Employment Hero grew by land and expand. It wins small and medium businesses with an anchor product, usually payroll or HR, then adds recruitment, engagement and benefits modules as the customer grows. In October 2025 it announced more than A$300 million in annual recurring revenue, a tenfold rise in just over five years, after its first EBITDA-positive month in December 2024.
Key takeaways
- Employment Hero passed A$300 million ARR in October 2025, up tenfold in just over five years.
- It added more than A$30 million of new ARR in the first half of 2025 and serves 350,000 businesses.
- Payroll is the anchor: once pay history and tax settings run through you, leaving is hard.
- It recorded its first EBITDA-positive month in December 2024, a sign that expansion revenue was starting to outpace acquisition costs.
Picture a café owner who's just hired her fifth employee.
She needs to pay them properly. Super, tax, leave, the lot. So she signs up for payroll software.
Six months later she's struggling to find staff, so she switches on the recruitment module. Then she wants rosters and contracts in one place, so she adds HR. Then someone suggests employee benefits might help her keep the good ones.
She never sat through a sales pitch for an "HR platform." She just kept solving the next problem, in the same place.
That's the story of how Employment Hero grew tenfold.
What does Employment Hero sell?
It calls it an "Employment Operating System." HR, payroll, recruitment, employee engagement and benefits, all in one subscription, for small and medium businesses.
Its pitch is that the platform gives small businesses "the infrastructure to operate at the same level as the world's largest companies." The kind of HR stack that used to be affordable only for big enterprises.
But the clever part isn't the list of features. It's the order customers buy them in.
How does land and expand work at Employment Hero?
A business might start with HR or payroll. Then, as it grows, it adds recruitment and engagement tools. Each one is another line on the subscription. And another reason not to switch.
Payroll is the anchor. Once your pay runs through a system, leaving means migrating pay history, tax settings and employee records. Nobody does that for fun.
In The Subscription Playbook I list five factors for land and expand. Employment Hero ticks them all:
| Land and expand factor | How Employment Hero does it |
|---|---|
| 1. An attractive initial offer | Start with the one product you need now, often payroll |
| 2. Product/market fit | Small employers need compliant pay and HR, and most can't afford an HR team |
| 3. Re-earning the business | New modules keep adding value as the customer grows |
| 4. Solid onboarding | Getting payroll right is the "aha" moment, and it has to work first time |
| 5. A funnel | Each module is a natural next step for a customer already inside the platform |
What did the numbers do?
| Date | Milestone |
|---|---|
| December 2024 | First EBITDA-positive month |
| First half of 2025 | More than A$30 million of new ARR added |
| 2025 to date | EBITDA-positive, on track for first full positive year |
| 8 October 2025 | Passes A$300 million ARR, a tenfold increase in just over five years |
It serves 350,000 businesses worldwide and describes itself as one of Australia's few unicorns, alongside Canva, Atlassian and Airwallex. AirTree is a long-standing backer.
The profitability timing matters. Land and expand is expensive at the start. You spend to acquire customers on a small first product, and you only earn it back when they expand. Employment Hero's move into profit suggests expansion revenue started to outpace the cost of acquiring customers.
Why expansion revenue compounds
In the book I use a simple example. A business has 1,000 customers paying $20 a month, so $20,000 MRR. Twenty cancel, losing $400. But thirty upgrade to a $50 plan, adding $1,500 of expansion. MRR ends the month at $21,100, even after churn. That's net negative churn, and it's what a menu of add-on modules is designed to produce. Learn more in expansion revenue and net revenue retention.
Is your expansion engine working?
Calculate your net and gross revenue retention to see how much growth is coming from existing customers.
Why is this so hard to compete with?
Because every module deepens the moat.
In the MOATS framework, S is for Switching. A customer using just payroll could, with some pain, move to a competitor. A customer running payroll, HR, recruitment and benefits through one platform would have to replace four systems at once and retrain every manager.
That's embedding. The more of the customer's operations run through you, the less likely they are to leave over a price rise or a competitor's discount.
My take
The mistake I see most with land and expand is landing with the wrong product. Founders lead with their flashiest feature, not their stickiest. Employment Hero leads with the boring, essential thing (paying people correctly) and lets the exciting stuff come later. Boring and essential is where loyalty lives.
Where can land and expand go wrong?
If the expansion never happens.
A company that lands thousands of customers on a cheap entry product, but can't get them to buy a second module, ends up with lots of customers and no profit. The book's warning applies: a growing business that makes no money isn't a business.
So measure the expand part, not just the land part. How many customers buy a second product in year one? What's your net revenue retention? If those numbers are flat, fix the product path before you spend more on acquisition. The LTV:CAC calculator shows whether expansion is paying back what you spend to land.
What can you steal from Employment Hero?
You don't need to build software. This works for any business with related services.
- Identify your anchor. The service that's painful to move: payroll, bookkeeping, compliance, IT management. Lead with it.
- Build a menu of add-ons for existing clients. Price each so the bundle beats buying separately.
- Make the next step obvious. When a client grows, they should see exactly what to add.
- Track expansion revenue separately. New revenue from existing clients is your expansion engine. Watch it monthly.
- Get the anchor perfect. If payroll is wrong once, nobody buys the recruitment module.
For the full method, read land and expand and see how another company did it in DocuSign's land and expand story.
What to do next
Write down your products or services in the order a customer could buy them. Is the first one an anchor? Is the second one obvious?
Then measure how much your existing customers are growing.
NRR and GRR CalculatorNet and gross revenue retention.Open the free tool →For more on the software side, see the SaaS business model guide.
Frequently asked questions
What is an anchor product?
An anchor product is the thing a customer can't easily stop using once it's in place, usually because it holds important data or runs a critical process. Payroll, bookkeeping, compliance and practice management software are classic anchors. Selling the anchor first gives you a long-term relationship you can then expand with related products.
How do you price add-on modules in a land and expand model?
Price each module so it's worth buying on its own, then make the bundle cheaper than buying the pieces separately. That rewards customers for consolidating with you. Keep the entry product affordable so landing is easy, and make sure the expansion path is visible inside the product, not hidden in a sales deck.
Can a service business use land and expand?
Yes. An accounting firm can land with tax returns and expand into bookkeeping, payroll and advisory. An IT provider can land with a help desk and expand into security and cloud management. Start with the service that's painful to move, then build a menu of add-ons existing clients can switch on.
How do you know if land and expand is working?
Track revenue from existing customers separately from revenue from new ones. Net revenue retention above 100% means existing customers are growing faster than you're losing others. Also watch how many customers buy a second product within their first year. If few do, your expansion path isn't obvious enough.
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Robert Coorey, MBA
Robert is the author of The Subscription Playbook and Feed a Starving Crowd and a Director at BPAG Accountants in Sydney. More about Robert.
Sources
- Employment Hero, Employment Hero Surpasses A$300M ARR (8 Oct 2025)
- Employment Hero, Employment Hero surpasses $250M ARR and achieves profitability (2025)
Facts and prices checked 27 October 2026. Spotted something out of date? Tell us.