The aim is to provide talent development.
In February 2020, cornerstone OnDemand, Inc. bought Saba, software and it will help cornerstone OnDemand, Inc to increase the product offerings and help the clients with great learning opportunities.
In February 2020– Orion Novotus that is a provider of requirement processes, took the help of Sava software. The Saba software will help Orion Novotus to enhance the requirement process.
Some of the market’s leading companies are Talentsoft, IBM Corporation, Oracle Corporation, Cisco Systems Inc., CornerStone OnDemand Inc., and others. They are currently delivering innovative solutions that include artificial intelligence (Al), cloud, and other advanced technologies. Furthermore, fierce market competition is prompting significant businesses to focus on acquisitions as a means of bolstering their positions.
in June 2020, Talentsoft bought Crafty, an HR technology firm, in order to integrate Crafty skills graphs with Talentsoft’s talent acquisition, learning, and management platform. The firm will manage skills and obtain matching recommendations via the talent marketplace and employee talent profile. The transaction was undertaken with the intention of better managing internal organizational mobility and talent growth.
October 2020 – Lattice and ADP, Inc. have announced a strategic partnership to provide an integration that allows users to manage and share employee data between the two platforms easily. This integration would help human resource (HR) teams manage their workforce data more effectively, decrease redundant data entry time, and improve security.
Key Market Players
Some of the Key Players in the Global Talent Management Software Market are
Workday, Inc. is a cloud-based enterprise application supplier for finance and HR. Its financial management, human resources, planning, expenditure management, and analytics tools are utilized by organizations all over the world, from small firms to Fortune 500 companies. It offers software-as-a-service solutions to help businesses manage problems including supporting and motivating their employees, managing their finances and spending in a constantly changing environment, and anticipating the unexpected. Its enterprise cloud apps cater to the requirements of chief financial officers (CFOs), chief human resources officers (CHROs), and chief information officers (CIOs) in a variety of businesses.
Learning Technologies Group plc is a holding corporation established in the United Kingdom. Corporate and government clients can choose from a variety of talent and learning solutions provided by the company. The Software & Platforms division, the Content and Services division, and the other segments are the three reportable segments. Software as a service (SaaS) and on-premises licenced product solutions, as well as hosting, support, and maintenance services, are all part of the Software & Platforms division. PeopleFluent, Gomo, Rustici Software, Watershed, Affirmity, VectorVMS, and Bridge are some of the company’s brands.
Automatic Data Processing, Inc. is a company that specializes in data processing. Employer Services and PEO Services are two of Automatic Data Processing Inc.’s business segments. The firm provides a cloud-based solution as well as strong HCM SM technologies. Payroll, Leave Management, Attendance, Performance Management, and Exit Management are some of the services it offers.
Bullhorn Inc. is organized into many segments, such as Products and Solutions. For staffing and recruitment activities, the company offers Salesforce Recruitment Software.
Cornerstone OnDemand Inc. is a company that provides on-demand services. Cornerstone OnDemand Inc. divides its operations into Product and Solution areas. PiiQ is a service provided by the corporation. It’s a learning management system that assists organizations and enterprises in fostering a learning culture.
The Global Talent Management Software is at the inflection point of growth and it is poised for significant growth which is expected to grow at a CAGR of 16.3% to reach a Market Size of US$ 32 Billion from a value of US$ 12.91 Billion in 2021. The Market is driven by factors such as Inherent benefits offered by Talent Management Software, Surging demand of highly efficient recruiting automation and Growing number of salaried employees.
Though Growth Bottlenecks exist in the form of challenges such as Prevalent usage of Legacy Systems, High Cost and Limited Awareness of Talent Management Software s. There are ample growth potential for both new and existing players with the presence of opportunities such as Advancement of technology, Increasing penetration rate of cloud-based platforms and Implementation of Big Data Analytics.
- SMEs – Small and Medium Enterprises
- HR – Human Resource
- HCM – Human Capital Management
- AI – Artificial Intelligence
- TMS – Talent Management Software