Our annual reporting on M&A in the HR technology space is one of our most popular pieces of content year after year (see our 2022 version here). We look at some of the many announcements that happen over the course of the year, flag some key ones, and identify any big trends that seem to appear across the landscape.

2023 was no different than recent years. It’s a perennial “trend” from the “experts” in the space that “we will see more consolidation.” That statement is about as safe as saying that summer in Texas will be hot this year. Shocker.

What’s most exciting for us at Lighthouse is that many of these companies that are succeeding and shaking up the industry are also winners in the HR Tech Awards program (now accepting 2024 submissions), a clear indication that the judges in our program see significant value in what these firms are bringing to the market for their clients.

If you’re an employer looking for the right technology so support your organization, don’t hesitate to reach out for our insights.

Credit where it’s due:

  1. If your company could be on this list in the coming year (meaning you want to acquire or get acquired) and you want a trusted partner, we work closely with the team at Gotham Growth.
  2. I read the Starr Conspiracy’s work on a weekly basis and respect their analysis of the market. You can sign up for their newsletter here.
  3. I follow the team at HRTech.sg–Sriram and team do fantastic, tireless work. 

Note: if you want to comment or share your own thoughts, you can see the LinkedIn social post on this here.

Overall HR Tech M&A Trends and Insights

A considerable amount of consolidation in the services space, which is a bit tangential to this analysis of HR technology but significant for the larger market.

  • For instance, Arthur Gallagher & Co. acquired Buck in the benefits consulting and administration services space. We’re starting to see some of these benefits companies using their data in creative ways to identify health trends, provide analytics back to employers on their workforce, etc. 
  • WilsonHCG picked up Personify in the recruitment process outsourcing industry. Our 2023 RPO research is some of the most compelling in the world when it comes to RPO buyer insights and behaviors.
  • Engage PEO acquired Zamp. Relatively small in the bigger scheme of things, but we’re planning some PEO research in 2024 to explore how PEO is evolving so we’re watching the space closely. 

Also seeing some interesting crossover as services companies buy technology firms to scale and differentiate their services as well as technology companies buying service providers to reach more clients and bring more data into their solutions. AI-based solutions require a lot of data to train the models, and if it’s structured properly, services companies are sitting on a ton of data that can be a competitive advantage.

In the past month we’ve met with two different companies that started as services firms and built a technology that could take their intellectual property and scale it to more customers via a platform. The challenge with that is that services companies make money when they touch customer accounts and support them, but product/technology companies make money when they don’t have to touch customer accounts. It’s a difficult transition to make.

Let’s take a look at some of the announcements over the last year.

Key 2023 HR Technology Mergers and Acquisitions

Talent Acquisition and Hiring

  • Radancy, a global leader in recruiting with its Radancy Talent Cloud, acquired Brazen, a hiring event and communication platform and Ascendify, an enterprise-focused recruiting CRM.
  • Lightcast, a labor market insights company created by the merger of Emsi and Burning Glass, acquired Gazelle, a provider of B2B intelligence.
  • LiveHire, an HR Tech Award-winning hiring platform, acquired Arrived Workforce Connections to support growth in candidate reach and direct sourcing.
  • Clovers acquired Talvista to bring two inclusive hiring solutions under one roof.
  • Fama, an innovator in social media background screening and HR Tech Award-winning company, acquired Social Intelligence.
  • Spark Hire, a video interviewing solution, acquired Chally, an assessment solution. Video-only screening providers are trailing off in favor of video + assessment solutions that can provide a more full (and unbiased) picture of what candidates are about. Spark Hire also merged with/acquired Comeet, an ATS solution.
  • Veritone (Pandologic AI-driven programmatic recruiting solution) acquired Broadbean, a legacy recruiting technology provider. Intrigued by the depth and breadth of data this might offer to train the Veritone AI solutions under the hood.
  • Appcast, a leader in programmatic recruiting technology, acquired Bayard Advertising.
  • Hirevue acquired Modern Hire, an HR Tech Award-winning provider of video interview and hiring assessment solutions for enterprise employers.
  • Fountain, a high-volume hiring and onboarding solution, acquired Clevy.

Talent Management and Employee Experience

  • Engagedly, an HR Tech Award-winning company, acquired theEMPLOYEEapp for enabling client communications with frontline workers.
  • Neobrain, a global skills insights and intelligence provider, acquired Flashbrand to establish a US presence and bring its popular technology to North America.
  • Mitratech, an HR Tech Award-winning company and leader in employer compliance solutions, acquired Trakstar (talent acquisition and development) and Circa (DEI and OFCCP compliance).
  • Simpplr, an internal communication and work hub, acquired Socrates.ai, one of the industry’s most compelling intelligent chatbot solutions for employee experience and navigation, to increase the ease of which employees find, access, and act on information.
  • Edenred acquired Reward Gateway, a rewards and recognition provider.
  • Perceptyx acquired Humu, the “intelligent nudges” company made famous by its founder, former Google HR leader Lazlo Bock. Intrigued to see this functionality in the Perceptyx ecosystem.
  • Peoplelogic, an HR Tech Award-winning firm, picked up Plai to enhance its features across performance management and the overall employee experience.

Core HR/HCM/Compensation

  • Salary.com, an HR Tech Award-winning company, acquired CompXL to scale its enterprise compensation management functionality across merit increases, bonus allocations, and other rewards.
  • Paycor, an HR Tech Award-winning SMB HR, payroll, and talent solution, acquired Verb for microlearning support.
  • ADP, a leader in payroll and HR solutions, acquired Sora, a low-code workflow automation tool.
  • Deltek, the global leader in payroll and finance solutions for government contractors, acquired Replicon, a workforce management system.
  • When I Work, an HR Tech Award-winning company for its workforce management solution, acquired Lean Financial to incorporate earned wage access into the solution.
  • UKG acquired Immedis, a global payroll solution, to enable more seamless payroll in countries around the world.

Learning and Talent Development

This year we’re unveiling our new Learning Tech Awards program to focus more deeply on the sophisticated and robust technologies supporting talent development, employee growth, and skills intelligence across the industry. If you operate in this space, you won’t want to miss it.

  • Docebo, a leader in the global LMS market, acquired Edugo.ai to increase its AI capabilities.
  • Go1, a leader in global learning content, acquired Blinkist and Anders Pink.
  • LMS365 acquired performance management solution Weekly10.

The Bottom Line

In spite of the continuing challenges from an economic perspective, 2024 is poised to have some interesting activity. Election years are always a bit unpredictable, and many new providers are emerging to tackle today’s most pressing talent and workforce challenges. Stay on top of the latest by following our ongoing research and insights across the HR technology market.

Curious what we do at Lighthouse?

  • We work with employers by providing research and advisory services around 1) the complicated HR technology landscape, 2) the talent trends and practices that matter most to the modern workforce, and 3) executive presentations to internal teams on how the market is changing in their industry or demographic.
  • We work with solution providers and vendors that want to sell more product and serve more customers. We use a combination of advisory, industry insights, market intelligence, and custom research to support our partners.

HR Tech Awards opens for submissions on January 3rd: learn about benefits of participation