Five years ago, human resources star Laszlo Bock—a veteran of Google and GE—unveiled “nudge engine” software startup Humu to the world, using HR technology to prompt smarter employee behaviour.
Humu’s trajectory appears to mirror both the promise and the challenge of the current H.R. tech space: the huge potential for machine learning and data analytics to prompt smarter employee behaviour and build better managers but also the crowded, competitive market currently exploding with artificial intelligence tools.
Now, amid growing consolidation of the H.R. tech market, Humu announced Wednesday it will be acquired by software firm Perceptyx, Forbes has learned exclusively.
The acquisition is aimed at helping Perceptyx—a platform with more than 600 customers that collects and organizes employee feedback via surveys—provide employees and managers with customized, AI-prompted recommendations for how to act on that feedback. These behavior change “nudges,” which appear in email, Slack or Microsoft Teams, might advise quieter employees to speak up in meetings if surveys find discussions are dominated by certain voices, or nudge managers to introduce new workers if feedback says new teammates need help integrating.
“When Perceptyx approached us, we realized that by teaming up we could reach more people and organizations much more quickly,” Bock says, calling it an opportunity to “change how work feels for millions of people.”
Both companies declined to disclose the terms of the deal.
Humu’s technology adds a feature that customers have been asking for, Perceptyx CEO John Borland says, as pressure on chief human resources officers intensifies amid a changing labor market and hybrid work models. “The expectation for organizations to leverage their people data in more meaningful ways has been rising,” Borland says. “The need to be able to close the gap between signal and action is more important than ever.”
Despite an uncertain economy, H.R. technology is still an in-demand market with a lot of innovation, says Josh Bersin, a human resources industry analyst, especially as companies fret about manager deficiencies that grew during the pandemic and aim to get more out of employee performance. “There’s been so much disruption in the workforce,” Bersin says. “Companies are doing a lot of reskilling, and they’re really concerned about employee productivity and [still] spending a lot of money on employee experience.”
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Perceptyx has made four other acquisitions over the past three years and has nearly $87 million in annual revenue, according to Kona Equity.
“Survey tools don’t really tell you what action to take as a result of the information you got back,” Bersin says. The integration could allow Perceptyx to differentiate itself in the market, he says, as H.R. departments try to turn survey results into behavior change and “everybody wants to figure out how to use AI in H.R.”
Bersin says Humu has been part of a crowded marketplace and “was a little ahead of its time,” launching “at a time when most companies were just barely getting their general surveys working, so they didn’t have the spectacular success they were hoping to have.” The acquisition means Humu is “bolted onto a more traditional solution that has the potential to add a lot more value,” adding it could put Humu in front of more customers.
Bock says feedback from customers was “enthusiastic,” and that “with our early customers, we realized that to reach [Humu’s] full potential, we knew it needed to be connected to employee feedback in order to ‘know’ who and what to nudge on.” While the startup tried to build its own survey engine, he says, they “ultimately decided to partner with an industry leader, which I’m confident is the right decision.”
Analysts say consolidation is common in the H.R. technology industry right now, as H.R. departments remain conservative with their budgets, causing companies to look for fewer vendors that offer more services.
As a result, employee experience platforms “don’t want to be a dead-end platform that just delivers the insights,” says Betsy Summers, an H.R. tech analyst at Forrester. “They also want to be involved in the action [because] if you can do that all in your platform, you’re incredibly sticky.”
Bock’s next act, meanwhile, takes him further afield from the H.R. world, which made him a star after years as the former head of people operations at Google, where he led teams whose generous perks and data-driven “people analytics” were followed across corporate America. Instead, he’s moving on to cofounding a second company, Gretel.ai, a platform that tests AI models and generates datasets for developers. “Increasingly the trend is for companies to start building their own kind of versions [of AI models],” Bock says. Still, “what’s also critical is the human” aspect of those tools, he says.
This article was first published on forbes.com and all figures are in USD.
