SAP Strengthens HCM Portfolio With SmartRecruiters Acquisition

SAP has entered into an agreement to acquire talent acquisition (TA) software provider SmartRecruiters. With SAP SuccessFactors a key part of the cloud-based SAP Business Suite, SAP believes that the expertise in high-volume recruiting that SmartRecruiters brings will be an ideal addition to the company’s human capital management (HCM) suite.

SmartRecruiters provides software-as-a-service solutions and a platform that serves more than 4,000 customers, including Amazon, Visa, and McDonald’s, and specialises in recruitment automation and AI-enabled candidate experience and engagement. Following the acquisition, SAP customers will benefit from AI-enabled recruiting and hiring capabilities, which will make tracking and candidate screening more efficient.

Combining these talent acquisition features with the SAP SuccessFactors suite will, according to SAP Executive Board member Muhammad Alam, allow customers to “manage the entire candidate lifecycle—from sourcing and interviewing to onboarding and beyond—all in a single system to streamline the experience of recruiters, hiring managers and, in particular, candidates.”

The Vision Behind The Acquistion

In speaking about the deal, Dan Beck, President and Chief Product Officer of SAP SuccessFactors, stated that talent acquisition is an important space for SAP customers and that bringing the right talent into an organisation is not just an HR priority but also a business priority. With the robust portfolio that SmartRecruiters offers, Beck believes this will better serve SAP customers and highlights the value that the deal brings to those customers and the community. In closing, Beck stated that he was convinced that SmartRecruiters will be an ideal complement to SAP SuccessFactors.

SmartRecruiters CEO Rebecca Carr, in talking about the acquisition, explained that the company’s vision has always been that of making hiring easy as it has frequently been complex and frustrating for both candidates and companies. SmartRecruiters has focused on keeping workflows simple and efficient while prioritising global capabilities. AI became a priority approximately two years ago and the vendor eventually released Winston, their AI-recruiting companion.

Once the acquisition is closed, Carr looks forward to partnering closely with SAP SuccessFactors and the team to ensure that SmartRecruiters appeals to the SAP ecosystem. She is confident that SAP’s support will enable SmartRecruiters to expand its global reach and make deeper research and development investments so that it can really impact how customers hire great talent. Carr is excited that “SAP’s commitment to this strategy is an incredible outcome.”

An Eye on AI

When asked about ensuring that both SAP and SmartRecruiters are combating the potential of bias, Beck stated, “SAP adheres to the highest ethical standards,” and that the company expects to bring that focus on ethics to all AI. This follows SAP’s commitment to the 3 R’s in making AI relatable, reliable, and responsible. The company has strict internal standards around AI and this flows into the AI capabilities that are delivered to customers.

Carr stated, “SmartRecruiters takes the use of AI in the business process very seriously.” She added that the company has an AI Trust and Compliance committee. Information coming from AI tools includes explainability of the results, inputs, and weighting given in those responses so that users can digest the outputs and give feedback. This includes information on why a particular percentage may appear in one place and not another.

SAP intends to enhance the SAP SuccessFactors suite to add AI-enabled recruiting and hiring capabilities, which will make applicant tracking and candidate screening more efficient. Insights from these hiring and recruiting analytics will flow directly into SAP’s existing HCM tools, as well as SAP Business Data Cloud, which will provide a single system of harmonised, compliant data. SAP also has no immediate plans to change the availability of the SmartRecruiters portfolio as a standalone option.

The transaction is expected to close in the fourth quarter of 2025, subject to customary conditions and regulatory approvals. SAP has indicated that it does not plan on adding any further information on how SmartRecruiters will be integrated into SAP until after the acquisition is completed. The company also did not disclose any financial details about the deal. This includes details on, for example, whether SmartRecruiters will replace the existing SAP SuccessFactors Recruiting module.

What This Means for Mastering SAP Insiders

• Adding talent acquisition capabilities is a strategic move for SAP. SAP SuccessFactors suite has only limited TA capabilities, something that is particularly true for high volume transactions. As one of the leading TA solutions, SmartRecruiters likely addresses a direct need for SAP customers and will allow SAP to move more quickly to better serve these customers.
• SAP’s investment in SmartRecruiters demonstrates that the company values HCM. SAP has not made any major HCM investments since the acquisition of SAP SuccessFactors in 2011. Although HCM represents an important module in SAP Business Suite, the acquisition of SmartRecruiters demonstrates that SAP is listening to its customers and that the continued enhancement and expansion in the HCM space is worth greater investment.
• Ensure that AI usage and vendors follow strict guidelines for responsible usage and results. Both SAP and SmartRecruiters have guidelines in place to ensure that AI is unbiased and provides clear data for oversight. While more vendors are embedding these governance capabilities into AI, there is a significant variation in how thoroughly these are followed. It is also crucial to ensure that internal usage of AI follows these same guidelines.