Global HR Tech Report Q2 2024: Continued strong market traction, active strategic investors, and potential within HR Tech stacks

15 May 2024

The first quarter of 2024 showed continued strong market traction with 250+ transactions and $2.9bn+ invested equity in HR Tech. This high level of activity points to an expected global HR Tech market volume of $28.8bn in 2024 as well as +13.4% expected market growth CAGR until 2027, as the need for sophisticated HR Tech stacks and solutions drives investment spending. Download the full report below.

HR teams can unlock full potential with impactful HR Tech stacks

The HR Tech stack levels within companies vary strongly across organizations. While 15% have cutting-edge, agile HR Tech stacks with AI applications and 37% use comprehensive HR tools with modest descriptive analytics, the other half lacks mature HR technology stacks. This spans from the use of solutions that are often rarely integrated to only basic HR functions with manual processes. The need for innovative solutions is huge and there is a lot of potential for growth for respective offerings in the field.

Recognizing the benefits of a well-integrated HR Tech stack, such as increased efficiency and improved employee work experience, 85% of organizations have at least two paid HR solutions, and 68% have between three and seven solutions integrated.

When looking at organizations’ spendings in HR Tech, numbers show that 78% increased their spending on HR technology in the last two years, 32% of which increased spending significantly; 82% plan to increase investment over the next two years.

Strategic investors have dominated investor activity over the past 12 months

In the last 12 months strategic buyers made up more than half of the M&A activity in HR Tech, driven by efforts to offer holistic platform HR solutions to provide end-to-end digitalization of the HR function. Around two thirds of invested capital was allocated to later stage venture funding rounds, as investors are increasingly looking for more mature assets with a clear path to profitability.

For an overview of the most active PE-backed and public consolidators in HR Tech as well as a comprehensive market map, capital market developments, M&A and private placement activity, notable recent HR Tech deals and many other insights, download the full report below:

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