HR Analytics Market Size, By Component (Solution, Services), By Application (Employee Engagement & Development, Payroll, Recruitment, Retention, Talent Analytics, Workforce Planning), By Enterprise Size (Large Enterprises, SMEs), By Deployment Model, By Industry Vertical & Forecast 2024 - 2032

HR Analytics Market Size

HR analytics market was valued at USD 3.7 billion in 2023 and is projected to register a CAGR of over 13% between 2024 and 2032. The industry is driven by the increasing demand for talent retention and succession planning across organizations. HR analytics helps optimize HR operations, reducing recruitment costs and improving workforce productivity. By analyzing data, companies can allocate resources more efficiently and achieve a higher return on investment (ROI). With changing labor laws and regulations, organizations need to comply with various HR-related legal requirements.
 

For instance, the general data protection regulation (GDPR) is an EU regulation that aims to protect the privacy rights of individuals. It applies to businesses that collect and process data related to individuals residing in the EU, regardless of where the business is located. HR analytics tools can assist in ensuring compliance with such employment laws and regulations, thus, contributing to market growth and popularity.
 

HR analytics can help identify employees at risk of leaving the organization and determine potential successors for key roles. These insights help develop targeted interventions to keep these employees engaged and motivated while developing succession plans that ensure that the organization has the right people in place to meet its future needs. A study by the Society for Human Resource Management found that organizations that use HR analytics are more likely to have effective succession plans. The study also found that these organizations are less likely to experience unplanned turnover.
 

However, companies with diverse workforce structures, multiple locations, and varying HR practices often find it difficult to consolidate and analyze data effectively. Besides, the absence of standardized HR metrics and benchmarks made it challenging to compare HR analytics results across different organizations and industries.
 

COVID-19 Impact

The COVID-19 pandemic had a significant impact on the HR analytics market, reshaping how organizations approached workforce management and decision-making. With remote work becoming the norm, HR analytics played a crucial role in monitoring employee productivity and well-being. Companies sought insights on employee engagement, mental health, and performance to adapt policies and strategies. LinkedIn reported a 122% increase in job posts requiring HR analytics skills, indicating a rising demand for data-savvy HR professionals. The pandemic accelerated the adoption of HR analytics, reinforcing its importance in navigating workforce challenges during unprecedented times.
 

HR Analytics Market Trends

Organizations undergoing HR transformation are leveraging HR analytics to support their change management efforts, enabling data-driven decision-making during the transition process. For instance, in 2022, Accenture announced a new global HR analytics practice to help organizations use data to improve their workforce strategies. The practice will focus on helping organizations with talent acquisition, performance management, and employee engagement. Apart from that, the availability of advanced analytics tools, machine learning algorithms, and artificial intelligence has facilitated the growth of HR analytics. 
 

HR Analytics Market Analysis

Based on the deployment model the market is segmented into on-premise and cloud. The on-premise segment held a market share of over 61% in 2023. The factors driving the adoption of on-premise HR analytics deployment include data security and control, especially for sensitive employee information. Some organizations prefer to keep their HR data within their own infrastructure to ensure compliance with data privacy regulations and have more control over data access and storage. For instance, in 2022, Pfizer adopted an on-premise HR analytics solution to improve its compensation and benefits program. Additionally, on-premise deployment can offer faster data processing and reduced reliance on external internet connectivity.
 

The IT & Telecom segment held a market share of 23% in 2023. The demand for HR analytics across the IT & telecom sector is driven by the need to attract and retain top tech talent, optimize workforce productivity, and enhance employee experience. Analyzing data helps identify skill gaps, assess employee performance, and align talent development strategies. For instance, companies like Cisco have used HR analytics to gain insights into employee mobility, leading to improved workforce planning and talent retention strategies.
 

North America HR analytics market share is poised to exhibit commendable growth trends over 2023-2032. North America held a market share of over 34% in 2023. The adoption of HR analytics in North America is attributed to the region's strong emphasis on data-driven decision-making and its technologically advanced corporate landscape. Organizations in North America recognize the value of HR analytics in optimizing talent management, enhancing employee engagement, and improving overall HR operations. For example, companies like IBM have successfully utilized HR analytics to analyze workforce trends, identify high-potential employees, and implement targeted learning and development programs, leading to better business outcomes and increased employee satisfaction.
 

HR Analytics Market Share

Major players operating in the HR analytics industry are

• SAP SE.
• Infor
• Cegid
• IBM Corp.
• Visier, Inc.
• Konor
• Oracle Corp.
• Sage Software Solutions Pvt. Ltd.
• Sisense Inc.
• Tableau Software, LLC.
• UKG Inc.
• Zoho Corp. Pvt. Ltd.
• MicroStrategy Inc.

These companies are focusing on strategic acquisitions to enhance their capabilities. For instance, In February 2023, IBM acquired Kenexa. This acquisition will allow IBM to integrate Kenexa's HR analytics platform with its other HR solutions, giving customers a more holistic view of their workforce. 
 

HR Analytics Industry News

• In July 2022, SAP acquired Qualtrics to expand its HR analytics capabilities and provide customers with a more personalized experience. 
   

The HR analytics market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD million) from 2018 to 2032, for the following segments:

Click here to Buy Section of this Report

Market, By Component

• Solution
• Services
  • Implementation & integration
  • Support & maintenance
  • Training & consulting

Market, By Application

• Employee engagement & development
• Payroll
• Recruitment
• Retention
• Talent analytics
• Workforce planning
• Others

Market, By Enterprise Size

• Large enterprises
• SMEs

Market, By Deployment Model

• On-premises
• Cloud

Market, By Industry Vertical

• BFSI
• IT & telecom
• Retail
• Healthcare
• Education
• Manufacturing
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ 
• Latin America
  • Brazil
  • Mexico 
• MEA
  • South Africa
  • UAE
  • Saudi Arabia