HR tech
People managers’ not-so-secret weapon
Last updated: 17 Nov 2022
Market 101
The “war for talent”, the “Great Resignation”, a wave of layoffs in a jittery economy — HR departments have had plenty to worry about in recent years. Competing for coveted talent while making sure existing employees don’t leave for greener pastures was hard enough before the pandemic, which made working life virtually borderless, and for many reaffirmed the importance of work-life balance. Lately, HR managers have needed to handle a delicate task unknown to most of the tech sector for over a decade: mass layoffs.
Stepping in to provide support at this crucial time is a growing wave of startups focusing on everything from performance analytics to recruiting software to payroll management, with many of them targeting the giant — but underserved — European SME market. Going forward, their biggest challenge won’t be a lack of demand for HR tech, but an increasingly crowded sector in which they must stand out from the pack.
Early stage market map
Key facts
$48.9bn
projected market size by 20271
24.4%
the share of employees aged 20-64 who regularly work from home in the EU2
$310
a company’s average HR tech spend per employee3
Trends to watch
The permanent hybrid
With office occupancy back on the rise, the extent to which fully remote workplaces are here to stay is up for debate.
Amid this uncertainty, HR-focused startups that are just starting out may do better to consider which products will remain essential to HR generally, rather than tailoring their offering too much towards fully remote or fully physical futures.
Fairness and AI bias
AI tools for sourcing and screening talent are sprouting up, but concerns around fairness and reinforced biases may slow their adoption.
Those startups need to be careful to sell their tools as providing additional, alternative information to support hiring managers in their decisions — rather than claiming to be able to replace human judgement altogether.
Securing data (and talent)
Faced with stringent data regulations, HR departments need to demonstrate strong levels of protection and compliance.
HR techs are filling the gap by developing “safe vaults” that centralise and protect social data, ensuring additional compliance across departments.
One for all, all for one
Because HR has touch points with many other departments — from finance to legal — it makes a particularly good starting point for building an all-in-one enterprise software kit.
With companies looking to streamline their spending amid the broader economic downturn, there’s even more incentive for HR startups to integrate additional services and help clients cut costs.
Startups tracked by Sifted
Sifted take
The pandemic and the advent of the remote working world undoubtedly elevated the HR manager and increased their spending power. But how many bits of HR tech do we really need? It’s a question CFOs are surely askingas budgets start to tighten. And with the HR tech sector itself quickly crowding up, startups may now need to double down on the services that their clients deem the most essential.
Rising stars
Backed by investors like Seedcamp and Village Global, Metaview provides analytics to let companies improve their interviewing processes. Its cofounders previously worked for the likes of Uber, Palantir and Morgan Stanley.
Round
Seed
Valuation
Undisclosed
Date
2021
Size
€6,000,000
Software to help companies offer flexible benefits to employees. Founder Miguel Santo Amaro previously cofounded student accommodation startup UniPlaces, which employs over 130 people.
Round
Pre-seed
Valuation
11000000
Date
2021
Size
€5,000,000
Helps companies assess employee stress levels and creates bespoke programmes to help manage this stress better. The startup was founded by BenevolentAI’s former VP of strategy and is backed by Octopus Ventures and Notion Capital.
Round
Seed
Valuation
Undisclosed
Date
2021
Size
€4,100,000
Early stage startups to watch
Applied
Hiring
Screening & interviewing
€4.9m
€3m
-
CandidateX
Hiring
Job portals & networks
€780k
€500k
-
Cosmos Video
Remote work
€2.2m
€2.2m
-
Coverflex
Employee benefits
€5m
€5m
€11m
Culture Shift
D&I and anti-harrassment
€3.3m
€1.8m
-
Develop Diverse
D&I and anti-harrassment
€2.5m
€2.5m
-
ehlo
Remote work
€600k
€600k
-
Equalture
Hiring
Screening & interviewing
€4.4m
€2.8m
-
Feats
Hiring
Job portals & networks
€2.6m
€2m
-
Glue
Hiring
Job portals & networks
€5m
€3.5m
-
HappyPal
Retention
Surveys
€4m
€2m
-
InChorus
D&I and anti-harrassment
€397k
€340k
-
JOBBY
Hiring
Job portals & networks
€3.3m
€2m
-
JUST KNOCK
Hiring
Job portals & networks
€200k
€200k
€2m
Lifeed
Retention
Wellbeing
€1.5m
€1.5m
€4m
Metaview
Hiring
Screening & interviewing
€7.6m
€6m
-
Metta Space
D&I and anti-harrassment
€300k
€120k
€3m
Mooncamp
HR ops
-
-
-
Moonstar
Remote work
-
-
-
PayCaptain
Payroll
€1m
€700k
€5.6m
Peero
Retention
Wellbeing
€400k
€400k
-
PESCHECK®
Hiring
Screening & interviewing
€800k
€800k
-
Pirical
HR ops
-
-
-
QPage
Hiring
Screening & interviewing
€240k
€200k
-
Quan
Retention
Wellbeing
€1.5m
€1.5m
-
Ratecard
Retention
Training & development
-
-
-
RecruitLab
Hiring
Screening & interviewing
€2.2m
€1.9m
-
Relocate.me
Hiring
Job portals & networks
-
-
-
Teemyco
Remote work
€3.5m
€2.6m
-
The Hub
Hiring
Job portals & networks
-
-
-
Walking on Earth (WONE)
Retention
Wellbeing
€4.6m
€4.1m
-
Wurkr
Remote work
€1.4m
€25k
-
Your FLOCK
Retention
Surveys
€430k
€180k
€1.8m
YourCampus
Employee benefits
€3.2m
€2.7m
-
Europe’s success stories
Who early stage startups are up against
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
One of the highest valued startups in Europe, it offers an all-in-one HR platform for startups and SMEs
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
Payroll management system for SMEs with up to 500 employees
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
HR software that takes care of recruitment, retention, operations, finance and legal aspects for more than 7,000 companies
Sources
Research report
1 Human Resource (HR) Technology Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2022-2027 | October 2022 | imarc
2 Rise in EU population working from home | November 2022 | Eurostat
3 HR Technology 2021 | July 2022 | Josh Bersin
PwC HR Tech Survey 2022 | February 2022 | PwC
The future of work: A hybrid work model | April 2021 | Accenture
The future of work: From remote to hybrid | 2020 | Capgemini
News article
Return to UK offices hits highest since pandemic began | February 2022 | Financial Times
HR tech mapping: the future of work in a post-Covid world | July 2020 | XAnge
For investors, future of work isn’t only about HR | January 2022 | TechCrunch
The future of work after COVID-19 | February 2021 | McKinsey & Company
How to ensure that the future of work is fair for all: The hybrid workplace will be unequal, unless bosses design it not to be | November 2021 | The Economist
Your feedback
How would you rate this briefing?