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The HR Tech Industry is Expanding Rapidly, Making Data-Driven Decisions That Much More Important
There’s no denying that it’s an excellent time to be in the field of HR technology. Last year, 12.1 million employers in the U.S. spent over $5 trillion on HR tech, 74% of companies plan to increase their HR tech budgets, and HR tech spending increased 66% between 2020 and 2023.
We’re in the HR tech space and will be the first to admit that with the increased interest in our platform and seemingly endless growth opportunities, it can be overwhelming, especially as a small (but mighty!) company, to figure out where to invest our time and resources. That’s why one of our core values here is being a data-driven company. We turn to data, statistics, surveys, and studies to help ensure we make the right choices to serve our customers and business goals.
We’re under the assumption we’re not the only ones in the HR tech space inundated with data, so we decided to help out by collecting what we felt were the most relevant HR tech statistics that we utilize in one place, to save other HR tech professionals time and energy.
We’ve broken these stats into three sections to help you draw the most relevant insights:
- The State of HR Tech: As we established, the HR tech market is rapidly growing. That’s a good thing, but what data-driven decisions will help your HR tech platform grow scalably and sustainably?
- Important HR Tech Trend Statistics: What’s trending in HR tech today, and can you use those trends to meaningfully grow your business?
- What Do Today’s HR Tech Customers Want?: What are customers looking for in their HR tech, and how can you provide that?
HR Tech Trends You Should Know
The State of HR Tech
- 89% of C-Suite executives and 83% of HR leaders say HR tech enables them to be more flexible and responsive to the constantly shifting world of work. Ensuring your platform is always looking to the future and ready to adapt to new workplace hurdles is vital.
- Workplace leaders agree HR tech is a worthy investment—80% of HR professionals believe investing in HR tech has improved their business.
- Zippia reports that 97% of employers plan to increase their investments in recruiting technology, while 60% of HR departments are looking to invest in predictive analytics, 53% in process automation, and 47% in AI.
- The most commonly included capabilities in HR tech stacks are payroll (79%), benefits administration (70%), recruitment/talent acquisition (67%), and onboarding (67%). However, the most common issue organizations are trying to address with their HR tech stack is providing useful people data and analytics (61%). How can your HR tech platform help provide people-driven data, and does your platform address the most commonly included benefits? Could it do so meaningfully?
36% of HR professionals feel they don’t have the proper technology to optimize their tech stacks. That’s a large chunk of potential customers your HR tech platform can help transform their business. When breaking it down by capabilities, onboarding is where most companies feel they don’t have the proper technology—about one-third of HR professionals blame a lack of technology for poor onboarding.
Important HR Tech Trend Statistics
- One trend we’ve been seeing is that users want HR tech platforms to address several HR capabilities instead of just one functionality due to what The Harvard Business Review calls a “toggling tax.” Workers are toggling between apps and websites nearly 1,200 times daily, amounting to 9% of their annual work time. Additionally, only 29% of HR tech users say the components of their HR tech stack usefully integrate well. This is causing the average mid-sized company to replace 39% of their SaaS applications with ones with better functionality. To make today’s SaaS customers’ lives easier, SaaS applications must address several of their top challenges. Apps must also easily integrate with other popular platforms.
- Another top trend in HR tech is strengthening the customer experience. Take recruiting tech, for example: only 46% of employers who have applied to a job at their own company said the process was “good.”
- PwC found that HR insights and analytics were tied with recruiting as this year’s top HR challenges. Ensuring your platform can provide meaningful data and analytics is crucial this year.
- HR tech platforms are embracing AI to help optimize and strengthen their capabilities. AI, for example, can detect with 95% accuracy which workers plan to leave their jobs. 44% of CEOs and 96% of HR professionals believe AI can improve the talent acquisition process and increase talent retention.
- Security is becoming increasingly important for HR tech platforms. Over one-fifth of HR leaders are concerned over the security of critical HR data stored via the cloud as a top tech concern.
92% of job candidates who start online job applications don’t finish them. That’s a bad candidate experience, based on back-end users not using HR tech properly. Remember, you could have the greatest HR tech out there, but if you’re not helping your clients use it correctly, the end user—the customer—experience will be poor.
What HR Tech Users Want
- 82% of HR tech users struggle to use the technology, which isn’t a good user customer experience (and is the fastest way to churn your customers). Today’s customers want robust onboarding, meaningful customer service and user-friendly solutions.
- DEI is becoming increasingly important—76% of job seekers want to work somewhere that values diversity, equity, and inclusion (DEI), and 32% of employees actively won’t apply to work at companies lacking diversity. Estimates show that by 2030, 90% of professional organizations will use HR tech to improve DEI outcomes.
- 57.25% of businesses in the US said they prioritize wellness as a business objective, and 82.31% of businesses “strongly increased” their focus on employee wellness.
- 58% of companies depend on HR technologies for talent recruitment and retention, and HR Tech guru Josh Bersin found that 74% of organizations felt their recruiting strategies were underperforming in 2022. If companies have to pick one part of the HR cycle to invest in via HR tech, it will be recruiting.
- Employees like working with AI. While only 47% of HR professionals used AI tools in 2022, ⅔ of those early AI adopters plan on doubling how much AI they use in their HR tech stacks this year.
Should a White Label Applicant Tracking System (ATS) Be Your Tech Stack's Next Addition?
Our place in the HR tech world here at HiringThing is creating a white label applicant tracking system, a recruiting solution that we brand and customize for organizations that want to quickly and efficiently add proprietary hiring capabilities to their HR tech platforms. White labeling hiring software allows you to solve one of HR tech customers’ biggest challenges, become a multi-functional platform (if you’re not already), and provide end users with a fantastic candidate experience. Would a white label ATS strengthen your tech stack? Set up a demo with our team below.
About HiringThing
HiringThing is a modern recruiting platform as a service that creates seamless hiring experiences. Their private label applicant tracking system and open API enables technology and service providers to add hiring capabilities to their solution. Approachable and adaptable, their platform empowers anyone, anywhere, to hire their dream team.
