HR has always been an important area for companies large and small. New tools and solutions have spawned new categories thanks to technological innovation and heavy investment in the field. The HR-Tech field has been attracting attention in recent years.
HR-Tech provides solutions across the employee lifecycle, from recruitment and hiring, training, development, and ultimately to retirement. This disruption to traditional HR has led both executives to view his HR as a competitive advantage rather than as a cost center, enabling technologies such as AI/ML and analytics to move the field forward. promoted by
The field of HR technology has changed dramatically over the last few decades. Tracing its beginnings to a system-of-records platform focused on automating paper transactions and record keeping, the HR-Tech stack has since expanded into applicant tracking systems (ATS), workforce planning (ERP systems), and systems of record. Engagement (HCM system), talent management and employee experience tools. Most recently, major companies have ventured into something called Talent Science, which is designed to harness analytics to assess employee behavior and performance.
Given the ongoing market turmoil, hiring, development, and talent retention remain top priorities for global companies, with C-level personnel focused on deploying resources, experimenting, and adopting technologies that enhance HR. is placed. Yet, the current environment has seen an increased focus on solutions that reduce costs and increase revenue more directly across the enterprise software stack, and HR is no exception.
Partly due to the impact of the pandemic, investment in HR tech will total $12.5 billion in 2021, accelerating to $7.5 billion in the first half of 2022 alone, demonstrating strong investor appetite. Before Covid-19, there were only 10 unicorns in the space, dating back to the pioneering HR SaaS platform Workday (currently worth about $40 billion), but interest from investors has increased. The surge has spawned 15 new unicorns in 2021 alone. Today, the largest incumbents in this space (i.e. Oracle, Workday, SAP, ADP) compete with hundreds of agile and innovative players in nearly every market segment.
As investors, we see the constant struggles our portfolio companies face when it comes to human resources. So it’s no surprise that these companies are innovating in their products in the same spirit, and they’re also innovating in how they think about their employee base. This, coupled with significant advances in cloud, big data, and AI/ML, has enabled the rise of new technologies, driving several key trends within HR.
1. Emphasis on skills and experience – Recent hiring trends prove that traditional CVs are not the “single source of truth” for ensuring an ideal employee-company fit. The talent acquisition process is revolutionizing. New technologies introduced by Skillset, Unboxable, Retrain.ai, Canditech, and MyInterview dramatically optimize the time and effort spent qualifying the right candidate, helping companies streamline the entire recruitment process while It enables you to improve your talent procurement capabilities.
2. Harnessing data and analytics for HR – Consistently across many different industries, organizations are increasingly moving to data-driven decision-making, and HR is no exception. Cohorts of new entrants such as HiredScore, DreamTeam, and Compete are building tools to decipher insights from massive amounts of data to drive growth, replacing gut-driven decisions with concrete, data-driven decisions.
3. Prioritize Diversity, Equity and Inclusion (DEI) – Covid-19, along with social movements such as the resignation and #MeToo, have become the driving force behind the DEI, fostering a stronger organizational culture. Solutions developed by Israeli startups such as Joonko are helping organizations better fulfill these important responsibilities.
4. Global Recruitment and International Team Management – The growing number of remote workers and shortage of qualified talent are spurring companies to expand their teams into decentralized, globalized talent pools. A.Start-ups and marketplaces such as Team find talented individuals and teams across borders to build projects, while others such as Papaya and Deel rely on global workforce management and various A powerful tool for compliance with local regulations.
5. Focus on employee experience (EX) and development – Employees want more from their jobs. Today, job satisfaction and career development are just as important as salary and title. Many innovations by companies such as Gloat, GrowthSpace, Central and Bites focus on employee development, health and growth to retain talent.
6. Invest in employee benefits – Employee mental health, personal time and well-being are increasingly important topics to prevent “burnout” while fostering a sense of belonging and culture in emerging hybrid work models. Companies like Covver, Sorbet and Beex are giving HR teams the resources they need to care for the modern workforce.
Ortal Sasson is an Investment Associate at Greenfield Partners.