Part
01
of one
Part
01
What is the total addressable market for people analytics worldwide?
Hello! Thanks for your question about the total addressable market for people analytics worldwide. The most useful sources I found to answer your questions were the "Workforce Analytics Market", "Deloitte's People Analytics" and "The Future of HCM." After searching extensively, I was able to find only one source that addressed the total addressable market of people analytics, and this source focused mainly on small to medium sized businesses. This source estimates that the TAM for people analytics is 178.4 billion USD. I was not able to find any other data that could help in triangulating the TAM of people analytics worldwide. This is because market analytics and industry reports list analytics for HR under many names, and often categorize them in reports with business analytics overall, not just those analytics used in HR. However, I was able to find a good deal of closely related information that I believe will be valuable for your project. Below you will find a deep dive of my research / findings along with all the details for how I came to this answer.
METHODOLOGY
I began my search by researching your query under a number of names, including: People Analytics, HR analytics, Talent Analytics, Workforce Analytics, and Human Capital Management, all of which I found, through my research, to be various names that covered the use of analytic software by human resources in businesses. I looked through a variety of sources, including third party market analysis websites, academic databases, corporate websites, industry reports, and trusted media sites, in an attempt to find or triangulate the total addressable market of people analytics globally.
THE PEOPLE ANALYTICS MARKET
According to Markets and Markets, "the global workforce analytics market stands at USD 422.5 Million in 2015, and is expected to grow at a CAGR of 15.3% during 2015-2020." By 2020, the global market for workforce analytics is expected to be approximately 860 Million USD. As well, Markets and Markets predicts that "North America is expected to have the largest market share and dominate the workforce analytics market from 2015 to 2020, due to the presence of a large number of analytics vendors. Asia-Pacific (APAC) offers potential growth opportunities."
As for the total addressable market, it is hard to find an exact number of or data on businesses globally that are primed for the people analytics market. However, there are a number of closely related statistics that shed light on to potential growth and current trends.According to research cited by Forbes, only 4% of HR departments are really using any form of predictive analytics. And, according to Deloitte's Human Capital Report, the number of people "using data to predict performance" increased 125% between 2015 and 2016. As well, an astounding 92% of businesses said they believed they were not optimally organized for success.
The Starr Conspiracy Intelligence Unit estimates that the total addressable market (TAM) for Small to medium sized business, or SMB, (which they define as fewer that 2,500 employees, and estimate make up 60% of the US workforce) Human Capital Management (HCM) is huge — $95.3 billion. "Although HRIS and talent management grab most of the headlines, we see the biggest opportunities is in core HR — benefits ($33.5 billion), compliance ($20.9 billion), and payroll ($26.8 billion). Furthermore, we believe that the SMB is larger than the enterprise market by $12.2 billion." The SCIU estimates the total addressable enterprise market at 83.1 Billion USD. Combined with the SMB TAM of 95.3 billion USD, we get a total of 178.4 Billion USD.
There are some limits to these estimations, however. The article never specifies whether this information is just for the United States, or globally. As well, it should be noted that the article does not discuss where its data came from or how it came to these numbers. However, based on the supporting statistics, that suggest that the few companies overall currently use HR analytics, while many companies increasingly feel the need, this data feels appropriate.
CONCLUSION
According to data from TSCIU, the 2016 TAM for people analytics (referred to in that specific article as Human Capital Management) is 178.4 Billion USD. Much of this opportunity for growth lies with small to medium sized businesses. Currently, only 4% of businesses of all kinds (including enterprise) are using any form of predictive analytics.
Thank you for using Wonder! Let us know if we can help you with anything else and have a great day!