Workforce Management Market Size, Share & Industry Analysis, By Component (Software, and Services), By Deployment (On-Premise, and Cloud), By Enterprise Size (SMEs and Large Enterprises), By Application (Workforce Analytics, Workforce Scheduling, Time and Attendance Management, and Others), By End-Use Industry (IT and Telecommunication, BFSI, Government, Retail, Healthcare, Education, Manufacturing, and Others) and Regional Forecast, 2019-2026

The global workforce management market size was valued at USD 2.44 billion in 2018 and is projected to reach USD 5.25 billion by 2026, exhibiting a CAGR of 10.1%. North America dominated the global market with a share of 37.7% in 2018.

There has been an increasing focus of organizations towards employee productivity and progressing workforce. For instance, in 2019, Apollo Hospitals, the healthcare service provider in Asia, incorporated Kronos Workforce Central to lift its workforce productivity and efficiency. Kronos Workforce Central offers collaborative self-scheduling that empowers the Apollo hospital staff to prefer and select their schedule and provides a simplified engaging experience. This growing demand for enhanced workforce productivity and efficiency is also expected to boost the hospital workforce management software market.

The above example shows that the implementation of automated software increases operational productivity and agility. It reduces non-compliance and financial risks, particularly for large organizations. As a result, these benefits drive the demand across organizations.

MARKET TRENDS

Adoption of Workforce Analytics Approach by Organizations is an Emerging Market Trend

Workforce analytics can recognize and deal with the loopholes in the firm’s workforce operations and provide a better solution to achieve improved business outcomes. According to a report by IBM Business Services, workforce analytics plays a significant role in HR migration towards a strategic approach from more administrative areas. This drives the interest of the companies to adopt workforce analytics to enhance workforce operations.

Organizations are more focused on the productivity of existing employees instead of hiring a new workforce. Workforce analytics could find the characteristics of well-performing employees and teams and the conditions that facilitate the enhanced performance of the workforce. As a result, the factors mentioned above contribute to the fact that incorporating workforce analytics solutions with this software is an emerging workforce management market trend.

MARKET DRIVERS

Workforce Management to Enable Organizations to Optimize Operational Costs

Among the numerous benefits of this software is the cost-saving benefit. It enables the company to save high operational costs compared to the overall spending on the employees.

For instance, the Cedar ROI study states that systematic labor management enables a small-sized enterprise with 5,000 employees and about USD 300 million in payroll to save approximately USD 6.0 million per year. A retailer with USD 5.0 billion turnover and 60,000 workforces could save USD 2.5 million annually by implementing an efficient time and labor solution that simplify time entry administration.

The above statistics show that workforce management software is likely to have a decisive impact on the long term economic viability of organizations. Optimization of cost to company and employee ratio would ensure to drive demand for this market.

New Product Offerings with Integration of Artificial Intelligence and Machine Learning to Drive the Market

Advances in technology have influenced the key players to integrate AI and Machine Learning (ML) with WFM software. For instance, Kronos has developed an AI engine for human capital management and workforce management called AIMEE.

AIMEE delivers improvised schedules that ensure the worker's skills are aligned with the seasonal demand and customer volume. Also, it provides advanced labor volume forecasting. Such developments influence the end-users to deploy advanced solutions to leverage its benefits.

MARKET RESTRAINT

Lack of Understanding and Awareness about Associated Benefits is Likely to Hinder the Growth

Lack of awareness and product understanding is observed to be a significant restraint. This restraint can be overcome by active government initiatives intending to drive digital adoption across the organizations, especially for the SMEs. On the contrary, inadequate investments of emerging markets such as Latin America, the Middle East, and Africa is likely to hinder the workforce management market growth.

SEGMENTATION

By Component Analysis

Services Segment to Propel Growth

The component segment comprises of software and services provided by the market players. Software is primarily concerned with tracking and scheduling the workforce. For instance, Kronos offers its solutions by driving productive outcomes through improved employee engagement and minimizing compliance risk.

Along with software, companies offer professional and managed services. Professional services comprise implementation services, support and maintenance, and training and education. Services are expected to exhibit significant growth in the coming years owing to the growing adoption of workforce management software.

By Deployment Analysis

Increasing Demand for Cloud-based Software to Augment Market Growth

Based on deployment type, the software segment is categorized into the cloud and on-premise. According to a report published by the International Customer Management Institute (ICMI) in 2017, 15.0% of the contact centers leverage cloud-based workforce management solutions; whereas, 36.0% of organizations that use on-premise solutions are switching to cloud-based workforce management solutions.

The above statistics show that cloud-based software is likely to have an unprecedented demand in the market. Reduced time for deployment, cost optimization, and capabilities to remove or add licenses are some of the factors that are fueling the demand for cloud-based WFM software than on-premise software.

By Enterprise Size Analysis

SMEs to be Significant Users of Workforce Solutions to Enhance Productivity

Organizations need basic solutions to deal with the business requirements of authority and compliance. Solutions for these requirements include core HR, time and labor, absence management, and payroll. Hence, based on the enterprise size, the market has been divided into SMEs and large enterprises. SMEs are anticipated to upsurge the demand during the forecast period.

Small and mid-sized enterprises are the major adopters of these solutions. Though the adoption is steady, the growth continues to increase as organizations expand in terms of workforce, size, complexity, and geography. Most of the SMEs adopt software-as-a-service (SaaS)-based solutions as their needs and requirements increase.

Large enterprises tend to adopt the workforce management software at a larger scale compared to the small enterprises owing to the huge workforce. Large enterprises hold a major share as they have adequate IT infrastructure and substantial investments in advanced technologies. However, large enterprises are expected to switch to cloud-based solutions from on-premise options owing to the advanced WFM software offerings of key players and optimized cost solutions.

By Application Analysis

Workforce Analytics to Exhibit a Remarkable CAGR During the Forecast Period

Based on application, the workforce management market has been segmented into workforce analytics, workforce scheduling, time and attendance management, absence management, and others (task management and fatigue management).

Workforce analytics is expected to exhibit a remarkable CAGR during the forecast period as it is leveraged by the end-users to analyze employee benefits, compensation, and other factors related to the employee.

Time and attendance management is a ubiquitous and primary application. Hence, it holds a major share in the market. Similarly, absence management applications provide automated features for employee leave management, federal and state compliance, employee self-service capabilities, and customized leaves. Absence management is one of the significant applications of workforce management software.

Other applications include workforce scheduling that offers optimized schedules of the workers to meet customers' demands. Task management offers employee management capabilities, whereas fatigue management applications provide real-time reporting and compliance.

By End Use Industry Analysis

IT and Telecommunication Industry to Upsurge the Demand for WFM Software

On the basis of industry, workforce management market is categorized into telecom and IT, BFSI, government, retail, healthcare, education, manufacturing, and others

IT and telecommunication industry is expected to have lucrative growth during the forecast period. This sector comparatively has the largest workforce compared to other industries. As a result, it becomes a vital factor for organizations to manage the workforce effectively. Similarly, BFSI is expected to be one of the major industries to deploy WFM solutions following IT and Telecommunication.

It has become an essential aspect of the healthcare industry to improve employee engagement and enhance the value chain. This is essential as mapping medical staff to patient demand is a challenging and complex task for the healthcare sector. The results of inaccurate schedules directly impact the quality of patient care and financial performance. Thus, these factors drive the market growth.

This software enables retailers to simplify store execution and engage the associated salespeople with task management. Advanced software such as Workforce Dimension by Kronos informs retailers about labor forecasting and scheduling to ensure seamless execution and transparency across the outlets and shops. 

The manufacturing industry is prone to witness transformations due to the economic conditions of the particular region. For instance, the manufacturing industry in India is going through a period of upheaval owing to the current economic slowdown. As a result, balancing workforce productivity and workforce costs will be a significant factor. This drives the demand for labor management software.

REGIONAL ANALYSIS

Asia-Pacific is Prognosticated to See Strong Growth During the Forecast Period

The market has been considered across five major regions of North America, Europe, Asia Pacific, the Middle East and Africa, and Latin America. North America is the largest buyer of WFM solutions. It holds a significant market share primarily due to early adoption of cloud platforms and the presence of well-established players such as Oracle Corporation and Kronos in the region. In 2018, North America generated a revenue of USD 0.92 billion and is anticipated to emerge dominant in the market during the forecast period.

Asia-Pacific workforce management market is predicted to have remarkable growth in the coming years. The companies in the Asia-Pacific continue to hire workforce at a faster pace compared to North America and Europe. Unprecedented market opportunities and strong businesses are driving the level of hiring in the region. This drives the demand for efficient management of workforce and fuels the need for its automation.

Furthermore, governments from the region are taking initiatives to support digital adoption in the IT sector, specifically among the SMEs that lag in productivity compared to their large counterparts. For instance, the Singaporean government initiated the ‘Go Digital’ initiative that supports small businesses to adopt digital solutions, including labor management, data analytics solutions, enterprise software, and others. Such active initiatives are likely to fuel market growth in the Asia-Pacific region.

Europe is forecasted to have moderate growth in the coming years, though it holds a major market share followed by North America before 2020. In Europe, there is an increasing demand to automate workforce operations to improve compliance. Regions such as United Kingdom have already implemented workforce management software as a preferred way of managing employees.          

The Middle East and Africa WFM market is likely to have a steady growth. This is due to the lack of investments in technology and the lack of a skilled workforce. Similarly, the Latin America market is likely to have slow growth. The market growth in Latin America is expected to be primarily driven by the companies headquartered in North America and Europe, by supporting operations in the region.

KEY INDUSTRY PLAYERS

Strategic Agreements, and Partnerships are the Key Strategies Opted by Kronos to Strengthen its Market Position

Kronos, Inc. is one of the key players which offer a range of applications such as time and attendance, employee scheduling, absence management, labor activities, and analytics. Kronos exclusively provides a range of labor management solutions including, workforce dimensions’ suite, workforce ready suite, and workforce central suite.

In January 2019, Kronos, Inc. announced advanced developments to Workforce Dimensions, its next-generation cloud suite. The new workforce dimension features empower a company with comprehensive workforce and human capital management experience. The solution also offers predictive scheduling, labor volume forecasting, and task management.

In the same year, the company declared an agreement with SAP SE. This agreement enables SAP to resell Kronos’s Workforce Dimension, its next-generation WFM solution to its customers under the name “SAP Time Management” by Kronos.

List of Key Companies Profiled:

• Kronos, Inc.


• Oracle Corporation


• SAP SE


• Automatic Data Processing, Inc.                    


• Workday, Inc.


• WorkForce Software, LLC.


• Ultimate Software


• Cornerstone OnDemand, Inc.


• IBM Corporation


• Verint


• Infor


• NetSuite, Inc. 

KEY INDUSTRY DEVELOPMENTS:

• January 2020 - Perfetti Van Melle leveraged the Kronos workforce solution to automate its workforce processes. The Perfetti Van Melle workforce consists of about 2,600 workers in eight locations. Kronos Workforce Central solution would provide an integrated workforce solution for staff as well as track the productivity metrics and workforce costs, while providing an automated solution for compliance.


• October 2019 - Automatic Data Processing, Inc. announced the addition of ADP Compliance on Demand to its product offerings. It enables businesses to stay updated and informed about every factor of the hour and wage compliance of the worker. It also includes crowd-sourcing opinions, compliance help desk, and other practices.

FUTURE OUTLOOK

The adoption of workforce management software by small and mid-sized enterprises would ensure to upsurge the WFM market growth in the coming years. Owing to the advancements in technology such as Machine Learning and Artificial Intelligence, workforce management is predicted to see significant market opportunities for additional revenue and offer more value to potential and existing clients. Cloud-based software is expected to be widely adopted by end-users.

REPORT COVERAGE

The workforce management market report provides detailed information regarding various insights into the market. Some of them are growth drivers, restraints, competitive landscape, regional analysis, and challenges. It further offers an analytical depiction of the market trends and estimations to illustrate the forthcoming investment pockets. The market is quantitatively analyzed from 2015 to 2026 to provide the financial competency of the market. The information gathered in the report has been taken from several primary and secondary sources.

Report Scope and Segmentation

ATTRIBUTE	DETAILS
Study Period	2015 - 2026
Base Year	2018
Forecast Period	2019 - 2026
Historical Period	2015 - 2017
Unit	Value (USD billion)
Segmentation	By Component Software Services
By Deployment On-Premise Cloud
By Enterprise Size SMEs Large Enterprises
By Application Workforce Analytics Workforce Scheduling Time and Attendance Management Others (Task Management and Fatigue Management)
By End-Use Industry IT and Telecommunication BFSI Government Retail Healthcare Education Manufacturing Others
By Region North America (U.S. and Canada) Europe (U.K., Germany, France, Scandinavia, and Rest of Europe) Asia-Pacific (Japan, China, India, Southeast Asia, and Rest of Asia-Pacific) Middle East & Africa (South Africa, GCC and Rest of Middle East & Africa) Latin America (Brazil, Mexico, and Rest of Latin America)