The Global Compensation Management Software Market is estimated to reach $2.3 million by 2025, growing at a CAGR of 8.6% from 2020 to 2025. Planning and executing a compensation strategy along with automating budget and pay tracking is ensured by compensation management software. In an organization variable pay programs for instance bonuses, merit, stock and equity are administered using compensation management software. Many compensation management software provide modeling and analytics as well owing to which they are widely adopted in multinational organizations and small organizations as well.
The rise in growth of IT sectors, rise in demand for compensation management software owing to its wide range of features for instance salary and commission tracking, forecasting &approval workflow, executive compensation, salary review and policy among others along with vendors focusing and providing compensation management software intelligence to guide compensation decisioning and others are driving the growth of the market.
Rise in adoption of compensation management software in enterprises to fairly pay their employees, track and budget their financials are driving the growth of the market.
The cloud based deployment is dominating the market owing the surge in cloud computing globally along with rise in internet penetration. This upsurge in cloud networking is boosting the growth of the market.
North America is witnessing a significant growth in the market owing to the rise in industrialization and IT sectors.
By Deployment- Segment Analysis
By Deployment Compensation Management Software Market is segmented as cloud based and on-premises. Cloud compensation management software is witnessing a significant growth in the market. In the recent years cloud computing is becoming an essential tool of organizations ranging from small to large. The cloud compensation management platform allows the organizations to manage their online assets from a single platform without having any extra hardware or software access in computer devices. Ease of installation, ease of use, flexibility and adaptability, security and many others are some of the benefits of cloud compensation management software. Wide range of flexibility in terms of customization and integration are allowed by cloud based content management systems. According to American Bar Association, cloud usage bumped from 55% in 2018 to 58% in 2019 globally. In large enterprises average number of cloud applications used by each employee is 36. These factors are driving the growth of the market.
By Organization size – Segment Analysis
By Organization Size the market is segmented into Small and Medium Organizations and Large Enterprises. The Small and Medium enterprises are dominating the market owing the rise in new enterprises, wide adoption of compensation management software in these small and medium enterprises along with wide use of cloud computing by enterprises. According to the World Bank, 90% of business is represented by the small and medium enterprises. In the emerging economies 40% of the national income (GDP) is contributed by the SMEs. In these SMEs the compensation management software enables the hierarchies to manage their work processes easily for instance hiring employees, status, payroll, wages, bounces, performance management and others. Furthermore, the compensation management software allows these organizations with incentive planning along with timely execution of compensation.
By Geography – Segment Analysis
The Global Compensation Management Software is dominated by North America by a market share of 39.1% in 2019. In North America the growth of industrial sectors along with the presence of major key players are contributing the growth of compensation management software Market. According to the World Economic Forum, United States witnessed a growth of 16.6% in global manufacturing output in 2018. Owing to the growth in manufacturing sector there is a demand for compensation management software platform to manage and track the records of the workers in these manufacturing sectors. These factors have driven the growth of Compensation Management Software Market in North America.
Drivers – Compensation Management software Market
Rise in the growth of cloud computing in enterprises applications:
The growth of IT and telecommunication industries have led to the growth of cloud computing owing to which cloud based compensation software platform is increasingly adopted by organizations. According to the International Trade Administration In 2018, 50% of enterprises with more than 1000 users are using products provided by Cloud Access Security Broker (CASB) to monitor and manage their use of software as service and forms of public cloud in United States. The use of cloud computing has increased in recent years at a global level owing to the enhanced flexibility and scalability which has enabled the enterprises with well-organized compensation management software platform through which employees work related data can be tracked and they can further be rewarded with incentives. The cloud managed services are best suited for use in the various IT firms due to their high speed internet and cost effectiveness. Owing to this public cloud, private cloud and hybrid cloud technologies are accessed by the servers of the various organizations. Owing to these benefits there is surge in adoption of cloud computing thereby driving the growth of the market.
Growth due the rising number of new enterprises along with growth of internet penetration:
The growth in new enterprises is also contributing the rise of compensation management software. The compensation management software provides enhanced data security owing to which it is adopted in the new enterprises. Improved retention, better employee engagement, user friendliness and others are some of the features of compensation management platform due to which it is chosen by the organizations for their growth and development. The penetration of high speed internet is one of the predominant factors affecting the growth of the market. Owing to the presence of high speed internet connectivity cloud computing has witnessed significant growth. Most of the compensation management software are procured by the organization in the cloud due to the presence of high speed internet. These factors are fueling the growth of the market.
Challenges – Compensation Management software Market
COVID-19 Pandemic resulting in great loss of economy, globally:
More than half of the SMEs globally are facing severe losses in revenues in the recent year. Owing to the COVID-19 pandemic many of the SMEs are not hiring employees due to which the employee count of the SMEs have declined. According to OECD, 43% of the responding businesses are temporarily closed and most of the businesses reduced their employees by 40%. Owing to this the compensation structures are a leading issue for human resource department in companies. Compensation packages are limited as most of the small business budgets are limited in nature. These factors have hindered the growth of the market.
Compensation Management software Market is dominated by major companies such as SAP Success Factor, Oracle Corporation, CuroComp, Ultimate Software, Workday,INC., CultivatePeople, People Tricker, Secure Sheet, HR ToolBench among others.
July 2, 2020- Cultivate People launched new compensation software named Kamsa. The software provided planning and budgeting the pay to the enterprises.
December 2, 2019- APEX HCM launched MyGo mobile app. This app is for iPhone and Android phone. This app enables Human Resource and payroll information in the mobile.