The HR Tech market has been on fire for the last few years. More than $15 Billion of venture and PE money was invested and the number of startups is astounding. The average large company now has more than 80 different employee-facing systems (OKTA), and this number has increased by more than 40% over five years.
There were two reasons for this growth First, the low-interest rate investing environment unleashed billions of dollars to entrepreneurs, so there are hundreds of new tools. Second, we’ve had a massive need to manage, hire, and support employees during the pandemic. Remote and gig workers need scheduling systems, remote payroll platforms, onboarding, and more. So HR buyers have had a blank check, shopping for tools and platforms with almost no limitations.
Well all that is about to change: 2023 is going to be a year of slowing growth, market consolidation, and new category definition. So let me give you my thoughts, and also thank Stacey Harris for publishing the 25th Sapient Insights HR Tech survey, which contributed to my analysis.