What is front of mind for the HR Tech sector in Europe?

What was front of mind for CEOs and HR leaders at the HR Tech Europe Conference in Amsterdam? Isabella Fox who attended the March event shares her key insights from the conference:

It is clear that AI remains the ultimate buzzword in European HR tech. However, the landscape has evolved, with AI now part of a continuous transformation as opposed to the single catalyst it was considered to be a few years ago. The impact on the sector is beyond doubt – it is the pace of change which is being debated.  

Speakers from the likes of Coca-Cola and Volvo, or Mercer and Deloitte, all shared similar views on some key trends permeating the sector:  


1. Human-centric AI

Investment in AI continues, although it has transitioned from being perceived as innovative to now being an enabler. The reality of AI being utilised effectively by HR teams, however, remains behind the curve. Whether it is organisational structure or data, most businesses don’t have sufficiently stable foundations to maximise AI’s efficiency, resulting in the risk that AI is layered into businesses without improving productivity. Many businesses are still spending a lot of time fixing interfaces or grappling with data.

This provides an opportunity for tech/AI providers who can create human centric solutions. Clearly even digitally advanced firms are still doing a lot of HR activity in very manual ways – i.e. recruitment, despite it being one of the first areas to adopt AI solutions. The solution in today’s environment can’t just be whether the tool is innovative, it is whether it is easy to adopt by the end users.


2. The importance of the right Tech Stack

The HR tech stack is vast. In an ideal world, a core HR Information system would be integrated across some key areas: 

  • Talent acquisition and recruitment 
  • Performance management and employee development
  • Learning and development 
  • Employee engagement and wellbeing 
  • Payroll and benefits  
  • Analytics and reporting  
  • Collaboration and communication tools  

However, usually an HR tech stack evolves in a slightly less ordered way as point solutions are needed, which means they aren’t always fully integrated. As businesses grow, they need to assess whether their HRIS is sufficient for them. There is an efficiency and usability experience factor for both employers and employees that is causing change in the sector, as HR teams focus on streamlining systems. This in turn is driving better employee experience, improved compliance, and data driven decision making.  


3. The resilience of HR teams 

As we discussed last week in our look back on the 5 years since the pandemic, the period since 2020 has been tumultuous for HR teams. The shift to remote working as well as a wave of job changes have kept teams incredibly busy.   

The pace of change for HR teams doesn’t look set to slow down. There is still a lot of uncertainty in the market and with the advent of AI there has been additional complexity to consider.  Overall, the consensus at the conference was that these teams have had to show remarkable resilience in recent years. The future is bright with AI providing the promise of a reduction in manual tasks, but this is not immediately on the horizon for most teams.  


4. Employee wellbeing is still a top priority

Wellbeing remains a key focus for those in HR across all job roles, with the likes of Coca Cola having wellness rooms across its factories. For HR Tech platforms, modules such as employee engagement and wellbeing are becoming increasingly important for an HRIS to accommodate. 

The first step to enhancing wellbeing is tracking it with monitoring, with HR platforms providing new and easy ways to understand employee sentiment. That increased monitoring inevitably has led to more demand for levers to pull to improve engagement. Changing regulation/labour laws is also a driver in some industries, but for the most part it is employee expectations that continue to grow, and HR tech is responding to that need.  

We’ve seen this ourselves at portfolio company, Ciphr, who acquired Avantus at the end of last year, giving HR teams the ability to pick the right mix of employee benefits that resonate with their people, including health and wellness schemes, lifestyle rewards, discounts and savings and more.

About the author

Isabella Fox

"I work in the Investment Team at ECI. So, that means I try to find, meet and invest in exciting growth businesses and then do my best to support the teams at those business to scale into global market leaders."

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About the author

Stephen Roberts

"I am a Partner in our Investment Team. My job is to lead investments into growth businesses and subsequently work with them throughout our investment. It means I get to meet with exciting businesses and inspirational teams pretty much every day, which is a real privilege."

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