HCM Top 500 Leaderboard Showcases Biggest Vendors in 22 HR Software Markets

Core HR, Talent Acquisition, and Workforce Management help companies achieve peak performance

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After conducting extensive research on the Human Capital Management applications market, we are pleased to announce the results of HCM Top 500 Market Report, which ranks and analyzes the world’s 500 largest HCM software vendors by their annual revenues across 22 segments in three primary groups – Core HR, Talent Acquisition and Workforce Management.

This report summarizes our research results, spanning thousands of interviews and continuous surveys with HCM vendors, customers and consultants over a three-year period, as we identify some of the most innovative, the fastest-growing, as well as the ones with unparalleled staying power because of their sizable Cloud and on-premise applications revenues after decades of selling Core HR, recruiting and time and attendance applications to millions of organizations around the world.

HCM Top 500 Market Report
HCM Top 500 Market Report

As shown in Leaderboard 1 below, the worldwide HCM applications market reached product sales of more than $15 billion in software license, maintenance and Cloud subscription revenues in 2015. We align the three major groups – Core HR, Talent Acquisition and Workforce Management – with their purpose-built capabilities to help companies identify and recruit talent, manage and evaluate every aspect of Core HR function from compensation to learning, while running a range of other apps to boost workforce productivity.

Leaderboard 1 – HCM Applications Market By Vertical, Function, Cloud vs. OnPremise, 2015-2020 Forecast

From hire to retire, HCM continuum extends across 22 markets, 21 verticals
From hire to retire, HCM continuum extends across 22 markets, 21 verticals

Amid low unemployment in countries such as the United States, coupled with a rapidly aging workforce in many developed nations, HR executives are not only measuring themselves against increased competition for talent, but also searching for the most effective technology solution for enhanced  visibility into each and every stage of the employee lifecycle in order to stem attrition, while positioning their organization as an attractive and desirable workplace in the eyes of current and future hires.

For this hire to retire continuum to keep running, the challenge remains if HR executives can make do with their current tools – usually a hodgepodge of internally built HR processes layering op top of different back-end systems that might have gone through extensive modifications to fit their needs. The alternative is look to the Cloud for innovation by zeroing in on best-of-breed HCM applications being developed and continuously improved upon by the HCM Top 500 vendors listed in this report.

HCM Top 500 Customer Use Case

A good example is Mohawk Industries, a Calhoun, GA-based flooring manufacturer recently implemented new HR and workforce management systems in order to better manage its 34,000 employees. For applicant tracking, Mohawk runs iCIMS. For Core HR, it turns to SAP SuccessFactors and for workforce management it uses Kronos. Compared to its old systems, all three vendors have delivered Cloud-based functionality that saves Mohawk time and money, while boosting usability across the far-flung organization covering multiple states and Canada.

The use of SAP SuccessFactors for Cloud-based HCM at Mohawk could save the company at least $1.2 million a year, according to Mohawk executives. In addition, Mohawk decided to migrate from an old iSeries system to the Cloud by adopting the latest version of Kronos in order to exploit real-time workforce analytics and eliminate unnecessary employee overtimes.

Companies like Mohawk requiring high-volume hiring, creating a consolidated view of tens of thousands of employees and their profiles as well as updating their time, attendance and scheduling records on a real-time basis need to rely on a host of purpose-built applications designed to solve specific problems for each of the 22 functional areas in our HCM taxonomy.

Furthermore, some of their problems can best be solved by industry-specific HCM applications like nurse hires at a hospital, contingent labor management at a software company or fatigue risk management for drivers at a logistics service provider. Based on vendor and customer surveys that highlight such industry-specific requirements, we are also splitting the $15-billion market by HCM applications spend across 21 verticals from aerospace to utility.

The makeup of these vendors underscores the rich history of selling tools to automate one of the most important corporate functions since 19th century when the industrial revolution ignited almost uninterrupted economic growth and more recently the Cloud revolution now sweeping across the globe.

The parallel is striking since the former movement drastically reduced the time to market for many companies. Today, the implications of Cloud software delivery for the HCM market are also boosting the trajectory of relatively young vendors like Benefitfocus, Cornerstone OnDemand, LinkedIn and Workday, as shown in Leaderboards 2 and 3 that rank top 10 vendors in the overall HCM apps market and Cloud HCM.

While it took ADP over six decades to become the world’s second-largest HCM apps vendor and the largest payroll solution provider, Workday – capitalizing on widespread adoptions of its HCM applications – has zoomed to become the second largest Cloud HCM player in less than 11 years.

Leaderboard 2 – Top 10 Vendors In Overall HCM Applications Market, 2015

Rank Top 10 in Overall HCM Apps Market 2015 HCM Apps Revenues, $M 2015 HCM Apps Market Share, % Major HCM Offerings Year Founded
1 SAP 1419 10% Core HR, Performance Management 1972
2 ADP 957 6% Payroll 1949
3 Oracle 855 6% Core HR, Applicant Tracking 1977
4 Workday 809 5% Core HR 2005
5 Kronos 711 5% Time and Attendance 1977
6 LinkedIn 688 5% Recruiting 2002
7 IBM 654 4% Performance Management 1911
8 Ultimate Software 516 3% Core HR, Payroll, Time and Attendance 1990
9 SumTotal 360 2% Learning, Core HR 1989
10 Cornerstone OnDemand 270 2% Learning, Performance Management 1999
Other 7745 52%
Total 15041 100%

Source: Apps Run The World, December 2016

As Workday is on track to sign its 2,000th customer in its fiscal year ending January 2017, the 11-year old vendor is closing in on SAP to claim the leadership position in the Cloud HCM applications market.

Leaderboard 3 – Top 10 Vendors In Cloud HCM Applications Market, 2015

Rank Top 10 in Cloud HCM Apps Market 2015 Cloud HCM Apps Revenues, $M 2015 Cloud HCM Apps Market Share, % Major HCM Offerings
1 SAP 862 10% Core HR, Performance Management
2 Workday 809 10% Core HR
3 Oracle 517 6% Core HR, Applicant Tracking
4 Ultimate Software 516 6% Core HR, Payroll, Time and Attendance
5 LinkedIn 410 5% Recruiting
6 ADP 300 4% Payroll
7 IBM 290 3% Performance Management
8 Cornerstone OnDemand 270 3% Learning, Performance Management
9 SumTotal 215 3% Learning, Core HR
10 Benefitfocus 161 2% Benefits Administration
Other 4079 48%
Total 8429 100%

Source: Apps Run The World, December 2016

Leading applications vendors like SAP and ADP that specialize in automating the mission-critical Human Capital Management function are racing to meet an array of domain-specific requirements that mirror the complexity of managing people as demographic shifts and work-life balance are upending today’s working population.

The question is whether these suite vendors are capable of addressing user requirements at a time when the latest innovation in HR from social recruiting to video job interviews is redefining the HCM competitive landscape. What’s at stake is whether suite or best of breed can deliver better usability, or for that matter greater utilization at the workplace and beyond.

For instance, more than a dozen vendors including InterviewStream, Sonru and WePow that specialize in video interviewing solutions are among this year’s HCM Top 500, in addition to segment leader HireVue. The issue is not whether all of them will prevail, but rather their ability to enlarge the pie so that video interviews would become the preferred method to screen candidates for certain employers.

Similarly, new leaders will emerge as different HCM segments continue to expand with growing adoptions of HR software products like contingent labor management for hiring project-based workers at a moment’s notice, continuous employee performance management for gathering real-time feedback, as well as task management for breaking down all kinds of labor activity from preparing food in a commercial kitchen to restocking shelves in a supermarket.

HCM Top 500 By Functional Segmentation

All these developments will result in broadening the HCM applications market at the granular level.  Leaderboard 4 shows the Nos. 1, 2 and 3 vendors in each of the 22 HCM applications segments in 2015. For other key players, follow the links of these 22 HCM applications segments below and access an index page that lists profiles of dozens or more of other vendors that compete in the same segment.

Leaderboard 4 – Breakdown of HCM Applications Market by Segment and Nos. 1, 2 and 3 Vendors in 22 Segments Based on Their Segment Revenues

Primary HCM Group HCM Apps Spend By Function, % As A Percent Of Total HCM Apps Market No. 1 Vendor No. 2 Vendor No. 3 Vendor
Core HR Benefits Administration 4% ADP Benefitfocus WEX Health
Compliance 1% IBM ADP Oracle
Core HR 19% SAP Workday Oracle
Payroll 15% ADP Paycom Paychex
Pension Administration 1% Aquila Oracle SAP
Compensation 2% SAP Oracle SumTotal
Learning 7% SumTotal SAP IBM
Performance Management 4% SAP IBM Cornerstone OnDemand
Succession Planning 2% SAP Cornerstone OnDemand Halogen Software
Subtotal 55% SAP Workday ADP
Talent Acquisition Applicant Tracking 4% Oracle iCIMS IBM
Contingent Labor 2% SAP Upwork Beeline
Marketing 2% LinkedIn IBM Cornerstone OnDemand
Onboarding 2% Ultimate Software IBM Oracle
Recruiting 7% LinkedIn IBM SAP
Sourcing 4% LinkedIn IBM Insperity
Subtotal 21% LinkedIn IBM SAP
Workforce Management Absence Management 3% Kronos Ultimate Software Oracle
Fatigue Management 1% Circadian Fatigue Science Optalert
Task Management 1% Oracle SAP Reflexis Systems
Time & Attendance 11% Kronos ADP Ultimate Software
Time Clock(Hardware) See ARTW Vendor Database dormakaba Kronos Amano
Scheduling 6% Kronos Verint NICE
Workforce Analytics 2% ADP SAP Ultimate Software
Subtotal 24% Kronos ADP Ultimate Software

Source: Apps Run The World, December 2016

Top 10 HR Software Vendors In 22 HCM Market Segments From HCM Top 500 Research

Check the Top 10 HR software vendors in 22 HCM market segment as part of our HCM Top 500 market research. These top 10 vendors are ranked by their latest annual product revenues attributable to that particular market segment. It also summarizes the market outlook and our forecast assumptions at the group level and for that segment, respectively.

Split by Sub-Functional Markets
 Top 10 Core HR and Performance Management Software Vendors

HCM Top 500 By Vertical Segmentation

The worldwide Human Capital Management applications market is evolving across different industries as demographic shifts and the increased dependence on services sectors for job growth are leaving the global workforce in a state of flux.

In 2015, collectively healthcare, retail and professional services accounted for nearly 30% of the total spend in HCM applications given the aging population, growing consumer spending and increasing demand for specialized professional services have all contributed to job growth in healthcare, retail and professional services verticals especially in fast-growing countries like China and India.

Backed by their domain expertise and differentiated offerings, many HCM applications vendors that specialize in strategic verticals are finding accelerated traction.

HealthcareSource has made significant inroads into the healthcare vertical signing up over 3,000 customers primarily hospitals by offering them HCM apps tailored for such requirements as nurse hiring.

For decades, Jeppesen, a unit of Boeing, has been developing specialized workforce management applications such as crew member rostering for airlines. In July 2016, Boeing signed a deal with Microsoft to modernize such applications in the Azure Cloud to drive down costs and boost efficiency for carriers.

In retail and hospitality, HotSchedules has become one of the hottest HCM apps vendors meeting worker scheduling needs of thousands of restaurants.

In professional services, Deltek, which specializes in ERP applications for professional services organizations including thousands of architecture and engineering firms, shored up its HCM offerings by acquiring HRsmart in 2015. Deltek was bought in December 2016 by Roper for $2.8 billion as the latter continued to expand in the professional services vertical following its purchase of Aderant for legal management software in 2015.

Leaderboard 5 shows the Nos. 1, 2 and 3 HCM applications vendors in each of the 21 verticals with SAP, Kronos and Workday dominating 17 industries in 2015. For other HCM Top 500 vendors that cater to specific industries, follow the links of these 22 verticals below and access an index page that lists dozens or more of other players that have built a franchise in that vertical.

Leaderboard 5 – Breakdown of HCM Applications Market by Vertical and Nos. 1, 2 and 3 Vendors in 22 Verticals Based on Their Vertical Revenues

HCM Apps Spend By Vertical, % As A Percent Of Total HCM Apps Market No. 1 Vendor No. 2 Vendor No. 3 Vendor
Aerospace & Defense 1% SAP ADP Oracle
Automotive 2% SAP Kronos ADP
Banking & Financials 8% SAP ADP LinkedIn
Communication 4% Oracle ADP SAP
Construction & Real Estate 4% Oracle Workday ADP
Consumer Packaged Goods 6% SAP Workday ADP
Distribution 5% SAP Ultimate Software Workday
Education 4% Workday Oracle Ultimate Software
Government 6% Kronos ADP Oracle
Healthcare 10% Kronos ADP Oracle
Insurance 4% IBM ADP SAP
Leisure & Hospitality 5% Workday Ultimate Software Cornerstone OnDemand
Life Sciences 2% SAP ADP Oracle
Manufacturing 9% SAP LinkedIn Kronos
Media 2% Workday LinkedIn IBM
Non Profit 1% SAP ADP Oracle
Oil and Gas 3% SAP ADP IBM
Professional Services 9% LinkedIn ADP Kronos
Retail 10% Kronos Oracle ADP
Transportation 4% SAP Ultimate Software Workday
Utility 1% SAP Oracle IBM

Source: Apps Run The World, December 2016

HCM Top 500 By Region

If one maps the current working-age of about 64% to the global population of 7.4 billion, nearly 4.7 billion between the ages of 15 and 64 could be end users of HCM applications. Against this vast group, the segmentation of the worldwide HCM applications market extends across geographies.

While North America accounted for 58% of the HCM applications market, or $8.2 billion in 2015, EMEA was the second largest at 26%, followed by Asia Pacific with 11% and Latin America at 5%, as shown in the left pie chart below.

The pie chart on the right shows the Cloud HCM applications market with similar split with the heaviest concentration in North America at 63%, followed by EMEA at 24%, Asia Pacific at 10% and Latin America at 3%.

Exhibit 1 – Worldwide HCM and Cloud HCM Applications Market By Region, 2015, $M

Worldwide HCM and Cloud HCM Applications Market By Region, 2015. Source: Apps Run The World, December 2016
Worldwide HCM and Cloud HCM Applications Market By Region, 2015. Source: Apps Run The World, December 2016

The same level of distribution can be found among the HCM Top 500 vendors with USA accounting for the most HCM applications vendors at 52%, followed by UK at 9% and Canada at 5%, as shown in the following table with 47 countries being listed in this year’s report.

Exhibit 2 – Country Breakdowns of HCM Top 500 Vendors

Headquartered Countries of HCM Top 500 Vendors Percentage
USA 52.3%
UK 9.2%
Canada 5.2%
India 5.0%
Australia 3.8%
France 2.5%
Germany 2.3%
Netherlands 1.9%
Brazil 1.7%
Sweden 1.3%
Belgium 1.1%
Ireland 1.1%
Singapore 1.0%
China 0.8%
Israel 0.8%
Switzerland 0.8%
Pakistan 0.6%
Poland 0.6%
Turkey 0.6%
Denmark 0.4%
Egypt 0.4%
Hong Kong 0.4%
Japan 0.4%
Kenya 0.4%
Korea 0.4%
New Zealand 0.4%
Norway 0.4%
South Africa 0.4%
Spain 0.4%
Sri Lanka 0.4%
Bangladesh 0.2%
Bulgaria 0.2%
Indonesia 0.2%
Kuwait 0.2%
Latvia 0.2%
Lebanon 0.2%
Luxembourg 0.2%
Malaysia 0.2%
Mexico 0.2%
Nigeria 0.2%
Philippines 0.2%
Portugal 0.2%
Russia 0.2%
Saudi Arabia 0.2%
Slovenia 0.2%
United Arab Emirates 0.2%

Source: Apps Run The World, December 2016

The diversity of our HCM Top 500 underscores the HR continuum that companies are trying to sustain and strengthen, especially those that need to operate in multiple countries. HCM vendors are proliferating around the world to support that strategy.

In the fourth quarter of 2016, SAP announced extending localization support for its payroll products to a total of 40 countries including the additions of Egypt and Oman.

MOVE-IT, on the other hand, is one of this year’s HCM Top 500 vendors with extensive ties to Egypt. With customers in 12 countries including many Gulf States, MOVE-IT said it is considered the first cloud based HR solution with dual language interface (Arabic and English). For any HR executive working in Egypt with more than 80 million people and a growing array of Cloud and HR options, choosing between a big vendor and a local hero will not be an easy decision.

Or take Xceed365 as an example, the Lagos, Nigeria-based vendor has won the support of some of the biggest banks in the country. These tier-one customers prefer to buy from local HCM heroes like Xceed365 capable of delivering extensive support as well as domain-specific in Core HR and talent management products, instead of partnering with others that are not ready to expand in Africa.

For HR executives, managing people is a universal challenge. With the advent of mobile technology and the spread of real-time information in split seconds, not running the right HCM applications may well be untenable at best, or detrimental in the worst-case scenario.

The purpose-built capability of this year’s HCM Top 500 vendors in 22 functional areas and 21 verticals serves as a game-changing reminder that choosing the right solution may well be the best antidote to a global challenge that could get more complicated for companies regardless of their size and location.

Further Readings

The HCM Top 500 report series covers more than 3,000 pages of content, make sure that you don’t miss any of the 500+ profiles by becoming a subscriber. Or you can catch the highlights with the following links:

Methodology

Similar to any of the hundreds of reports that we have published since 2010, HCM Top 500 is a labor of love. Since 2013, our team of researchers have been conducting rigorous research on thousands of HCM vendors, surveying them quarterly, reviewing their products at even shorter intervals because of the compressed Cloud release cycle, and discussing HR vision with their customers to better understand user needs as well as different paths to upgrade and replace their existing systems.

Each year we also attend many industry-wide and vendor-specific user conferences – HR Tech, Dreamforce, SAPPHIRENOW, Oracle Open World, just to name a few, to gauge what customers are looking for.

Throughout this process comes a rich database of more than 2,000 HCM vendors as well as over 50,000 HCM customers that have been touched one form or another through regular surveys, phone and in-person interviews, email exchanges, and social media interactions, etc.

On a proactively basis, we contact the vendors directly to tabulate their latest quarterly and annual revenues by HCM segment, vertical market, revenue type, region, country and customer size.

We supplement their written responses with our own primary research to determine quarterly and yearly growth rates in each of the 22 segments and 21 verticals, in addition to customer wins to ascertain whether these are net new purchases or expansions of existing implementations.

Another dimension of our quantitative research process is through continuous improvement of our HCM customer database, which stores more than one million records on the enterprise software landscape of over 100,000 organizations around the world.

The database provides customer insight and contextual information on what types of HCM, enterprise software systems and other relevant technologies are they running and their propensity to invest further with their current or new suppliers as part of their overall HCM and IT transformation projects to stay competitive, fend off threats from disruptive forces, or comply with internal mandates to improve overall enterprise efficiency.

The result is a combination of supply-side data and demand-generation customer insight that allows our clients to better position themselves in anticipation of the next wave that will reshape the HCM marketplace for years to come.

HCM Market Taxonomy

From hire to retire, HCM continuum extends across 22 markets, 21 verticals
From hire to retire, HCM continuum extends across 22 markets, 21 verticals

Definition of Human Capital Management (HCM) Applications

Core HR and Performance Management
Core HR and Performance Management Description
Personnel & Organization Management Core human resource management system, personnel records, HR master file, accruals, organizational development, org chart visualization
Payroll Payroll processing, tax filing, language support, country-level updates, payslip calculations, automatic deductions and other government requirements for proper disbursement of employee compensation.
Benefits Administration Benefits and health administration. Plan and design benefits lifecycle, billing and payment. Carrier solutions are also included for integration purposes.
Pension Administration Pension and retirement fund(401K) administration as well as software that helps manage profit sharing plan, defined benefit plan, or cash balance plan.
Compliance Compliance, regulatory updates and reporting including such laws as Affordable Care Act, Overtime Regulations, Fair Labor Standards Act
Performance & Goal Management HR performance management applications are designed to automate the aggregation and delivery of information pertinent to the linking of job roles and the mission and goals of the organization. More specifically, the system allows users to automate the performance review process by using mechanisms such as training and key performance indicators to continuously track and monitor the progress of an individual employee, work team, and division. Some of the key features include: Assessment of individual career objectives and organizational skills gaps that impede performance and job advancement. Continuous reviews and establishing milestones. 360-degree evaluation and real-time feedback. Performance appraisal automation. Goal setting and tracking. Employee surveys. Alignment of human assets to corporate objectives. Fast tracks for top performers.
Learning & Development Learning management systems refer to applications that automate the administration, tracking, and reporting of training events. Other tools may include courseware and other delivery, management, tracking, or integrated solutions whose focus is on the learning environment, including learning content management systems. Career development tools include apps for coaching, mentoring, employee development planning, and diagnosing of development needs.
Succession & Leadership Planning Identify and address current and potential talent gaps to create succession management reporting. Develop and maintain a continuous supply of internal talent to fill critical job roles. Improve employee engagement through digital tools to advance career path development opportunities.
Compensation Management Compensation management applications are designed to automate the process of providing cash, noncash, variable and nonvariable compensation to employees through advanced modeling, reporting, and built-in interfacing to payroll processing systems. Other key features include seamlessly manage compensation budgets and allocation in a single, shared tool. Streamline pay recommendation workflows and approvals. Support multiple pay and incentive practices. Ensure budget compliance and adherence to compensation guidelines. Quota and territory management. Calculation and distribution of commissions, spiffs, royalties, incentives to employees, and channel and business partners. Compensation analysis using internal and external data for retention risk analysis. Linking salary, commission and incentives — cash and noncash — to business objectives. Payroll and payment engine interfaces. Account payables integration.
Talent Acquisition 
Talent Acquisition Description
Applicant Tracking Applicant tracking software automates such functions as management of resumes, applicant information, scoring, workflow, matching, search, interview scheduling, job descriptions, EEOC reporting, job postings and notifications
Recruiting Recruiting applications are designed to automate the recruitment process of salaried and hourly employees through screening and skills assessment, as well as automated selection processes to improve hiring pipeline by identifying talent inside or outside the organization. Other key features include: Manage skills inventories. Create and manage job requisitions. Coordinate team collaboration within hiring processes. Video Interviewing, team building and digital coaching.
Marketing Applications designed to attract and engage candidates and employees. Other tasks automate functions such as candidate relationship management apps, career site technology, social recruiting, employee referrals, branding, video engagement, campus recruiting and internal hiring
Contingent Labor Management Processing of hiring of contingent labor, search, skills matching, assessment, interview scheduling, negotiation of rates, approvals, project milestone payments, project completion tracking, performance ratings
Sourcing Facilitate resource planning for staffing firms as well as vendor managed system, allowing for front office integration for employment agencies as well as talent acquisition apps designed for staffing firms.
Onboarding Applications designed to deploy workers to appropriate jobs, projects, or teams for accelerated on-boarding.
Workforce Management
Workforce Management Description
Absence and Leave Management Absence management applications offer automated features to support employee leave management, employer authorized leave, Short-Term-Disability/Workers’ Comp coordination, federal and state compliance, customized leave correspondence, medical certification processing, insurance premium payment tracking as well as employee self-service capabilities. Leave Management supports compliance activities related to government regulations such as the Family and Medical Leave Act in the United States and other local leave laws in different countries.
Workforce analytics Workforce analytics are used to analyze compensation, benefits, and other employee variables. These applications can also be used to analyze and optimize labor allocation for particular projects.
Fatigue Management Fatigue Management apps help automate key facets of fatigue risk mitigation, enforcing employee work-hour limits and aligning with fitness for duty best practices. Similar apps may act as electronic work diaries for real-time reporting and compliance with transportation laws.
Hardware (Time Clock) Time capture is the hardware platform that provides authentication features for clock-in and clock-out times, meal and rest breaks, as well as timesheet and payroll reporting and compliance.
Workforce Scheduling Products are designed to Increase forecasting accuracy by factoring in a variety of methods and historical patterns. Create optimal schedules to meet customer demands, while reducing costs and maximizing resources
Task Management Task Management offers labor management capabilities such as task-based and project-based activity tracking as well as measurement and reporting functions against performance standards like engineered labor standards, team standards and reflective standards.
Time & Attendance Time and Attendance applications are designed to automate employee time tracking in different locations, help reduce overtime expenses, improve payroll accuracy, eliminate pay errors and adjustments, along with the need to simplify and optimize administrative tasks and complex rate calculations by making available accurate and current labor data and full audit trail of payroll data.

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