Human Resources Technology (HR Tech) optimizes all HR processes – from talent acquisition and development to workforce management and administration. These solutions are used either as comprehensive Human Capital Management (HCM) suites or as specialized applications. The “war for talent”, efficiency pressure and technological advances are constantly driving the demand for HR Tech solutions.

 

HR Tech in practice – how we use digital solutions ourselves

At atares, we also rely on modern HR Tech tools to make our internal processes efficient and team orientated. Our philosophy: only those who understand and utilise technological solutions can provide others with the best possible advice.

 

A (small) selection from our HR Tech toolbox

• Personio: Our HCM suite for personnel administration and recruiting.
• LinkedIn: The central tool for networking and talent acquisition.
• Edenred & Belonio: Platforms for managing benefits and benefits in kind.
• Spendesk: Our automated management of company expenses.
• VimCar: software for our fleet management.
• Trello: Project management tool for organizing internal processes.

These tools make it possible to automate administrative tasks and create an efficient working environment.

HR Tech market: growth and trends

The HR Tech market is growing at an impressive rate worldwide. In 2021, the market volume was estimated at 21.2 billion euros and is expected to reach 36.9 billion euros by 2029, which corresponds to an annual growth rate (CAGR) of 7.2%.

The demand for digital HR solutions is constantly increasing, particularly in the following areas:

1. AI in recruiting & talent management

AI is revolutionizing recruitment: algorithms analyze applicant profiles, carry out automated pre-screening and find suitable talent faster. Worldwide, 88% of HR departments use AI.

2. Hybrid working & team bonding

Companies offer flexible working models to remain competitive. HR Tech provides support with self-service portals, digital benefits and data-based personnel development. 48% of managers cite team retention as a key HR topic.

3. Automation to increase efficiency

HR processes such as payroll, onboarding and performance appraisals are becoming increasingly automated. The market for HCM software is expected to grow from 23.1 billion euros (2024) to 33.3 billion euros (2029).

4. Sustainability & ESG in HR Tech

Companies are increasingly focusing on software that measures and promotes diversity, inclusion and team satisfaction. The demand for tools to implement ESG criteria is growing continuously.

M&A activities in the HR Tech sector: market analysis and strategies

The HR Tech sector is driven by innovation and is an attractive market for M&A transactions.

Why HR Tech is attractive for M&A

1. Scalability and high margins: HR Tech companies, especially SaaS providers, benefit from high economies of scale.
2. Strong growth rates: The HR Tech market is growing steadily; the market volume is estimated to reach 36.9 billion euros by 2029, with an annual growth rate of 7.2%.
3. Synergy effects: Companies integrate HR Tech solutions to expand and improve existing HR and IT services.
4. Increasing pressure to consolidate: start-ups with innovative solutions are looking for larger partners in order to establish themselves on the market.

Current M&A trends in HR Tech

The transaction volume in the HR Tech sector has doubled in the last five years. In 2024, more than 800 transactions were recorded in the HR Tech sector worldwide, with total equity invested of 6.6 billion euros. The most significant developments:

• Acquisitions of niche players by large software providers – e.g. Workday’s acquisition of Peakon to expand its employee experience platform.
• Private equity investments in high-growth HR Tech companies – Financial investors are increasingly focusing on HR Tech start-ups with innovative business models.
• Expansion of HR platforms through international deals – companies such as SAP and Oracle are investing in the global expansion of their HR Tech services.

With an expected compound annual growth rate (CAGR) of 12% until 2030 in certain segments, such as AI-supported HR technologies, the HR Tech market remains highly dynamic and offers attractive M&A opportunities for strategic investors and financial investors.

Conclusion: M&A as a key strategy in the HR Tech sector

HR Tech is more than just a trend – it is a decisive success factor for companies. Those who invest now will secure a clear competitive advantage.

• HR Tech is a growth market: the market volume is estimated to reach 36.9 billion euros by 2029.
• M&A as a catalyst: Companies use M&A to grow faster and integrate innovative technologies.
• Automation is essential: Investment in HR Tech is constantly increasing, especially in AI and automation.
• Talent management determines success: HR Tech strengthens team building and retention.