Talent Acquisition Suite Magic Quadrant 2025 and 2009
A look back and a look forward. Repeats and rhymes.
There is no evidence Mark Twain actually said or wrote the phrase, “History doesn’t repeat itself but it does rhyme.” But the weight of the internet meme community believes he did.
A few days ago Gartner published the Talent Acquisition Suite Magic Quadrant. This is the first Gartner recruitment tech MQ since I worked on the last one in 2009. I was curious to see what had changed and hadn’t changed in the 15 years or so. Quite a lot of it rhymes. I really enjoyed reading the report, congratulations to the analysts who worked on it.
Talent Acquisition Suite Magic Quadrant 2025
A couple of things jumped out at me.
Firstly, the robust market.
The recruiting TAS market leads the talent management technology sector, with an anticipated five-year compound annual growth rate (CAGR) of 16.7%. A shortage of skilled workers, increased investments in candidate and employee experience, and AI innovations are contributing to the market’s growth.
Conservatively estimated, forecast annual spend for talent management in 2024 neared $9 billion, with projections reaching $11 billion in 2025
(This is bigger than the whole HR tech market was in 2009.
Secondly, the replacement cycle.
Gartner estimates that enterprise hiring organizations look to replace their TAS vendors every five to seven years. This change often occurs when the technology in use fails to meet hiring demands or when the organization moves to a more comprehensive HCM suite with embedded recruiting.
Recruitment tech is a lot less sticky than core HR, Learning systems etc.
Thirdly, the competitive dynamics between the broader HCM suites and the specialized Recruitment plays.
Recruiting is one of the modules in the HCM technology stack in which point solution depth of functionality can outweigh the cost savings of an integrated, all-encompassing suite. HR technology leaders have observed that compromising by sticking with the talent acquisition module of an HCM suite might optimize the overall HCM tech TCO, but can significantly increase hiring costs, thereby negating the savings
This hasn’t changed in 15 years, and will not change in the next 15. Suites and Niches could be a radio show like the Archers.
I’d disagree with the strategic assumption “By 2027, the recruiting landscape will consolidate further, with 20% fewer providers in the talent acquisition (TA) marketplace.” We see a pitch for new TA solutions more than anything else. As I sometimes sardonically comment, “Almost every unemployed software engineer builds an ATS.”
Lots of players will get rolled up, but new ones will emerge.
Before I fall foul of the Gartner copyright police, I suggest you download the report and read it yourself. SmartRecruiters, one of the leaders (and an Acadian Ventures Portfolio company) has a helpful link to do so.
The e-Recruitment Magic Quadrant of 2009.
I wrote this together with Jim Holincheck. I learnt so much working with Jim.
A couple of obvious comments. Fewer vendors. This is a reflection of the inclusion criteria, rather than the market. 15 years on, many of the then vendors have been acquired, rolled up (Taleo was acquired by Oracle, for instance), and there is a wave of new players. SmartRecruiters was founded by Jerome Ternynck, who also founded Mr Ted. Kenexa was acquired by IBM and then gradually evaporated.
When we wrote this, it was it the relatively early days of SaaS. Recruitment was way ahead of pretty much any functional area in enterprise technology in terms of genuine SaaS adoption. The on-prem solutions were very much on the way out. It was a fascinating period of disruption and innovation, with massive changes in business model, front-end and back-end technologies.
We also commented “New vendors continue to enter the e-recruitment space, and sometimes provide concepts and technologies that challenge incumbent thinking. At least 400 vendors offer some form of e- recruitment capability, and the market is far from consolidated.”
On hiring managers
A quote from the 2009 report:
Hiring managers are still not responsive. A continuing trend in e-recruitment is focusing on the hiring manager's user experience. Vendors have introduced wizards to make it easier for hiring managers to perform certain tasks, as well as exposing more functionality in Microsoft Outlook, so that they don't need to enter the system and can,instead, perform tasks in environments with which they are familiar. Many vendors have reworked user experience with Rich Internet Applications (RIAs), such as Silverlight,Flex or Ajax. However, technology can only do so much. Hiring managers must be accountable for achieving the desired recruiting results (for example, it should be part of their performance reviews). Better analytics also helps identify problem managers
We could replace wizard with agents, outlook with teams or slack, but hiring managers are still the biggest stumbling block to effective and efficient recruitment.
On offers
Convincing top candidates to join remains difficult. Offers need to be created that are likely to be accepted by candidates within the constraints defined for that job. Moste-recruitment software supports a requisitioning process, which includes a budget defined for that open position (if not, one would be defined as part of the process).However, little intelligence is generally applied to determine that budget. Companies tend to overlook current market data because it is not integrated into the requisitionprocess. Entry and exit interview data is not gathered and presented during the requisition process to determine whether compensation was a major factor in attracting and retaining people, or if it was too low to attract top candidate
This is still largely the case today, and it is why we invested in Compa and Figures.
What we got wrong.
We thought that there would be stronger coming together of full time and contingent recruitment, but this still hasn’t really happened. We also predicted that companies would get a lot better at workforce planning, but they are still shit at it (we didn’t phrase it quite like that).
Looking forward beyond 2025
The new MQ is a reflection of today’s market, and it does a robust job of that. As I look through the investments we have made in talent acquisition technology, and the dealflow we see, I can’t help thinking we are heading into a new phase of disruption, driven mainly by AI. Some of the current vendors will thrive, but there will be a wave of new players. The innovation will be as much business model as it is technical.
We invested in Squarepeg to because it solves the needle in the haystack problem. Their focus on managing for bias and fairness really convinced us. AI is at the centre of what they do. There will be specialists like Squarepeg that will do really well. Of all the applications areas in HR Tech, recruitment will continue to spawn niche with niche players, some of them will get very big.
The next few years will see products that augment or even wrap and trap existing, established ATS. Some of those products will scope creep into being an ATS over time.
We’ll also see brand new ATS players, offering better user experiences, more flexible workflows and more. Typically this will be mid-market first, but eventually it will impact enterprise.
Core HR vendors will wax and wane with their commitment to recruitment software. I’d expect some acquisitions too.
Recruitment vendors will fail dismally to move beyond recruitment.
Some of the incumbent ATS players will grasp the AI opportunity, others will miss it. I’m thrilled to see how SmartRecruiters is thriving under Rebecca’s leadership.
New business models will shake up traditional ARR pricing structures.
To misquote Twain, the reports of death of the ATS are greatly exaggerated.
Recruitment remains a frustrating experience for candidates. This is partly because changing jobs is a massively stressful experience. Hiring someone is just another thing on the to do list of the manager, and this emotional asymmetry is the main failure point. AI offers the opportunity to reduce much of the friction in the the process, but questions of bias, fairness are still not adequately solved.
I’ll probably have to see many more pitches of end to end agents with a woman’s name, portrayed as a sexy librarian avatar, but hopefully we can move beyond this puerile anthropomorphization quickly.
The time to hire has not significantly dropped in 40 years, so there is a lot to get busy with.
I wish I knew who came up with that meme, it is brilliant. Thank you, nameless one.
As I usually do, I’ll end with a song. Let’s go back to 2009.
Here’s XX. What a great band.