In 2015 and 2016, over $4 billion in venture capital money was pumped into the HR technology category. We estimate that about a quarter of that money has made its way into talent acquisition technologies and services.
The real question on a lot of people’s minds is what exactly has that money (around a billion dollars) gone toward? We see three key areas of importance:
- Navigating category and brand confusion. Talent acquisition is transitioning. It’s not just applicant tracking systems and job boards anymore. Job boards are adding ATS capabilities. RPOs are adding technology. ATSs are adding assessment tools. What do buyers want and how do you describe your vision for talent acquisition successfully? Especially when you look at series B investment rounds and beyond across multiple subcategories of talent acquisition, resources are being devoted to brand and message effectively to win the hearts and minds of fickle talent acquisition buyers.
- Developing the role of AI and robots. Artificial intelligence is going to play a role in talent acquisition. The real key that vendors have to navigate is understanding what parts of their platform make sense to update. The goal here isn’t just to follow the newest, shiniest object, but to add value to the process in meaningful ways. One way that we’ve already seen companies like Restless Bandit and Entelo help with algorithms is in candidate search and decision support. We expect more of that in the coming year.
- Figuring out the service model. The dream of the scalable SaaS company is one where they’re simply selling access to the platform and not having to worry about scaling up a support infrastructure around it. Companies are rethinking how they’re selling and bundling services, and buyers are rethinking their buy. As such, we’ve seen much more thought going into considering how organizations will service their client base.
If you’re interested in market trends in talent acquisition, make sure to sign up to get notified of our newest report, the 2017 Talent Acquisition Brandscape Report™. It should be out next month and will go into even greater detail on brand and market presence, market sizing, and trends that every vendor, investor, or close follower of the industry should know.