For many employees, the COVID-19 pandemic flipped the world on its head. Needing to stay home was an awakening for most, resulting in many leaving their jobs, and becoming what is known as The Great Resignation. Because of this, knowing more about human resources (HR) has become incredibly important.
Many of these changes have shown a need in improving the overall HR process. Businesses have grown increasingly reliant on HR software.
But regardless of technology’s power to provide a consistent HR process, the need to develop effective strategies is still there. But for HR strategies to work, you need data.
To help you with this data pursuit, we’ve gathered the most important HR and HR software statistics for 2023. Below, you’ll find information you can use to help with your human resource decisions.
Employee productivity statistics
Ultimately, many HR specialists need to focus on hiring productive employees. To do this, employers need to be just as engaged as their employees, as 63% of employees say culture drives success. The data also points toward that resulting in improved productivity (by 14%), higher customer satisfaction (10%), and more sales (18%).
Freelancers represent a new potential, having more productive hours than standard employees. Sometimes, getting a fresh perspective can be helpful, as the average worker doesn’t get much done beyond the first two and a half hours. This lack of productivity relates to stress (41% of employees share this) and lack of control regarding big decisions.
- Top performers are 400% more productive than average ones. This gap rises to 800% when the job is more complex. (McKinsey & Company)
- 63% of employees say business culture affects organizational success. This includes doing their best work, productivity, and their ability to serve customers. (Eagle Hill Consulting)
- 68% of hiring managers say remote work is going more smoothly now than when their company first made the shift at the start of the pandemic. (Upwork)
- Engaged employees are 14% more productive. (Gallup)
- Highly engaged businesses get 10% higher customer ratings and 18% more sales (Gallup)
- The average worker is only productive for 2 hours and 53 minutes each day (Vouchercloud)
- Freelancers are productive for 36 hours each week (Friday)
- 50% of employees consider meetings wasted time (Atlassian)
- Big decision participation is an important booster of employee satisfaction and productivity (ResearchGate)
- 47% of workers say that stress causes them to be less productive. (breeze)
- Only 7% of workers feel productive during regular work hours (FlexJobs)
Employee morale and engagement statistics
Morale and engagement rates reveal a lot about how HR professionals can assist employees and companies. There’s clearly a lot of work to be done, as only 20% of global employees are engaged. Much of this comes from not finding work meaningful, a lack of transparency, and having a poor work leader or manager, which can result in overall employee burnout and poor job satisfaction.
More personal recognition of an employee’s hard work can be incredibly helpful. Meanwhile, also providing employees with hybrid work schedules has been shown to improve employee wellbeing. Much of this has been shown to work in any company’s favor, resulting in increased profitability by 23%.
- Only 36% of US employees are engaged with their workplace. Meanwhile, only 20% of global employees are engaged. (Gallup)
- Two out of five white-collar workers prefer to work from home. (Gallup)
- At least 70% of employees state the quality of the manager or team leader creates more engaged employees (Gallup)
- 85% of employees say that they have more motivation when receiving regular updates on company news (Trade Press Services)
- Three in four employees want more transparency from their company (Paychex)
- Companies with high engagement are 23% more profitable (Gallup)
- Highly engaged businesses have 18% fewer turnovers in high turnover organizations and 43% less turnover in low turnover organizations. (Gallup)
- When employees thrive, there are 53% fewer missed days because of health issues (Gallup)
- Disengaged workers cost organizations up to $550 billion per year (Gallup)
- 37% of employees say that personal recognition would encourage them to produce better work (Fortune)
- Only 33% of employees are thriving in overall wellbeing while the remaining don’t find their work meaningful or don’t feel hopeful about the future (Gallup)
- About 50% of the world’s workers felt a lot of daily stress, with most of this stress affecting working women in the US and Canada (Gallup)
Development and training statistics
Continued development of training links heavily in with job advancement and development. This much is true, especially for new employees and retention. After all, without senior support, 68% of workers will consider leaving a job.
The push for smaller teams and the need for flexible employees is clear. Internal mobility and cross-functional training will more likely keep employees, so providing employees with skills is important.
In addition, it’s important to check your preference for remote vs on-site employees. There is evidence pointing towards an implicit bias towards development (through promotion) of on-site employees.
- On-site employees are 76% more likely for promotion when compared to remote workers (Gartner)
- 68% of employees consider leaving their jobs without support from senior employees (Staples)
- 72% of companies say that learning and development is a strategic function of their organization (LinkedIn)
- Companies that excel at internal mobility (cross-functional training) are two times more likely to keep employees (LinkedIn)
- 61% of new hires do not receive training on company culture (TalentLMS)
- People are four times more likely to think about your company for future opportunities when offering constructive feedback (LinkedIn)
HR profession statistics
With The Great Resignation and the Coronavirus pandemic, the HR profession is now more challenging than ever. Employee expectations within their work environment has changed immensely, resulting in HR professionals needing to adjust their approach. Below, you’ll find some statistics related to the HR profession.
Employee retention statistics
Employee retention is one of the biggest challenges for the HR profession. Namely, because one in three hires (33%) will quit within the first year. Even among later employees, 3% of them will still quit. HR professionals will need to work with employee needs, which have been shown to be related to achievement in their career, health or family-related issues, or desire for a better work-life balance.
- The average rate of turnover in all industries was 47.2% in 2021. (Bureau of Labor Statistics)
- Southern states experienced the highest rate of turnover with rates averaging at 52.2%. (Bureau of Labor Statistics)
- Companies that focus on their culture see a 72% lower attrition rate (Gallup)
- First-year employees have the highest turnover rate, sitting at 33% (Work Institute)
- Nearly 18% of people who leave say its related to the lack of growth, achievement, and security in their career (Work Institute)
- About 12% leave because of family or health issues while 10% want a better work-life balance (Work Institute)
Over 90% of employees decide whether they want to stick with a company based on onboarding. However, few companies (one in four) and employees (12%) rate those onboarding processes as successful. Much of it comes down to having a formalized onboarding process, as 77% of employees who follow a clear and formal onboarding process are more likely to stay. HR professionals need to pay close attention to onboarding to increase employee retention.
- It takes new employees up to eight months to be as efficient as new employees (AlliedHR IQ)
- Only one in four companies rate their onboarding programs as “highly successful.” (AlliedHR IQ)
- 86% of HR professionals said recruiting is more like marketing (Glassdoor)
- Nearly 50% of companies do not know how to define success or failure in their current onboarding process (SHRM)
- 52% of companies see improved retention rates with good onboarding practices. 60% of those same companies see better productivity while 53% of those companies see improved customer satisfaction. (SHRM)
- 77% of employees who go through formalized onboarding processes meet their first performance reviews (eLearning Industry)
- 56% of new hires would like a “buddy” to help them through the onboarding process (ClickBoarding)
- 93% of employers think a good onboarding process is critical when an employee decides whether to stay with your company (CareerBuilder)
- Less than half of companies think their onboarding process is effective at retaining new hires (HCI)
- Only 12% of employees think that their company is good at onboarding. (Gallup)
- 80% of job seekers are discouraged from pursuing additional job opportunities at an organization if they aren’t notified of their job application status. (G2)
- Employees are 3.5 times more likely to re-apply if notified of their job application status. (G2)
General HR market size statistics
Despite technology being a major driving force behind HR, the industry is more than tech. Overall, this is proven with expected growth rates above 12%. With a current overall market size of $87 billion, this means that there is significant growth potential for newcomers to the HR industry. Leading companies, like Randstad, are likely to try to take advantage of this growth rate.
- The global human resources market size is expected to grow at a 12.8% CAGR from 2022 to 2030. (Grand View Research)
- The total human resources & benefits administration market size in the US is $87.3 billion as of 2022. (IBISWorld)
- The US has over 380 thousand businesses with nearly one million employees in the HR industry as of 2022. (IBISWorld)
- The growth rate for the overall human resources and benefits administration sector in 2022 was 5.1%. (IBISWorld)
- The leading companies in the human resource services industry were Randstad, Adecco, and Manpower. (Statista)
HR software market size statistics
When looking at the HR market size, there are two areas to look at: the overall field and how technology has affected it. To start, we will focus more on the technology aspect.
HR technology market size statistics
Below, you’ll see a breakdown of various market sizes and spending statistics related to HR technology. From these statistics, there is consistent data across the board that the value of HR software is expected to nearly double. A good portion of this will be driven by a combination of artificial intelligence (AI) and cloud-based solutions. Most of this growth will take place in North America, with both the European and Asia Pacific markets just behind.
- The HR software market is projected to grow at a nearly 10% CAGR, or compound annual growth rate. (Verified Market Research)
- The HR software market is expected to reach 33.57 billion by 2028, this is from 15.59 billion found in 2020. That’s a growth rate of 10%. (Verified Market Research)
- North America accounts for the largest market share at 35.81%. Europe has the second largest market share, followed by the Asia Pacific region. (Verified Market Research)
- The IT and Telecommunications industry will hold a 23.3% share of the human resources market. (Fortune Business Insights
HR salary statistics
For those who need to hire a new HR manager, most managers expect to be paid a minimum of $65 per hour. This is not considering the need for entry-level positions. The highest paying state for HR professionals is New York while the highest number of HR employees work in California.
- The average wage of HR professionals is $65.67. Meanwhile, the annual wages average at about $136 thousand according to 2021 figures. (Bureau of Labor Statistics)
- The top paying industry for human resources managers is in information services. Annual wages for HR professionals in this industry is about $192 thousand per year (Bureau of Labor Statistics)
- Most HR professionals work in California, with their annual wages sitting at about $154 thousand per year (Bureau of Labor Statistics)
- The top paying state for HR is New York, which has an annual wage of $186,930.(Bureau of Labor Statistics)
HR technology statistics
From our earlier section, the growth of HR technology is going to nearly double within the next decade. Because of this, the need to invest in HR software is real. In the below statistics, you’ll see the problems HR software seeks to solve and how they assist through automation.
HR technology function statistics
Technology can help solve many of the biggest challenges faced by HR professionals. Business owners and HR specialists benefit from its potential for increased flexibility and talent acquisition features.
Remote work, which has been heavily in demand since the COVID-19 pandemic, benefits heavily from the use of HR tech. Most hiring managers agree that remote working is better, as we’ve taken the past few years to develop those technologies. Thanks to the impact of modern video conferencing technology (which you can read more about in our blog about video conferencing statistics), it is easier than ever to establish genuine connections, regardless of where employees work.
Technology has also been shown to benefit those in talent management. Talent acquisition is an incredible challenge for recruiters, and most recruiters (69%) admit that usage of AI technology has improved with finding candidates, screening them, and supporting them. The statistics below will show you the benefits of using HR software.
- Only 16% of employers use technologies to monitor employee engagement. (Gartner)
- Technology-based performance management software is 12% more likely to engage with employees. (Aberdeen Group)
- In 2019, 22% of companies used AI to help with talent challenges. (Aptitude)
- 44% of CEOs believe AI can help with acquisition and retention. (Aptitude)
- 63% of talent acquisition specialists state that usage of AI has changed the recruiting process. 69% of recruiters shared that AI helped with finding better job candidates. (Korn Ferry)
- Over half (50% or more) of recruiters say AI is helpful with sourcing, screening, and nurturing candidates. (LinkedIn)
HR automation statistics
Automation has proven effective across a variety of functions and industries. In its current form, its most potent use has been to screen applicants, outperforming human hiring managers by 25%. With the right hiring algorithms, you can spot the character traits that meet your business needs, getting better job seekers with a reduced chance of worker’s compensation abuse.
IBM, in particular, has used their HR management system to reduce their HR team by 30%. Overall, this has saved them money that they can spend towards talented individuals.
AI and automation can cause increased profits, improved employee morale, and prediction of when a person is likely to leave their job. For many businesses, the issue is finding the talent who can leverage this technology, meaning that most businesses are still in the early stages of using this technology.
- Hiring algorithms outperform humans by 25%. (University of Minnesota)
- Using an algorithm to screen applicants for character traits can drop workers’ compensation abuse by 68%. (Richfield Management)
- Mundane and repetitive tasks often cause reduced morale and employee retention. (IDC)
- Artificial technology can predict which workers will leave their jobs. IBM has one with 95% accuracy. (CNBC)
- Predictions show that 83% of early adopters of AI will see an increase in ROI, or return on investment. (Deloitte)
- 45% of companies are still in the beginning stages of process automation. (Forbes)
- Lacking resources and skills is the biggest limitation to using AI technology across multiple business industries and sectors. (IBM)
Statistics from leading HR software companies
Below, you’ll see the top four human resource service providers worldwide. These rankings are from HRoot, a global ranker of HR service provider:
- Randstad – $26.5 billion
- The Adecco Group – $26.2 billion
- Recruit Holdings – 22 billion
- ManpowerGroup – $20.8 billion
While these are the top four companies worldwide, they have not earned the most profit. Below, these companies are the top five for profitability. This data also comes from HRoot:
Most of these companies have a strong segment for HR management software. According to HRoot, operating profit growth among HR software companies sat at 103.1% on average, the highest compared to other types of HR businesses. For example, many of them are payroll service companies.
Should you use HR software?
The need for streamlined HR processes is essential. HR software allows you to create a consistent HR experience. So, you should use HR software to improve the employee experience.
HR software allows small to medium-sized businesses to save money and time. Companies like Paychex and ADP allow you to outsource your payment processing system. These payment systems remind us why detailed bookkeeping is important and how technology makes it easier.
Many of these HR software systems also allow for consistent file tracking systems. Sage, for example, works to streamline your onboarding process. It also assists you throughout employee training, an important aspect of HR management.
Many HR software systems also work with employee offboarding. Zenefits, for example, is another company that handles the full process. They can even help store your documents for compliance, which is important if you need to offboard an employee.
Check out our HR product reviews to compare your options.
How many companies are using HR software?
According to an International Services Group (ISG) survey taken in 2021, it’s estimated that 46% of companies are using HR platforms. This is up by 20% from the prior year, namely because of the push of COVID-19.
Additional data from IBISWorld tells us that there are over 500 HR & payroll businesses in the United States. This is concerning growth rates of 11%, which are expected to remain consistent. There is a good likelihood of more HR platforms and companies using these platforms.
Why is HR software necessary?
HR software is necessary because our world is creating more small businesses and teams. These teams need to work independently, requiring more effective HR solutions, many of them AI-driven and cloud-based.
The massive growth of these services, especially during COVID-19, allows for greater flexibility. This allows a business that runs out of a basement to compete with larger companies. These micro-specialized businesses need HR solutions as well, creating a demand for better software.
Even larger businesses are seeing the demands of their widespread workforces. Office and sales employees are demanding hybrid work schedules and remote work opportunities. Greater flexibility and freedom is something companies cannot avoid, increasing the demand for a more robust technology sector on all fronts, including human resources.
From the collection of statistics above, you should be able to make better strategic decisions. By considering the global and local effects of how HR has changed, you can better meet stakeholder needs.
Over the next ten years, the push for further automation and technology-driven features will probably change our perspectives again. As always, knowledge and information will be your best weapon in attracting top talent, retaining talent, and nurturing talent to push them to the next level.