HR Analytics Market Size - By Component (Solution, Services), By Application (Employee Engagement & Development, Payroll, Recruitment, Retention, Talent Analytics, Workforce Planning), Enterprise Size, Deployment Model, Industry Vertical & Forecast, 2023 – 2032

HR Analytics Industry Analysis

HR Analytics Market size was valued at USD 3.3 billion in 2022 and is projected to register a CAGR of 13.1% between 2023 and 2032, 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).
 

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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 Deployment Model Segmentation

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The on-premise segment held over 61% of the HR analytics market share in 2022. 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.
 

HR Analytics Industry Vertical Segmentation

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The IT & Telecom segment accounted for 23% of the HR analytics market share in 2022, led 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.
 

HR Analytics Regional Analysis

North America HR analytics market was over 34% of revenue share in 2022, 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 Industry Leaders

Major companies operating in the HR analytics market 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., and 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. 
   

This 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:

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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 has been 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