The HR tech consolidation wave that everyone predicted is officially here, and it's moving faster than anyone expected. Small and mid-sized recruiting tech vendors are getting acquired left and right, and if you're a buyer, you need to understand what this means for your tech stack.

Because spoiler alert: that niche tool you just spent six months implementing might get absorbed into a massive platform you already said no to.

The Acquisition Frenzy

In just the past six months, we've seen some major moves. Workday acquired two skills assessment platforms. SAP SuccessFactors picked up a candidate experience tool and a recruitment marketing platform. iCIMS grabbed a video interviewing company and an AI screening tool.

The pattern is clear: the big players are buying innovation instead of building it. Why spend years developing a feature when you can just acquire a company that's already cracked the code?

HR Tech Conference data shows that M&A activity in HR tech is up 67% compared to 2024. Venture-backed startups that couldn't hit profitability are taking exit opportunities. And the giants are opening their wallets because interest rates are (slightly) more favorable for acquisitions.

What This Means for Buyers

If you're using HR tech (and who isn't?), here's what to watch for:

First, expect pricing changes. When your nimble, affordable point solution gets acquired by an enterprise platform, those "$99/month" plans tend to disappear. You'll get "migrated" to enterprise pricing with "enhanced features" you didn't ask for.

Second, roadmap chaos. That feature you were promised? Yeah, it's probably getting deprioritized in favor of integration work with the parent company's platform. Reports from G2 user reviews show that 58% of customers experience feature stagnation after their vendor gets acquired.

Third, forced integrations. The tool you loved because it played nice with everything? Post-acquisition, it's going to work really well with the parent company's ecosystem and get progressively worse at integrating with competitors.

The Strategic Play

Here's the cynical truth: many of these acquisitions aren't about making your life easier. They're about platform plays and vendor lock-in.

The big HR tech platforms want to be your single source for everything - ATS, HRIS, onboarding, performance management, learning, you name it. By acquiring the best-in-breed point solutions, they're eliminating your reasons to look elsewhere.

Gartner's take on this is that we're moving toward 3-5 dominant HR tech ecosystems, with everyone else fighting for scraps or getting absorbed.

How to Protect Yourself

If you're evaluating new vendors right now, do your homework on their funding situation and acquisition likelihood. Check Crunchbase to see who's invested and how much runway they have.

Build contract language that protects you if your vendor gets acquired - pricing guarantees, feature commitments, migration support.

And honestly? Consider whether you should just go with a platform play from the start instead of cobbling together point solutions that'll get acquired anyway.

The consolidation wave isn't slowing down. Adapt or get stuck with a Frankenstein tech stack that barely talks to itself.