RedThread Study Reveals People Analytics Tech Market Reached $12.2B in 2025 as Growth Cools, Contracts Unbundle, and Vendors Reconsider their Customer Support

2026-06-30 · Source: The AI Journal · Field: Business & Management — Human Resources & Workforce Development, Corporate Strategy & Leadership · Depth: Fundamental Awareness, short

Summary

A new RedThread Research study, "People Analytics Tech Market Trends 2026: Old Market, New Pressures," reveals the People Analytics Technology (PAT) market reached an estimated \$12.2 billion at the end of 2025, growing 26% year-over-year from \$9.7 billion in 2024. This growth rate, however, indicates a maturing market, down from its 2022 peak of 50%. The report, based on 47 vendor solutions and mapping 163 PAT solutions, highlights significant shifts: contract unbundling, with bundled consulting dropping from 53% to under 25% and implementation from 69% to about 33% in two years. M&A activity quadrupled in 2025, rising from 9% to 36% of vendors, particularly among HCM/HRIS platforms. While 89% of vendors now offer AI, 70% focus on copilots, with only 16% building complex automation agents. Furthermore, internal vendor ethics codes increased to 94%, but customer education on data ethics plummeted from 62% to 26%.

Key takeaway

For HR Professionals evaluating People Analytics Technology, you must scrutinize vendor contracts more closely than ever. The market's shift towards unbundled services means you are likely paying separately for consulting and implementation, which were previously included. Be prepared to assess the true scope of AI capabilities, as most offerings remain "assist" mode copilots, and recognize that vendors are reducing customer support for data ethics, placing more responsibility on your organization for responsible data governance.

Key insights

The People Analytics Technology market is maturing, shifting towards unbundled services and internal AI focus, while external customer support declines.

Principles

• Market maturity shifts buyer responsibility.
• Unbundling services is a growing trend.
• AI adoption is widespread but basic.

In practice

• Evaluate PAT contracts for unbundled services.
• Assess vendor AI beyond "assist" mode.
• Prioritize internal data ethics training.

Topics

• People Analytics Technology
• Market Trends
• AI Adoption
• Data Ethics
• HR Technology
• Mergers & Acquisitions

Best for: Investor, CTO, Entrepreneur, HR Professional, Consultant, Executive

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Editorial summary, takeaway, and curation by AIssential. Original article published by The AI Journal.