Since last year and up until mid-2023, the massive layoffs in tech companies have been making headlines. Many fear that the trend hails bad news for HR Tech, and since we at SSR focus on this niche of the SaaS industry, we decided to look at the data ourselves.
Pulling figures from LinkedIn, we looked at the headcount trends of 26 HR Tech companies for the past few years. This research included 10 of the most prominent players like Workday, Greenhouse, and ADP, as well as recent VC-backed startups that have been growing rapidly since the pandemic, like Deel, Remote, and Rippling.
You can access the full list and data below, but as our headline hints, the data showed to be more positive than we expected.
Gazing into the landscape of 26 leading HR Tech companies in 2023, the trajectory is undeniably upward. Over the last half-year, the industry exhibits an average headcount growth rate of 16%. For the top ten prominent players, it's a commendable 7%, and when we turn our attention to the up-and-coming, venture capital-fueled startups, the surge leaps to 22%.
Startup Leaders Keep Expanding
While VC-backed unicorns are not immune to fluctuations, frontrunners in the space like Deel, Rippling, and Remote, keep growing tremendously.
Consider the case of Deel: while their 6-month growth rate of 172% might seem small compared to their 1000% 2-year rate, that’s because it’s just harder to keep growing at huge rates when you’re already so big.
In other words, the picture changes if you look at it nominally. According to their LinkedIn, Deel had 557 employees in November of 2021. Now they have over 9,300. But many of those, close to 1,000, were hired only in the last month.
Companies like Deel and Rippling seem unlikely to have a layoff any time soon. In November 2023, Deel had 223 job openings listed on their LinkedIn. Deel just hit $400 million in ARR. Rippling, while smaller in headcount, has 348 job openings at the time of this writing and has added close to 400 people since May 2023.
So, in a sense, the hyper-growth party that was associated with the pandemic boom for many of these companies is not over. This is especially true considering that only a handful of these companies became industry leaders and are now reaching stability and maturity.
Most HR Tech Companies Are Growing
Out of the 26 companies we analyzed, only six experienced a downsizing from Q3 2022 to 2023. Thus, 77% are exhibiting some kind of growth, albeit not always at the fervent pace exhibited by the examples above.
In the grand scheme, the growth of the industry might appear somewhat stagnant. When comparing Q3 2023 with Q3 2022, only 27% of companies are currently displaying equal or superior headcount growth rates. They are Eightfold, Employ, Bamboo, Gusto, Oyster, Awardco, and PapayaGlobal.
Yet, if we look at the total Q3 2023 headcount and compare it with the start of the year, 95% of the 26 companies expanded their employee base.
That said, the new hires from the ten biggest HR Tech companies totaled 14,367 in the first half of 2023, showing a slight dip from the previous year's 16,788. While somewhat notable, it's important to point out that Q3 2023 again demonstrated an encouraging rebound.
HR Tech Behemoth Helps Pull the Industry Upward
Such a story comes from ADP, who made a resounding statement in September 2023, bringing on board an impressive 8,000 new hires in a single month. This upward trajectory, which started in May 2023, has increased their two-year headcount growth to 74%.
With their total employee numbers now above 90k, they are playing a large part in keeping the industry trends on the up.
Photo Caption: ADP’s stock chart seems reflective of its upward trajectory. It shows a slow and steady growth when looked at from afar, as much as 5 years is a short time when you consider this company has been publicly traded since before the 90s.
Zooming out to look at the collective headcount of the 26 analyzed companies, you also get a positive picture. In Q3 2021, the aggregate employee count stood at 121,394, soaring to 184,254 in Q3 2023. This illustrates a 51.82% growth over two years for the industry bellwethers.
The Trend Towards the End of the Year
While interest rates keep going up and there seems to be a new tech layoff every week, we should also consider the ‘Big Stay’— a way of saying that workers in general are quitting their jobs at pre-pandemic levels. That is, much lower than when we couldn’t stop hearing about the great resignation.
Job hopping may have had something to do with all the frenzied new hires in HR Tech during 2021 and early 2022. While job cuts in tech are likely to keep making headlines, the data shows that HR Tech, seen in bulk, should be in very good shape to close off 2023.
A recent study says that the global HR Tech market should reach $76.5 billion by 2031, implying a growth rate of 9.2% by the next decade. The headcount trend is, of course, only one part of the equation. But along with product innovations, the surge of AI, and new tech companies founded (this site gets dozens of requests for reviews each month); that part sure looks healthy.
Here’s the full list of companies along with their Q3 headcounts:
And you can access our full data here.