Why is HR Tech industry the next most booming industry?
As the business world undergoes a seismic shift, the HR Tech industry is experiencing a $24.04 billion gold rush. A horde of venture capitalists are flocking to the HR Tech space and pouring billions of dollars into cutting-edge technologies and disruptive startups. According to reports, venture capital investments in HR Tech skyrocketed to $18.6 billion in 2021. The HR Tech industry is on the threshold of a radical overhaul that will transform how organisations operate.
Ushering in the future of work, HR Tech has become the cure-all for nearly every workplace woe. From facilitating remote work as the pandemic erupted to helping organisations win the war for talent to upskilling and reskilling the workforce at the peak of digital transformation, organisations worldwide are arming themselves with bleeding-edge HR Tech tools and solutions. As uncertainties stack up, 90% of HR leaders plan to increase their HR Tech budget.
Pandemic-induced work upheaval
The COVID-19 pandemic has caused a 180-degree turn in the way organisations perceive HR functions, especially with the advent of HR Tech. There is no denying that many changes, such as online talent marketplaces and cloud-based HRMS, were already afoot before the pandemic. Now, they have gained the status of ‘disruptors’ after a pandemic-induced acceleration. As organisations worldwide pivoted to remote work overnight, they realised the importance of HR function to be more resilient and agile. With remote and hybrid work arrangements cementing their place, HR Tech tools that help employers manage distributed workforce are witnessing explosive growth.
Renewed focus on employees
In an ever-evolving and fiercely competitive global economy, organisations must have the right people at the right time. Against the backdrop of war for talent and the ‘great resignation’, organisations are prioritising employee engagement, satisfaction and wellbeing, so that they can hire and retain the best talent. The HR Tech stack, from AI-based recruitment to performance management to employee engagement, touches every employee across the organisation. As employers find new ways to cater to employees’ needs in better ways, the value of HR Tech which has employee experience at its core will grow from $24.04 billion in 2021 to $35.68 billion in 2028.
Learning to live with hybrid & virtual
Despite much resistance and scepticism, hybrid work arrangements and virtual hiring have become mainstays of modern working. There is no denying that the future of work is hybrid and that the future of hiring is virtual. To support the long-term hybrid set-up and shift to virtual hiring, organisations are collaborating with HR Tech startups that offer cloud-based solutions, people analytics software, advanced hiring platforms, video interview tools etc. As a result of mass adoption, HR Tech funding has accelerated across the globe. In 2021 alone, at least 17 HR Tech startups have reached the coveted unicorn status.
Making the most of digital transformation
Digital transformation, spurred on by the coronavirus pandemic, has caused disruption everywhere, including HR processes of long-established industries. Rapidly changing market dynamics have compelled organisations to adopt new technologies to respond to changing customer expectations, increased competition, and fulfilling the needs of their workforce.
Propelled by the need of the hour, more and more organisations are looking to upgrade their HR Tech stacks. Consequently, AI, robotic process automation (RPA), and data analytics that optimize HR functions and minimize costs are gaining more traction each day. In the upcoming years, investments in these technologies will lead to the next tech boom - in HR Tech.
Preparing for Web 3.0 hiring
As traditional HR models become ripe for disruption, week-long hiring, the quest for the best talent, and manual background verifications are set to be things of the past. With AI and automation making inroads into all processes, the HR industry is embracing next-gen technologies such as blockchain, machine learning, and NFTs. As Web 3.0 technologies capture the market, the HR Tech industry is preparing for Web 3.0 hiring where candidates will be approached on the metaverse, background verification will take place on blockchain and salaries will be paid in cryptos. Naturally, companies will be more inclined to adopt these technologies, attracting an influx of investments in the HR Tech industry.
Final Thoughts
Emerging as the most powerful tool for organisations across the globe, HR Tech has enabled organisations to accelerate hiring, retain the best talent, elevate employee engagement, and upskill their workforce. As the talent market poses a slew of challenges, HR Tech will help companies brave the disruptive forces of the market and inevitably attract an outpouring of investments from venture capitalists and organisations across the globe.