Artificial Intelligence In HR Market Size, Share & Trends Analysis Report By Component (Solutions, Services), By Deployment Mode, By Enterprise Size, By Application, By End-use, By Region, And Segment Forecasts, 2024 - 2030

AI In HR Market Size & Trends

The global artificial intelligence in HR market size was estimated at USD 3.25 billion in 2023 and is projected to grow at a CAGR of 24.8% from 2024 to 2030. The automation of recruitment processes is anticipated to drive the market growth. AI-powered tools streamline candidate sourcing, resume screening, and interview scheduling, drastically reducing time-to-hire and improving the quality of hires. Automated systems can analyze vast amounts of data to identify the best candidates, ensuring a more efficient and unbiased recruitment process. This trend is particularly beneficial for large organizations and industries with high turnover rates.

Artificial intelligence (AI) is revolutionizing employee engagement by providing personalized experiences and support. AI-driven platforms offer tailored career development plans, training programs, and real-time feedback, enhancing employee satisfaction and retention. These tools analyze employee data to identify engagement trends and predict potential issues, allowing human resource (HR) teams to proactively address concerns. The ability to deliver personalized experiences at scale is driving widespread adoption.

The integration of AI is enabling advanced workforce analytics, providing deep insights into employee performance, productivity, and satisfaction. AI-powered analytics tools can identify patterns and trends, offering actionable insights for strategic decision-making. This data-driven approach helps organizations optimize workforce planning, identify skill gaps, and improve overall organizational performance. The demand for sophisticated analytics solutions is a key driver of market growth.

AI technologies are improving compliance and risk management in HR by ensuring adherence to legal and regulatory requirements. AI-driven systems can monitor and analyze HR practices, flagging potential compliance issues and reducing the risk of legal complications. These tools also enhance data security by safeguarding sensitive employee information. The growing emphasis on regulatory compliance and risk mitigation is fostering the adoption of AI solutions in HR operations.

Industry Dynamics

The artificial intelligence (AI) in human resource (HR) market is characterized by a high degree of innovation, driven by advancements in machine learning, natural language processing, and predictive analytics. These technologies enable more efficient and effective recruitment, personalized employee engagement, and data-driven performance management. Companies are leveraging AI to automate routine tasks, reduce bias in hiring, and enhance decision-making processes. Continuous innovation in AI-driven HR solutions fosters improved workforce productivity, satisfaction, and retention, making it a dynamic and rapidly evolving sector poised for significant growth and transformation.

The AI in HR market is seeing an increasing number of merger and acquisition (M&A) activities,driven by the need for technological advancements and market expansion. Companies are acquiring AI startups and specialized firms to integrate advanced HR technologies, enhance their product offerings, and gain a competitive edge. These M&As enable the consolidation of expertise, resources, and customer bases, fostering innovation and accelerating the development of comprehensive AI-driven HR solutions. This trend is reshaping the market landscape, promoting the growth of more sophisticated and integrated HR technologies.

The AI in HR market is also subject to moderate regulatory scrutiny and is impacted by its operations and strategic decisions. Regulations like GDPR and CCPA impact the development and deployment of AI-driven HR solutions, ensuring compliance with data protection laws. Companies must navigate these regulatory frameworks to avoid legal pitfalls and maintain trust. Strategic decisions in AI implementation are affected by these regulations, necessitating robust data governance practices and transparent algorithms. This scrutiny ensures responsible AI use, safeguarding employee data and fostering ethical AI practices in HR management.

Due to its unique capabilities and advantages, AI in HR faces minimal competition from product substitutes in the market. Traditional HR methods often struggle to match AI's efficiency, accuracy, and scalability in tasks like resume screening, candidate matching, and performance analysis. While some manual processes and legacy software systems persist, they generally can't replicate AI's ability to process vast amounts of data, identify patterns, and provide data-driven insights.

End-user concentration is a moderate factor in the AI in HR market. These organizations often have the resources and willingness to invest in advanced HR technologies. However, the market is gradually expanding to include mid-sized businesses and even some small enterprises as AI solutions become more accessible and affordable. This moderate concentration affects pricing strategies, product development, and market competition.

Component Insights

Solutions accounted for the largest market revenue share in 2023. The market is driven by the demand for comprehensive, integrated tools that address various HR functions. AI-powered HR solutions enhance recruitment, performance management, employee engagement, and workforce analytics. Advanced algorithms and machine learning capabilities provide data-driven insights, streamline processes, and improve decision-making. Organizations adopt these solutions to optimize HR operations, reduce costs, and enhance overall workforce productivity and satisfaction.

Services are expected to register the fastest CAGR from 2024 to 2030. The growth is driven by the increasing need for expertise in implementing and managing AI-driven HR solutions. Organizations seek consulting, implementation, and support services to effectively integrate AI technologies into their HR processes. These services ensure seamless adoption, customization, and optimization of AI tools, helping organizations maximize their benefits, improve workforce management, and stay competitive in a rapidly evolving business landscape.

Deployment Mode Insights

Cloud-based accounted for the largest market revenue share in 2023. The market is driven by the need for scalable, flexible, and cost-effective HR management tools. Cloud-based AI solutions offer easy integration, real-time updates, and remote accessibility, making them ideal for organizations with diverse and distributed workforces. These solutions enhance data security, reduce IT infrastructure costs, and provide seamless user experiences, driving their adoption across various industries.

On-premises are expected to register the fastest CAGR from 2024 to 2030. The growth is driven by the need for enhanced data security, control, and customization. Organizations with stringent data privacy requirements and specific compliance regulations prefer on-premises AI solutions. These solutions provide greater control over data, customizable features, and integration with existing IT infrastructure, making them suitable for industries like finance, healthcare, and government sectors that prioritize data protection and regulatory compliance.

Enterprise Size Insights

Large Enterprise accounted for the largest market revenue share in 2023. The market is driven by the need to manage complex, large-scale HR operations efficiently. AI technologies streamline recruitment, onboarding, performance management, and employee engagement processes. Advanced analytics and automation enhance decision-making, reduce operational costs, and improve workforce productivity. The scalability and adaptability of AI-driven HR solutions make them essential for large organizations aiming to maintain a competitive edge and optimize their HR functions.

SMEs segment is expected to register the fastest CAGR from 2024 to 2030. The market is driven by the need for cost-effective, scalable solutions to manage HR processes efficiently. AI-powered tools streamline recruitment, employee onboarding, performance management, and engagement, allowing small and medium-sized enterprises to compete with larger organizations. By automating routine tasks and providing data-driven insights, AI enhances decision-making, reduces operational costs, and improves overall workforce productivity, making it a valuable asset for SMEs.

Application Insights

Recruitment & Hiring accounted for the largest market revenue share in 2023. The market is driven by the need for efficient, unbiased, and scalable talent acquisition processes. AI-powered tools streamline candidate sourcing, screening, and selection, reducing time-to-hire and improving the quality of hires. Advanced algorithms and machine learning enhance decision-making, ensure compliance, and provide a competitive edge in attracting top talent, making AI indispensable for modern recruitment and hiring practices.

Performance management is expected to register the fastest CAGR from 2024 to 2030. The market growth is driven by the need for data-driven insights and personalized feedback. AI-powered tools provide continuous performance monitoring, real-time feedback, and predictive analytics, helping organizations enhance employee productivity and engagement. These technologies enable objective performance evaluations, identify skill gaps, and support tailored development plans, leading to improved overall organizational performance and employee satisfaction.

End-use Insights

IT & Telecommunication segment accounted for the largest market revenue share of 21.1% in 2023. The market is driven by the need for efficient talent acquisition and management processes. High employee turnover rates and a competitive job market necessitate the adoption of AI-driven HR solutions for recruitment, performance management, and employee engagement. Advanced AI technologies streamline these processes, improve decision-making, and enhance workforce productivity, making them essential for maintaining a competitive edge in this fast-paced industry.

Healthcare segment is expected to grow at a CAGR of 27.4% from 2024 to 2030. The market is fueled by the need to manage a diverse and specialized workforce efficiently. AI-driven HR solutions help streamline recruitment, optimize staff scheduling, and enhance employee training and development. The integration of AI in HR practices ensures compliance with regulations, improves patient care quality, and addresses the challenges of workforce shortages, ultimately driving the adoption of AI technologies in healthcare HR management.

Regional Insights

North America accounted for the highest market revenue share in 2023. The market is driven by a high adoption rate of advanced technologies and a focus on enhancing workforce productivity. The presence of leading AI and HR tech companies, combined with significant investments in AI research and development, propels market growth. Additionally, the need for efficient talent management solutions and data-driven decision-making processes in HR functions contributes to the expansion of AI applications in HR across various industries.

U.S. Artificial Intelligence In HR Market Trends

The AI in HR market in the U.S. is expected to have a notable CAGR from 2024 to 2030. The market is fueled by a robust technological infrastructure and a strong emphasis on innovation. Companies are increasingly adopting AI-driven HR solutions to streamline recruitment processes, enhance employee engagement, and improve performance management. The presence of numerous tech startups and established HR tech firms, along with favorable government policies supporting AI development, further accelerates market growth.

Asia Pacific Artificial Intelligence In HR Market Trends

The AI in HR market in Asia Pacific accounted for a significant revenue share in 2023. The rapid growth in the market is due to the increasing digital transformation initiatives across enterprises. Countries like China, India, and Japan are leading the charge in adopting AI technologies to enhance HR functions. The region's large and diverse workforce, combined with a growing emphasis on automation and data analytics, drives the demand for AI-powered HR solutions, fostering market expansion.

Japan artificial intelligence in HR market is estimated to grow significantly from 2024 to 2030. The market is driven by the need to address labor shortages and improve workforce efficiency. The aging population and declining birth rate have prompted businesses to invest in AI technologies for talent acquisition, employee training, and performance management. The government's support for AI innovation and the presence of advanced technology infrastructure further boost the adoption of AI in HR practices.

Artificial intelligence in HR market in India is estimated to record a notable CAGR from 2024 to 2030. The market is propelled by a rapidly growing tech-savvy workforce and the increasing adoption of digital HR solutions. The country's large and diverse talent pool, coupled with a competitive business environment, drives organizations to implement AI-driven HR tools for recruitment, employee engagement, and talent management. Additionally, the government's push for digital transformation and AI development supports market growth.

China artificial intelligence in HR market had the largest revenue share in 2023. The market is rapidly growing due to significant investments in AI technology and a strong focus on innovation. The country's large workforce and competitive business landscape drive the adoption of AI-powered HR solutions for recruitment, employee training, and performance evaluation. Government initiatives supporting AI development and the presence of leading tech companies further contribute to market growth.

Europe Artificial Intelligence In HR Market Trends

The AI in HR market in Europe is anticipated to grow at a moderate CAGR from 2024 to 2030. The market is driven by a strong emphasis on digital transformation and the need for efficient talent management solutions. Countries like the UK, Germany, and France are leading adopters of AI technologies in HR functions. The region's regulatory framework supporting AI innovation, combined with the presence of advanced technology infrastructure, propels market growth. Additionally, the increasing focus on enhancing employee experience and productivity fosters the adoption of AI in HR practices.

France artificial intelligence in HR market accounted for a significant revenue share in 2023. The market is fueled by the country's strong emphasis on innovation and digital transformation. Businesses are increasingly adopting AI-driven HR solutions to streamline recruitment processes, enhance employee engagement, and improve performance management. The government's support for AI research and development, along with the presence of advanced technology infrastructure, further accelerates market growth.

Artificial Intelligence in market in the UK is estimated to grow at the highest CAGR from 2024 to 2030. The market is driven by the high adoption rate of advanced technologies and a focus on enhancing workforce productivity. Companies are implementing AI-driven HR tools for talent acquisition, employee engagement, and performance management. The presence of numerous tech startups and established HR tech firms, along with favorable government policies supporting AI development, contributes to the expansion of AI applications in HR.

Germany artificial intelligence in HR market is estimated to grow at a moderate CAGR from 2024 to 2030. The market is propelled by the country's strong industrial base and focus on innovation. Businesses are adopting AI-driven HR solutions to enhance recruitment processes, employee training, and performance evaluation. The government's support for AI development and the presence of advanced technology infrastructure further boost the adoption of AI in HR practices, fostering market growth.

Middle East & Africa (MEA) Artificial Intelligence In HR Market Trends

The AI in HR market in the Middle East and Africa (MEA) region is estimated to grow significantly from 2024 to 2030. The market growth is driven by the increasing adoption of digital transformation initiatives and a growing emphasis on workforce efficiency. Countries like Saudi Arabia and the UAE are leading the charge in implementing AI-driven HR solutions to enhance talent management, employee engagement, and performance evaluation. Government initiatives supporting AI development and the presence of advanced technology infrastructure further contribute to market growth.

Artificial intelligence in HR market in Saudi Arabia accounted for a considerable revenue share in 2023. The market is fueled by the government's Vision 2030 initiative, which emphasizes digital transformation and innovation. Businesses are increasingly adopting AI-driven HR solutions to streamline recruitment processes, enhance employee engagement, and improve performance management. The country's focus on developing a knowledge-based economy and the presence of advanced technology infrastructure further accelerate market growth.

Key Artificial Intelligence In HR Company Insights

Some of the key players operating in the market include IBM Corporation, Oracle Corporation, and SAE SE.

• IBM Corporation focuses on enhancing its AI capabilities through continuous innovation and strategic acquisitions to maintain leadership in market. It invest heavily in research and development, collaborating with academic institutions and industry partners to advance AI technology. IBM leverages its robust cloud platform, Watson, to integrate AI-driven HR solutions, providing personalized employee experiences and streamlined HR processes.

• Oracle Corporation emphasizes a cloud-first strategy to drive growth in market. They focus on integrating advanced AI and machine learning capabilities into their Oracle HCM Cloud platform, offering enhanced analytics, talent management, and recruitment solutions. Oracle invests in R&D to continuously improve their AI offerings and expand their portfolio. Strategic acquisitions and partnerships with AI startups and tech innovators further bolster their technology stack.

Cegid Group, Eightfold AI, and Harver B.V. are some of the emerging market participants in the AI in HR market.

• Cegid Group drives the growth in market through strategic product development and expansion. They focus on enhancing their HR software solutions with AI-driven features such as predictive analytics, employee engagement tools, and automated recruitment processes. Cegid prioritizes customer-centric innovation, ensuring their offerings align with market needs. By expanding their presence through strategic partnerships and acquisitions, Cegid taps into new markets and enhances their technology portfolio.

• Eightfold AI employs a growth strategy centered on innovation, strategic partnerships, and customer success. They continuously enhance their Talent Intelligence Platform with cutting-edge AI capabilities, offering personalized talent management, predictive analytics, and diversity hiring solutions. Eightfold AI collaborates with leading HR tech providers and enterprises to integrate their solutions seamlessly. They focus on expanding their global footprint through targeted marketing and sales efforts, showcasing success stories and case studies.

Recent Developments

• In July 2024, SmartRecruiters announced the Q2 2024 product release, featuring new tools to revolutionize enterprise recruitment. This release demonstrated SmartRecruiters' commitment to innovation, providing talent acquisition teams with advanced tools to attract, select, and hire efficiently. The update introduced AI-powered tools to enhance recruiter efficiency and candidate engagement. The Scorecard Copilot used AI to generate and refine interview scorecard questions, ensuring secure and compliant data handling. The Communication Copilot enabled recruiters to create personalized email campaigns in multiple languages quickly, integrating with SmartRecruit and SmartCRM to enhance candidate engagement.

• In September 2023, SAP SE announced Joule, a natural-language, generative AI copilot designed to transform business operations. Joule was embedded throughout SAP’s cloud enterprise portfolio, providing proactive and contextualized insights from SAP solutions and third-party sources. This development reflected SAP’s history of delivering revolutionary technology with tangible results.

Artificial Intelligence In HR Market Report Scope

Global Artificial Intelligence In HR Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global artificial intelligence inHR market report based on component, deployment mode, enterprise size, application, end use, and region:

• Component Outlook (Revenue, USD Million, 2018 - 2030)

  • Solutions

    • Chatbots

    • Virtual Assistants

    • Software Platforms

    • Analytics Solutions

    • Others

  • Services

    • Implementation Services

    • Consulting Services

    • Training and Support Services

• Deployment Mode Outlook (Revenue, USD Million, 2018 - 2030)

  • Cloud-based

  • On-premises

• Enterprise Size Outlook (Revenue, USD Million, 2018 - 2030)

  • Small & Medium Enterprises (SMEs)

  • Large Enterprises

• Application Outlook (Revenue, USD Million, 2018 - 2030)

  • Recruitment & Hiring

  • Employee Onboarding & Engagement

  • Employee Record Management

  • Performance Management

  • Payroll Processing

  • Others

• End Use Outlook (Revenue, USD Million, 2018 - 2030)

  • BFSI

  • Healthcare

  • IT & Telecommunication

  • Retail & E-Commerce

  • Manufacturing

  • Education

  • Government

  • Others

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • UK

    • France

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia

  • Latin America

    • Brazil

  • Middle East and Africa (MEA)

    • UAE

    • Saudi Arabia

    • South Africa