Double-Digit Growth for Strategic HCM Applications in Western Europe

IDC: The Western European human capital management (HCM) and payroll market, including erecruiting, incentive management, and HR performance management, was worth $1.6 billion in revenue in 2005. This represents growth of more than 6% in constant U.S. dollars, despite the continuing challenging market environment in continental Europe. IDC expects this solid demand to continue throughout the forecast period.

The market is driven forward by a number of factors:

• Corporate compliance, in areas such as executive pay, workforce gender and ethnic composition, workforce training, drives investments in HCM applications that can ensure and document compliance.

• Talent scarcity in Western Europe drives investments in applications that strengthen talent acquisition and retention.

• Software as a service (SaaS) offerings that promise relatively fast implementation and low initial investment have increased adoption and broadened the user base.

• HCM analytics purchased either separately or built-in to the applications have become a critical end-user requirement.

• Operational consolidation around shared service centers continues to drive new investments across industries.

• HCM and payroll service providers are increasingly adopting packaged software as the maintenance burden of custom-developed solutions becomes too costly. These services providers continue to compete with vendors of packaged software for HCM budget dollars, but are also becoming major buyers of packaged HCM software.

Adoption of strategic HR applications will increase significantly as large organization are focusing on attracting, developing, and retaining talent to stimulate growth.

Western European Human Capital Management and Payroll Applications Forecast, 2006–2010 Publ 20060615