Scott Berg from Needham & Company attended the HR Technology Conference in Vegas. Attendance was up Y/Y although overall traffic levels to be lower than 2014’s event and really focused on the larger vendors.

Demand trends appear healthy and Berg noted "one large HRMS/payroll vendor stated that that their pipeline to quota coverage ratio is currently 5x, up from 3x Y/Y". He believes Ultimate Software (NASDAQ: ULTI) and Paylocity (NASDAQ: PCTY) will benefit the most from the strongest areas of customer spending as mid-market customers race to join their peers in the Cloud.

Compliance is driving incremental spend.

-ACA reporting

-pre-hire activities for background testing

-compliance for learning/training LMS systems

Video recruiting continues to gain steam and discussions with video recruiting vendors highlights a space that likely continues to grow well above 20% Y/Y. Berg believes the spend in this area warrants its own category but the companies are private leaving public investors to wait for acquisitions to occur understanding that the revenue will be layered onto existing business models.