Capstone Headwaters Reports: Remote Employee Management Presents Tailwinds for HCM SaaS Industry

August 28, 2020

Boston, MA – Capstone Headwaters released its Q2 2020 Human Capital Management (HCM) SaaS Report today, reporting last twelve-month merger and acquisition activity was strong with 150 deals and dollar volume of $7.6 billion, predominantly occurring prior to COVID-19. In Q2 2020, deal activity fell to 25 deals compared to a record 48 deals in Q1. As the country gets back to work, Capstone Headwaters expects the HCM SaaS industry to rebound with some potentially new longer-term trends emerging as capabilities like remote employee management and increased use of outsourced contractors provide more staffing flexibility.

COVID-19 has had a larger impact on HCM SaaS companies than the broader SaaS universe as hiring freezes, layoffs, and workforces moving remote caused significant segment disruption. Stock prices in the HCM SaaS universe jumped 30.5% in Q2, roughly in line with NASDAQ, representing a quick rebound from the initial COVID-19 sell-off despite clear headwinds for the segment. The impact of COVID-19 on the HCM SaaS industry is largely split as solutions for freelancing and virtual training are experiencing strong tailwinds while businesses focused around hiring and core administration are typically struggling to add new customers as companies reduce investment and delay purchases.

To access the full HCM SaaS report, click here


Capstone Headwaters is one of the largest and most active independent investment banking firms in the United States. The firm has a rich 17+ year history of achieving extraordinary results for middle market entrepreneurs, business owners, investors, and creditors. CSHW offers a fully integrated suite of corporate finance services, including merger & acquisition, debt & equity private placement, ESOP advisory, corporate restructuring, valuation & fairness opinion, and financial advisory services. Headquartered in Boston and Denver, Capstone Headwaters has over 170 professionals across 17 offices in the U.S. and an international presence including 450 professionals in 40 countries. With 16 dedicated industry groups, the firm delivers sector-specific expertise through large, cross-functional teams on a global basis. CSHW has been recognized as one of the top investment banks to work for, the top 3 most referred firms, and has been named “Middle Market Firm of the Year” for the past 9 consecutive years. For more information, visit

For More Information Contact the Key Report Contributors:

David Michaels
Managing Director

Teak Murphy