Perceptyx Acquires Humu: HR Tech Is Harder Than It Seems

by joshbersin · Published August 2, 2023 · Updated August 4, 2023

I’ve been an analyst covering HR Technology for more than twenty years and there’s one big thing I’ve learned: it’s a tough market for entrepreneurs. While it looks like a massive and easy-to-understand space, the competition is brutal and HR professionals are very pragmatic buyers. So when companies with new ideas like Humu come along, I am always a slight bit reserved in my enthusiasm.

Humu, a company founded by Laszlo Bock, the ex-CHRO of Google, raised over $100 million over the last seven years. Laszlo was a brilliant CHRO and also wrote a very popular book Work Rules which I read cover to cover. But when he launched Humu I was a bit concerned: the company was designing an end-to-end “nudge engine” for coaching and behavior change in business, intending to disrupt engagement surveys. I wondered if it would work.

Well it did work for some companies, but not many. Over the last six years Humu had limited success, now with around 35-40 customers. (I talked with Sweetgreen and they found it useful for store management training.) But as a generic, scalable solution it was hard to understand. So the company’s new home as part of Perceptyx will change its trajectory in a big way.

Here’s what I believe happened. Humu’s original idea was to create “happiness at work,” a concept they argued was overlooked and understudied in the market. So they built a “happiness survey” and designed a series of leadership, management, and individual behaviors associated with happiness. To “activate” all this they built a large library of “nudges” – email messages or text messages that nudge, coach, and develop people in these 90+ behaviors. All makes perfect sense.

Remember that back in 2017 when this started we had not yet been flooded with text messages, emails, slack notifications, and MS teams messages. We were using email and text messaging and chatbots were in their early stages. So the idea of well-designed “nudges” was exciting. I certainly liked the concept: to me it was the world of microlearning (or what I’ve always called “learning in the flow of work”) implemented at scale.

Yet despite the fascinating concept, the reality was more complicated. Companies have already invested in billions of dollars of survey tools, surveys, and employee engagement benchmarks. Employee Experience teams design custom journeys and use NetPromoter scores to figure out where employees are having problems. And the pandemic gave birth to a huge industry of mental health, coaching, and fitness apps that essentially “nudge us” in other ways. And most of these are mobile apps, not emails.

So while Humu was a fascinating innovation, it got caught in the crossfire of existing infrastructure and other disruptive technologies. (Enter the AI-based Chatbot, which is our newest shiny object.) And given the competition (Qualtrics went public, was acquired by SAP, and went private again – Medallia went private – Glint was acquired by Microsoft and recast in Microsoft Viva, Peakon was acquired by Workday), it was hard for Humu to get attention.

Are nudges still a good idea? Yes, if they are timed well and appropriately designed. But today, as we get interrupted by notifications every minute, they have to be carefully positioned and introduced only when people express the need.

Humu and Perceptyx

Enter Perceptyx, a seasoned and fast-growing employee listening and engagement company. Perceptyx is one of the most successful enterprise survey and advanced listening companies, having stuck to it’s core and grown over the years. (Today Perceptyx has more than 650 enterprise customers, covering more than 30% of the Fortune 100, and delivers a NetPromoter over 70. We use Perceptxy for our surveys and our Global HR Capability Assessment.)

Perceptyx offers a wide range of EX solutions, including many forms of surveys, 360 assessments, crowdsourcing (a’la Waggl now called Dialogue), and an AI-based passive listening platform called Cultivate. Cultivate is a true AI system: it monitors and understands emails, messages, and other interactions and gives employees near real-time suggestions on how to be more productive, developmental, fair, and supportive.

While Perceptyx competes with Qualtrics, Medallia, Glint, and Peakon, the company has been growing quickly because it focuses on scalable employee listening for large companies. The company offers savvy advisory services and the Perceptyx customers I talk with are exceptionally happy. They don’t just sell software – they sell and implement end-to-end listening solutions. And this is what many large companies need.

Where does Humu fit? Well, as the press release points out, Humu fills a critical hole in the employee listening problem: how to drive action from the feedback we receive. For many years survey companies have been trying to “close the loop” (I call it “insights to action”) on these employee issues. When a survey or feedback item comes in and HR or a manager reads it, what are we supposed to do? It’s not always clear.

Now, as Humu’s nudge library gets integrated into integrated into Perceptyx’s AI Insights Engine (the AI recommendation engine that first powered Cultivate), customers will have to option to “turn on nudges” for managers, employees, or leaders who need help fixing the problems identified in these surveys. And the 90+ behaviors covered by Humu are important business topics we understand. How do I create accountability? How do I create a more collaborative team? How do I build psychological safety? You get my drift.

Each of these “management practices” (or behaviors) can be addressed through Humu’s nudges. And with more than 650 customers (one third of the Fortune 500), Perceptyx can bring this solution to many large companies.

Will this all work? I have to believe the answer is yes. Large companies struggle to provide supervisors, managers, and teams easy-to-use tools for development, coaching, and personal growth. BetterUp’s product Connect is targeted at this market, and BetterUp is now a large and respected company valued at over $2 billion. So I believe Perceptyx can take the work Humu pioneered and bring it to many organizations.

The Employee Experience market is massive. Major vendors like ServiceNow, Microsoft, Qualtrics, Medallia, Zoom (Workvivo) and Firstup are aggressively going after the space. Perceptyx, with strong tools for surveys, feedback, and listening, can now close the gap between insights and behavior change. And Humu’s IP can survive and meet the needs of more companies.

We’ll stay in touch with this technology evolves.

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