In the USA, we've been hearing a lot of talk the last five or six years about industry consolidation in the HR marketplace. While there has been a steady stream of M&A activity and a few high-profile deals (e.g., Oracle Peoplesoft), the activity is not unusually high compared to historic norms. We are also not seeing a significant rise in the number of business failures. To the contrary, for every company we see closing their doors, we are seeing at least two companies open their doors as new entrants in the HR marketplace. At HRmarketer.com, we talk with a lot of HR suppliers (hundreds each week) and the overwhelming majority say business is good. And of the many HR suppliers who sign-up for HRmarketer.com each month, quite a few are new to the HR marketplace. And SHRM, who just had their Annual Conference and Exposition, had a record number of exhibitors compared to recent years.
Our belief is the industry is expanding. There are a lot more HR vendors (suppliers) today than there were five years ago and we continue to see more new players emerging each month. And this expansion is primarily happening as a result of HR spending in the mid-market, something we observed in January of 2005 and reported in our blog posting Mergers, Acquisitions and Consolidations in the HR space – Oh My!.
What about the global HR space? Michael Specht, who runs a blog from Australia titled My blog of HR, and technology stuff, told me yesterday that he believes the number of HR suppliers in his country is expanding. I hear similar reports from Europe and most definitely in the Pacific Rim. This is great news for everyone as it is a sign of a healthy global HR marketplace and shows the importance being placed on HR within organizations. But it also means increased competition and that may not be good news for some suppliers.
What do you think? Is the total number of HR suppliers increasing? Decreasing? Send us an email: blog at fishervista.com