The HRTech Trends and Tools You Need to Know About
The latest HRTech report from Hampleton is full of insights into this sector, and sheds light on just how bullish it is. The stats speak for themselves: transaction volume has surged by 282% since 2020, with the total disclosed value reaching the $11 billion mark at the end of last year. Private equity investors have shown continuing enthusiasm for companies in this space, spearheading nearly half of the transactions in 2H2022.
As our report puts it, “Increasing deal volumes have shown that HR Leaders are rethinking their people strategy and are ready to invest into this digital transformation.” The transformation is allowing businesses to better adapt to the era of hybrid working and decentralised workforces – not to mention the ongoing challenges presented by the Great Resignation.
The latter is still very much a thing, as a recent global survey of professionals has highlighted. “Despite the uncertainty of the current economic climate,” the research states, “four in five employees surveyed shared that they have plans to change jobs in the next 12 months. Almost half (46%) are planning to leave their company within only 6 months.”
Improving internal communications
That eye-opening survey cites a lack of employee engagement as one of the key drivers of people leaving their jobs, stating that “companies need to ensure they’re investing in their employee listening programs and internal communications.” Tools that can alleviate this communications pain point are in demand, and a prime example is Palm.hr.
While working as a human resources consultant in Riyadh, its co-founder Richard Schrems had found that the HR software he used was overly complex and geared to HR managers rather than general employees.
He was inspired to create Palm.hr, whose people-management portal collates employee data, making it easy to track performance metrics and share the information with stakeholders. But, just as importantly, it prioritises the employee experience, with its self-service tools allowing workers to request time off, access key company documentation, receive and respond to real-time feedback, and generally communicate in a seamless, transparent way.
The company, which is based in Saudi Arabia, enjoyed a $5 million fundraise earlier this year and is “on a mission to transform HR tech and employee experience across the Middle East and North Africa”.
Optimising flexible working
How about the aforementioned challenges posed by hybrid working? Much-used tools like Slack have helped maintain cohesion between colleagues working in disparate locations, while newer tech companies are springing up to help professionals in specific verticals.
One of these is awork, a Hamburg-based startup which aims to improve hybrid working within the creative industries. Currently focusing on clients in the DACH region, the company landed $5.4 million in funding in early 2023, fuelling its ambition to “turn the entire work management landscape upside down”.
With its bold, colourful interface, awork is tailor-made for creative companies such as media agencies to manage campaigns, respond to spontaneous client requests, and coordinate workloads in a way that reduces the risk of siloes developing. Its ease of use has led to its take-up by well over 2,200 teams so far.
With a recent LinkedIn survey showing that employees who are able to work in a flexible way are 2.6x more likely to be happy at work and 2.1x more likely to recommend others to work for their employer, it’s no surprise that startups like awork are gathering clients and investment.
Placing a priority on skills
A report published this year by HRTech market analyst firm Hrtech.sg highlighted how “organizations can build a competitive workforce by developing a learning culture and assessing employees based on their skills rather than their degrees.”
Some HRTech startups are reacting to this unprecedented emphasis on tangible skills rather educational history, with Spotted Zebra being a case in point. The UK-based workforce management startup raised $1.8 million in seed funding last month, with one investor hailing the company for “putting skills at the heart of all people-decisions.”
Spotted Zebra is tackling what its CEO calls the “skills-gap crisis”, and helping businesses adopt “a new operating model for workforces, one that sees skills as the fundamental building blocks of work.” Its platform features a “Skills Cloud” which pinpoints the skills associated with specific roles, allowing HR executives to make more informed decisions on both talent acquisition and internal mobility, so that staff can be nurtured and developed effectively. We expect to see much more activity within the “skillstech” subsector of HRTech in the months and years to come.
Reaching out to Gen Z
As Gen Z – the generation born in the late 90s onwards – continues to enter the professional workforce, companies will inevitably have to accommodate their attitudes and concerns. Studies suggests that there may be a profound break with how Gen X and even millennial cohorts have typically worked. For example, research by Deloitte indicates that “Generation Z values salary less than any other generation”, placing a greater emphasis on interesting, fulfilling roles.
HRTech companies like Young Heroes are stepping in to help companies attract and nurture Gen Z talent. The Dutch startup provides a platform for young marketing, communication and sales professionals to receive tailored mentoring, and very recently received $432,000 in funding which it will use to scale an SaaS platform that can help businesses to incorporate development programs for young employees in an easy, cost-effective way.
According to research by Young Heroes, a whopping 94% of employees say they would stay at a company longer if they felt it was investing in their career development. So it’s easy to see why HRTech firms mindful of this fact will be increasingly in-demand as Gen Z-ers make up an ever-larger proportion of the workforce.