2022 HR Digitalization in China

Source:iResearchJuly 19,20226:15 PM Overview

Status Quo of Demand: Status Quo of Demand: High-tech enterprises that focus on talents and human efficiency and the traditional labor-intensive enterprises that advocate digital transformation have a great demand for human resource digitalization. The managers mainly focus on cost reduction and efficiency enhancement, while the HR department and employees attach more importance to realizing individual values. The three parties have different digitalization demand, but their need for productization is rising and they are paying increasing attention to the product experience. With the increasing penetration of the flexible employment model, digital demand based on this model is surging. The core needs are improving the supply and demand match, coordinating personnel management, and ensuring the compliance of payroll tax settlement. Enterprises will select digital products or services based on cost performance, brand, product, service and other factors.

Market size: The size of the human resource digitalization market was around 20 billion yuan in 2021 and its CAGR in the next three years is expected to reach 25.3%. From the perspective of demand, the factors driving the growth include: (1) companies are attaching increasing importance to the digital management of human resources. (2) SaaS accelerates the penetration of digitalization in human resources; (3) Enterprises have an increasingly clear digitalization layout, purchase more digital product models and spend more on human resources. From the perspective of supply, the driving factors include (1) HR SaaS; (2) More and more technology companies and cross-industry players have joined in, increasing market supply; (3) Players have been improving service chain, service accuracy and service models. The proportion of one-stop solutions has increased and the overall profitability has improved.

Trends: In terms of concept, the integration of business and human resources has gradually become a consensus on both the supply and demand side. In terms of technology, there will be deeper implementation of AI in human resource scenarios. In the aspect of product deployment, the SaaS form will be the major trend since it has features such as fast iteration, easy access and social integration. In terms of product abilities, one-stop and comprehensive human resource management covering all processes is the ultimate goal. The achievement of integration needs cooperation and synergy between the upstream and downstream as well as inside and outside of the industrial chain. Thus, market ecologicalization will be a main trend.

Human Resource Digitalization

Human resource digitalization plays an important role in enterprise digital transformation. It is a multi-level change from the outside to the inside and from the bottom to the top. Its core value is using data in human resource management to reshape management and business processes, Thereby enhancing enterprise management energy efficiency and optimizing employee work experience. In basic definition, the main body of human resource digitalization is the human resource department of the enterprise. In a narrow sense, it refers to digital transformation within the human resource department; In a broad sense, it refers to the integration of human resources business into the operation ecology of the enterprise, and the interaction and cooperation with the enterprise's digital transformation. In the implementation process, the digitalization of human resources often analyzes and predicts the underlying data through technologies such as cloud and AI to empower enterprise decision-making, and enhance employees' understanding of digitalization, thereby forming a cultural atmosphere of digital management.

Market Size

According to iResearch, the size of the HR digitalization market was around 20 billion yuan in 2021, increasing by 26.8% year on year. Its CAGR in the next three years is expected to be around 25.3%. By 2024, it will reach about 40 billion yuan. From the perspective of demand, the factors driving the growth include: (1) companies are attaching increasing importance to the digital management of human resources. (2) SaaS accelerates the penetration of digitalization in human resources; (3) Enterprises have an increasingly clear digitalization layout, purchase more digital product models and spend more on human resources. From the perspective of supply, the driving factors include (1) HR SaaS; (2) More and more technology companies and cross-industry players have joined in, increasing market supply; (3) Players have been improving service chain, service accuracy and service models. The proportion of one-stop solutions has grown and the overall profitability has improved.

Industry Map

Competitive Elements

HR digital service providers need to improve their competitiveness in the increasingly fierce market competition. Besides firm value judgment and insights into industries, a deep understanding of business, flexible products and services, and good user experience are also important. The key to success is using good tools to provide the right customers with products and services that have wide coverage, good business fit and resiliency. With good products and services, service providers also need to attach a lot of importance to their marketing capabilities.

Development Pain Points

The core development pain point of HR digital service providers is in the aspect of industrial logic, centering around digitalization understanding and cognition. In terms of the top-level design, Party A and Party B often have different cognitions of business scenarios. Therefore, the products or services might not suit the application scenarios. In terms of underlying cognition, digital service providers need to focus on improving products and services. Instead, many party B players focus on marketing and promotion and fall into a homogeneous competition. For digital service providers, the premise of building products or services is improving business standardization. However, the overall standardization level of the HR industry in China is low. To achieve sound development, relevant companies need a top-down logical reshaping from top-level design to underlying cognition. They also need to work with multiple parties to build an industry standard system.

Concept: Integration

HR is increasingly closer to businesses. The concepts that the job of HR should start from understanding business and business demand, and that HR management should also involve the business department are more and more widely accepted by enterprises. In the digital sector of human resources, few Chinese companies now carry out management and business digital transformation at the same time, and not many of them are close to the actual business demand, which means the integration of HR and businesses still has a long way to go. Meanwhile, some digital service providers have begun to promote the concept of business and HR integration, which starts from the perspectives such as covered scenarios and functions to improve products or services, help companies connect HR and business, and realize the deeper value of HR management.

Table of Contents of the Full Report

Abstract


1 Development Background of Human Resources Digitalization

1.1 Human Resource Management

1.2 Human Resource Digitalization

1.3 Features of Human Resource Digitalization - Elements

1.4 Features of Human Resource Digitalization - Main Line

1.5 Driving Factor - Economic

1.6 Driving Factor - Society

1.7 Driving Factor – Technology


2 Status Quo of Human Resource Digitalization Demand
2.1 Standard Recruitment
2.1.1 Demand Overview - Subject
2.1.2 Demand Overview - Object
2.1.3 Recruitment
2.1.4 Organization and Personnel
2.1.5 Salary
2.1.6 Performance
2.1.7 Benefits
2.1.8 Training
2.1.9 Test
2.2 Flexible Employment
2.2.1 Demand Subject
2.2.2 Core Demand
2.3 Demand Implementation
2.3.1 Factors of Selection
2.3.2 Status Quo of Implementation
2.3.3 Pain Points of Implementation


3 Status Quo of Human Resource Digitalization
3.1 Market Size
3.2 Industry Map
3.3 Analysis of Core Players
3.3.1 Core Technologies
3.3.2 Supply Form
3.3.3 Service Chain
3.3.4 Competition and Cooperation
3.3.5 Competitive Elements
3.3.6 Development Pain Points
3.4 Case Study
3.4.1 Beisen
3.4.2 BRIDGE HRTech
3.4.3 iHR
3.4.4 eRoad
3.4.5 ZHONGHE GROUP


4 Trends in Human Resource Digitalization
4.1 Concept: Integration
4.2 Technology: Intelligence
4.3 Product: SaaS
4.4 Product: Integration
4.5 Market: Ecologicalization


Contents

Development background: The digitalization of human resources refers to integrating human resource business with enterprises' operation ecology to interact and cooperate with the digital transformation of enterprises. Its core value is using data in human resource management to reshape management and business processes, thereby enhancing enterprise management energy efficiency and optimizing employee work experience. Influenced by social factors such as the digital economy, the aging population, and the ongoing COVID-19 response, and technical factors such as cloud computing, the development of human resource digitalization will speed up.

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