In this episode of the podcast, Anna Carlsson and Emira Blomberg dive into an important and highly relevant discussion—the innovation climate among Swedish HR tech providers. Is Sweden at risk of falling behind in technological development, and how can both vendors and buyers of HR systems contribute to a more forward-thinking and competitive market?
The conversation highlights the challenges of balancing customer needs with innovative product development. If companies focus solely on what customers demand here and now, they risk missing out on long-term progress and being overtaken by international players. AI is a crucial part of the future—but how much are Swedish HR tech companies actually investing in AI compared to their global competitors?
Anna and Emira also discuss the role of buyers in the innovation process. Many companies tend to procure HR systems based on outdated routines and detailed requirements rather than being open to new, more efficient ways of working. How can HR tech buyers become more strategic and ensure they invest in solutions that are sustainable over time?
If you want to understand how the future HR tech landscape is taking shape and how to make more informed choices, this is an episode you don’t want to miss!
Note: This episode is in Swedish. A translated transcript is available below.
Transcription:
Anna Carlsson: In today’s episode, we take on an important discussion that I have been thinking about and discussing with colleagues in the industry over the past year: What does the innovation climate look like among Swedish HR Tech providers? And what do buyers need to do to ensure they choose solutions that aren’t already outdated by the time they are implemented?
Joining me in the studio today is Emira Blomberg, my podcast sidekick who is actually a guest today. Emira works on the vendor side but also has a background as a recruiter and system user. So, we both have experience from different perspectives—supplier, consultant, and HR departments.
We talk about the balance between developing based on customer requests and driving real innovation, the importance of understanding market trends, and how both vendors and buyers need to collaborate to ensure Sweden doesn’t fall behind. We can’t just listen to customer needs—if we do, Sweden’s HR solutions risk lagging far behind international alternatives.
We also discuss AI. How much effort should vendors put into integrating AI into their solutions? How do Swedish providers compare to international players? And what requirements should buyers set to get modern, future-proof systems?
Together, we reflect on challenges and opportunities in the market and how we can create better dialogue and understanding between buyers and vendors.
Do you need support in choosing a vendor? Feel free to reach out to me—that’s one of the things I do as an advisor. A couple of hours here and there to discuss your needs and vendor selection can make a big difference. If so, contact me at anna@hrdigi.se.
Anna Carlsson: Hi, Emira.
Emira Blomberg: Hi, Anna.
Anna Carlsson: Today, it’s just the two of us in the studio, and I’ve been thinking for a long time. I’ve also discussed on LinkedIn about vendors, Swedish vendors, innovation, and development. In January, for example, I wrote about a company that didn’t even invest in Sweden, even though they were new and innovative. So, I thought we should have a discussion about that.
Emira Blomberg: Yes, how exciting!
Anna Carlsson: You work at a vendor.
Emira Blomberg: Yes, I do—the other side now. The vendor side of things. It’s really exciting to have this perspective. And I think it’s extremely valuable that I’ve worked operationally before. I know that from my current job, which is at Refapp—we provide a service for digital reference checking.
The founder was also a former recruiter. He saw that this was a tool he needed, and many of us working here are former recruiters. And since this system is meant to help recruiters, having that insight is very useful. I often go back to my own experiences in product development.
At the same time, it can be risky to rely too much on your own perspective as an ideal customer profile. But domain knowledge is definitely an advantage.
Anna Carlsson: I think we should stay with the background for a moment. We should also reflect on the fact that all these vendors and startups, even those that have been around for a long time, all have an idea they want to solve, something they want to offer the world.
No one starts a company just to make money—at least, not in the HR Tech world, from what I’ve seen. Instead, there’s always a strong idea, something they’ve experienced in their professional role or helped others with, that they believe could be turned into a product and offered to the world.
Emira Blomberg: Yes, exactly. And that... how should I put it? The level of innovation when a company is founded can vary. As the landscape fills with smart tools, some see an opportunity not just to make money but to refine something that already exists and make it even better.
Take the ATS (Applicant Tracking System) market or general HR systems, for example. They aren’t disruptive innovations in the same way because they’ve existed for a while. But processes are always changing, influenced by global megatrends that impact how we attract, recruit, and retain talent. So, it’s all interconnected.
Anna Carlsson: Yes, exactly. And I think that in the HR systems market, development often happens in waves. Maybe ten years ago, there was new technology—SaaS solutions emerged, and systems moved to the cloud. Before that, everything was on-premises, installed locally on a company’s own servers.
Emira Blomberg: Yes.
Anna Carlsson: Locally installed software in one’s own operations, that changed things a lot. Many companies saw opportunities in this and began offering services in new ways. But let’s start by talking about our backgrounds, since we’ve both been on both sides of the industry.
For example, I’ve worked at two major global vendors—IBM, which entered the HR Tech market by acquiring solutions, and later I worked with Cornerstone OnDemand, an e-learning tool. So, I’ve worked with big global players, and now I’m independent, meeting many different vendors and evaluating their solutions.
Emira Blomberg: Yes.
Anna Carlsson: And you’ve also worked at more than just Refapp, right?
Emira Blomberg: That’s right. I’ve been a system user since I started my career in recruitment in 2007. Back then, we worked with Excel spreadsheets and physical binders with printed CVs—can you imagine?
Since then, I’ve seen the birth of innovation in recruitment system support. Before Refapp, I worked at Assessio, where I was also close to product development. I joined when Assessio transitioned from a consulting firm to a platform company.
Anna Carlsson: When was that?
Emira Blomberg: That was in 2019. The company had already had a platform for a while, but it hadn’t been the main source of revenue—the consulting business was. Then new owners came in and decided to transform Assessio into a platform company. That was an incredibly educational journey.
Anna Carlsson: That’s interesting because I saw a similar trend when IBM acquired an HR Tech company—it turned out to be more of a survey-based business rather than a scalable product. And when they realized the costs, they couldn’t sustain it.
Emira Blomberg: Yes, exactly. And I think in the SaaS world, there’s been a push for pure-play SaaS models without consulting services. But for complex data, hybrid models seem necessary.
Anna Carlsson: That’s a great point. And from the customer’s perspective, they often want a single point of accountability—if something goes wrong, is it the product or the implementation? It’s a tricky balance.
Emira Blomberg: Absolutely. At Assessio, we provided tools for personality and cognitive ability assessments. Historically, this was the domain of licensed psychologists with in-depth analyses. The challenge was to simplify this for digital use while maintaining accuracy.
Anna Carlsson: And at Refapp, you’ve had to work on making digital reference checking acceptable in the industry.
Emira Blomberg: Exactly. Initially, there was resistance—some even thought reference checking was outdated. But recent studies show that when done correctly, references can have high predictive validity. The challenge was to make it easier and digital, reducing barriers to adoption.
Anna Carlsson: That’s really interesting. But how do vendors balance customer revenue with innovation? I often criticize Swedish HR Tech vendors for not being innovative enough. How should companies allocate their earnings to product development?
Emira Blomberg: That’s a great question. It depends on the company’s financial model and customer adoption strategies. At Refapp, we focused on lowering adoption barriers. When we started in 2016–2017, digital reference checking was almost unheard of.
Then COVID-19 accelerated digital adoption, which was a turning point. The key was to focus on the first big behavioral shift—going digital—before adding complex features.
Emira Blomberg: Exactly. And as I said, there are pros and cons to different investment strategies. One advantage of bootstrapping or financing much of the development through incoming revenue and one's own funds is that you are forced to prioritize what customers are willing to pay for. That is, real customer value from day one. The downside, of course, is that if you only rely on customer feedback as a source of product development, you can end up in the "Henry Ford scenario" where the customer wants a faster horse when, in reality, you should be delivering a car. So, that’s the disadvantage of this type of strategy when developing a product. Raising more capital to build that car right away is, of course, a really cool thing, but you also need to be sure that this is the car the customer actually wants.
So, it’s really a fine balance between looking into the crystal ball, identifying major trends, and understanding where we are heading, while also working to lower barriers so customers can adopt the innovation being offered. Otherwise, nothing happens. I believe you can’t delay revenue streams for too long; you have to synchronize product development and sales. You shouldn’t accumulate too much sales debt, but you also shouldn’t accumulate too much product debt.
Anna Carlsson: What do you mean? A product debt would be when you only keep the bare minimum, continue selling it, and then suddenly realize you haven’t kept up with market developments, and other players come in and take over, causing your customers to leave?
Emira Blomberg: Exactly.
Anna Carlsson: And customer expectations.
Emira Blomberg: Exactly, really. If you always develop purely based on customer insights or customer feedback, you risk creating short-term solutions. We’ve also talked about the different layers or perspectives that need to be considered. You need to have an immediate, operational, and business focus. But you also need to spend a lot of time on market analysis and monitoring industry trends to understand where things are headed. That is absolutely crucial! Maybe I’m being too abstract here, but in our case, we have different sources for our product development.
We have our R&D team working on forward-looking and major product development initiatives. But we also have our Customer Success team, which works very closely with customers and gathers feedback. I’d say one key to success is ensuring that there are no closed doors between the tech team and the business side—there has to be a constant feedback loop. The real customer feedback from those who meet customers daily must be integrated into the roadmap.
Anna Carlsson: But perhaps not too much, either. I’ve been thinking about the criticism against Swedish vendors—specifically that they are not keeping up with AI as part of their products. At the same time, they are so customer-focused that they make changes that negatively impact other customers because they haven’t considered the full consequences of customizations. There are so many perspectives to consider.
I also think that your product is relatively easy to understand and timely, which might make it easier to balance the short-term and long-term perspectives. Or what do you think?
Emira Blomberg: Yes, exactly.
Anna Carlsson: I just threw in a lot of thoughts there.
Emira Blomberg: Yes, really. And I also want to say that I am very humble about the fact that I haven’t worked in product development for that long. There are certainly many experts out there. I believe it’s important to balance innovation and customer feedback while ensuring that there is real value in the end.
Revenue streams, of course, are proof that you have succeeded in product development—people are willing to pay for what you’ve created. But there are also other parts of the product that are crucial to invest in to ensure longevity. Some developments may not generate new revenue streams tomorrow, but they ensure the product remains viable in the long run.
Anna Carlsson: Yes, it’s all about balancing development for the future versus development for the customer and their experience. In Sweden, we have a relatively immature buyer group, which is a problem. If buyers only request minor product tweaks instead of thinking long-term, development becomes very short-sighted.
In contrast, international buyers are often more senior and have a longer-term perspective. That, in turn, drives international vendors to be much more innovative.
Emira Blomberg: That’s very true. And in Sweden, at least, the key to success has been to have a mix of inputs in the product roadmap—balancing innovation and competitive advantage.
Anna Carlsson: Competitive advantage?
Emira Blomberg: Yes, we talk about economic "moats" in product development and business strategy in general. I believe Warren Buffett coined the term. Essentially, it’s about ensuring that your product remains relevant and doesn’t become obsolete overnight. As you mentioned, new innovative players can come in and offer something better, so we’re always working on future-proofing our product.
Speaking of which, I just remembered something I wanted to mention!
Anna Carlsson: Oh, great!
Emira Blomberg: We are currently seeing market consolidation, where everyone wants to own the entire value chain. I understand why that trend exists—it’s similar to the centralization vs. decentralization cycle we often see. But I think it becomes incredibly difficult to build great products when you're just one part of a massive chain under a single umbrella.
We are fortunate to have a relatively niche product, allowing us to refine a specific process in depth. That optimization leads to highly satisfied customers. If I were using a large HR system like Workday, for example, I’ve heard a lot of negative feedback about their ATS functionality.
Anna Carlsson: Yes, that’s true.
Emira Blomberg: Exactly! That’s a perfect example of why an ATS is much more than just another module in an HR system. It’s absolutely crucial to optimize for the real workflows that exist.
Anna Carlsson: Yes, and for the specialists who work with those workflows. Often, the people using the ATS are not the same as those managing the HR system.
This centralization vs. decentralization discussion ties into the broader consolidation trend. I spoke with a vendor yesterday who insisted that everything should be under one system. But I’m not sure about that—because then you lose the depth and specialization.
Emira Blomberg: Exactly. And then you add AI to the mix… I think we will see both centralization and decentralization happening simultaneously.
I just looked at a startup called Talent River, which is part of the Stockholm School of Economics' incubator program. They have built a super-focused solution for quickly searching candidates within existing talent pools, using AI and other parameters.
If you’re an ATS trying to optimize for all recruitment steps while also developing an advanced AI search engine, it becomes overwhelming. That’s why focusing on a specific problem often leads to better solutions.
Anna Carlsson: Yes, it ultimately comes down to how buyers approach this. They need to be quite knowledgeable to make informed choices.
It’s easy to want an all-in-one system, especially for HR departments that may not be very mature in their tech adoption. But if you look globally, the trend of having multiple specialized systems is growing because companies recognize the need for best-in-class solutions.
Emira Blomberg: Exactly! It’s about balancing innovation and usability.
Anna Carlsson: There’s this metaphor—some call it the sunflower model, where you have a big central system with small add-ons, and others call it the daisy model, where you have a minimal core system with specialized tools attached. I think that’s a great way to visualize it.
Emira Blomberg: That’s a smart analogy! Even in consumer tech, we see this trend—people build their own service ecosystem with Netflix, Spotify, etc. The same thing is happening in HR Tech, but it requires a certain level of knowledge.
And in Sweden, our market is small, which is a challenge for product companies. A single market segment in the UK can be larger than all of Sweden. For large systems, there’s a limit to how much they can invest in new development. But as a specialized company, we can still build highly valuable solutions.
Anna Carlsson: Yes.
Emira Blomberg: In large systems, priorities always exist. Some features will inevitably be underdeveloped—like Workday’s ATS.
Anna Carlsson: Or SAP SuccessFactors' learning module—there’s a lot of criticism there too.
Emira Blomberg: Exactly! Now we’ve officially lost all potential sponsorships outside Sweden.
Anna Carlsson: No, but I'm also thinking about these companies. The level of buyer maturity and the UK being at the top of the list of the most innovative countries that use digitalization the most. If we go back to the Center for Global HRM report that was released a year ago—wait, was it a year ago? No, it was last fall. Well, it depends on when you're listening. But it was in October 2024. And when they released that report, Sweden ranked very low. We were second to last in terms of innovation. How digitalized are we as a country in HR, and how much analytics do we use? We were at the bottom among 38 countries, while the UK was at the top, and the U.S. was somewhere in the middle. They have different levels of innovation on the East and West coasts, while central U.S. is more like a different country altogether.
But if we then come up with innovative solutions that are perhaps difficult, solving problems we haven't even looked at yet... There was a company I wrote about in January that chose not to focus on Sweden at all with its product. And here we see the meeting point between having excellent technical competence—we have highly skilled developers, innovators, and entrepreneurs, especially in Stockholm, particularly at Epicenter where I sit. But at the same time, they struggle to sell their niche products because we have a traditional mindset. So, I feel sorry for them. Many people come up with incredibly smart ideas but struggle to bring them to market.
Emira Blomberg: Exactly. I think it would be interesting to understand how HR sets budgets for their systems, purchases, and whether this is changing—whether they are planning ahead, knowing they will need more. We recently had Henrik here, Head of Future Work at Sodexo, and he talked about how his own SaaS subscription costs had increased significantly as a private individual. I think we need to be prepared for that.
And where should we recoup that cost? Where do we see the revenue to justify that expense? But then I think about the challenges we face in attracting, recruiting, and retaining employees. We struggle to attract talent. Our recruitment processes are inefficient, and we can't retain employees to the extent we would like. There are so many key metrics we could start measuring and tracking to demonstrate that these expenses are actually investments.
Anna Carlsson: And then you add the knowledge gap—the fact that the right people to recruit simply don’t exist. So, you have to think about upskilling and reskilling. Internal competence development benefits employees because they often want to grow. We have all these aspects of how competence flows within Sweden, and we really need to work on that. We need to start measuring these things quickly so we can invest in different types of support and solutions.
It could be providing access to generative AI, which is a general investment for employees to help speed up, improve, and simplify their work. But it’s also about planning for budgets and finding ways to justify why you need more money.
Emira Blomberg: Absolutely.
Anna Carlsson: Because I don’t think this is something that gets prioritized or that people even know how to do properly—unless they have dedicated staff working on these issues.
Emira Blomberg: Exactly. And if there is a consolidation happening in the market, it becomes even clearer that internal functions need to sit down together to understand the bigger picture. Learning & Development needs to collaborate with Talent Acquisition, which in turn needs to work with compensation & benefits, and so on. We need to understand all the needs within the HR chain to make good decisions about where to invest. This is not an isolated process; we need to consider the entire employee journey and keep that in focus at all times.
Anna Carlsson: And then remember that we all need to keep an eye on external developments. That brings us back to our discussion and advice for 2025. It’s crucial to make time to look up and see what’s happening in the world—not just listen to the vendor you already have, who may have a more generic focus. Every specialist needs to stay informed about what’s possible.
Emira Blomberg: Definitely. I hosted a panel yesterday because we had a product launch in Gothenburg, and Mikaela from Zeppelin, a company that deals with large construction machinery, also talked about efficiency. In 2025, they, too, are looking to become more efficient. And I asked, "What will you do with all the time you free up through efficiency gains?" Her answer was so refreshing. She said, "I’m going out to network."
We need that because Talent Acquisition has been such an inward-looking function when, in reality, it should be outward-looking. It needs to get out there. And her response made me happy—she wants to network, monitor trends, and stay ahead to ensure a steady inflow of candidates into the organization.
So, hopefully, everything ties together. If we make time for market research, we can invest in the right tools. If we invest in the right tools, we gain more time for market research. No, but seriously...
Anna Carlsson: For some, this feels like climbing a huge mountain. If they have technical debt and a vendor who lacks the capability to innovate and stay ahead, then they have a massive challenge. They need to start taking steps forward.
Meanwhile, in the tech industry, they are far ahead. They might not even understand what we’re talking about because for them, using digital tools and staying at the cutting edge is second nature. I often advise new, innovative solution providers to focus on that sector because others have so much more catching up to do. Did I lose my train of thought?
Emira Blomberg: No, I think this is just a discussion between us, Anna. We don’t have all the answers. This is more of a conversation where we explore the issues. But I think we can agree that there is a problem here.
Vendors are not innovative enough. Buyers are not bold enough. And somewhere in between, we all need to step up to ensure we don’t fall behind as a nation. But I’m optimistic about the future. I think we are becoming more aware of these challenges. Education plays a big role, and I feel like things are bubbling beneath the surface. We are starting to adopt new technology.
Anna Carlsson: The pandemic played a significant role in getting HR systems and digital support systems in place because people realized they had to change. And now, with AI, we are seeing another wave of realization—that things can be done differently. I think a lot will happen.
For solution providers, my advice is to always think about both the customer and the future. If you’re a new vendor, focus on finding the right audience before investing too much in your product.
For buyers, remember that you can change things. With SaaS solutions in the cloud, switching providers is easier—though not necessarily easy. But you have greater flexibility. Challenge your ways of working. Make sure you stay informed about what’s possible so you don’t end up buying outdated technology.
Emira Blomberg: Exactly. And when purchasing a new system, you have to make internal behavioral changes. But if those changes become too overwhelming and counterproductive, making it harder to support the business, then it’s not the right solution for you.
Be open to change, but also challenge vendors. Ask them: When will this be available? How does this fit into your roadmap? When can I expect this functionality?
Anna Carlsson: Also, during procurement, many buyers reuse old Excel sheets and ask outdated questions. My advice is to focus on what’s actually important for you to know. But also, allow innovative companies to describe the future—don’t just frame everything based on your current knowledge.
Emira Blomberg: Absolutely.
Anna Carlsson: I hope this discussion has been valuable.
Emira Blomberg: I really think we need to connect more.
Anna Carlsson: So don’t be afraid of dialogue.
Emira Blomberg: Exactly.
Anna Carlsson: And if you feel that you’re not mature enough to have this kind of dialogue and feel insecure—maybe even a bit overrun by a vendor—it all comes down to competence. You need to develop and educate yourself to understand what the vendor is saying. Yes, there were many aspects to this.
Emira Blomberg: Yes, absolutely.
Anna Carlsson: Thank you, Emira, for joining and talking about this.
Emira Blomberg: Thank you, Anna. It was really fun to discuss this and product development. Innovation is always exciting.
Anna Carlsson: Innovation is so much fun! I hope this provided interesting insights for both buyers and sellers of various HR tech solutions.
