HR Analytics Market Size

HR Analytics Market Size

HR analytics market was valued at USD 3.7 billion in 2023 and is projected to register a CAGR of over 13% between 2024 and 2032. The industry is driven by the increasing demand for talent retention and succession planning across organizations. HR analytics helps optimize HR operations, reducing recruitment costs and improving workforce productivity. By analyzing data, companies can allocate resources more efficiently and achieve a higher return on investment (ROI). With changing labor laws and regulations, organizations need to comply with various HR-related legal requirements.

For instance, the general data protection regulation (GDPR) is an EU regulation that aims to protect the privacy rights of individuals. It applies to businesses that collect and process data related to individuals residing in the EU, regardless of where the business is located. HR analytics tools can assist in ensuring compliance with such employment laws and regulations, thus, contributing to market growth and popularity.

HR analytics can help identify employees at risk of leaving the organization and determine potential successors for key roles. These insights help develop targeted interventions to keep these employees engaged and motivated while developing succession plans that ensure that the organization has the right people in place to meet its future needs. A study by the Society for Human Resource Management found that organizations that use HR analytics are more likely to have effective succession plans. The study also found that these organizations are less likely to experience unplanned turnover.

However, companies with diverse workforce structures, multiple locations, and varying HR practices often find it difficult to consolidate and analyze data effectively. Besides, the absence of standardized HR metrics and benchmarks made it challenging to compare HR analytics results across different organizations and industries.