In 2021, China’s HCM SaaS market for human capital management reached US $490million, with a year-on-year increase of 39.1% From IDC

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In 2021, the SaaS market scale of human capital management (hereinafter referred to as HCM) in China reached US $490million, with a year-on-year increase of 39.1%, higher than the growth rate of the overall SaaS market in China. IDC predicts that by 2026, China’s HCM SaaS market will reach US $2.63 billion, with a rapid growth of 40% CAGR, leading the rapid development of the entire SaaS market.

From the perspective of the future development trend of China’s HCM SaaS market, the development trend of China’s HCM SaaS market mainly focuses on the following aspects:

Digital priority continues to deepen HR integrated solutions: with the continuous deepening of the digital economy, the importance of data continues to rise in the development of enterprises; HR integrated solutions tend to complete all modules (such as organization, personnel, salary, attendance, training, recruitment, performance, etc.) in the same system, so that enterprises can integrate and analyze data in the same system. Integrated HR solutions are more in line with the needs of large enterprises.

Professional people do professional things, and the vertical field will become more and more active: with the rapid development and gradual popularity of China’s HCM SaaS market, many local start-up SaaS manufacturers have emerged in the vertical field. For example, in the fields of labor management, recruitment, training and so on, they are more inclined to use system integration to meet the needs of enterprises. Because of their strong professionalism and fine granularity in a single field, they will also become the first choice of customers.

People oriented and continuous optimization of user experience: in the post epidemic era, in the mode of flexible users and contactless office fow (future work), employee experience has become one of the important standards to measure whether enterprises can attract and retain talents; Therefore, improving employee experience has become a key concern of HCM technology manufacturers.

According to the definition of IDC, HCM market is divided into six sub markets: employee performance management, recruitment / talent acquisition, core HR, labor management, learning management and salary management. From the market share of each sub market in recent years, employee performance management and recruitment / talent acquisition have the highest market share, and the market share of core HR has increased, but the customer group is still dominated by small and medium-sized enterprises.

From the perspective of market competition pattern, head manufacturers focus on “talent integration” solutions, represented by Beisen and SAP successfactors. Their customer groups are mainly aimed at medium and large-scale enterprises, and take the apaas platform as the base to provide enterprises with perfect HR function modules. ERP manufacturers represented by UFIDA and Kingdee, with the deepening of ERP cloud strategy, also began to pay attention to increasing investment in HCM SaaS. For example, UFIDA focuses on acquisition and acquires Dayi to supplement its product line. Kingdee also launched HCM SaaS products for large enterprises in 2022. Manufacturers in this camp have a certain customer base, and their main competitiveness is to bundle and sell their ERP products together.

Analyst view

Xuwenting, senior research manager of IDC China enterprise application software market, believes that with the continuous deepening of the digital economy, digitalization gives priority to the continuous deepening of the process of HR digital transformation. The rapid development of cloud computing has laid a good foundation for HCM SaaS market; With the repeated impact of the epidemic on the economy, enterprises need to use digital technology to improve the level of talent management; With the increasing labor cost, HCM SaaS can help enterprises realize process standardization and reduce cost investment. Intellectualization will continue to deepen in the HCM module, from recruitment and performance to core HR application. Read more: IDC: the global smartphone shipment in the second quarter of 2021 was 313 million, an increase of 13.2% IDC: the market size of China’s software definition computing software market reached 340 million US dollars in the first half of 2019 IDC: the overall market size of China’s public cloud services (iaas/paas/saas) reached 12.31 billion US dollars in the first half of 2021 IDC: 56% of European enterprise IT departments lack cloud service professionals IDC: the overall market size of global public cloud services in 2020 （IaaS/PaaS/SaaS） Reached US $312.42 billion, with a year-on-year increase of 24.1% IDC: the size of China’s public cloud service market exceeded US $4billion in the second half of 2018 IDC: the global SaaS market size is expected to exceed US $14billion in 2017 IDC: the overall market size of China’s public cloud services exceeded us $3billion in the first half of 2018 IDC: the market share of China’s public cloud manufacturers in the first half of 2018 Alibaba cloud’s share reached 43% IDC: the market share of China’s public cloud IAAs in the first half of 2017 Alibaba cloud’s share expanded to 47 6% IDC: in 2017, China’s public cloud service market exceeded $4billion IDC: in the first half of 2020, the overall market size of China’s public cloud services (iaas/paas/saas) reached $8.4 billion, with a year-on-year increase of 51% IDC: in 2015, China’s public cloud computing reported that Alibaba cloud’s market share reached 31% IDC: it is expected that the global PAAS market will reach $14billion in 2017, with an annual compound growth rate of 30% IDC: in 2014, the overall size of China’s public cloud service market will reach $717 million

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