The global workforce management software market size was worth USD 7.5 billion in 2021. It is estimated to reach an expected value of USD 12.5 billion by 2030, growing at a CAGR of 6.5% during the forecast period (2022–2030). The idea of "workforce management" focuses on raising an organization's competency and performance, monitoring staff productivity, and ensuring that all resources are used effectively and efficiently at the appropriate time. Locations fall within the purview of workforce management. Workforce management makes forecasting, scheduling, intraday management, timekeeping, and attendance easier.
The rising use of cutting-edge technology like artificial intelligence drives the workforce management market. The demand for workforce management will be further exacerbated by small and medium-sized businesses' increasing desire for the internet of things and the growing popularity of remote workforce solutions. Smartphone adoption is rising, and companies are putting more emphasis on human resource analytics, which will lead to more profitable growth opportunities for the workforce management market.
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Artificial Intelligence and Machine Learning-Integrated New Product Offerings
Technological advancements have influenced the leading players to incorporate AI and Machine Learning (ML) into WFM software. For instance, Kronos has created AIMEE, an AI engine for the workforce and human capital management. The customized timetables provided by AIMEE ensure that the employee’s skills align with the seasonal demand and consumer volume. Additionally, it offers sophisticated labor volume forecasting. Such advancements encourage end users to implement cutting-edge solutions to benefit from its features.
Increased Adoption of Analytical Solutions by SMEs
As online usage increases, businesses are pressured to keep up with demand, necessitating adding capacity for ongoing cloud-based services. Over 59% of companies worldwide anticipate that their cloud consumption may be substantially higher than expected, and over 50% of small and medium-sized enterprises (SMEs) anticipate the same. Applying cutting-edge technologies to improve mobile workforce management often entails a financial barrier, particularly for small and medium-sized enterprises. Different organizations can use the cloud-based solution flexibly and "as a service," which enables smaller businesses to adopt cutting-edge technologies for minimal variable costs and increase their competitiveness.
With the advent of economic and widely available mobile technology and the increased demand for affordable technology solutions for small and mid-sized businesses, cloud-based adoption has been rising. These cloud-based solutions appeal to companies wishing to update their current processes just as much as they do to SMEs shopping for their first system. SMEs are aided by real-time data access, adaptations, the long-term total cost of ownership, and the growing requirement for software integration. Such elements fuel market expansion.
Concerns Related to Implementation and Integration
Most software-as-a-service evaluations center on selecting a vendor that works well with and comparing feature sets to existing trouble areas. To get the benefits that any firm seeks, new workforce management software implementation can be a costly and time-consuming process that must be done correctly.
Mercer's 'Journey to Digital HR' found that up to 30% of HR tech implementation projects fail due to poor workforce change management. There are two areas where most businesses don't always invest enough time and energy to guarantee a workforce management software implementation's success. The first is testing, which, if done correctly, may reveal unforeseen problems that may be fixed before going live. The second area is training to ensure that it is possible to reap the benefits of effective adoption and use by the current workforce. Such factors hinder market growth.
Demand for Improved Human Resource Management (HRM)
It is projected that the global workforce management software market will grow at a healthy rate, primarily due to the growing adoption of human resource management techniques that take advantage of modern technologies. Enterprise workforce management software offers a consolidated solution for many HRM processes, including hiring, record keeping, performance management, and others. These advantages are laying the foundation for market growth.
The global workforce management software market is segmented by deployment mode, type, end-user, and region.
By deployment mode, the global workforce management software market is segmented into on-premise and cloud.
The Cloud segment is the fastest growing and is expected to grow at a CAGR of 8.8% over the forecast period. Companies across the globe have been embracing the advantages of Software-as-a-Service (SaaS), or cloud-based software, for their mission-critical applications. In recent years, cloud-based solutions have grown significantly due to technology allowing users to access data even from far-off areas. Businesses increasingly realize the benefits of moving their data to the cloud rather than building and maintaining on-premise infrastructure, which drives the demand for cloud-based solutions and, subsequently, the adoption of these solutions.
By type, the global workforce management software market is segmented into performance & goal management, workforce scheduling & workforce analytics, time & attendance management, absence & leave management, and others.
The Time & Attendance Management segment occupies the largest market share and is expected to grow at a CAGR of 6.1% during the forecast period. The workforce time and attendance management software solutions help managers maintain employees' attendance history and automatically and proactively notify the workforce supervisors whenever the attendance violates a configured policy. This solution also helps create a seamless data exchange among all the workforce management processes that can coordinate with the payroll and human resources processes. Such benefits contribute to the market growth,
The Workforce Scheduling & Workforce Analytics segment is the fastest growing segment. As multiple industries have relied on workers, workforce scheduling forms the foundation of a smooth business operation. The workforce scheduling needs to be efficient to take care of changes such as delays in job reporting, and sudden leave of absence, among others. With scheduling automation on the rise coupled with the growth in the number of tools available to manage larger workforces, the market is growing significantly.
By end-user industry, the global workforce management software market is segmented into BFSI, Consumer Goods & Retail, Energy & Utilities, Automotive, Healthcare, Manufacturing, and Others.
The Consumer Goods & Retail segment occupies the largest market share and is expected to grow at a CAGR of 5.7% over the forecast period. The demand for workforce management software is growing in the retail sector, as the solutions are witnessing increased adoption. The rise in the interest for fast-moving consumer goods, aggressive business sector development by market incumbents, and an increase in the number of new players are a few factors that have brought about robust growth in this locale.
The Healthcare segment is the fastest growing. Future norms are predicted to include workforce management solutions in a big way. With functionalities such as workforce scheduling, effective schedules of employees can be generated considering the mix of employee skills and experience to deliver quality care. These solutions can also provide the nurses and other caregivers with self-scheduling capabilities that enable them to set schedule preferences and swap and choose open shifts, which can help them improve their work/life balance and decrease absenteeism. The market is also witnessing increasing investments in these solutions catering to the healthcare industry. For instance, in June 2020, ICONIQ Capital LLC made a significant equity investment in QGenda LLC, which offers a SaaS-based workforce management software for healthcare providers.
By region, the global workforce management software market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.
North American Dominion in the Global Market
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North America holds the largest market share and is expected to grow at a CAGR of 6.1% over the forecast period. The market for workforce management in North America has been booming recently. The main issues in this area are improving labor productivity and efficiency. The region established itself as the top trader in the retail venture market by occupying a sizable portion of the market and doubling trade volumes to surpass other regions. Countries like the United States and Canada are to blame for this situation. Canada has been witnessing notable growth in the e-commerce industry. According to International Trade Administration, retailers invest in digital platforms to reach consumers dispersed over a vast landmass while responding to competition from global e-tailers like Amazon Canada. Fashion is presently the leading product category, followed by electronics and media. 59% of Canadian shoppers use a credit card when shopping online, and 20% prefer PayPal. This has been driving the demand for workforce management solutions in the country.
Europe holds the second-largest market share and is estimated to reach a market value of USD 3 billion by 2030, growing at a CAGR of 6.9%. The widespread adoption of best workforce management practices among businesses results from the increasing need for compliance with GDPR enforced by European legislative bodies. 99% of European companies are small and medium-sized enterprises (SMEs), and most of the manufacturing sector is still underrepresented in international commerce. These players are anticipated to be significant users of the different workforce management software modules to preserve their competitive advantage and grow their operations. Germany is one of the most mature e-commerce markets in Europe. The widespread demand for e-commerce platforms has enabled companies to adopt workforce management solutions.
Asia-Pacific is the fastest-growing region. Asia-Pacific is one of the biggest exporters and producers of goods. China, India, Indonesia, South Korea, Japan, and Australia are huge manufacturers of different goods. Many goods are produced in this region, from automobiles to software, from UAVs to food items. The workforce is essential for making this wide range of goods. This will further help the workforce management software market to increase in the region. The region's high concentration of SMEs, which are heavily involved in creating and using workforce software and their management solutions, is credited with its quick growth rate. The region is also anticipated to increase due to investments made by small and medium-sized businesses. SMEs are investing to increase the utilization of cloud-based and cutting-edge technology personnel management solutions.
Key players in the global workforce management software market are