On the back of the pandemic, the focuses of business have changed. Suddenly, and rapidly, employee experience, retention, and engagement have climbed the ladder of corporate policy.
With exciting technologies being developed to respond to the need of the current working market, it is easy to believe that there is an economic boom that is being ridden by emerging technologies across the world.
Crunchbase has now collected the data that shows how well the HR tech industry is doing. The answer is extremely well.
HR tech investments
Between 1 September and the beginning of November, there was $2.8 billion of venture dollars invested into HR tech.
Of course, this doesn’t mean that the companies who received this investment are guaranteed to be successful, but it does show the huge faith investors have in the market.
In fact, the investment over that two-month period is more than the amount that was spent in the whole of 2020 when only $2.2 billion was invested.
September to November 2021’s boom was helped by major funding rounds by leading HR tech companies. Examples are Deel, Personio, Rippling, and Checkr. All of these companies received at least a quarter of a billion in funding.
Nonetheless, this wasn’t an isolated boom. The entirety of this year has seen a growth in HR tech investment when compared to previous years.
With $7.5 billion invested in 2021, the year has seen more investment in HR tech than 2020 and 2019 combined.
The future of investment
There is undoubtedly a demand for HR technology as companies grapple with the ‘Great Resignation‘ and related talent shortages.
Millions of people are leaving the workforce with no roadmap for returning. This is because their employers and jobs have failed to give them the benefits and balance that they desire.
As a result, companies are seriously reconsidering how they communicate, incentivize, and engage with employees. Doing this in a hybrid world of work requires technology.
Companies are investing heavily in bringing in HR tech, and it is a growing interest for everyone within a business. Sage found that 56% of C-level executives want to be involved in HR investment strategy.
On the back of this, Siddiqui said: “You will definitely see more investment here.
“Everyone has spent the last 16 or 18 months working (remotely) but no one really enjoys it. So the question is how do you make it more enjoyable?”
If the market need was not enough, Siddiqui also notes the success of investments: “As investors start to see returns, it makes it easier to double down [on the sector] and valuations just rise.”
With that in mind, could 2022 be an even bigger year for HR tech?