Holy Grail of HR
One of the most critical aspects of business is talent acquisition. Talent acquisition strategies are expected to evolve as a business grows in size and scale. An early stage startup’s talent requirement is drastically different from a growth stage one.
One of the biggest recruitment & staffing firms in the world – Randstad, pegs the highly fragmented global HR services market at € 475 Bn. The HR services industry is divided roughly into three main segments: staffing, professionals, and executive search.
Given the complexity and volume of the recruitment industry, quite a few startups have emerged, in India and beyond, which can be termed as talent acquisition (TA) technologies. TA technologies aim to deploy tech enabled intelligent decision making to drive efficiency between the talent demand and its supply.
But TA specialists are part of the larger ambit of HR tech space. HR tech is dominated by legacy talent/HR management systems (TMS). For hygiene HR functions such as attendance, payroll, leave management, employee compliance etc; organizations have been using Talent management systems. Often, in big organizations, TMS is a module of their company-wide ERP.
Thus, the majority of the TMS have evolved for a purpose other than talent acquisition. This has led to the proliferation of other set of solution providers, invariably used by all organizations, known as ATS. ATS stands for application tracking system. ATS refers to a software application used to receive, filter, shortlist, track progress of the applications on a job requisition.
ATS is a hygiene functionality now. Every TMS is likely to have an inbuilt ATS or an integration support with popular ATS applications. But ATS in themselves have not been designed for making intelligent talent acquisition decisions, rather they evolved to manage the logistics of the hiring funnel.
Thus, a complex competitor/collaborator ecosystem has emerged in the larger HR tech space. TA technologies and TMS vendors compete with each other, also at the same time, these providers need to offer robust integration with third-party applications that may offer similar services.
A critical question for buyers of talent acquisition technologies is whether or not the solution needs to be part of a broader suite of capabilities, such as learning and performance management, or if the route of a TA specialist vendor is the right path?
In such a complex ecosystem, it is imperative for a new startup in TA technologies to deploy appropriate GTM strategies. The approach to be followed for large clients, with a likely TMS already in place, has to be different for smaller companies or startups. With larger clients, the new TA technology has to augment their existing recruitment process. Whereas, for early stage startups and smaller clients, the new TA technologies have to establish their product’s value addition along with price competitiveness.
At ESV we have been following the trends in the HR tech space for quite some time. In fact, we have recently onboarded a startup in the talent acquisition space with a stellar team spread across three geographies.
Keep following this space for the latest updates on interesting startups in our portfolio.
Startup Funding Summary
InsuranceDekho, Gurugram-based insurance company, has raised $150 Mn in Series A funding from TVS Capital Funds, Goldman Sachs Asset Management, Investcorp, Avatar Ventures and LeapFrog – Read More
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Prozo, Noida-based supply chain management startup, has raised $5 Mn in Pre-Series B funding from Sixth Sense Ventures, JAFCO Asia and other HNIs – Read More
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