Market Watch January- February 2023

Executive Summary

The US market is showing resilience and added 517,000 jobs despite the continuous rounds of layoffs that led to almost 78,000 tech skilled employees losing their jobs in January, according to Layoffs.fyi. Furthermore, the unemployment rate dropped to 3.4%, the lowest since 1969.

Volatile market conditions are creating the opportunity for other industries of hiring high-skilled workers to accelerate growth and profitability. Emerging technologies are disrupting the business landscape and the HR function is discussing how to leverage new technologies to increase productivity, reduce cost and enable workplace collaboration and hybrid work. 

The HR function is also exploring new ways to innovate HR capabilities to support areas of growth of the business and leverage the power of talent, technology, and data to identify, develop and mobilize hidden talent to increase operational excellence and drive efficiencies. This means:

1. Reimagine a new operating models and people services
2. Establish a new set of organizational mindsets to adapt to a new hybrid work
3. Develop experience-first talent practices
4. Use technology to enable work, workplace, and sustainability

Innovation is in full steam in HR technology (more than +11B of investments in 2022). However, 2023 is all about reimaging your Digital HR strategy and technology architecture to facilitate business transformation and redeploy talent into growth areas of the business.

ChatGPT is taking the world by storm. Last week OpenAI lunched chatGPT plus at $20 per month (only available to US companies for now) There is even a waiting list to test and use this AI-enabled application. Furthermore, Microsoft launched Microsoft Teams Premium bringing the latest technologies (including OpenAI’s GPT-3.5). 

As ChatGPT gets deployed and its algorithms learned overtime, there are multiple HR use cases that this tech can solve for in the future of work space:

• Assisting recruiters to create interview questions 
• Prepare job postings
• Provide self-people services for HR operations
• Create job descriptions
• Communicate with candidates
• Summarize resumes
• Recommend a role to a candidate

HR Technology Ecosystem

We had a very slow start this 2023, with minimum activity in acquisitions and venture capital investment. WilsonHCG acquired Personify (RPO), Clovers acquired Talvista (DEI platform) and My interview raised $11 million in series A funding.

HR technology vendors need use their cash strategically for go to market purposes, re-assess its value proposition and focus on discussing with clients how your platform can be integrated across the HR Technology stack. Every dollar needs to be directed to build stronger relationships with clients and/or product improvements.

For HR functions, the HR Tech budget will be limited, and dollars will need to be used wisely to develop an integrated HR technology stack to enable work, workforce, and workplace. This includes, defining the HR technology architecture outlining your systems of record, systems of intelligence, systems of experience and use cases for enablement. 

Highlights:

• Emerging Technologies such as VR, Metaverse, Blockchain and ChatGPT are still in early stages. We started to see some POVs and Thought Leadership, however, hardware/software, data, compliance, and privacy regulation’s aspects will need to be overcome first to accelerate enterprise adoption

• Hybrid technology, combine with workplace, people analytics, and employee listening will be more important than ever to understand how employees, work, when and whom they work with. Furthermore, these capabilities also measure productivity and provide #insights on employee needs, space management, track engagement and people services

• Personalized Learning and Upskilling are critical (in these uncertain times) to identify talent and skills gaps, develop learning journey and upskilling plans as well as address how to build, buy, borrow, and redeploy talent. Culture and leadership are critical here for adoption and deployment.

• Talent Intelligence and Labor Market Analytics capabilities analyze internal and external skills and talent data to provide insights for decision making. This technology can be applied across the talent lifecycle enabling multiple use cases from talent sourcing, talent ranking, internal mobility, performance, succession planning, wellbeing etc.

Relevant Acquisitions in 2022

Payroll

• Deel made 2 acquisitions last year (reaching an estimated valuation of $12 billion): Pay Group Limited (AU $121 million acquisition) and Roots becoming a vendor to watch out in the payroll and HCM space for the enterprise market.
• Papaya Global acquired Azimo ($150-200 million acquisition), a global digital cross-border payments service provider, reaching an estimated valuation of 3.7 billion.

Recruiting

• WilsonHCG made 2 acquisitions last year: Claro Analytics (people analytics) and Tracking Talent (recruiting consultancy)
• Harver acquired Pymetrics (soft skills assessment). This acquisition will bring AI behavioral soft skill assessments to expand Harver’s capability in the recruiting space.
• ICIMS acquired Candidate ID (recruiting marketing automation) and Skillsurvey (digital reference checks) to expand its recruiting suite with specialized point-solutions

People Analytics

• Visier, made two strategic acquisitions of Yva and Boostrs to expand its people analytics offerings with workplace collaboration, employee listening and skill mapping engine capabilities. These acquisitions will position Visier as one of the leading players in the people analytics and workforce planning space with new offerings to provide talent insights for decision marking.

Learning/Upskilling

• Cornerstone on Demand (acquired by Clearlake in 2021 for $5.2 billion), acquired Edcast (LXP and talent mobility) and SumTotal (LMS for $200 million) bringing an end-to-end talent experience with skill engines/systems, learning experience, and talent management capabilities to address multiple use cases across the talent lifecycle.

HCM

• Paycor, acquired Talenya (recruiting platform) to expand its capabilities to source and engage with qualified candidates and accelerate hiring

Process Mining

• Celonis acquired Process Analytics Factory (PAF) for $100 million reaching an estimated valuation of $12 billion. The company has been building relationships with service integrators companies such as Accenture and Deloitte but also with large technology players such as SAP, IBM and ServiceNow. This acquisition will expand offerings in the Microsoft Teams and Microsoft office space.

Employee Listening

• Medallia (acquired by Thoma Bravo for $6.4 billion in 2021) acquired Thunderhead (real-time interaction management and journey orchestration) to keep providing personalized and predictive insights across every customer journey and experience channels.

More to come! Stay tuned.

Note: All views expressed in this article do not represent the opinions of any entity whatsoever with which I have been, am now, or will be affiliated. My opinions are my own.