Is the HR Tech Market sitting on a bubble?
An overview, updates and a conclusion in one article.
In the past years, the world of Human Resources has experienced remarkable growth in the quantity, quality and fragmentation of new technologies. With the rise of digital innovations, countless HR solutions and tools have been developed that help organizations optimize their HR processes. From recruitment software and talent management platforms to AI-driven chatbots and automated onboarding systems, the diversity of available technologies is overwhelming.
It has already led to a “test pattern” of a Global Market Landscape, created by the independent research & connection platform HRTOOLZ.online.
Global findings
The amount of new technologies for HR has increased exponentially. There are more and more suppliers and start-ups offering innovative solutions to address various HR challenges. This plethora of options enables HR professionals to choose the right tools to meet their specific needs and goals.
At the same time, the quality of HR technologies has improved significantly. Due to continuous technological advancements, new tools offer advanced functionalities and possibilities to make HR processes more efficient and effective. Think of automated screening of applicants, data-driven insights into employee engagement, and personalized learning management systems. These high-performance technologies enable HR teams to make more informed decisions and improve employee performance.
However, with the growth in quantity and quality comes the fragmentation of HR technologies. There are so many different tools available that it can be challenging for organizations to find the right mix of technologies that can integrate seamlessly with each other. Managing multiple systems and ensuring a consistent user experience can be a complex task. Therefore, the different steps in the life of a digital HR solution are:
Innovation
Cooperation
Integration
Despite the fragmentation, the growth of new technologies in Human Resources offers unprecedented opportunities. Organizations now have access to a wide variety of tools and platforms to streamline their HR processes, attract and retain talent, and improve the employee experience.
It is essential for HR professionals to keep abreast of the latest developments and carefully select which technologies best suit their specific needs and strategies (HR- & people analytics).
With the right technology tools, HR teams can make a significant contribution to the success and growth of their organizations.
The BeNeLux
Since HRTOOLZ.online starts from and focuses on the BeNeLux, 670 providers from the BeNeLux, or slightly beyond, were also mapped and spread over six categories.
The note about this extensive collection is that it is never complete and each category must be approached with the necessary nuance, there are solutions that cross several categories or companies that disappear or are taken over.
The numbers per category are:
Recruitment & Selection: 342 solutionsas talent platforms, recruitment support (e.g. recruitment marketing, advertising, multiposting, or a non-conventional recruitment approach), recruitment systems (from ATS or VMS, to all-in-one) and digital solutions that screen talent (tests, channels, and artificial intelligence) .
Employee Experience: 85 solutions where cooperation, information exchange, involvement, culture, well-being or communication are key.
Learning & Development: 67 solutions who at HRTOOLZ.online mainly focused on learning management systems, learning content providers, learning applications and channels, performance management and points for improvement, or even the entire learning and development experience.
WorkForce Analytics: 18 solutions and thus few subcategories. However, the solutions listed here have different ambitions. One to create descriptive analytics, telling us what has already happened (reports and dashboards); the other to do predictive analytics, which show us what might happen, and finally those who want to provide prescriptive analytics, which inform us about what should happen in the future.
A note here is that many solutions that focus on People Analytics and Skills are also listed with the screening solutions in Recruitment & Selection, but that is certainly open to interpretation. Talent Intelligence is something that benefits multiple HR processes.
Payroll, Compensation & Benefits: 42 solutions who are aiming to be the backbone of any organization and deliver on the core promise to each employee. Various payroll engines, (extra-legal) benefits, platforms and remuneration mechanisms play an important role in this.
HCM & HR Automation: 116 solutions that can range from workforce planning and time registration to core processes and administration for HR (HRIS), often with systems offering talent management functions (HCM) and/or artificial intelligent automations.
Talent Management is not mentioned as such for the sake of fragmentation and clarity in focus. HRTOOLZ.online has divided this into 3 categories, namely: Employee Experience, Learning & Development and HR Analytics.
Value
There is a lot of variation in WorkTech or HR Tech market forecasts, of course no one can predict the future and there will always be optimists and pessimists. The spectrum is indicated by three recently published reports on the HR Tech Industry.
The most positive report comes from Spiceworks, which states that the total market for WorkTech is expected to grow to $970 billion by 2026.
However, the HR Tech market is only estimated to grow from USD 24.9 billion in 2022 to USD 63.5 billion in 2032, growing at a CAGR of 9.8% over the forecast period according toDeep Data van Future Market Insights, Inc.
Finally, the report of Fortune Business Insights hits the lower bound: “with a CAGR of 7.5%, the market size of Human Resource Technology is in 2029; Worth $39.90 billion.”
Dynamics on the BNX WorkTech market
This quarter, these movements caught the eye:
Shyfter.io - raises €1.1M of capital to better plan personnel
AG5 - raises €1.2M in fresh capital to further expand their skills solution
BCS HRM Software takes over Centric's HR & Payroll activities
Hot of the presses this week:
Payroll provider Partena is being reviewed by the government’s “competitor watchdog” concerning their acquisition of Easypay in Q1 of this year.
After acquiring the Belgian scheduling solution Beeple in 2022, Visma acquired Dutch CleverGig to unlock the growth of small teams and companies last month.
SD Worx, the leading European HR and Payroll solutions provider, is delighted to welcome CVC Strategic Opportunities II as a new partner and minority shareholder.
Without knowing the valuation of providers the size of Visma or SDWorx, the BeNeLux has also grown HR Tech Unicorns who received large amounts and high valuations over the past years.
Odoo has a total of $319M raised capital as an ERP provider with extensive HR functionalities
Remote raised $150M + $300M in two installments to manage payments (and more) for a globally dispersed workforce
Goodhabitz: sold a majority share to Prosus for €212M to keep educating the workforce.
Conclusion
The HR Tech Market has not stood still in recent years and has grown into a varied range of digital HR solutions that can also tackle the problems of companies qualitatively. As a small region, we can be quite proud of that.
The HRTech Market is not sitting on a bubble, because there is no “one size fits all” and the diversity in solutions, companies, context and requirements will assure almost every company for a suitable solution to measure the KPI’s they want (or improve what they have).
The question is whether this valuable collection of digital HR solutions is inspiring or confusing, because as an HR manager or recruiter, people are quickly overwhelmed by the offer. Moreover, due to the limited and fragmented resources for thorough market research and the scattered information sources, the search process is often inefficient too.
Thus, the risk is not the potential bubble, but missing out on innovative HR solutions, wasting valuable time and resources, or ending up with sub-optimal choices that do not meet unique requirements. Ultimately, the budget involved in purchasing a new digital system is often not trivial and the users of the solution want value for money.
Tip:
It is important for companies to ask the question right from the start in order to get an appropriate answer. Also for the providers, who then are enabled to work more customer-oriented.
Wrong questions often lead to wrong choices.
Good luck and don’t hesitate to ask HRTOOLZ.online for support!