Market Scenario

The GCC HR tech market was valued at US$ 2,557.3 million in 2023 and is projected to hit the market valuation of US$ 5,483.5 million by 2032, at a CAGR of 9.05% during the forecast period 2024–2032.

Digital transformation, efficient talent management systems, and cloud-based solutions are some of the factors that have caused HR tech market in GCC to thrive. Many organizations, in the region have adopted advanced-feature-packed HR tech solutions. What AI does for hiring is it makes it easier. Whereas, business performance is fostered by employee engagement analytics alongside performance management tools. With remote working becoming more common during the COVID-19 pandemic, there was need for further digitizing HR processes that focused on managing staff outside office premises as well as their well-being too. This is where cloud-based human resource solutions come into play because they enable one access data from anywhere at any time. Cloud computing has made accessing human resource data easy since end users can do so from anywhere at any time. HR technology serves many functions within organizations based in GCC.

AI-powered recruitment platforms have revolutionized talent acquisition by making it faster and more accurate through sourcing, screening and selection of candidates. There are specific systems designed to assist employees acclimate themselves with new environment in the HR tech market. Healthy work cultures are promoted. Thus, increasing staff productivity when they use feedback mechanisms that come along with a rich performance management module included in an HR system Another function handled by these programs is enabling personal growth among workers through effective learning and development initiatives. It also helps managers make better decisions relating to their teams such as knowing who needs coaching or mentoring most among others.

The future of HR technology market within GCC countries seems promising if businesses continue focusing on improving employee experience by streamlining operational efficiency driven by insights derived from data analysis. As machine learning and predictive analytic technologies are integrated into various systems within an organization, we expect further advancements being made in how different human resources activities take place. Today, several enterprises across the region are utilizing bigdata inputs to select talents wisely. Thereby, driving overall success rates higher. 

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Market Dynamics

Driver: Rising Demand for Automation Across Enterprises

The GCC HR tech market’s increasing requirement for automation among enterprises is acting as a major driver of HR tech growth. Moreover, the market is also being fueled by the adoption of HR technology solutions like cloud-based human capital management (HCM) software suites. These types of solution offer an extensive range feature such as talent management systems, recruiting software, performance management systems and workforce analytics tools which meet changing organizational needs within the region. Seventy percent (70%) of GCC companies plan to invest in HR tech to improve their talent management capabilities according to our research findings thus highlighting how important automation has become in HR processes.

The HR tech industry is expanding rapidly in the Gulf Cooperation Council due to increased job opportunities created through digital transformation initiatives by organizations. For example, United Arab Emirates alone had more than 1133 technology related jobs advertised on various online platforms in 2023 alone which shows that there were many positions available for people skilled in these areas. This surge reflects growing demand for skills required to work with automated systems or even manage them while working with others’ data thus necessitating this expertise within this geography’s labor market. Another trend gaining momentum is integration around HCM platforms where companies want their systems talking seamlessly between different HR functions at once so they can have all necessary information about employees easily accessible. Thereby Oracle HCM Cloud being one such system in the GCC HR tech market that allows core HR functions alongside talent and workforce managements on same platform hence automating most if not all activities performed by department staff members while SAP SuccessFactors has been adopted dans intend drive efficiency across its entire operation through advanced use of technology especially those touching on employee records keeping.

Trend:  Integration of Robot Process Automation (RPA)

A main trend that is shaping the HR tech market in GCC is the integration of Robotic Process Automation (RPA), which has been identified as one of the many key drivers for HR tech growth. This increase has been fueled by a need to be efficient and innovative in human resources solutions. RPA simplifies operations within HR departments thereby making them more effective as well as innovative according to an HR technology report. Through this automation, organizations are able to optimize their processes relating to staff management while at the same time improving general operational efficiency.

The potential for transformation possessed by RPA has attracted many businesses operating in GCC countries because it represents technological convergence with HR practice. Therefore, it is becoming among major catalysts behind software development for human resource management systems. According to studies, there will still be 98% firms using artificial intelligence tools within few months henceforth in this region alone. These numbers in the GCC HR tech markets are driven by data which shows that most enterprises use AI-driven approaches so that they can anticipate talent requirements ahead of time. Also, about one third of establishments have invested heavily on cloud deployed HCM (human capital management) showing acceleration towards more investments into technology.

The adoption of robotic process automation into different functions under human resource management stands out as a game changer across all industries not just those related with IT sector but also outside it since such kind like move marks another transformative shift point concerning how things are done vis-à-vis what was previously known or practiced even if only limited locally may apply globally too at some stage where necessary again depending on context.

Challenge

Talent Acquisition and Retention: A Critical Challenge Facing HR Tech in the GCC 

Talent acquisition and retention are the two major issues that HR tech market in the GCC is currently facing. This shows how volatile the technology labor market of this region is. There has been an influx of millennials into organizations coupled with rapid technological changes. Hence, companies have found it hard to attract as well as keep specialized talents especially in areas like software development, data science and cyber security. It was discovered that 68% percent of businesses in GCC states lack enough qualified staff which they consider a major recruitment problem.

According to World Economic Forum figures which reveal that by 2024 there will be 250% more demand for data analysts and scientists in Middle East; we can see that there is increased competition for these professionals too. Organizations therefore need urgent HR tech innovations that would not only simplify talent acquisition but also improve retention strategies since such skills are much sought after now. At the same time, expectations among millennial workers who value career growth opportunities, work-life balance and jobs with purpose could make talent keeping even more difficult in this part of world.

Segmental Analysis

By Application

Due to the shift from integrated talent management to the concept of talent experience, it is not surprising that The Talent Management segment commands the largest share (56.17%) in GCC HR Tech market. Essentially, this means changing HR software and practices so that they become more helpful, productive and meaningful. The traditional integrated talent management systems have been seen as old fashioned for quite some time now; hence talent experience vendors are coming up and disrupting the talent management market. What mainly triggers this switch is developing an experience software which will improve overall employee engagement as well as satisfaction with work therefore such kind of a system must be designed having in mind new expectations about labor among other things.

Moreover another thing which should never be ignored is that soon companies will need staff capable of working with AI systems while at the same time being able to manage them but still this problem cannot be solved by simple solutions because already there were many changes before even current technological wave came into place so what does it mean? This implies among other things that more advanced adaptive workforce planning tools would be required too.

The Workforce Management segment is projected to grow at the fastest CAGR of 9.5% in respect to GCC HR Tech market due several factors. Firstly, increased demand for automation at workplace level where businesses are looking forward towards automating most processes has led into realization that there are higher chances achieving business objectives if only some tasks can be automated; therefore, this need comes with another one being more data driven decision making process within organizations. This is because analytics enable managers identify operational gaps that might be there among employees which in turn leads to improved business outcomes hence fueling demand for workforce analytic tools.

By Type

The outsourced segment holds the highest share of 75.52% in the GCC HR tech market. The market is being driven by the increase in adoption of artificial intelligence and machine learning. These systems are used by service providers to streamline HR processes, making them efficient enough for organizations that want new talent approaches. Moreover, recruitment processes have become more scalable through digitization which is assisted by improved HR tech while making them attractive to executives at the C-suite level who decide on whether or not to outsource. This aligns with CEO’s and CHRO’s need for headcount flexibility especially during periods of fluctuating demands in recruitment. Besides this trend also increases workforce analytics focus as well optimization thus forcing companies into partnering with other firms specialized in these areas hence realizing that they lack such skills internally therefore bringing them on board through outsourcing some if not all HR processes. All these factors emphasize the importance of GCC based outsourced GR technologies which can completely transform traditional methods.

The GCC HR Tech market is experiencing its highest growth rate within the in-house segment where it is projected to keep growing at the fastest CAGR of 8.43%. Technology has been adopted quickly across enterprises leading to many jobs being created and this is what driving up demand for software in this area too. Again, there’s also another reason why people are purchasing more programs which deal with human resource management and that involves automation; businesses want everything done automatically without any manual intervention so they can save time but still maintain a good working environment. Technological advancements have rendered most traditional solutions useless hence necessitating further investment into such platforms since they drive operational efficiency within organizations themselves rather than relying entirely upon external agencies or vendors only – thereby reshaping how things were done before altogether.

By End Use Industry

The Information Technology (IT) segment holds a high share of 22.41% in 2023 and is experiencing the fastest growth at a CAGR of 9.47% in the GCC HR Tech market during the forecast period. The market is growing because of the wider use of advanced technologies like artificial intelligence and machine learning. These are being used to streamline HR processes thus attracting organizations interested in new ways to hire, manage and keep their talents. This also makes these procedures more scalable and appealing for enterprises by digitizing them through HR tech advancements. Such a move corresponds with the requirement for flexible HR solutions that can quickly adapt to changing business needs and market dynamics as well.

Moreover, technology projects related to cybersecurity or data management where governance remains uncertain have begun aligning themselves towards organizational goals in the HR tech market. Thus, creating demand for IT solutions within HR space. Among other factors driving this growth include; Cloud Solutions Investment in GCC Region as well as Increased Demand among SMEs & Startups for IT Services which has led to exponential rise in size of Information Technology segment within Human Resource Technology Software Market across the globe including but not limited to Middle East region. For instance; many startups dealing with HR technology have received huge amounts of money meant expand their operations within this area so as cater for rising demand not only locally but also internationally. 

By Company Size

The segment with greater than 5k employees holds the highest share of 45.1% in 2023 and is growing at the fastest rate of 9.24% in the GCC HR Tech market. There are many challenges that large companies with more than 5,000 employees face in their human resources departments. Hiring, onboarding, payroll, benefits administration, performance reviews and more need to be managed efficiently and for this there must be some strong software solution. With the increasing size of their workforce, businesses have to invest much into new HR software programs; about 57% of them within the next year and a half alone. These are multi-faceted problems – automation carries out redundant administrative tasks so that HR staff can concentrate on strategic undertakings such as drawing high-quality applicants or managing employee relations during orientation periods etcetera; Zenefits does all these things plus many others automatically across its over 10k client firms where it serves more than four hundred thousand workers.

Modern labor laws compliance is another reason why modernizing human resource technologies is essential in the GCC HR tech market especially those used by enterprises based in countries like UAE, Qatar etcetera which form part of GCC region where various legislations govern different aspects concerning employees’ rights vis-a-vis employer responsibilities. Studies reveal that large businesses which lag behind others in terms revenue growth tend do poorly when it comes talent retention, so they should take advantage more technology-driven insights derived from predictions within systems towards improving strategies related staff’s retention too. 

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Country Analysis

Saudi Arabia holds the highest market share of 48.16% in the GCC HR tech market due to several significant factors. Saudi Arabia is unique in the GCC region because of its huge economy and workforce. The GDP of this country was $834.1 billion in 2022, accounting for almost half of that in all GCC countries. Therefore, there should be created good HR tech solutions to manage such a large number of employees who work – over 13,8 million people. There are some factors which contribute to the development of hr technology sphere within Saudi Arabia. One thing can be mentioned here – government’s effort towards digitalization which is part and parcel with Vision 2030.It primarily depends on how much you read into it but I would say that another important driver for HR Tech growth in KSA would have been keeping up with changing labor laws; this is especially true following the various reforms enacted by Saudi Arabia over the last few years including but not limited to introduction WPS etc. In addition to these measures however what has helped foster wider adoption among businesses across different sectors has been allocation more than $6.4bn towards ICT initiatives as this supports local companies/providers & also gives foreign direct investment opportunities. Compliance with new regulations may incur hefty fines hence need them having an integrated system through their organizations’

HR managers in the GCC HR tech market often complain about their time being taken up by routine tasks such as handling paperwork or answering frequently asked questions from employees. Cloud-based HR solutions are becoming increasingly popular because they automate many of these processes and can be accessed remotely at any time. Cloud HR tech spending is projected to grow faster than the average rate for cloud technology adoption within Gulf Cooperation Council countries (GCC).One reason why companies might want cloud based software systems could be due too its scalability since when a company grows it may require more storage space thus requiring them upgrade servers which will cost lot money .Considering that FDI reached record highs last year one would expect multinational firms entering market bring global best practices backed cutting edge software solution especially areas like talent management where some multinational companies have sophisticated tools in place to attract retain top talents. Investments were made into start-ups worth $548 million dollars during 2021 alone so we can see that there is an appetite for new technology. Some of these organizations are looking for systems that cater specifically towards local market needs especially within HR functions.

Saudi Arabia HR tech market has a large youth population, and talent management is therefore crucial for businesses in this country. In fact, recruitment is one of the areas where Saudi companies plan to invest most heavily in HR tech according to recent surveys. Recruitment process can be time consuming expensive, therefore companies should find ways automate ensure best fit hires are selected such roles. Recent studies have shown significant correlation between engagement profitability / productivity so organizations want applications which foster employee engagement. Finally Saudi government was ranked first among governments globally ready AI adoption rankings; hence it would not come as surprise if organizations began adopting AI powered tools for resume screening onboarding hr analytics decision making.

Key Players in GCC HR Tech Market

• SAP SE
• Oracle Corporation
• Automatic Data Corporation (ADP), Inc
• Cornerstone OnDemand, Inc.
• Ceridian HCM Holding Inc.
• Infor, Inc.
• Cegid Group
• The Access Group

Recent Developments

• In November 2023, Indian GCCs' strategic evolution towards AI-Powered Growth Engines.
• In October 2023, Rierino and Maven Insights revealed their collaborative alliance aimed at advancing smart technology-driven digital transformations within the GCC region.
• In October 2023, an exclusive interview featured PeopleStrong's Group CEO Pankaj Bansal discussing Wheebox's acquisition by ETS.
• In September 2023, GCCs are transitioning from traditional 'Back Office' setups to a unified 'One Office' structure.
• In Aug 2023, Talents Arena secures a pre-Seed round of $750,000 in funding.

Market Segmentation Overview:

By Application

• Talent Management
• Payroll Management
• Performance Management
• Workforce Management
• Recruitment
• Others

By Type

• Inhouse
• Outsourced

By End Use Industry

• TTH (Travel, Transportation, and Hospitality)
• Public Sector
• Healthcare
• Information Technology
• BFSI
• Others

By Company Size

• Less than 1k Employees
• 1k-5k Employees
• Greater than 5k Employees

By Country

• Saudi Arabia
• UAE
• Qatar
• Bahrain
• Kuwait
• Oman