A 2022 Guide To HR Startups

A 2022 Guide To HR Startups

・16 min read
A 2022 Guide To HR Startups

The field of human resources technology is exploding. Human resources are attracting the full focus of software developers from large-scale corporations like SAP and IBM to start-ups with five or more employees.

With over 12.1 million businesses in the United States spending more than $5 trillion on payroll, benefits, teaching, and other employee programs, according to HR Technology 2021: The Definitive Guide, a report released by industry analysts and HR Tech Conference opening keynoter Josh Bersin. Similarly, the L&D business is valued at more than $240 billion each year, with a $250 billion-plus market for recruiting, marketing, evaluation, and interviewing tools.

In addition, there is a sizable market for wellness, benefits, insurance, workplace tools, and office productivity solutions. This article aims to explain the state of HR startups in 2022 and the best practices for success.

What does the HR Market Look Like?

According to individuals in the sector, several dynamics are combining to improve human resources technologies desirable to investors right now.

Three venture fundraising rounds in the HR IT industry have exceeded $200 million this summer alone. Workers, an Austin-based energy labor platform, raised $300 million in June, while Eightfold, an AI talent management platform located in Santa Clara, California, and Gympass, based in Brazil, got $220 million in Series Es last month.

Some benefits, including 401(k) and health savings account administration — where companies like Lively, located in San Francisco, have grown — are also expected to see increasing investment in HR.

Companies like Gusto, a cloud-based human resource management system valued at $3.8 billion in 2019, and BambooHR, a SaaS HR software solution for small and medium-sized businesses, are being eyed as prospective contenders for the open market the coming year.

The global revenue generated in the HR technology industry was almost 47.5 billion dollars in 2019.

This sum is expected to progressively rise over the next several years, reporting a maximum value of 90 billion dollars by 2025. Both incumbents and startups appear to be benefiting from the upward trend. For example, incumbents' revenue in the worldwide HR IT market is expected to grow from 45.45 billion US dollars in 2019 to 82.62 billion U.S. dollars in 2025.

Types of HRM Solutions


There are different types of HRM solutions available in the market. Here’s a list of the most common ones by usage.

Human resources information systems (HRIS)

HRIS (Human Resources Information System) software is a broad phrase that encompasses as many different types of software as there are online HR software providers. These cross-systems go by various names, but they aim to maintain individual employee data, administer payroll and benefits administration, and keep track of the company's regulatory and legal employment needs.

Payroll, time and attendance, and benefits administration are the three basic pillars of HRM that HRIS solutions are supposed to simplify and automate. And contemporary technologies go a long way toward reducing staff data input by hand. These capabilities can be found in popular online HR systems for companies looking for the correct HRIS software:

  • Payroll
  • Time tracking
  • Employee scheduling
  • Benefits management
  • Self-service employee portal

Applicant tracking systems and recruiting software

The recruiting software and applicant tracking systems have comparable purposes; however, they are generally scaled differently. Because recruiting software is designed to manage bulk or continuing recruitment activities, it is most commonly used by recruiting agencies and big business organizations with significant employment needs.

Organizations that require employee lifecycle monitoring commonly use applicant tracking systems, which can incorporate performance and engagement modules in addition to the conventional job board, CV, interview, and onboarding functions.

Learning management systems

Learning management systems (LMS), often known as e-learning systems, keep track of an employee's education, certificates, credentials, and abilities while connecting them to resources and courses that might help them improve those skills. An LMS can be part of an ATS or integrated into ERP software, but numerous independent alternatives are available for enterprises of all sizes.

Managers can approve training, expenditures, schedules, and performance and assessment data using a typical learning management system. Most LMS users produce their learning content, which is subsequently stored on a server. These systems often require in-house departmental specialists and training coordinators or HR staff with training knowledge to create substantial learning and evaluation modules.

Performance management software

HR experts, managers, and workers can use Performance management software to assess employee abilities, create performance targets, and measure progress over time.

Many businesses utilize performance review software to teach employees of various skill levels and tenures and organize and manage performance evaluations on an annual, quarterly, or weekly basis.

This data is kept in employee files, giving HR personnel and managers a comprehensive picture of the employee's progress in their present position. This end-to-end view, which is frequently aided by a good online HR system, often assists the team with bigger HR objectives like succession planning and employment expansion.


Employee engagement

Employee engagement software positively enhances the employee experience. It promotes individual, and team involvement with everyday job goals, while performance management solutions aim to create an integrated system from recruiting to retirement. Employee engagement software evaluates existing levels of employee involvement in everyday duties while also attempting to give good feedback and coaching to enhance the employee's level of involvement.

Survey tools, follow-up processes, gamification, and analytics are often used in these systems. Users are asked to submit comments on their current work priorities, goal progress, and opinions about their job daily or weekly.

Employee experience software can be found as a stand-alone system, part of an HRIS or ERP system, or an integrated tool that works in conjunction with other software.

Top HR Startups

Some of the recently successful HR startups are:

1: Belong

  • Founded: 2014

Belong has built a solid reputation by providing outbound hiring services to its clientele. This Bengaluru-based business uses data analytics and artificial intelligence to find the top applicants. Belong delivers decreased hiring time, automated and tailored outreach, quick applicant monitoring, effective talent engagement, and integrating talent DNA to attract and keep the best matches. Cisco and Publicis are among the worldwide giants that Belong has as clients.

2: Beamery

  • Founded: 2014

Beamery is working on a talent operating system that would allow businesses to treat candidates like customers. Beamery's CRM recruitment approach will aid in attracting, engaging, and retaining talent across businesses. This strategy is based on disruptive technologies like data mining, predictive marketing, and artificial intelligence. Beamery is poised to change the way organizations approach personnel management and guarantee that people are at the center of their operations.

3: Humaans

  • Founded: 2020

By incorporating an advanced HRIS, this recently founded HR IT business wants to streamline the normally tedious onboarding, offboarding, promotions, and other HR tasks (Human Resource Information System). Humaans have acquired $5 million in seed investment to help the company expand its platform. The finest people management systems and tracking require faster processes, efficient automation, and easy data accessibility.

4: Personio

  • Founded: 2015

By combining HR operations, recruiting, and payroll into a single software platform, the business makes them easier to manage. Personio, based in Germany, promises to digitize basic HR procedures so that businesses can focus on strategic player development. Both employees and employers have autonomous access to data due to their systems.

5: Darwinbox

  • Founded: 2015

Darwinbox is a cloud-based new-age HRMS platform that helps businesses improve their personnel management processes. End-to-end recruiting management, a centralized and accessible staff database, payroll administration, an internal social networking platform, and various other services are available through the organization. Darwinbox, one of the most well-known HR IT businesses, manages all aspects of resource management, from hiring to dismissal.

Must-Have Features to Build the Best HR Solution

Here you can find a list of features that should be integrated to build the best HR system.

Cloud-based vs. on-premises


The majority of HR systems are hosted in the cloud. The vendor hosts the program, and corporate access to the application and data can be accessed via a web browser or a mobile device. Vendors also sell HR software that is installed and operated on-premises within the organization, usually by IT.

Core HR

The core HR module is a significant component of HR software that maintains employee information and is frequently the center for functionality that applies to the whole HR system, such as security and reporting.

Time and attendance

Tracking absences and recording working hours on a timesheet are common elements of HR software. Ascertain that the system is capable of accommodating business rules and procedures. Verify that the system can do the following tasks:

  • Allow customizing all of the company's absence categories
  • Identify which forms of absences relate to which staff groups
  • Create schedules and timesheets that show and record the information needed
  • Using a mobile device or a browser make timekeeping easier for employees


The recruitment module, often known as an applicant tracking system, manages the whole process of discovering and hiring new personnel. Most HR systems contain this feature. However, it isn't necessarily as complex as systems from specialized suppliers. The following are important HR software characteristics to consider:

  • Job library with a job description and crucial job information such as pay, job family, job level, and salary range
  • Workflow for requisitions and offer approval that can be customized
  • Posting vacant openings to several sites and job boards is a simple process
  • Offer exception reporting for missing shifts, clock-outs, and overtime


An onboarding module can help recruits get up to speed quickly and make a good first impression. Recruits utilize the onboarding section to complete paperwork and examine policies, at the very least.

Performance Management

Many suppliers have incorporated capabilities to facilitate informal feedback while still maintaining the capability for standard performance evaluation management. Consider the following considerations while assessing HR software functionality, regardless of the performance management approach:

  • A form that can be customized to collect information from employees and supervisors
  • Customizable processes to ensure that the procedure and approvals follow the company's guidelines
  • Filling out forms at the same time decreases the amount of ping-ponging necessary to finish the review process

Employee Benefits

Including a tool that takes employee benefits information throughout the onboarding process and open enrollment can save a lot of time. Confirm that these capabilities can perform the following, based on corporate requirements:

  • Configure a variety of plan choices
  • Instead of rekeying data, submit it to insurance providers; allow workers to pick their coverage based on the possibilities offered and provide costs
  • To prevent rekeying data, submit data to payroll.

Reporting and Dashboards


Reporting and dashboard are two very integral features for the HR solution. Most of the time, these features aren't considered until the demo of the software.

Learning and Development

Integrating an LMS and learning experience can help in the administrative tasks of scheduling running courses and reinforce a corporate learning culture.

Self-service Portals

A significant benefit of using HR software is the ability to securely share information with employees and managers.

Integration options

The ability to interface the HR system with other company tools can be quite beneficial. Knowing about new employees and terminations, for example, might assist IT systems.

Data Management

The built-in capabilities in HR software can be used to alter and audit data. HR software may include the following features:

  • When several modifications are necessary at the same time, data import is used.
  • Quickly enter several workers and a subset of fields that need to be updated; and
  • Checking for errors to ensure that data is input correctly and is legitimate.


Regardless of whether payroll reports to HR or finance, the data between the two departments are intertwined and should be considered. In addition to prebuilt connections with the major payroll providers, many HR systems include a payroll feature.

Succession Planning

Including a succession planning feature in your HR system can aid in identifying and preparing emerging stars for senior positions. However, because this module requires time and money to deploy and license, make sure there is a company-wide commitment to succession planning.


Although just a once or twice a year process, compensation planning is critical to get right, and the often-used spreadsheet can be problematic

Why HR Startups Fail - Common Reasons for Failure

Based on the failure of some of the HR startups, here’s a list of reasons you should keep in mind.

Reason 1: Market Problems

One of the main reasons for the company's failure is little or no market for the product they have created. Here are some of the most typical signs and symptoms:

  • There isn't a strong enough value proposition or compelling event to entice the consumer to make a purchase. Good salespeople will tell you that in today's difficult market, you need to identify consumers who have their "hair on fire" or are "in excruciating agony." You'll also hear individuals debating whether a product is a Vitamin (which is wonderful to have) or an Aspirin (which isn't) (must have).
  • The timing of the market is incorrect. You could be a few ways ahead of your marketplace, and they aren't prepared for your idea at this time. When EqualLogic originally released its product, iSCSI was still in its infancy. It took the emergence of VMWare, which required a storage area network to do VMotion, to truly put their market into high gear. They were fortunate that they had sufficient funds to see them through the early years.
  • The market for those in discomfort and who have money is simply too small.

Reason 2: Business Model Failure

After sitting down with hundreds of businesses, as I said in the introduction to Business Models section, I concluded that one of the most prevalent causes of failure in the startup industry is that entrepreneurs are overly enthusiastic about how easy it will be to recruit clients. Clients will beat a path to their door if they establish an intriguing website, product, or service, they believe. That may be true for the first few clients, but after that, attracting and winning clients becomes a costly endeavor. In many circumstances, the cost of acquiring the customer (CAC) is substantially more than the customer's lifetime value (LTV).


Reason 3: Poor Management Team

A poor management team is a prevalent factor that leads companies to fail. A competent management team will avoid reasons 2, 4, and 5. Weak management teams create errors in a variety of areas:

  • They frequently lack strategy, resulting in a product that no one wants to buy due to a lack of effort to verify concepts before and throughout production. A poorly thought-out go-to-market strategy might be a result of this.
  • They are typically bad at execution, which leads to problems with the product not being produced correctly or on schedule and poor go-to-market execution.
  • They will assemble a weak team beneath them. The adage is that A players recruit A players, whereas B players can only employ C players (since B players don't want to work for other B players). As a result, the remainder of the company will be feeble, and bad execution will be commonplace.

Reason 4: Running out of Cash

The fourth most common reason for a startup's failure is because it ran out of money. The CEO's task is to figure out how much cash is left and whether it will get the business to a point where it can get funding or become cash flow positive. What commonly goes wrong, resulting in a business running out of cash and unable to secure further funds is management's failure to meet the next milestone before cash runs out. It is frequently feasible to raise funds, but the value will be much lower.

Reason 5: Product Problems

Another factor for business failure is the failure to design a product that matches market demand. This might be due to a lack of skill or execution. It might also be a considerably more strategic issue, such as a lack of Product/Market fit.

Most of the time, a startup's initial product will not fulfill market demand. A few changes will be required to achieve the desired product/market fit in the best-case scenario. The product will be completely off the mark in the worst-case scenario, necessitating a total overhaul.

How our Experience at Selleo can Help you Grow

Selleo has been in the business for over 16 years, serving over 150+ clients from various industries and sectors. We have 230+ tech leaders who help companies achieve desired goals with streamlined processes and systems. We have worked to build HR solutions for various clients to empower their HR personnel with features at their fingertips.

B4B payments is a platform that addresses the automation of payroll processes and reward distribution. It limits the need for paper documentation, unifies reporting and speeds up processing. Equipped with the latest technologies, the solution gave our client access to important data, helping them retain high employee satisfaction while controlling costs.

Humly is a recruitment platform for effective hiring with a custom Applicant Tracking System streamlining hiring processes. The app allows scheduling interviews and applicant reviews for faster talent acquisition and money savings.

Our custom employee training software created for one of our clients - Neutopia - makes room for employee growth with crucial skills development. This training management software enables companies to schedule workshops, monitor education levels and store certification records all in one place.

Employee training is a critical aspect of a team's development. To improve the efficacy of learning and skill development, we can supply you with a unique solution that allows you to track education levels, maintain certification records, and store job descriptions.

Maintaining and enhancing staff performance while ensuring that it is in line with its objectives is a pretty difficult task. We can design solutions that will help you organize, monitor, and review employee work objectives, analyze their progress and offer timely feedback with a bespoke platform.

Our experience in the software industry with many clients from various sectors can help you grow your business and achieve desired results.


Navigating the HR management software environment doesn't have to be difficult or irritating. With the rapidly growing need for HRM solutions and dependencies on AI and gadgets, it is high time for companies to make the shift.

Are you prepared to integrate your latest online HR system? If you are looking for a trusted software partner, contact us now!

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