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Compensation Software Market Overview
Shift toward data-driven decision making, increasing need for efficient compensation policies and talent retention models, and growing focus on automating pay-scale management processes are some of the key factors supporting the growth of the compensation software market across the world. Compensation software solutions centralize data from all talent management processes and allow organizations to plan and execute a compensation strategy for its employees. Organizations are increasingly deploying these solutions to view and alter related policies, if required, and efficiently plan rewards, bonuses, and promotions for their employees.
The compensation software market has been categorized into large enterprises and small & medium enterprises (SMEs), based on enterprise, of which large enterprises held the larger market share in 2019. This can be attributed to the ability of such enterprises to make considerable IT investments for the deployment of compensation management software. Moreover, large enterprises generally have dispersed operations across several locations, and this requires them to deploy pay-scale management solutions to efficiently handle and maintain data of a large number of employees.
The market has been divided into on-premises and cloud models on the basis of deployment type. Of the two, the cloud category is expected to witness faster growth in the market during the forecast period (2020–2030). Cloud deployment offers higher scalability and speed, in addition to facilitating 24X7 services and enhanced management capabilities. Moreover, as cloud deployment does not require any hardware investment, it helps reduce the operational expenditure of companies.
The market, on the basis of vertical, has been categorized into banking, financial services, and insurance (BFSI), manufacturing, information technology (IT) & telecom, healthcare, education, energy & utilities, government, retail, and others, which include automotive, hospitality, oil & gas, entertainment, and logistics. Of these, BFSI held the largest share in the compensation software market in 2019. With the increasing focus of financial organizations on talent scouting and employee engagement for optimized performance, the demand for compensation management solutions among them is growing for the formulation of incentive plans that align with their strategy. These solutions help such organizations in retaining employees and increasing productivity.
Geographically, North America led the compensation software market in 2019, and this can primarily be attributed to the presence of numerous large-scale industries with a highly skilled workforce in the region. In addition, increasing IT spending and technological advancements are the factors supporting the growth of the market in the region. In terms of growth, APAC is expected to be the fastest-growing market for the software during the forecast period. This can be mainly attributed to the escalating IT investments by enterprises in developing countries, primarily China and India, for improved operations. Furthermore, countries in the region are promoting digitalization and introducing various initiatives for developed IT infrastructure, which would further support the growth of the market in the region.
Compensation Software Market Dynamics
Growing focus on automating pay-scale management processes is one of the key factors supporting the growth of the compensation software market worldwide. Compensation planning is an essential element of any successful business. Strategic pay-scale decisions can help organizations increase workforce engagement, employee retention, new talent acquisition, and productivity. Manual calculation and tracking of employee pay grades take a significant amount of time and can lead to errors as well. Thus, companies are increasingly adopting compensation management software for streamlining and automating their compensation activities with minimal chances of error.
The software offers several features, including review and reporting tools, automated budget controls, manager decision support, and centralized planning dashboard, which make it easy for HR personnel to make accurate and timely pay-related decisions.
Compensation Software Market Competitive Landscape
Due to the presence of a large number of market players, the global compensation software market is highly competitive in nature. In recent years, players in the market have taken several strategic measures, including mergers and acquisitions, partnerships, and product launches, to strengthen their foothold.
Some of the key players operating in the market are Oracle Corporation, PayScale Inc., SAP SE, The Ultimate Software Group Inc., International Business Machines Corporation, Automatic Data Processing Inc., beqom SA, BullseyeEngagement LLC, PeopleFluent Inc., Kronos Incorporated, Paycom Software Inc., and Workday Inc.
The report also provides a country-wise analysis. Some of the major countries covered in the report are the U.S., Canada, Mexico, Brazil, the U.K., Germany, France, Italy, Spain, Russia, China, Japan, India, South Korea, Australia, South Africa, Turkey, the U.A.E., and Saudi Arabia.
Market Size Breakdown by Segment
The compensation software market report offers comprehensive market segmentation analysis along with market estimation for the period 2014–2030.
Based on Offering
Based on Enterprise
Based on Type
Based on Vertical