HR Technology Market Insights 2023-2024

Global venture funding reached an estimated $236 billion in 2023, a 47% drop vs 2022. HR Technology funding is not the exception, with estimates closing 2023 with $4 billion in funding vs $12 billion in 2022.

Borrowing become more expensive, and revenue growth and profits were a challenge in 2023. Many HR Tech vendors (especially early-stage startups) struggle to grow, unable to raise money, and conducted layoffs to maintain a cost savvy- mindset to survived.

However, with an estimated 40K vendors in the ecosystem, we have seen innovation in almost every HR capability area to hire talent faster, match people to opportunities and manage skills and talent data.

HCM and talent acquisition were the areas with most funding in 2023. Microsoft launched 365 Copilot, and Google introduced Duet AI for Google Workspace, competing toe to toe to bring productivity services to the enterprise market.

AI Partnerships and Investments went mainstream.

▶ Microsoft invested $100 billion in Open AI, Google invested $300 million in Anthropic, and Amazon also invested nearly $4 billion in Anthropic.

▶ Google launched “Gemini” and expanded partnerships with big technology and AI players.

▶Management consulting firms made investments and developed key partnerships by combining digital and strategy expertise with cloud platforms, hardware companies, and foundational/hub models startups.

Enterprise

▶ Enterprise disruptors started experimenting with AI and defining strategy and roadmap.

▶ AI talent is in high-demand becoming harder to attract and retain.

▶ Concerns around AI compliance, ethics and copyrights started addressed by government regulators and responsible AI practices.

What’s coming in 2024?

💡Venture funding slowdown will continue. Be laser focused on market, use cases, marketing and profitability. Cultivate relationships with current clients.

💡Align HR Technology investments with AI enterprise initiatives. Leverage resources, talent and expertise.

💡 Define the path forward to implement Gen AI efforts in human capital (i.e. Copilots)

💡Assess talent and deploy skilling AI programs at all levels.

💡Develop a clear plan for AI awareness and adoption.

  The one pager below provides a high-level view.

Did I miss anything? Let me know your thoughts.

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.