The HR software market is forecast to grow at a compound annual growth rate (CAGR) of 2.4%, reaching $9.2 billion worldwide by 2020. For CXOs who are tea leaf readers, what is perhaps more noteworthy from this survey is a definite shift in HR software buying patterns that might reflect future workforce management requirements.

The shift is the replacement of baby boomers by millennial workers — and with this, a major shift in what employees expect from companies, and how they plan to work. Individuals with the most highly sought skills get multiple employment offers from multiple companies on any given day, so they can afford to be picky. In one case, a Silicon Valley tech company could only recruit a key technical contributor by promising him unlimited anytime access to company-furnished mobile gear at home and at work, in addition to a lavish comp package and a personal gym setup, a company car, and several other perks. “I’m not surprised,” commented an HR tech consultant in the Silicon Valley. “There isn’t anyone here who isn’t working.”

The situation in the skilled labor sector isn’t much different. In manufacturing, there is a major shortage of Computer Numerical Control (CNC) machine operators; in logistics, companies can’t find enough truck drivers. The latter is particularly interesting, because one of the adjustments the trucking industry has made is a shift to intermodal transportation, where goods shipped across country go by train, with trucks delivering the goods onto the train and then picking them up at debarkation points for local delivery. The new strategy saves fuel costs, and it allows drivers to be home at night, instead of on the road.

The “foundation blocks” of HR software, such as payroll, time and attendance and benefits management, are predicted to be the “slow movers” in the global HR software market, with much of the market pickup in HR tools like recruiting, training, performance management, employee HR self service, HR mobile apps, and succession and leadership planning. CEOs recognize that in order to develop and retain talent they will have to keep their employees engaged through training, development, communications, collaboration, and even using social media. In the future, C-level managers and the mid-level managers who report to them will likely be evaluated on how well they recruit, develop, and retain talent.

“The number one reason employees quit their jobs is because of a poor quality relationship with their direct manager,” writes Monique Valcour, a professor of management at EDHEC Business School in France, in the Harvard Business Review. “No one wants to work for a boss who doesn’t take an interest in their development, doesn’t help them deepen their skills and learn new ones, and doesn’t validate their contributions.”

The good news from a recent CareerBuilder survey is that 63% of US employees surveyed rated their managers as an “A” or a “B,” although 14% in the same survey gave their immediate managers a grade of “D” or “F.”

The CareerBuilder survey concluded the HR software market is already indicating that employee engagement with the company, and the right tools to build employee confidence in their skills and abilities make work better.

“Managers who interact frequently and communicate directly are more likely to have the support of their employees,” said Rosemary Haefner, vice president of human resources at CareerBuilder. “The ideal form of that communication will vary from individual to individual, but everyone’s jobs get done better when expectations and roles are clearly defined. The best managers understand the triggers for their workers’ success and are able to course correct when productivity drops or conflict arises.”