While investments in work technology surpassed $1 billion, investments in talent acquisition technology were somewhat disappointing. According to WorkTech data, TA went from $162 million of investments in Q4 2023 to just over $54 million in Q1 2024.
Industry-standard reports
With WorkTech, founder George LaRocque helps HR leaders that use and buy HR technology and HR tech providers to understand each other. The company was founded in 2009, and since then, LaRocque’s company has excelled at helping employers understand the trends that are impacting their workforce today and in the future.
LaRocque and WorkTech’s reports have become industry-standard for tracking everything that happens as far as developments and investments go. In the first quarter of 2024, global investment in Work Tech reached $1.07 billion. The quarter’s investment was spread across 50 deals. Q1 2024 was an increase over quarters 2 through 4 in 2023, and on par with with some quarters in 2020 and previous.
The anomaly years
It’s worth noting that the investment levels absolutely peaked in 2021 and 2022, when investment levels topped out at approximately $6 billion in Q3 of 2021. The drop from the record highs of 2021 and the first half of 2022 was quite shocking, as the report notes. “During those six quarters, we reached unprecedented levels, almost forgetting how the previous years had been.”
From the first quarter of 2018 to the last quarter of 2020, investment was significantly higher – between two to nine times more than any quarter before. The first quarter of 2024 looks similar to those exceptional quarters of 2018 to 2020, considered great at the time. When we remove the anomaly of those six quarters, Q2 2022 to date starts to look better than it’s been feeling. This isn’t to say that it hasn’t been more difficult to raise VC or that investors haven’t been hesitant. But it does illuminate how much easier it was to raise during those quarters.”
HCM is the leading work tech category
In past reports, it’s been Human Capital Management investments that very much lead the discourse. “HCM continues to outperform the Talent Acquisition and Talent Management categories”, the report notes. “Prior to the current economic climate, Talent Acquisition numbers would be more competitive with HCM in a quarter-to-quarter race. This is most likely a reaction by investors to the confusing job market data, with headlines continuing to repot layoffs and a general sentiment of uncertainty and concern.”
Talent’s acquisition’s disappointing quarter
While HCM’s quarterly investments grew from $473 million to $861 million, Talent Acquisition’s investments decreased by more than $100 million. It went from $162 million of investments in Q4 2023 to just over $54 million in Q1 2024. Marketplace Job Boards was the leading category in talent acquisition, according to the report. “The most prevalent model was leveraging AI-based algorithms to match candidates to jobs based on skills and other factors.”
“The most prevalent model was leveraging AI-based algorithms to match candidates to jobs based on skills and other factors.”
