Workforce Performance Management Still Hot Despite Downturn, IDC Finds

IDC is forecasting the market for workforce performance management (WPM) software and services will reach $2.55 billion by 2012, increasing at a compound annual growth rate (CAGR) of 10.1 percent.

"Despite a potential business downturn, employee retention will continue to be a key concern for HR executives in 2008, given the very real demographic shifts occurring in the workforce," said Lisa Rowan, program director, human resources and talent management services. "Employers will be seeking ways to both automate and integrate talent functions, with the goal of identifying and retaining top performers. Performance management is a linchpin in this process."

The IDC report, which forecasts the WPM market from 2008-2012, shows performance management with the highest buyer interest among the talent management offerings. However, it noted many vendors are reporting buyer interest in integrated talent management even if buyers are not yet in a position to implement all functions simultaneously.

Consulting services make up the largest share of spending given the complexity organizations face when redesigning performance management for strategic advantage, the research firm said. However, it also noted the popularity of the software as a service (SaaS) model is growing and surveyed vendors report that on average, 82 percent of their performance management implementations are delivered via SaaS.

Although the performance management market is maturing with some standardization emerging in terms of vendor offerings, it remains a relatively new market with ample room for growth and innovation, IDC reported.