The market for human capital management (HCM) software will be worth almost £1bn by 2010, according to a report from analyst firm IDC.
The HCM software market, which covers the purchase and support of software, is currently worth £700m, but it will grow quickly as HR departments continue to strive to become more strategic, IDC predicted.
The increase in self-service applications and shared-service centres, and the growing burden of employment legislation, will be the key drivers of growth, said Bo Lykkegaard, an analyst at IDC.
Addressing an event in Valencia organised to mark the first anniversary of the Oracle/PeopleSoft merger, he revealed that the market has grown by 6.5% in the past 12 months alone, as HR departments have looked for software to support areas such as compliance and talent management, as well as more traditional functions such as payroll.
"Employers are looking for next-generation HCM software," he said. "New markets such as workforce management and workforce optimisation are becoming critical areas."
Elsewhere at the event, Oracle promised employers that support for HCM products from PeopleSoft and JD Edwards - both now subsidiaries of the software giant -would continue.
Sean Harman, senior director for HCM marketing at Oracle, said: "We are providing unlimited support and no forced upgrades no matter what the product, despite some scaremongering in the market. We have listened to customers and what they have told us is that they want choice."