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Hackernoon logoPerformance And Productivity Management Software Industry Research [Part 1] by@vitalii.berdichevski

Performance And Productivity Management Software Industry Research [Part 1]

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@vitalii.berdichevskiVitalii

Product Manager

Hi there! My name is Vitalii Berdichevskyi, I’m a Product Manager. I want to share with you HR Management industry research I conducted in March 2019.

The research is divided in 4 parts:

  1. Performance Management Software industry research
  2. HR Management Software business research
  3. 2020 HR Tech trends
  4. List of top VC's invested in HR Tech by the Categories

In this essay I want to share with you analytical research for the performance management software industry.

What you will find in the essay:

  • Total market and forecast
  • Performance Management software market trends
  • A collection of handpicked links like industry reports, VC's, TOP influencers in HR tech space and many more

If you are in HR Tech space or plan to launch a product - I hope this information will give you a food for thoughts!

What is performance management?

Performance management software is a technology that helps companies better understand their employees' performance and productivity. It allows leadership and managers to easily track, analyze and evaluate workers, ensuring goals are met or trending issues are addressed preemptively

Total market and forecast

Major takeaways:

  • $2.1 bil­lion in 2018 - Value of glob­al per­for­mance man­age­ment soft­ware mar­ket in 2018
  • $5.6 bil­lion by 2026 - how much market expected to generate by 2026
  • 12.8% - CAGR between 2019 and 2026

(Source: Performance Management Software Market by Zion Market Research)

Performance Management Trends

1. Per­for­mance and engage­ment need to work together

  • Problem - since the 2008 recession, pro­duc­tiv­i­ty has (at best) stag­nat­ed
  • Labor productivity in the US is higher than average in the European countries. Nonfarm business sector labor productivity increased 1.2 percent in the fourth quarter of 2019

Source: Bereau of Labor Statistics USA

  • 85% of employees worldwide are not engaged or are actively disengaged in their job
    (source: Gallup)
  • Only 10% of employed Western Europeans are engaged at work; by comparison, the figure among U.S. employees is more than three times as high, at 33%
    (source: Gallup)

2. Man­agers need more time to man­age their people

  • Man­agers are respon­si­ble for 70% of the vari­ance in employ­ee engagement
    (source: Gallup)
  • 92.3% of the respon­dents in ClearView’s Per­for­mance Man­age­ment Report said that per­for­mance man­age­ment was a crit­i­cal area they need to address in the next 12 – 18 months (source: ClearView)
  • The prob­lem is that man­agers don’t have enough time due to their overload. Con­cerns from HR direc­tors and CEOs over the avail­abil­i­ty or capa­bil­i­ty of their team lead­ers to act as coaches (Source: ClearView)
  • Tech­nol­o­gy con­tributes to this. On-board­ing, which might his­tor­i­cal­ly have been seen as an HR func­tion, is now often deliv­ered through tech­nol­o­gy under the guid­ance of the line man­ag­er (Source: ClearView)

3. HR isn’t mov­ing as rapid­ly as we might think

  • Results of the poll among 300 HR lead­ers with question how they are cur­rent­ly man­ag­ing per­for­mance at their own organ­i­sa­tion: 28.3% said they were using a con­tin­u­ous mod­el of some kind. 1% were using noth­ing at all. The remain­ing 70.7% were either still using annu­al appraisals or were look­ing for the right con­tin­u­ous mod­el to move to (Source: ClearView


4. Employ­ee-cen­tric organ­i­sa­tions will have an edge

  • Employ­ee-focussed tools - give peo­ple the chance to express their own feel­ings about the work­place. Iit could be as sim­ple as a sug­ges­tion box, or a Slack chan­nel, or a ded­i­cat­ed email address (source: ClearView)
  • User-friend­ly tech approach­es - if some­thing isn’t sim­ple and intu­itive, it can get in the way of user adop­tion: (sourse: ClearView)
  • Employ­ee-cen­tric think­ing - for example appraisals which primarily developed not for the ben­e­fit of the busi­ness but for benefit of the employees: pro­vide a bonus or pay rise (source: ClearView)

Challenges the companies have and HR tech companies could solve:

  • How can we recruit strong candidates when unemployment rates are so low?
    Hint: The research was conducted one week before I got statistics how COVID-19 affected the unemployment rates. A total of 3.28 million people filed for unemployment insurance in the week ended March 21. It rose from 281,000 the previous week. COVID-19 was a black swan and could affect the demand of job boards.
    (Source: Bloomberg, US Department of Labor). 
  • Why does our candidate experience still lag despite our cool new interactive recruiting page, YouTube recruiting channel and automated email response tools?
  • Can I hire freelancers instead of full-time staff, and where do I find them?
  • How are we supposed to reskill an entire workforce when we don’t know what skills they are going to need?

(Source: Workforce)

A collection of handpicked links I used in the research

Below is the link to handpicked resources I have used in Google Sheet format. 

What’s inside:

  • Articles
  • industry reports
  • List of top HR tech influencers and many more.

To use filters you can easily make a copy of the file and save it to your Google Drive.

A collection of handpicked resources

Summing it up

  • $2.1 bil­lion in 2018 - Value of glob­al per­for­mance man­age­ment soft­ware mar­ket in 2018
  • $5.6 bil­lion by 2026 - how much market expected to generate by 2026
  • 12.8% - CAGR between 2019 and 2026
  • North Amer­i­ca holds a major rev­enue share of glob­al per­for­mance man­age­ment soft­ware mar­ket. 
  • Key market drivers: the emer­gence of cloud com­put­ing ser­vices and the need for real-time feedback to drive employees' engagement

P.S. If you have any questions about the research or are in love with creating products - please feel free to ping me on Facebook or LinkedIn.

Previously published at https://lampovoeit.space/performance-management-software-industry-research-part-1-4/

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