Workforce Management Market

Market Overview

The global workforce management market size was valued at USD 8.74 billion in 2023. It is estimated to reach USD 22.90 billion by 2032, growing at a CAGR of 11.3% during the forecast period (2024–2032). The global workforce management market growth has been driven by the rising demand from enterprises to effectively and efficiently manage their work, which has been accelerated by the introduction of remote and hybrid work models following the COVID-19 epidemic. Moreover, the primary stakeholders in this market are developing innovative and more efficient Workforce Management (WFM) technology, which is estimated to create opportunities for global market growth.

Workforce Management refers to the strategic approach of optimizing the productivity and efficiency of an organization's workforce. It involves tasks such as scheduling, forecasting, staffing, timekeeping, and performance management. By leveraging technology and data analysis, workforce management aims to align employee schedules with business needs, ensuring the right people are in the right place at the right time. This process enhances operational efficiency, reduces labor costs, and improves employee satisfaction by balancing workload and minimizing overstaffing or understaffing situations. Ultimately, effective workforce management enables businesses to meet customer demands efficiently while maximizing their human resources' potential.

Highlights

• On-premises dominates the deployment type segment 
• Large enterprises dominate the organization size segment
• BFSI dominates the industry vertical segment 
• North America is the highest shareholder in the global market

Market Dynamics

Global Workforce Management Market Drivers

Emergence of Remote and Hybrid Work Models

There has been a growing prevalence of remote, hybrid, and distributed workforces spurred by factors like globalization and the COVID-19 pandemic. This trend necessitates robust WFM solutions to manage remote teams effectively, ensuring productivity, collaboration, and communication. Organizations seek tools that enable remote scheduling, performance monitoring, and resource allocation while maintaining operational efficiency and employee engagement. The demand for flexible work arrangements underscores the importance of WFM platforms that accommodate remote work preferences, fostering adaptability and resilience in the face of evolving workplace dynamics and geographical dispersion.

Based on the survey conducted by Owl Labs, 16% of employees globally engage in remote work, whereas 62% have opted for a hybrid work arrangement. Only 22% of the entire workforce is engaged in full-time office employment. Consequently, considering the above, employees are strongly inclined to work in a hybrid workplace. Likewise, according to the McKinsey survey, 58% of employees experienced increased productivity due to hybrid work. This is estimated to propel the global market growth.

Global Workforce Management Market Restraint

Regulatory Compliance

Regulatory compliance significantly restraints the workforce management market due to the diverse and stringent labor laws, data protection regulations, and industry-specific mandates. Companies operating across multiple regions must navigate a complex landscape of compliance requirements, often necessitating customized solutions.

Robust systems that can track and manage various aspects of workforce management while maintaining compliance are necessary to ensure adherence to regulations such as the Occupational Safety and Health Administration (OSHA) standards, the Fair Labor Standards Act (FLSA), and the General Data Protection Regulation (GDPR). Legal repercussions, harm to one's reputation, and interruptions to business operations may arise from breaking these restrictions. Consequently, organizations may hesitate to invest in workforce management solutions due to the uncertainty and costs associated with achieving and maintaining regulatory compliance, restraining market growth.

Global Workforce Management Market Opportunities

Launch of Novel Workforce Management (WFM) Technology

The key players in this industry are introducing new Workforce Management (WFM) technology with advanced features like automation, analytics, and integration capabilities. For instance, in September 2023, Zoom introduced its Workforce Engagement Management suite, which includes Workforce Management and Quality Management services. This feature is now accessible to Zoom Contact Center users. Zoom Workforce Management empowers contact center managers to create accurate four-week staffing projections using AI models considering call volume, handling time, and other relevant parameters.

Furthermore, in May 2023, Indeavor, a prominent company in the field of People Operations & Workforce Management, introduced its Labor Demand Planning software. This software allows major multinational corporations with a workforce that operates in shifts around the clock to seamlessly integrate their Enterprise Resource Planning (ERP) and Workforce Management systems globally. This technology is unique and can effectively handle intricate labor and demand planning scenarios on a large scale. These factors present opportunities for market expansion.

Regional Analysis

North America Dominates the Global Market

Based on region, the global workforce management market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America is the most significant global workforce management market shareholder and is expected to expand substantially during the forecast period. The market share of workforce management was dominated by North America, primarily because of the presence of industry leaders such as IBM, Oracle, SAP, ADP, and Workday. Due to the population's extensive technological understanding, there is a distinct inclination towards remote and hybrid work in this region. For instance, Upwork forecasts that by 2025, over 32.6 million Americans, including roughly 22% of the workforce, will be engaged in remote work. This assessment suggests a consistent and gradual shift towards remote work arrangements. This is anticipated to drive the growth of the North American workforce management market.

Furthermore, the launch of technologically advanced WFM solutions integrated with artificial intelligence (AI), machine learning (ML), and predictive analytics are transforming WFM's capabilities. For instance, in July 2023, Workstream, the platform for managing hourly workers, introduced a new and innovative AI chatbot called Workstream Assistant. This chatbot can communicate in multiple languages and be customized to meet specific needs. Workstream Assistant, the leading product in the company's transition towards a completely AI-driven workforce management solution, enables businesses to effectively engage and retain hourly workers in various markets throughout the United States. Thus, such factors expedite the market expansion.

Asia-Pacific is expected to have the highest growth rate during the forecast period, mostly because of its rapid economic expansion and industrialization. These factors significantly contribute to the region's potential for growth in the workforce management market. In addition, the leading market participants are implementing innovative workforce management systems to efficiently manage the large workforce in this region. For instance, in May 2023, UKG, a leading provider of HR, payroll, and workforce management solutions, announced the launch of UKG Strategic Workforce Planning in Australia and New Zealand (ANZ). UKG Strategic Workforce Planning combines strategic planning and personnel development to help firms achieve operational excellence. Thus, the factors above contribute to the expansion of the market.

Segmental Analysis

The global workforce management market is bifurcated into components, operating systems, deployment types, organization sizes, and industry verticals.

Based on components, the global workforce management market is bifurcated into solutions and services. 

The solutions segment dominates the global market. The dominance of the solutions segment is attributed to the transformation of traditional management techniques into digital and other technological solutions. Simplifying schedules and redirecting employee work allocations to focus on more significant business aspects are expected to boost the segment's growth. The solutions segment is further bifurcated into workforce scheduling, time and attendance management, leave and absence management, workforce analytics, and others.

Moreover, the market players are introducing new workforce management solutions, driving this segment's growth. For instance, in June 2023, Strata Decision Technology (Strata) introduced its Real-Time Workforce Management (RTWM) solution, a cloud-based healthcare tool focusing on financial planning, analytics, and performance. This solution is developed to meet the needs of nursing leaders in terms of their financial and operational objectives.

Based on operating systems, the global workforce management market is bifurcated into Windows, Android, iOS, LINUX, and others.

Workforce Management (WFM) deployment on Android systems involves adapting WFM software to run seamlessly on Android devices. This deployment aims to optimize workforce productivity, scheduling, and resource allocation through mobile platforms. Android's widespread adoption and customizable nature make it an ideal platform for deploying WFM solutions across diverse industries. This deployment enhances efficiency by enabling real-time updates, remote monitoring, and seamless employee coordination.

Based on the deployment type, the global workforce management market is bifurcated into on-premises and cloud. 

The on-premises segment is estimated to own the highest market share. On-premises workforce management refers to software and systems hosted locally within a company's infrastructure rather than cloud-based. It enables businesses to manage various aspects of their workforce, including scheduling, time tracking, attendance, and task allocation, all within the confines of their physical premises. This setup offers greater control and security over sensitive workforce data, as it's stored internally rather than on external servers. However, it requires dedicated IT resources for maintenance, updates, and security and may lack the flexibility and scalability of cloud-based solutions. On-premises workforce management remains viable for organizations with specific security or compliance requirements or those preferring direct control over their software environment.

Based on organization size, the global workforce management market is bifurcated into SMEs and large enterprises. 

The large enterprises segment contributed to the most significant market share. Large enterprises refer to corporations or organizations with significant scale, extensive resources, and substantial operations. These entities typically have a large number of employees (250 or more employees), significant market presence, and substantial revenue streams. Thus, there is a rising need to optimize operational efficiency and productivity to manage such a huge workforce. Moreover, workforce management empowers managers to allocate resources effectively, aligning staffing levels with demand fluctuations and business goals. Thus, WFM is a strategic tool for large enterprises to drive operational excellence, improve service quality, and achieve competitive advantage in dynamic market environments.

Based on industry verticals, the global workforce management market is divided into BFSI, telecom, government, consumer goods and retail, manufacturing, energy and utilities, transportation and logistics, healthcare and life sciences, Information technology-enabled Services (ITeS), and others. 

The BFSI segment dominates the global market. The BFSI industry utilizes Workforce Management (WFM) systems to optimize operational efficiency, enhance customer service, and ensure regulatory compliance. These platforms help forecast customer demand, schedule staff shifts, manage time and attendance, and analyze performance metrics. In the BFSI sector, where customer service and operational excellence are paramount, WFM solutions enable organizations to align staffing levels with fluctuating service volumes, reduce labor costs, and mitigate compliance risks. Through the automation of repetitive operations like compliance reporting and payroll processing, WFM systems free up resources for strategic initiatives and people management. Thus, using WFM technology empowers BFSI institutions to deliver superior customer experiences while maintaining cost-effective and compliant operations.

Impact of covid-19

The novel coronavirus outbreak has caused disrupted global economies and their work culture. Organizations are struggling to maintain employee health and productivity. With a majority of workers working from home, companies are finding it difficult to sustain in the new environment, and many are forced to take tough decisions, such as cost-cutting, lay-offs, and salary cuts. The pandemic has presented new roadblocks for the global workforce, predominantly hitting the daily wages of contractual workers.

Recent Developments

• January 2024- When I Work, a prominent provider of shift-based workforce management software utilized by over 200,000 workplaces globally, introduced its latest offering, When I Work Payroll. When I Work Payroll is specifically developed to streamline the payroll process for small businesses.
• December 2023- Upwork launched two collaborations aimed at providing an enhanced approach to workforce management. The work marketplace has announced the beginning of its first relationship with vendor management systems (VMS) and managed service providers (MSP) for its enterprise suite offering. The initial partnerships will be with SAP Fieldglass and Flextrack.