2024 People Analytics Technology Report: State of the Market

SeekOut has partnered with RedThread Research to bring you this report that examines the state of the People Analytics Technology (PAT) market over the last year.

While people analytics remains crucial for providing data-driven insights during uncertain times, market growth has slowed, and customer satisfaction has declined due to insufficient support and ROI. Additionally, the PAT market has become increasingly complex with the integration of generative AI, confusing customers on the technology’s safety and effectiveness at solving business problems.

This study has a lot of information, and we know you might be thinking, “Well, what now?! “ We want to leave you with some suggested next steps, depending on whether you are a people analytics tech customer or vendor.

Recommendations for PAT customers

• Know your problem, know your (tech) solution. Customers have a responsibility when it comes to enabling ROI. Specifically, you need to be clear on the issues you are trying to solve and dig into the technology’s capabilities during the RFP process to be sure the technology can do what is promised. As we’ve seen in this year’s analysis, capabilities can vary significantly based on the vendor’s size in particular, and it is critical to avoid making assumptions about what the technology can do.

• Clarify expectations on time to value. One of the quickest ways to achieve a high ROI is through quick time to value. Partner internally and with your vendor to be crystal clear on how the solution will be perceived as generating value and align on expectations on when that will occur. In an ideal world, it will be within the first 6 months. In the real world in which you live, it might be in 24 months. Regardless, align expectations with your colleagues and your vendor and hold everyone accountable for meeting those objectives.

• Put secure, safe, ethical, and responsible AI at the heart of your RFP or deployment process. Customers need to hold vendors accountable for developing and deploying secure, safe, ethical, and responsible AI by asking about it during RFPs or when new AI-based capabilities are deployed. AI has the potential to change how we do people analytics dramatically, but we have to make sure this revolution results in more benefit than harm. Given the relatively slow pace of AI legislation, customers cannot wait for others to ensure that the AI will not cause undue risks – it is on you to ask the hard questions. If your organization does not yet have an AI ethics council, consider starting one. If it does, make sure you are part of its conversations.

Recommendations for PAT vendors

• Partner for ROI. Vendors must partner closely with customers to ensure a strong return on investment. This starts with being clear with potential customers about your technology’s value proposition and when those customers can expect to get value from the product. It also means clarifying and being realistic about what business problems newly introduced AI capabilities can help solve—and not overselling that technology.

• Support your customers, especially after initial deployment. We will say this again for those in the back: Help your customers succeed! Identify scalable and tailored support mechanisms that will ensure customers have what they need—especially later in their contracts—to be successful. Provide customer support pods, access to other customers, technology that can remove some of the administrative burden, and real-live people as needed. Better customer support = more renewals.

• Identify and communicate the big business problems your solution solves, mentioning AI when it makes sense. Right now, most vendors’ AI (likely including yours) is not directly contributing to customers’ perceptions of ROI or their renewal intentions. Further, most vendors’ marketing efforts are just muddying the water. Clarify how your solution helps customers with their biggest business problems, and mention AI’s contribution when it makes sense. Please do not lead with AI features that may fix some efficiency issues that no one really cared about before Gen AI could address them.

One of our earliest studies on people analytics tech referred to the space as the teenager of HR Tech, meaning it was growing quickly and was a bit ungainly. The market has matured since we wrote that 5 years ago, with much clearer categories, better value propositions, and greater size.

Part of maturing, though, is that growth slows down, and that is much of what we saw this year. While it is easy to blame market conditions and market size, our data indicate that those are not solely to blame: Lower customer NPS scores, which impact renewal rates, are a significant factor.

Vendors have, along with many customers, become hyper-focused on the rise of Gen AI. To be clear, Gen AI will be transformative, and vendors must integrate it in ways that solve customers’ business problems. Right now, the task is to experiment with new offerings and build that future capability while still taking care of customer’s immediate needs.

Vendors, we would like you to redirect some of your attention to core blocking and tackling topics, like being clear on your market value proposition, solving customers’ business problems, and giving them the support they need. This will be how you create ROI for your customers and drive better NPS and renewal rates, which will give you the permission to introduce that truly revolutionary AI-enabled capability in the future.

PAT customers, please continue to push your vendor partners to focus on the things that matter to your business. Vendors are focused on AI, at least in part, because they think you want them to be. You can redirect their focus to the things that will make people analytics and PAT successful in your organization today. Partner with them to ensure you and your organization get what you need. And when it comes to AI, please, PLEASE require them to show you how their AI is safe, accurate, ethical, and responsible.

We are in a moment of immense change in the technology industry broadly, and people analytics tech will benefit from this transformation in particular. When we next write this report, we expect the story around AI and its value to customers will be very different. What we don’t expect to change is that the vendors who are beloved by their customers will be those who provide high support and ROI. By doing this, these vendors ensure they and their customers win.

The report aims to help practitioners navigate the PAT market by providing insights into market size, customer satisfaction, AI implementation, and security considerations.