With increased automation and demand for more strategic training process along with payroll management over past few years, we have witnessed the proliferation of Human Resources (HR) software tools for all types of small and mid-sized businesses. Larger companies are additionally pooling in their resources to bring automation tools to make the complete payroll system automated and synced. Even the investors around the Silicon Valley have seen an opportunity to completely streamline the HR challenges that the small businesses to face, for example, Zenefits recently become one of the foremost technology company in the HR vertical with valuations in the billions, and its founder was recently able to raise $45 million for his next venture.  HR is the only part in the complete business operation that hasn’t seen any significant investment from businesses of this size to streamline HR responsibilities such as on-boarding and getting the benefits enrollment. Many of the small industries around the world had to depend on the paper-based system, but the recent increase in the amount of investment capital flowing in the HR tech tools demonstrates the scope of this market opportunity but why has the technology companies taken so long actually to get there? The HR vertical is one of the most sequential required operations that the business needs to find several required factors that can support the complete payroll management and hiring process that is or was paper-based.

Following the money trail

The short answer is that Silicon Valley investors follow the revenue growth and HR sector has been over the years underfunded. When considering the lifespan of any type of Software-as-a-service (SaaS) industry that is one of the key points to keep in mind, for example, Salesforce is often credited with creating the first SaaS product, and its founders were smart to target the space with most of the organizations that have allocated a significant amount of funds. Many reasons why businesses have pushed the investment in HR tools for so long because the current resources that are available in HR have been sufficiently capable of keeping the costs down and combined with accuracy it has been completely being ignored by the leaders because it won’t be driving any revenue. Sales often get the highest portion of any organizations budget with added customer support and marketing that follows closely in the second position along with customer support.  After which the HR comes that is usually somewhere along the bottom. The SaaS industry has closely followed the same trend when you look towards the current funding options, after addressing the sales need they are followed by the marketers with wave of options that includes HubSpot, ExactTarget, Pardot, Marketo and Eloqua that have the close connection with sales and marketing solutions for all types of small businesses.

The digital transformation of HR

Building a digital ecosystem was pushed, but when you look at the business operation that consumes most paper, it would be HR. From different billing and invoicing to applicant tracking and on-boarding HR is getting the Silicon Valley treatment as founders and investors are building platforms that could better manage the employees and organizations. The advent of such tools is also closely related to the changing workforce; with business leaders initially had often been ignorant of the workforce at the best time or at the worst time. However, this sequence is changing with HR teams becoming instrumental for the organization that also supports employee success. Experiencing the lowest rate of unemployment for last 50 years and with the strong economy, more organizations are prioritizing the business culture with hiring, career growth and other people centric responsibilities that will affect the complete experience for the business. Business leaders want to change the perception about the employee experience that will, in turn, be driving the business opportunities; the once overlooked tasks in HR are now being prioritized.

Software bringing the world

HR is probably one of the last parts in the complete business operation to go digital in the coming year. In fact, many experts around the globe believe that the rise of cloud and benefits of automation will make businesses process move to software function.  This type of dynamic was described by Marc Andreessen, Netscape, co-founder, and venture capitalist said in the Wall Street Journal, where the column was titled as “Why Software Is Eating the World.” In the Column, Andreessen predicted that software companies are bracing for increased running on software or offered as online services. He covered various examples in the industry moving their entire value proposition and service processes online and away from the physicality of goods and hardware. The companies need to be ready when it comes to implementing the complete revolution of software that can be done.  

Software-based solutions in HR

The software-driven change has already transformed the sales, marketing, and now it is coming to HR, but exactly where are they headed next? For business owners or tech founders that are establishing themselves in other spaces, there are two potential takeaways that can change the complete face of solution. First, regardless of how your business operation is taking place, whether online or offline, it will be better to assume that technology will not be transforming your industry. Keep an eye on how your value proposition may evolve as the software tools are introduced and adopted. Secondly if your any leader of the software development company and currently unable to find mass appeal you need to stay on the course that could change complete industry dynamics, economic trends and tech industries hunt for the next big thing will align with your product or tool mainstreaming the complete industry.


HR technology is still far from completely explored, and for many tech innovators, this might be the right opportunity to bring new technology in this sector. SaaS with cloud-based can bring the required agility and information leverage across the complete sector. To know more, you can download latest whitepapers on HR technology.