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HR Tech


Why HR Tech is Taking Center Stage


In a few short months, we will have reached the two-year anniversary since the Covid pandemic first shut down schools and offices throughout the world. Different regions and countries have taken varied approaches to addressing the health, social and economic challenges that the pandemic has presented. While some countries continue to impose nationwide lockdowns, others have returned to a semblance of normalcy. In both contexts, however, the ways in which we work and live have undergone irreversible changes.

Given the tectonic shift towards remote and hybrid work, companies need to answer big questions on how to maintain visibility, stay connected, and build a company culture without relying on a shared, in-person workspace. This challenge is made more complicated by the fact that some HR and coworking technologies are still in their infancy while companies are reshuffling their budgets to invest in a new breed of workplace planning and organization. The evolution of HR technology will shape the ways in which companies respond to massive trends like the Great Resignation and the ensuing war for talent.

The New Talent Paradigm

Without the restrictions of physical offices, companies see new opportunities to recruit talent on a global scale. Highly skilled employees can now compete for any job, anywhere. Power in the workplace has shifted from the employer to the employee. Employees now have the leverage to pursue a much broader range of new opportunities, giving employers greater incentive to actively invest in strengthening their technologies and culture.

Unfortunately for most enterprises, when it comes to hiring, the average quality of prospective talent coming in has not improved in parallel with the quantity of leads coming in. 

The need to keep employees happy and engaged is stronger than ever before. Losing a talented employee isn’t just a matter of having to find a replacement; in the short- and medium-term, the employer must deal with a loss of productivity, loss of institutional knowledge, not to mention the cultural disruption on remaining employees. According to Gallup, the costs of hiring a new employee – ranging from conducting the search itself to investing in training and onboarding the new hire – can amount to 0.5 – 2x of the employee’s annual salary. These costs add up even more quickly if companies fail to find the right hire on the first try. As 55% of the US workforce considers making a job switch in 2022, companies that will see the greatest success in retaining their workforce are those that invest in technology that maximizes the wellbeing and engagement of their employees. This includes technologies that improve employee collaboration and communications, increase transparency, and heighten training and mentorship experiences. This also means identifying and executing on what matters most for individual employees, whether it be flexibility, salary, benefits, or other factors.

Unfortunately for most enterprises, when it comes to hiring, the average quality of prospective talent coming in has not improved in parallel with the quantity of leads coming in. Even with modern-day ATS and recruitment software, companies today still find themselves sorting through an abundance of leads to qualify the most promising candidates. For the best recruitment experience, companies must invest in software that not only sources candidate leads but also identifies those best-suited for the job, such as technologies that focus on innovative interviewing, provide accurate skill measurement, and promote diversity & inclusion in the workplace. Once a candidate is hired, it doesn’t end there – recruitment software must be compatible with onboarding and engagement software in order to provide the best employee/employer experience. Without innovations in HR technology, companies could find themselves falling behind in their hiring, onboarding, and employee retention.

HR Tech: Miles Wide, Inches Deep

The current market for HR technology has become increasingly crowded as emerging companies are stepping up to the challenge of revolutionizing the employee experience. This level of saturation imposes a major tension on HR managers. While some of the younger HR companies will emerge over time to lead their specific verticals, the current lack of consolidation means that HR managers and recruiters are left to deal with a large and unwieldy tech stack. They struggle to make sense of the floods of data that exist in their HR applications and are therefore limited in their ability to gain actionable insights into their workforce. Yet despite the size and complexity of their company’s HR tech stack, these same managers remain dissatisfied with the comprehensiveness of HR toolkit and still feel that there are major gaps or blind spots that have not been addressed.

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HR Tech: The Path Forward

So how do HR companies make room for themselves within a company’s existing infrastructure? We believe that as companies settle into their “new normal”, HR solutions that will “win” are those that

  1. Can integrate well with the rest of a company’s HR tech stack and employee journey (breadth) and
  2. Can effectively address the needs of specific verticals and job functions, even if it means only targeting specific industries or job types (depth).

By balancing both the breadth and depth of HR technology offerings, emerging players can stand out as a value-add to companies facing ever-expanding tech stacks. With HR organizations facing an increasing amount of pressure to win the war on talent, these teams are desperate for technology advancements that will make their work easier and more organized. As the future of work continues to evolve post-Covid, Volition Capital will seek to identify and support the HR tech providers that are positioned to lead this next phase in remote and hybrid work.



Volition Capital

Estelle Spanneut


Estelle Spanneut



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