Market Sizing Research Report

B2B SaaS HR Analytics for Mid-Market Tech Companies

Research Date: December 4, 2025
Geographic Scope: United States and Western Europe
Target Segment: Mid-market tech companies (500-5,000 employees)

Executive Summary

Market Size Estimates:

• TAM: $1.15B - $1.50B (HR analytics software for tech companies globally)
• SAM: $630M - $850M (mid-market tech companies, 500-5,000 employees, US + Western Europe)
• SOM: $32M - $43M (5% market share over 5 years)

Key Insights:

1. HR analytics market growing at 13.6% CAGR, reaching $5.03B globally in 2025
2. Tech/IT sector holds 23% of HR analytics revenue share—largest vertical
3. Technology companies lead in HR analytics maturity (8.4/10), highest adoption rates (91% for mid-market+)
4. Strong tailwinds: AI integration (73% of HR pros using AI tools), regulatory compliance mandates (EU AI Act, US human-capital disclosure rules)
5. Estimated 3,000-4,000 target companies in US + 2,000-2,500 in Western Europe

Confidence Level: Medium-High (75%)

TAM: $1.15B - $1.50B

Definition: Total revenue opportunity for HR analytics software serving all tech companies globally (all sizes)

Calculation (Top-Down):

• Global HR analytics market (2025): $5.03B
• Tech/IT sector share: 23%
• TAM = $5.03B × 23% = $1.16B

Sources:

• Mordor Intelligence: HR Analytics Market - $5.03B global market in 2025
• Future Market Insights: HR Tech Market - IT & Telecom holding 23% revenue share

SAM: $630M - $850M

Definition: Revenue opportunity from mid-market tech companies (500-5,000 employees) in US and Western Europe

Calculation (Bottom-Up):

Target Customer Count:

• US mid-market tech companies: 3,500-4,000 companies
• Western Europe estimate: 2,000-2,500 companies
• Total Target Market: 5,500-6,500 companies

Average Annual Spend per Customer:

• Mid-market (500-5,000 employees): $10-$15 PEPM for core + analytics
• Average employees in segment: 1,250 (midpoint)
• Average annual spend: $115K-$180K

SAM Calculation:

• Conservative: 5,500 companies × $115K = $633M
• Base: 6,000 companies × $145K = $870M
• Realistic range: $630M - $850M

Sources:

• Ask Wonder: US Employers by Employee Count - 18,627 businesses with 500-5,000 employees
• People Managing People: HR Software Cost 2025 - $8-$20 PEPM for mid-market
• Tomasz Tunguz: Mid-market $10K-$100K ACV

SOM: $32M - $43M

Market Share Assumption: 5% over 5 years

5-Year Revenue Trajectory:

Key Assumptions & Sensitivities

Assumption 1: 5,500-6,500 Target Companies

Basis: US Census Bureau data on businesses by size, Tech sector representing 25% of large corporations

Sensitivity:

• If 4,000 companies (-27%): SAM = $460M - $620M
• If 8,000 companies (+30%): SAM = $920M - $1.16B

Confidence: Medium-High (75%)

Assumption 2: $115K - $180K Average Annual Spend

Basis: HR software PEPM pricing, analytics premium (2-3x vs. basic HR software), SaaS mid-market ACV benchmarks

Sensitivity:

• If $80K average (-33%): SAM = $440M - $520M
• If $220K average (+33%): SAM = $880M - $1.14B

Confidence: Medium-High (75%)

Competitive Landscape

Incumbents (Enterprise-Focused):

• Workday: 27.9% market share, 41.9% purchase intent, ~$5.8B HCM revenue
• SAP SuccessFactors: 25.5% market share, 32.3% purchase intent, $4B+ HCM
• Oracle HCM: 23.3% market share, 22.6% purchase intent, $3.5B+ HCM

Combined “Big 3” Market Control: 76.7% of current deployments

Key Insight: While market appears saturated, the Big 3 focus on enterprise leaves mid-market underserved. Workday explicitly “ceded the mid-and small business market to others.”

Strategic Recommendations

1. Market Is Attractive: SAM of $630M-$850M exceeds $500M threshold for venture scale, growing 13.6% annually
2. Focus on Tech Sector Wedge: Tech companies are #1 HR analytics adopters (91% penetration, 8.4/10 maturity)
3. Start US, Then Expand to Western Europe: US market larger, faster to adopt new vendors
4. Position Against Incumbents: “Analytics maturity of Workday, implemented in 4 weeks not 4 months”
5. Critical Validations: Willingness to pay $100K-$180K for standalone analytics, buying process complexity, integration requirements

Research Sources

• Mordor Intelligence: HR Analytics Market Size
• Future Market Insights: HR Tech Market
• Apps Run The World: Top 10 HCM Software Vendors
• Futurum Group: Workday, SAP, Oracle market share data
• HiBob: HR Tech Trends & Statistics

Limitations: No access to paid Gartner/Forrester reports. European mid-market counts less precise than US data.

Alternative Scenarios

Conservative: TAM $1.15B, SAM $630M, SOM $19M (3% share)
Base Case: TAM $1.32B, SAM $740M, SOM $37M (5% share)
Optimistic: TAM $1.50B, SAM $850M, SOM $60M (7% share)