In this article, we will take a look at the 10 best human resources stocks to invest in.
The US Job Market: At a Glance
According to a report by Reuters on January 23, the number of citizens in the United States applying for unemployment benefits rose slightly during the week before the release of this report. The subtle change emphasized no decline in labor market conditions. In addition to that, the report highlighted that while layoffs were particularly low, the opportunities available to people finding new jobs remained scarce and limited.
The Labor Department reported that the jobless rolls surged to the highest level in over three years during early January. For the week ended January 18, claims for state unemployment benefits increased by 6,000 to reach 223,000. On the contrary, economists polled by Reuters were expecting claims to reach 220,00. The gap can be explained by a surge in claims after the wildfires occurred in Los Angeles, with undocumented claims being even higher.
More recently, on February 5, Reuters reported that job openings fell by the most in 14 months in December 2024 but the relatively stable hiring situation pointed towards a steady labor market. The Labor Department’s Job Openings and Labor Turnover Survey suggested that for every unemployed person, there were 1.1 job openings available in December, down from 1.15 in November 2024. While this does put a serious question mark on the Fed’s easing cycle, it also raises concerns over the stability of the US economy and its future.
By the last day of December, job openings fell by 556,000 to reach 7.6 million, the largest decline since October 2023. The decline in job openings points towards uncertainty around the new administration’s policies and a general lack of confidence, especially with incoming decisions like mass deportations and broad tariffs, leaving businesses more cautious than ever. In addition to that, policymakers are also extremely cautious, given that they believe most policies are inflationary, reducing the chances of an easing cycle being continued as planned.
With the growing need for job opportunities, the demand for human resource companies and experts is at an all-time high. That said, let’s take a look at some of the best human resource stocks to invest in thanks to their solid performance, upward growth trajectories, and positive investor sentiment.
Copyright: baranq / 123RF Stock Photo
Our Methodology
To come up with the names with sifted through multiple rankings available on the internet, and compiled a list of stocks in the industry. We then selected the following human resources stocks based on the hedge fund sentiment toward each stock as of Q3 2024 and picked the most popular ones. The list is arranged in ascending order of the number of hedge fund holders in each firm.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Human Resources Stocks To Invest In
10. Dayforce Inc (NYSE:DAY)
Number of Hedge Fund Holders: 18
Dayforce Inc (NYSE:DAY) is a software-as-a-service company that is focused on global human capital management, time management, payroll management, and talent management. The company is transitioning to becoming fully backed and run by AI, streamlining the HR functionality for businesses further. In the fourth quarter of 2024, DAY generated $347.9 million in recurring revenue, up by 19% year-over-year. In addition to that, total revenue was $465.2 million, up by 16%. Overall, the company saw groundbreaking technologies emerge in its business functions during the year, contributing to its solid growth in revenue and profits.
On February 6, Jake Roberge, an analyst at William Blair, gave a buy rating on Dayforce Inc (NYSE:DAY). Despite a lack of recurring revenue, the company reported solid financial performance in the fourth quarter of 2024, explaining why Roberge is bullish on the stock. The analyst also explained that the company had robust sales momentum and a recovering demand situation. In addition to that, Roberge is confident that the company’s AI plans will further fuel the surge in sales and customer activity in 2025 and beyond. Analysts are also bullish on the stock and their median price target of $85 points to an upside of 30%.
9. Paychex, Inc. (NASDAQ:PAYX)
Number of Hedge Fund Holders: 20
Paychex, Inc. (NASDAQ:PAYX) ranks ninth on our list of the best human resources stocks to invest in. PAYX is a payroll services company that is committed to helping businesses improve their HR functionalities and succeed. The company offers a myriad of tools to help companies solve their HR challenges such as AI-assisted recording, employee engagement and perks, and HR analytics and insights. Other than that, through its single platform, the company provides payroll services, human resource solutions, time and attendance services, employee benefits management, and full-service HR functionalities.
In an impressive update and a commitment to expand, on January 7, Paychex, Inc. (NASDAQ:PAYX) entered into a definitive agreement to acquire Paycor, a human capital management company that provides a complete suite of technology and advisory solutions in HR, insurance, employee benefits, and payroll. The agreement has been settled at an enterprise value of $4.1 billion and has been unanimously approved by the board of directors of both companies. Paycor has 2,900 employees, is home to 49,000 clients, and supports 2.7 million employees across the United States. The acquisition will greatly improve PAYX’s standing in the industry, positioning it as an emerging leader.
8. Korn Ferry (NYSE:KFY)
Number of Hedge Fund Holders: 21
Korn Ferry (NYSE:KFY) is a management consulting company that is headquartered in California, United States. The company is focused on designing and developing the optimal organizational structures, roles, and responsibilities for employees across an entity. KFY is also committed to understanding the best way clients should reward, motivate, and uplift their workforce, allowing individuals to advance in their careers and navigate their professional lives. The company has received several accolades for its functionality and business performance, explaining why analysts are bullish on the stock and their median price target of $82.5 points to an upside of 19%.
In the fiscal second quarter of 2025, Korn Ferry (NYSE:KFY) generated fee revenue worth $674.4 million and closed the quarter as the sixth consecutive one of improving profitability. Operating income during the quarter was worth $87.5 million and operating margin increased by 980 basis points to 13%. In addition to that, the net income generated was worth $60.8 million and the company repurchased 456,250 shares worth $32.6 million during the same period. Overall, Korn Ferry (NYSE:KFY) believes its execution has been pretty solid and maintains confidence in its talent acquisition business model.
7. TriNet Group, Inc. (NYSE:TNET)
Number of Hedge Fund Holders: 21
TriNet Group, Inc. (NYSE:TNET) is one of the best human resources stocks to invest in. The company offers unmatched HR solutions, payroll, and HR outsourcing to companies. The full-service HR solution allows companies to focus on other areas of business without having to worry about HR. TNET has been in business for more than 30 years and now celebrates over 365,000 worksite employees and nearly 23,000 clients. Some of its tools and platforms include TriNet PEO, HR Plus, and TriNet Clarus R+D.
In a recent update, on January 8, TriNet Group, Inc. (NYSE:TNET) launched enhanced HR Plus allowing businesses to benefit from advanced technology for small and medium-sized businesses. Through HR Plus, businesses will be able to choose any service level that aligns with their business goals and needs at the moment. For example, a client will be able to choose between an HR manager, a payroll manager, a payroll tax compliance manager, and an HR advisory. Ancillary features in the launch include an enhanced payroll solution, a marketplace with various business solutions and integrations, and a learning management system providing clients with content and tools to help them stay compliant and on track.
6. ManpowerGroup Inc. (NYSE:MAN)
Number of Hedge Fund Holders: 24
ManpowerGroup Inc. (NYSE:MAN) is an employment agency that ranks sixth on our list of the best human resource stocks to invest in. The company helps more than 400,000 clients streamline their human resource functions using MAN’s workforce solutions backed by technology. Over the past few months, the company has achieved several milestones, closing 2024 on a high note. For example, in October 2024 the company was not only named a leader in staffing in the latest Everest Group PEAK Matrix, but it also expanded its partnership with Junior Achievement to enhance the career exploration experience.
In the fourth quarter of 2024, ManpowerGroup Inc. (NYSE:MAN) generated $4.4 billion in revenue and $22.5 million in net earnings, compared to a net loss of $84.5 million last year. In line with its expectations, the company had a gross profit margin of 17.2%, with staffing margins remaining solid. The company also reported stable results in its permanent recruitment segment. Overall, ManpowerGroup Inc. (NYSE:MAN) posted a solid recovery towards the end of 2024 and expects to carry momentum in 2025. Analysts are also bullish on the stock and their median price target of $72 points to an upside of 24% from current levels.
5. Paycom Software, Inc. (NYSE:PAYC)
Number of Hedge Fund Holders: 27
Paycom Software, Inc. (NYSE:PAYC) is a software company that provides online payroll services and human resource software solutions for businesses of all sizes. Its single HCM software is focused on streamlining performance to establish a continuous flow of automation, allowing businesses to manage recruitment data, hire, onboard, and offboard more efficiently. In addition to that, the company also offers an unmatched applicant tracking tool that is focused on enhancing the flow of recruitment and hiring for other companies.
According to a study, Paycom Software, Inc. (NYSE:PAYC) has managed to reduce payroll processing time by 90% and the time spent correcting payroll errors by 85%. Most of these milestones were achieved thanks to PAYC’s GONE, a time-Off Requests tool. On January 15, the company received a BIG Innovation Award for GONE from the Business Intelligence Group. The tool allows companies to automate time-offs to fit their needs based on criteria provided by the company itself. Automated time-offs ensure no disruption in business activity. The tool has a projected return on investment of up to 821% over the span of 3 years, making it a solid investment for the company and other businesses.
4. Robert Half Inc. (NYSE:RHI)
Number of Hedge Fund Holders: 30
Robert Half Inc. (NYSE:RHI) is a recruitment and human resource consulting firm headquartered in California, United States. The company offers AI-matched candidates, recruiter assessment, HR planning, HR consulting, and automation technologies to streamline HR functionalities. Over the past few months, the company has achieved several accolades, reinforcing its position in the industry. For example, very recently, RHI was honored as one of the “World’s Most Admired” companies by Fortune.
In the quarter ended December 31, 2024, Robert Half Inc. (NYSE:RHI) generated $54 million in net income and $1.382 billion in revenue. Similarly, for the year 2024, the company generated a net income of $252 million and revenue worth $5.796 billion. The company believes its financial performance was in line with its expectations, attributing its growth to Protiviti, RHI’s business consulting unit. Robert Half Inc. (NYSE:RHI) is also assured that the elevated business confidence amid the new administration will thoroughly benefit the company in the long term.
3. Automatic Data Processing, Inc. (NASDAQ:ADP)
Number of Hedge Fund Holders: 49
Automatic Data Processing, Inc. (NASDAQ:ADP) ranks third on our list of the best human resources stocks to invest in. ADP is a management service company that provides human resources management services, tax services, online payroll services, and tax solutions. The company provides recruiting and hiring services, talent management services, activation services, retirement plans, and workers’ compensation services. ADP has as its mission to optimize operations for businesses such that forecasting budgeting, and scheduling become extremely simple.
The company recently released results for its fiscal second quarter of 2025. By the end of the quarter, Automatic Data Processing, Inc. (NASDAQ:ADP) had more than 1.1 million clients across 140 countries, managed by nearly 64,000 global ADP associates. The company also now delivers payroll for more than 42 million workers across the globe. During the quarter, ADP generated $19.2 billion in revenue, up from $15 billion in the fiscal year 2021.
As of now, the company’s total addressable market stands at $175 billion, and expects its market to grow by 5-6% in the fiscal year 2025 and beyond. This explains why hedge funds were bullish on the stock, given that 49 hedge funds held stakes in ADP at the close of Q3 2024.
2. Workday, Inc. (NASDAQ:WDAY)
Number of Hedge Fund Holders: 84
Workday, Inc. (NASDAQ:WDAY) is a system software company that specializes in human resource management and financial management. The company is leveraging artificial intelligence to streamline human resources and finance functions across the business. For HR specifically, Workday, Inc. (NASDAQ:WDAY) offers human capital management services, payroll services, time management solutions, and personalized employee experience tools.
In a recent development, the company announced that it was integrating TechWolf AI to manage and enhance the skills of its 20,000-plus employees. This development will ensure that Workday’s (NASDAQ:WDAY) employees are better able to manage their profiles and advance in their careers. In addition to that, on January 21, WDAY announced a crucial advancement to its AI journey. The company announced the launch of a Workday AI Advisory Board, a group of experts in AI to lead AI research and thought leadership across the company.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) ranks first on our list of the best human resources stocks to invest in. While the large company offers various technologies, it also specializes in providing top-notch human resource tools and features. Its Dynamics 365 Human Resources capabilities allow businesses to increase productivity, improve employee profiles, empower employees, improve management control, and speed up development in key areas. Users can also integrate its Dynamics 365 solution with various prebuilt apps to improve data access, manage online shops, improve platform inspection, and enhance content.
In addition to that, Microsoft Corporation (NASDAQ:MSFT) also owns a comprehensive job board and networking platform, LinkedIn, which allows individuals and businesses in every field, industry, and position to connect, find jobs, collaborate, and forge partnerships. The comprehensive platform was acquired by MSFT in 2016. Today, LinkedIn boasts more than 1 billion members in over 200 countries. According to LinkedIn’s fiscal FQ2 2025 report, the platform grew its revenue by 9% year-over-year and logged record engagement. In addition to that, the platform saw a 37% year-over-year increase in comments, indicating an increase in high-value engagement across the platform.
The company is also leveraging AI to enhance the functionality of LinkedIn, by investing in short-form video content and enhancing lead generation. Speaking of subscriptions, the platform surpassed 2 billion in revenue from LinkedIn Premium, given the platform logged 40% subscriber growth in the past 2 years.
While we acknowledge the potential of MSFT to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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