At Work-Bench Ventures, an investment area that we spend a lot of time exploring is Human Resources. One of our founding board members at Work-Bench, Tom Carroll, has been extremely helpful in sharing his perspective on some of the challenges and opportunities he sees in HR today.
Tom is the Chief HR Officer at RR Donnelley, a Fortune 500 company with approximately 68,000 employees worldwide. He distills HR into two buckets: the hard stuff and the soft stuff. The hard stuff is numbers - wages, healthcare costs, headcount, etc. The soft stuff is things like employee engagement, job satisfaction and training. The key here is to carefully balance both, ensuring that the benefit of hiring an individual outweighs the costs associated for the business.
As we look out into 2015, three important trends we’ll be tracking this year are employee engagement, employee health and employee analytics.
1. Employee Engagement
Companies with engaged employees outperform their competition, making employee engagement one of the top priorities for all organizations. Today, this means ensuring that an employee knows that he or she is exactly where they want to be in their career at the company. For Millennials, who will comprise roughly 50% of the workforce in 2020, knowing that their manager cares about them, as well as having a strong connection to their work, is a now a requirement.
Learning is also tied to this. The concept of learning used to be that everyone took a three day learning seminar and management thought that it would immediately transfer to the workforce. Learning can and should take on different modalities other than the classroom - including remotely, electronically and on mobile devices. Engagement means different things for different people and these needs have to be properly addressed in order to drive organizational success.
An early investment and success for us in this domain was True Office (acquired by NYSE), a gamified learning technology startup that transforms outdated organizational training content into interactive courses. Under the employee engagement umbrella, we’re excited about new startups with novel solutions for employee recognition, professional development, and retention.
2. Employee Healthcare
Employee healthcare is a mess. It is the largest expense outside of wage and the whole industry is in transition. With the introduction of the Affordable Care Act, there have been many changes to the healthcare environment including access to healthcare, payment rendered for healthcare and the affordability of healthcare (including tax deductibility). These outcomes will influence how people consume healthcare.
The consumerization of healthcare has moved many employees to high deductible plans, shifting a greater portion of healthcare costs from companies to employees. Most people spend more time shopping for their vacuum cleaner or coffee pot than their healthcare plan – and consumerization will change this. Technology that better prepares the consumer with information on values of plan design, costs for care rendered and clinical outcomes will be important. The Affordable Care Act gave more people access to a system with runaway costs, another opportunity for technology to address.
We’re interested in tools that enable Fortune 1000 companies to better manage spend, and enable employees to get the best clinical care at reasonable prices. Our recent investment in Oration is a good example of one solution in the space. Oration develops software that moves beyond healthcare transparency, and today offers employees and organizations a way to save money on prescriptions drug costs.
3. Employee Analytics
Most HR folks are not good with numbers (like finances and key performance indicators) but they hold keys to massive databases full of information like compensation, job promotion, injuries on the job, absenteeism, turnover, and employee survey results. Little of this data is being examined today for insights that could improve the organization, but there's a treasure trove of data here that could effectively present million dollar cost saving opportunities. For example, analyzing data on supervisor behavior and correlating that with healthcare spend or absenteeism could uncover some remarkable insights.
With vertical specific applications of predictive analytics being another one of our investment focus areas, we’re very excited about this space as it continues to develop in 2015. Two companies we’ve seen recently, hiQ Labs and PeopleHQ, analyze public data sources and overlay them on internal employee data to predict unwanted turnover and can be used for other strategic workforce planning purposes.
We’re looking forward to new startups and innovations in HR to help large organizations transform and improve their current business processes. If you are working on a startup in these areas or the broader HR space, we’d love to talk. Please reach out to us at Work-Bench Ventures.comments powered by Disqus