The global human capital management market will grow from $22.3 billion in 2021 to $32 billion by 2026 with an average annual growth rate of 7.5% — this calculation was published by the analytical publication Reportlinker. The main growth factors are the introduction of artificial intelligence (AI) and machine learning technologies into human resources management (HR) processes.
For HR specialists, AI opens up opportunities to save time and increase productivity. The HR management sector is also a “promising market” for hundreds of startups in the field of HR and artificial intelligence.
AI frees human resources from repetitive and time-consuming tasks, which means that HR employees and related departments specialists can focus on more complex processes.
Companies use virtual assistants and AI-based chatbots to automatically answer employees’ questions: “Where is my training app?” or “How many vacation days do I have the right to take?”. AI directs to the appropriate documentation or to the right expert. AI based on employee profiles can also personalize social benefits, take into account additional legal aspects of payroll.
Recruiting is another area where AI can be useful. It can simplify the search and screening of candidates, manage applications, as well as to determine the profile of an applicant who meets the selection criteria for a required position.
“Smart” algorithms semantically analyze the content of job offers in internal and external databases through professional social networks such as LinkedIn focusing on the resumes of applicants who meet the expectations of recruiters the best.
HR managers are replaced by chatbots at the first level of interaction between candidates and companies, using pre-recorded questions to collect information about skills, training and previous experience.
The AI approach to learning involves a transition from the usual acquisition of business skills to setting up a career path. With the advent of the analytics of the educational process, methods and ways of teaching are developing. Tracking classes, recording the time needed to acquire knowledge, and the level of understanding are used to compile individual training programs and proposals for skill development.
AI is used to provide employees with internal rotation opportunities, taking into account their wishes, skills and opportunities available within the company. AI startups offer solutions to optimize staff mobility management. Such programs combine assessment, training, and suggestions about suitable areas of activity, positions, and development programs for the employee. AI is used to identify talents not discovered by HR and management teams, as well as to determine the risk of valuable employees leaving the company.
AI allows the personnel management service to better recognize the social processes taking place in the team, to identify employees who are threatened with dismissal. Thanks to applications that regularly survey employees while maintaining their anonymity, HR managers can see indicators of the strengths and weaknesses of work teams in real time. Managers can analyze what contributes to the growth of engagement and what puts it at risk in the current mode.
Today, about 100 startups are engaged in innovations in the field of HR and artificial intelligence. Below is a description of some of them that are actively gaining momentum.
Iziwork connects temporary workers with open vacancies and provides on-the-job support through its online recruitment platform. Iziwork strives to be “worker-oriented” and currently has more than half a million registered users. Bpifrance and Cathay Innovation invested a total of €35 million in the French startup in January 2021.
Founded in: 2018
Five-year growth: 6900%
Funding: $62.3 million (Series B)
SeekOut uses artificial intelligence technology to give recruitment specialists a more complete picture of potential employees and achieve better hiring results. In particular, they help companies find technical, rare or non-standard talents. In the spring of 2021, as part of the Series B round, SeekOut received its most significant amount of funding — $65 million.
Founded in: 2016
Five-year growth: 1050%
Financing: $188.6 million (Series C)
Personio is a German HR management software company focused on small and medium—sized businesses. Their technology provides solutions for simplified hiring, centralized management of personnel data and documents, as well as for payroll tasks. In January 2021, Personio reached the level of 3.5 thousand customers and received an impressive $125 million as a result of Series D. The company is currently valued at $6.3 billion, making it one of the most expensive startups in Europe.
Founded in: 2015
Five-year growth: 700%
Funding: $524 million (Series E)
Staffbase offers a communication platform for improving the work and cooperation of companies. The platform is suitable for professionals in various industries, including retail, manufacturing, healthcare and more. In March 2021, Staffbase and Bananatag joined forces to strengthen Staffbase’s reputation as a leading internal communications company and expand their combined reach. Staffbase recently acquired Valo, a leading provider of intranet services for Microsoft 365. As a result of this acquisition, the world’s largest internal communications company is being created.
Founded in: 2014
Five-year growth: 809%
Funding: $307,1 million (Series E)