FPE Capital: HCM software growth needs focus on customer targeting, direct sales

FPE Capital analysis published Sept. 22, 2026, suggests mature HCM software vendors focus on tightening ideal customer profiles to reduce customization drag, shorten implementations, and lift retention. The analysis recommends prioritizing direct sales over channels to build repeatable pipelines, with partners as a secondary route, and emphasizes cross-selling via modular add-ons to sustain net revenue retention above 100% and reduce reliance on new logos. The report cited Zest's doubling of ARR within four years after a direct-sales rebuild before its sale to Epassi Group.