IDC predicts double-digit growth for strategic HCM applications in Western Europe

COPENHAGEN, DENMARK – JUNE 15, 2006 – 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," said Bo Lykkegaard, program manager, European Enterprise Applications.

The study, Western European Human Capital Management and Payroll Applications Forecast, 2006-2010 (IDC #LC02N, June 2006), presents revenue forecasts for the human capital management and payroll application markets in Western Europe from 2006 to 2010. For the first time, IDC segments the human capital management market in Western Europe into five distinct functional segments (core HR, workforce management, erecruiting, incentive management, and HR performance management) and provides forecasts for each segment. The study also provides forecasts at the country level for the 16 Western European countries.

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