In 2020, in spite of the pandemic-related shutdowns and other business impacts, the HR technology industry was within a few M&A deals of the 2019 numbers we were tracking (approximately 50). This represents a vibrant industry full of continuous innovation and providers striving to serve the needs of the HR buyer. It also helps to highlight certain trends and shifts in how the market operates, as we pointed out in our 2019 HR Tech M&A roundup.

What’s intriguing is that the trends we identified in 2019 have sped up, not slowed down. Yes, there were the requisite acquisitions to fill product gaps and acquire competitors, but overall the focus on increasing access to a new customer base and creating stronger data systems and AI-enabled decisions have been key focal points.

Our team watches these announcements to keep tabs on the market as part of our ongoing research and coverage, and we have included some of the larger and/or more exciting transactions that will impact the market in the coming year. If you have questions or know of a transaction that isn’t on our list, please let us know!

Overarching Trends/Insights

  • Global Expansion: Several key acquisitions linked to opening up new customer segments in different areas of the world, enabling faster future growth.
  • Recruiting is Buzzing: Talent acquisition is always a hot space, and in 2020 more than 70% of the M&A activity we tracked was around consolidation and bringing best of breed tools to more established providers. Note: we are finalizing our list of partners for our Q1 research on talent acquisition. If you’re interested in details please reach out to us.
  • AI and Data: By far, the most interesting for us was a big focus on data, and AI. Data sets are fuel for AI, and many of these announcements led to better and more comprehensive data. Some were specifically focused on bringing AI/machine learning talent and/or tools into a technology stack with a deep dataset. That signifies more smart apps and tools in the coming year.

Key 2020 HR Technology Mergers and Acquisitions

  • Cornerstone, one of the largest talent management providers in the world, acquired Clustree to support its growth of career pathing based on skills and AI. But this was lost in the noise as Cornerstone also acquired Saba, one of its leading competitors in the enterprise market. The roll up in previous few years brought two other talent-focused companies, Halogen Software and Lumesse, into the Saba family, and Cornerstone now has all of that capability under one roof.
  • Ultimate Software and Kronos merged, creating a unified HCM cloud company (UKG) valued at $22 billion and focusing on the full HCM spectrum from payroll to workforce management to talent management and more.
  • Betterworks, one of the industry’s leading providers of OKR and performance management tools, rounded out its product by acquiring Hyphen, an engagement platform.
  • Paylocity acquired two companies in 2020, VidGrid and Samepage, to expand its capabilities serving the SMB space. We talked with Paylocity during our HR Analyst Day and were very impressed with what they’ve been up to.
  • iCIMS, a leading talent acquisition systems provider, acquired EasyRecrue and Altru Labs, adding increased expansion in Europe and video storytelling capabilities, respectively. Our research shows video is critical in talent acquisition and most companies have not yet leveraged its power.
  • Ceridian, a midmarket payroll and HCM provider, acquired Excelity to expand operations and a payroll customer base in Asia Pacific.
  • Jobvite, which made headlines in our 2019 M&A report for the rollup of multiple technology companies (Rolepoint, Talemetry, and Canvas), acquired not one but two new companies during 2020. This is indicative of their long-term strategy in that they snagged Talentegy which has some excellent talent analytics capabilities along with Predictive Partner which brings additional expertise in AI to the team.
  • Modern Hire, one of our 2019 HR Tech Awards winners for its enterprise candidate screening technology, acquired Sonru to expand reach in EMEA and Asia Pacific.
  • Indeed acquired the much beloved ZapInfo, which has enabled an incredible amount of recruiting automation and data migration in recent years by connecting different platforms and systems in user-friendly ways.
  • OutMatch continued its blazing path of acquisitions (four in previous years) with three new companies: FurstPerson (screening), LaunchPad (recruitment automation), and Checkster (reference checking and quality of hire). See the full list.
  • Also in the SMB space, Paycor acquired 7Geese to bolster its performance and goal setting capabilities.
  • Phenom, known for its innovative Talent Experience Management platform, snagged MyAlly (a recruiting bot with great partnerships at SAP) and Endouble (to expand its European presence and momentum). Read our take.
  • In a similar move, HireVue scooped up what was arguably the most heavily funded ($64 million) recruiting chatbot ever, AllyO, expanding its ability to support hiring at high volume organizations.
  • SmartRecruiters acquired JobPal, creating a competitive advantage with embedded robotic process automation into its hiring tools.
  • And last but not least, LTG is one of the big players in the talent/learning space. They hold PeopleFluent, acquired BreezyHR in our 2019 report, and have a whole range of other heavy hitters in learning in their stable (Gomo, watershed, instilled). In 2020 LTG picked up career pathing and talent mobility platform Patheer as well as Open LMS and eThink to further round out their portfolio.

If 2020 held that pace in spite of a pandemic, 2021 may offer similar volume in terms of growth and expansion of the HR technology M&A trends.

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