“Why Invest in HR Tech? Why Now?”

Investments in Hr Tech are growing quickly. Why is it happening NOW and what can we expect down the road.



We’re half way through 2018 and the HR tech sector has already closed 33 deals totalling $642M  – Making Q1’18 the second highest-funded quarter ever. At this pace, $2.9B will be invested across 146 deals in 2018. This would be a 51% increase in deals and a 138% increase in dollars raised compared to 2017, according to CB Insights.
These numbers are indicative of a broader trend. According to Josh Bersin, Founder and Principal of Bersin by Deloitte: “..the entire marketplace is shifting from tools that automate traditional HR practices to platforms and apps that make life at work better. This fundamental shift is profound in its implications, and I believe we will see new winners and some losers as a result.”

A combination of market demands, shifting workforces and technology are fueling the transformation of the HR world. To simplify HR functions for employers, employees, contractors and other contingent employees, startups are emerging at a breakneck speed. Technologies related to performance management, real-time engagement, people analytics, talent acquisition, wellness and AI are powering a 60% annual increase in HR tech investments, according to CB Insights.

One HR Tech expert with a finger on the pulse of the latest developments in this rapidly evolving industry, is Karen Azulai,  Editor-in-Chief of HRtechnation.com.

bob’s blog recently discussed the HR tech boom and future investment possibilities with Azulai. Excerpts below.

"karen azulai" hrtech "HR tech"bob’s blog: Why are we seeing this major buzz around HR technologies now?

Azulai: The reason for this growth is, I believe, the fast pace in which infrastructure technologies are developing. This growth is affecting many industries, HR is one of several other rapidly evolving industries.

bob’s blog: Has HR tech peaked? If not, how long will this trend continue?

Azulai: Definitely not peaked. HR tech in Q1 2018 represents “73% of the total amount tracked last year.” In other words we’ve already seen “..as many deals through Q1 2018 as in ALL of 2017!!” ( #HRWins). These numbers will continue to rise for several reasons. Among them, buyouts and new apps and platforms will get even more investor attention and generate greater publicity.

bob’s blog: What do you think the near future will bring, innovation wise?

Azulai: I believe that we will witness the following innovations in the next few years:

1. I believe we will see more and more “one-stop-shop” platforms. Sourcing, recruiting and HR, all in one place. For example..SmartRecruiters and Hibob combined. Why use different systems. We will probably also see feature-oriented HR Tech startups being bought and integrated into platforms.

2. AI based sourcing and recruiting tools will be enriched by new layers of information that will affect the choice of candidates. Information will be aggregated from industry, key players, competitive intelligence, trends and also company DNAs. Also, the “profile” as we know it will become three-dimensional.

“The profile, as we know it, will become three-dimensional.”

3. Sourcing and Recruiting processes will be initiated by voice commands on a mobile device.

4. More recruiting via candidates’ soft skills, especially for graduates who are new to the job market and are looking for their first gigs. These young men and women don’t yet have much to show for professionally. Focusing on soft skills will also deepen the candidate pool of people from developing countries, since their lack of experience will be partially compensated for.

“There will be a proliferation of apps that emphasize health, wellness, fitness and help people strike the right balance between work and life.”

5. VR in the workplace will EXPLODE!

6. Wearables, “quantify self” – or “lifelogging” – will be integrated into workplace data (although some will find wearables very “intrusive”..not sure where that will go..

7. Proliferation of apps that emphasize health, wellness, fitness and helping people strike the right balance between work and life.

8. People analytics  – Combined with AI technologies promises a huge leap of potential data insights within companies. To the point it may become somewhat creepy…

All of the above is already here. Some in very very early stages.
I have to say, though, that the excitement of having such innovative developments and solutions is clouded by the pressing need to solve bias and ethical issues. A lot of what’s going on will be learning “on the fly”, as well as adopting a “failing fast” mentality.

bob’s blog: Thank you very much for your time and insights, Karen.

Azulai: Thanks bob!


Leave A Reply

Your email address will not be published.