Hi there! My name is Vitalii Berdichevskyi, I’m a Product Manager. I want to share with you HR Management industry research I conducted in March 2019.
The research is divided in 4 parts:
- Performance Management Software industry research
- HR Management Software business research
- 2020 HR Tech trends
- List of top VC's invested in HR Tech by the Categories
In this essay I want to share with you analytical research for the performance management software industry.
What you will find in the essay:
- Total market and forecast
- Performance Management software market trends
- A collection of handpicked links like industry reports, VC's, TOP influencers in HR tech space and many more
If you are in HR Tech space or plan to launch a product - I hope this information will give you a food for thoughts!
What is performance management?
Performance management software is a technology that helps companies better understand their employees' performance and productivity. It allows leadership and managers to easily track, analyze and evaluate workers, ensuring goals are met or trending issues are addressed preemptively
Total market and forecast
Major takeaways:
- $2.1 billion in 2018 - Value of global performance management software market in 2018
- $5.6 billion by 2026 - how much market expected to generate by 2026
- 12.8% - CAGR between 2019 and 2026
Performance Management Trends
1. Performance and engagement need to work together
- Problem - since the 2008 recession, productivity has (at best) stagnated
- Labor productivity in the US is higher than average in the European countries. Nonfarm business sector labor productivity increased 1.2 percent in the fourth quarter of 2019
Source: Bereau of Labor Statistics USA
- 85% of employees worldwide are not engaged or are actively disengaged in their job
(source: Gallup)
- Only 10% of employed Western Europeans are engaged at work; by comparison, the figure among U.S. employees is more than three times as high, at 33%
(source: Gallup)
2. Managers need more time to manage their people
- Managers are responsible for 70% of the variance in employee engagement
(source: Gallup)
- 92.3% of the respondents in ClearView’s Performance Management Report said that performance management was a critical area they need to address in the next 12 – 18 months (source: ClearView)
- The problem is that managers don’t have enough time due to their overload. Concerns from HR directors and CEOs over the availability or capability of their team leaders to act as coaches (Source: ClearView)
- Technology contributes to this. On-boarding, which might historically have been seen as an HR function, is now often delivered through technology under the guidance of the line manager (Source: ClearView)
3. HR isn’t moving as rapidly as we might think
- Results of the poll among 300 HR leaders with question how they are currently managing performance at their own organisation: 28.3% said they were using a continuous model of some kind. 1% were using nothing at all. The remaining 70.7% were either still using annual appraisals or were looking for the right continuous model to move to (Source: ClearView)
4. Employee-centric organisations will have an edge
- Employee-focussed tools - give people the chance to express their own feelings about the workplace. Iit could be as simple as a suggestion box, or a Slack channel, or a dedicated email address (source: ClearView)
- User-friendly tech approaches - if something isn’t simple and intuitive, it can get in the way of user adoption: (sourse: ClearView)
- Employee-centric thinking - for example appraisals which primarily developed not for the benefit of the business but for benefit of the employees: provide a bonus or pay rise (source: ClearView)
Challenges the companies have and HR tech companies could solve:
- How can we recruit strong candidates when unemployment rates are so low?
Hint: The research was conducted one week before I got statistics how COVID-19 affected the unemployment rates. A total of 3.28 million people filed for unemployment insurance in the week ended March 21. It rose from 281,000 the previous week. COVID-19 was a black swan and could affect the demand of job boards.
(Source: Bloomberg, US Department of Labor).
- Why does our candidate experience still lag despite our cool new interactive recruiting page, YouTube recruiting channel and automated email response tools?
- Can I hire freelancers instead of full-time staff, and where do I find them?
- How are we supposed to reskill an entire workforce when we don’t know what skills they are going to need?
(Source: Workforce)
A collection of handpicked links I used in the research
Below is the link to handpicked resources I have used in Google Sheet format.
What’s inside:
- Articles
- industry reports
- List of top HR tech influencers and many more.
To use filters you can easily make a copy of the file and save it to your Google Drive.
Summing it up
- $2.1 billion in 2018 - Value of global performance management software market in 2018
- $5.6 billion by 2026 - how much market expected to generate by 2026
- 12.8% - CAGR between 2019 and 2026
- North America holds a major revenue share of global performance management software market.
- Key market drivers: the emergence of cloud computing services and the need for real-time feedback to drive employees' engagement
P.S. If you have any questions about the research or are in love with creating products - please feel free to ping me on Facebook or LinkedIn.
Previously published at https://lampovoeit.space/performance-management-software-industry-research-part-1-4/