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The HR Tech Conference had what seemed to be its most successful year ever in 2022. There was a palpable energy and excitement from the attendees, most of whom had to miss the past two years due to the coronavirus.
With so many people back under one roof again, there was much to discuss and many trends to pick up on. Here are a few of the topics that we came away thinking about
HR Tech has been on the rise for years, but the growth trajectory dramatically accelerated during the pandemic. Without in-person work environments, companies became much more reliant on digital employee files, cloud-based technology systems and tools that could support productive and engaged employees.
Investment by venture capital firms into the private HR Tech sector went through the roof over the last 24 months and the publicly traded HR tech platforms continue to outperform their peer groups.
With all of this money pouring into the industry, it is no surprise to see such exuberance at the industry's main event. Most of the software companies are growing rapidly, adding customers and seeing their team's balloon.
One of the common challenges being discussed at this year's event was simply not having enough bandwidth to implement and service all of the new customers.
This rising tide is lifting all boats in the HR Tech industry and creating new opportunities for businesses of all shapes and sizes.
The biggest takeaway from HR Tech 2021 was the rise of the global employment providers. Vendors like Deel, Papaya Global and Velocity Global all made their first major appearance at the conference which was a sign of all of the success they had experienced during the pandemic.
Fast forward a year and some of that momentum has been taken out of the sails of the global payroll and global EOR vendors. Many of those companies relied on high-growth tech companies to buy their products but the economic slowdowns and venture capital cool off has made it so these customer bases are less cash-rich.
Still, it was a bit surprising to see that the only major vendor with a large presence at the event was a relative upstart called Atlas.
One of the benefits of the rising tide in HR Tech was that it was very easy for companies to raise new rounds of venture capital funding every 9-15 months. Now that markets are starting to cool off, however, we are seeing some companies face bigger challenges.
Companies that took on a lot of venture capital debt, but were unable to find sufficient traction during the upswing will be under immense pressure to find a buyer over the next year.
The Namely acquisition was announced right before the show started, but I have a feeling that won't be the only major transaction we see before HR Tech 2023
