The ASX HR Tech stocks boosted by remote working boom

HR tech stocks on the ASX have had a solid 2020 as remote working exploded.

COVID-19 restrictions have led to entire workforces working remotely and tools such as those offered by ASX HR tech stocks have been in hot demand.

Almost all of these companies have benefited in the form of increased revenue and in some cases a share price boost.

Workforce managers win big in HR tech

Two stocks in the HR tech sector offer broad workforce management solutions.

One small cap is intelliHR (ASX:IHR), which offers an online HR management and data storage tool. Among other HR tasks it enables on-boarding and performance management of remote workers.

The company’s share price has nearly tripled in 2020 and so did its total revenues in FY20.

In August, it received $2.5m from tech entreprenuer and investor Bevan Slattery.

At the time he made the investment, Slattery noted the COVID-19 trend of remote working was here to stay and intelliHR could play “a pivotal role” in the transition.

PayGroup’s (ASX:PYG) bottom line has also received a nice boost thanks to more people working from home. The company has a SaaS-based payroll and human capital management platform.

Shares witnessed a modest boost this morning after the company told shareholders it booked $5.4m in sales in the last six months.

IHR & PYG Share price chart

Verification stocks among the winners

Two other stocks in this space are online verification companies utilised for employment background check purposes.

CV Check (ASX:CV1) has been a beneficiary of remote working, helping companies onboard employees.

Three recent new clients are ASX buy now, pay later companies Afterpay (ASX:APT), Openpay (ASX:OPY) and Zip Co (ASX:Z1P) as they expand globally.

While the company initially saw revenue decline as COVID-19 broke out, things have been improving ever since.

Yesterday CV Check told shareholders it had witnessed a 40 per cent jump in quarter-on-quarter sales “despite pandemic related shutdowns in New Zealand and Victoria”.

Xref (ASX:XF1) is also a verification stock, and in a HR context focuses on candidate references. It reported a cash flow boost of 20 per cent in its last quarterly.

The company also received a boost in August from a deal with tax services company H&R Block for its AML/KYC capabilities.

XF1 and CV1 share price chart

HR tech stocks making acquisitions

The remaining two HR tech stocks are players that have also strengthened their bottom lines, and have used the opportunity to expand.

Elmo Software (ASX:ELO) offers HR and payroll software.

In FY20 its Annualised Recurring Revenue (ARR) came in at $55.1m, nearly 20 per cent up on the year before.

Today it announced it was acquiring UK HR platform Breathe for $32.4m. While Elmo is already present in the UK, it said the deal would allow it to break into the small business market.

Additionally, the acquisition provided a boost to its earnings and revenue estimates.

Nvoi (ASX:NVO) was another to have made an acquisition. The stock is a parent company of multiple HR technology products, including recruitment softwares Workconex and JXT.

The latter was acquired in May for $650,000.