Market Trends of GCC Human Capital Management Software Industry
E-learning and E-recruiting Application Segment Holds Significant Market Share
- E-learning and e-recruiting applications include candidate management, applicant tracking, candidate evaluation, onboarding, job training, and talent management. The shift toward digital advancement and remote work culture accelerated the adoption of e-learning and e-recruiting solutions among GCC regions. As more employees work remotely, organizations are investing in online learning platforms to provide training programs and develop the skills of their workforce. E-recruiting applications in HCM software enable remote hiring processes, various job postings, candidate assessments, and onboarding, making talent acquisition seamless regardless of location.
- An evolving business environment requires employees to adapt to new technological processes and market trends. E-learning applications support agile learning methodologies, allowing organizations to deliver short-focus training modules that address immediate skill needs. Hence, these approaches enable rapid skill acquisition and empower employees to learn on the job, reducing time to competency for new skills and initiatives.
- The government sector is expected to hold a substantial market share due to increased government initiatives. For instance, in April 2024, the Dubai Government Human Resources Department and Hamdan Bin Mohammed Smart University signed a Memorandum of Understanding, establishing a roadmap for cooperation. The partnership spans various areas, including research, specialized studies, and training. Its main aim is to encourage exchanging and enhancing knowledge and skills and to foster institutional communication channels and community benefit initiatives.
- In January 2024, Saudi Minister of Human Resources and Social Development Ahmed Al-Rajhi recently issued a ministerial order obliging private sector businesses with 50 or more employees to provide cooperative student training. Such developments will create significant growth in demand for human capital management software for e-learning applications in companies.
- GCC countries are witnessing a decline in their unemployment rate. For instance, the youth unemployment rate in Oman was 6.9% in 2023, which was 13.55% in 2020. Additionally, youth unemployment in Saudi Arabia was 15.6% in 2023 and 29.5% in 2018. This trend is followed by other GCC countries as well. This is due to the government's initiative to stimulate job creation and support entrepreneurship. As the number of jobs continues to increase in these countries, it becomes difficult to manage the workforce efficiently. Hence, companies in the country, including both local and international, are increasingly shifting toward adopting HCM software.
- In conclusion, businesses planning to train their employees to enhance their skills and increase their company's operational efficiencies would propel the demand for the studied market. Further, government initiatives to train employees are expected to drive the market. In addition, the growing need to navigate recruitment challenges such as talent scarcity, inefficient hiring processes, etc., will create demand for human capital management software to streamline employee hiring and onboarding processes in organizations across the region.
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Saudi Arabia to Witness Significant Growth
- Technological advancements are the primary driving force propelling the growth of the market in Saudi Arabia. The rapid evolution of technology led to the development of sophisticated HCM solutions that offer advanced features and capabilities. Additionally, integrating Artificial Intelligence, Machine Learning, and data analytics into HCM software enables organizations to automate routine HR-based tasks and gain valuable insights into workforce trends and behaviors, facilitating improved decisions.
- The Saudi Arabian government has implemented various initiatives to diversify the economy, creating new job opportunities in the private sector. Industries such as healthcare, technology, finance, and tourism are experiencing growth, and consequently, there is an increased demand for skilled workers. Moreover, the Saudi Arabian government is pushing for localization initiatives to replace expatriate workers with Saudi nationals to boost job creation for citizens in the private sector.
- For instance, in May 2024, according to the Saudi National Labor Observatory report, there was a net increase in citizen employment in April 2024, with 18,535 individuals newly joining the private sector workforce. There are over 2.35 million Saudi nationals, comprising more than 970,200 female workers and over 1.38 million male employees. Due to the large workforce organizations, the demand for human capital software solutions is anticipated to grow, which aids in managing recruitment onboarding and performance management processes efficiently.
- The CIPD will support the company with CIPD qualifications, assessments, capability, membership, and consulting services, among other valuable resources. The STC Group will support the CIPD with joint research and regional insights. Through this partnership, the CIPD will help STC Group align its HR framework with an international benchmark for the people profession known as the CIPD's Profession Map; this strategic alignment will empower STC to meet and exceed global professional standards in human resources.
- The HCM software market in Saudi Arabia is expected to see significant growth in the future, driven by an increasing focus on employee experience. Organizations realize the importance of creating a positive work environment by supporting employees' well-being and fostering a culture of continuous learning and development. Furthermore, as companies in Saudi Arabia prioritize employee satisfaction and retention, the demand for HCM software with advanced employee experience features is expected to rise.
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