Contractor Management Software Market Set To Exceed $4 Billion By The End Of 2028

Contractor Management Software Market Set To Exceed $4 Billion By The End Of 2028

Increasing reliance on third-party labour, coupled with a surge in corporate focus on supply chain risk, will see more firms adopt contractor management software in the next four years. In the Verdantix Market Size And Forecast: Contractor Management Software Solutions 2022-2028 (Global), our research predicts contractor management software spend to grow from $2 billion in 2022 to over $4 billion from 2022-2028, at a compound annual growth rate (CAGR) of 12.5%. Our forecast leverages confidential financial information from prominent contractor management specialists, as well as more general EHS software vendors as featured in our Green Quadrant benchmarking. These data points form an accurate market baseline upon which Verdantix builds in macroeconomic trends, vendor expectations and buyer trends taken from Verdantix corporate surveys.

Numerous drivers are influencing the market’s growth. Across industries, there is a growing reliance on contractor labour, with firms reaping numerous benefits, such as reducing employee costs, accessing external subject-matter expertise, and accounting for surges in resource requirements. However, when relying on contractors, firms must also account for higher levels of risk exposure, an inherent aspect of outsourcing to any third-party worker or supplier. Historically, organizations have turned to vendors to streamline the vetting and maintenance of compliance credentials for both potential and longstanding partners. Contractor compliance management was the software use case that drove most spend in 2022, accounting for 62% of the contractor management market.

Despite a historical focus on compliance, contractor management is evolving to better mitigate the various legal, financial, operational safety and ESG risks associated with third-party workers. This is motivated by a growing focus on supply chain resilience and risk management, which is becoming a priority for large corporate entities (see Verdantix Global Corporate Survey 2023: Risk Management Budgets, Priorities & Tech Preferences). For contractors, the most prevalent risk is worker safety, with labour statistics showing that incident rates involving contractors typically occur at a rate three or four times higher than those for FTEs. Contractor management software providers have developed functionality to support more granular safety control of third-party workers, including individual verification, efficient onboarding and integrated safety management tools (see Verdantix Market Insight: Using Technology Effectively For Holistic Contractor Safety Insight).

For more information, read the Verdantix market size and forecast on contractor management software. To view more EHS research, visit the Verdantix research portal.