Venture capitalists have the ability to place bets on the titans of tomorrow, and as they have done for companies most often associated with Big Tech—think social networks and e-commerce giants—they’re reaching into their pockets to fund startups that hope to reinvent HR for the future of work.
Historically, the technology used by the HR industry hasn’t seen the sky-high levels of financial investment lavished on industries like biotech.
The technical nuts and bolts of HR—payroll, compliance, onboarding—have not really been associated with great innovation, Jason Corsello, the founder and CEO of Acadian Ventures, an early-stage venture-capital fund focused on companies attempting to help workplace tech evolve, told HR Brew.
“HR tends to be not necessarily on the bleeding edge of leveraging emerging tech,” he said. That may be changing, however, as VCs, like Corsello, pour money into companies that are attempting to revolutionize HR tech—a trend that began prior to the pandemic, but accelerated as remote work became normalized and companies scrambled to continue business under radically new circumstances, George LaRocque, the founder and principal analyst of WorkTech, which analyzes investment trends across the industry, told HR Brew.
LaRocque said HR’s heightened emphasis on DE&I initiatives and the growing demands of hybrid work have “increased the amount of money looking for a home” around HR tech.
The influx is also indicative of a changing tide in the HR profession, Corsello said, one that he likened to the rise of software as a service (SaaS) 15 years ago. Except now, he said, “in the last three to five years, a lot of these tools have gotten way smarter,” referencing machine learning.
LaRocque hinted at “another wave” of startups that could be a glimpse of HR tech’s future, coming from the “Web3, metaverse, blockchain world…I think that’s the next explosion.” But he and other experts warned that the development of these tools is still nascent.
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