Key Findings & Highlights:

NelsonHall’s market analysis of the Cloud HR Transformation Service market  consists of 67-pages.

2020 became a survival and recessionary year, where organizations experienced greater cost pressures as a result of :

• Fluctuating business volumes and associated staffing needs due to uncertainty/lockdowns
• Significant legislative changes and increased operational costs
• Health challenges resulting in unprecedented absence rates, reduced labor force participation, travel disruption and difficulty attracting hard-to-fill roles
• Continued mandated working from home  (WFH) for long periods resulting in a greater need for digital services, technology, and automation, reducing the dependency on personnel to support volume changes and scale as well as supporting the new WFH model.

Employees experienced increased mental stress not helped by many additional family/financial pressures, despite this, there was also an overall increase in productivity. Society also saw a widening  of inequalities and movements to address DE&I, climate and social responsibility gained greater traction across many organizations and communities

Over 2021 and into 2022 organizations will strive to deliver workforce safety, workforce productivity with the latest digital tools, security and better manage cost containment. Expect increased M&A activity in 2022 and improved growth rates as companies have revised their strategies and are consolidating to support scale. Restructures & M&A activity will create greater demands on the HR function to manage change and organizational agility.

Key industry market developments include:

• In 2020, the global cloud HR transformation services market was estimated at $6.6bn, with cost, process improvement and superior employee experience the primary drivers. Transformative client agendas are increasingly addressing skills gaps as part of the business needs. The majority of MPRHO clients have now migrated to Cloud HR platforms, with less than 5% of the market represented by on-premise HCM solutions
• Just over half of the Cloud HR Transformation Service market comprises payroll-related revenues that are bundled into HR service contracts. HR services bundled with HR Transformations are typically only one or two service towers, payroll being the most common tower
• Providers offering a global HR service increasingly have a technology agnostic approach. and are looking to drive portal solutions that deliver a consistent experience across platforms. Vendors that have a technology preference tend to have a country or regional focus
• Buyers select cloud HR transformation services vendors primarily based on their cost-effectiveness and their technical and process expertise to support the client environment
• Growth through acquisitions over 2020 focused on European geographical expansions
• Vendors continue investing in automation and chatbots, however, the use of chatbots across buyers is nascent across the industry.