At Work-Bench Ventures, we invest in early stage enterprise technology startups. HR is an area where we have been spending significant time. Our first portfolio company exit was True Office, which transforms outdated training content into interactive courses, using game mechanics and motivation techniques so that users actually enjoyed learning. The NYSE acquired the company a year after we invested to enhance its role as thought leaders in the Governance Risk Compliance space. We’ve explored the broader HR space as a major focus area with the help and guidance of Tom Carroll, a founding board member of Work-Bench and Chief HR Officer of R.R. Donnelley, a Fortune 500 communication services provider. Tom and other thought leaders in the New York ecosystem have been instrumental in helping us understand the landscape and challenges that accompany the space.
A Brief History
We’ve learned that a lot has changed over the last two decades in HR. Candidates now prioritize learning experiences over becoming permanent fixtures at one organization. HR Technology itself started in early 2000 as a form of process automation, which then saw a rise with integration and new talent applications. HR Software represents a $15B industry and today it primarily focuses on analytics and systems of engagement. Using Crunchbase, we took a look at over 200 investments made in the last 3 years and included those that exhibit the three qualities we look for in potential portfolio companies: a stellar team, a superior product, and promising market traction. Our HR Tech landscape highlights the most promising startups in the space and is shaped by the timeline of an employee's lifecycle - starting with talent recruitment and ending with the aftermath of retention analytics. We’ve broken out each segment and described a forward looking trend for each, as well as highlighting a few notable companies in each respective area. If you have any feedback, please share it on Twitter (I’m @v1p1n). Note: We did not include new and emerging human resource information system (HRIS) companies like Namely, Justworks, and Workday, as we will be exploring those broader solutions in a future post.
We define recruiting as the effort to attract the best individuals for your organization, and it is changing rapidly with the application of big data technologies.
Trend: One major evolution within recruiting is the transformation of sourcing methods. Rather than using recruiters or working with agencies to fill hiring needs, network recruiting is emerging as a new model to attract individuals that are a good fit for your company culture. Social media is now mature enough to be used to source candidates. Combined with a little data science, it’s an amazing talent management, branding, and engagement tool if used correctly.
SmashFly: Smashfly helps organizations centralize their recruiting operations while providing real-time analytics across all of their initiatives to improve overall recruitment results.
Connectifier: Connectifier is building a large scale data analysis software that processes professional profiles from all around the web. By analyzing code repos, blogs, and social profiles, they help recruiters and hiring managers connect more efficiently with the candidates best for their openings.
Gild: Fueled by data science, consumer-friendly technologies, and predictive analytics, Gild’s smart hiring platform powers the way companies find, nurture, and hire talent across all industries and functions.
Hiring Platforms / Skill Assessment
Hiring platforms are similar to recruiting but come into play after the initial contact has been made. These platforms help onboard employees effectively and ideally infuse the process with organizational culture and values.
Trend 1: Machine learning is at the heart of many new companies in this space, allowing organizations to hire better and assess candidates quicker.
Trend 2: Video Hiring is starting to mature as new EEOC regulations now discuss video interviews with the same legalese as in-person interviews. HireVue, one of the leaders in the space for video interviews, for example, just raised $45M this past June.
Unitive and Textio: Both these startups provide predictive text analytics to optimize job listings so that employers can attract more qualified candidates and hire more diverse teams while avoiding unconscious biases.
Pymetrics: Created based on decades of neuroscience research, Pymetrics applies neuroscience-based assessment to identify what you are naturally best at, and matches it up with the career that requires it.
HireVue: HireVue's Digital Interview Platform helps improve interviews of all types, including in person, phone and video interviews. Digital question, feedback, and collaboration tools remove hassle and make interviewing up to ten times faster and nine times cheaper.
Healthcare and Wellness
The consumerization of healthcare has moved many employees to high deductible plans, shifting a greater portion of healthcare costs from companies to employees.
Trend 1: Technology that better prepares the consumer with information on values of plan design, costs for care rendered, and clinical outcomes will be important. Oration leads the charge here by intelligently routing prescribed drugs through lower cost pharmacies in a user friendly fashion.
Trend 2: Wellness programs are picking up steam both in terms of startup funding and Fortune 1000 adoption. These programs are not only a way to get employees healthy, but also drive engagement and team-building. I saw the effectiveness of this firsthand at my former employer, Bank of America, where 46K employees used ShapeUp to form 12K teams and collectively shed a total of 96,320 pounds. There is still opportunity here to modernize the collection of data points and add more team-based game mechanics.
Oration: Oration's algorithms predict where employees can save on their prescriptions and its software does all of the work to get those savings for them. Oration does this by analyzing billions in prescription claims and offering an easy to use system for managing prescription drug purchases.
Keas: Keas is the leading employee engagement and benefits management platform for enterprise HR with an emphasis on health benefits and corporate wellness. Keas provides HR with a consumer-style app for employees and dependents that is gamified, social, and mobile with a 10x greater engagement than other health IT apps.
ShapeUp: What started as a community based wellness program has evolved into a global online platform for wellness that unites comprehensive health challenges, social networking tools, health coaching, fitness tracking, and financial incentive management, and uses social networking and gaming to motivate positive long-term behavior change like increased fitness, balanced nutrition and weight loss.
The new reality is that employee engagement is your employee brand and it goes hand in hand with network recruiting. According to Deloitte, although retention, engagement and culture are the #1 top priority for HR leaders, only 13% of employees are highly engaged with their jobs.
Trend: New methods of both incentivizing employees with recognitions and rewards as well as real-time surveying are helping to bridge gaps and ultimately lead to more engaged employees.
Bonusly: With Bonusly, employers and managers can create a simple and effective peer to peer recognition and reward program in just minutes. Meaningful peer bonuses improve worker morale, productivity, retention, and happiness.
Honey: Honey is a beautiful and intuitive social intranet. Built to connect global teams, share resources, simplify team conversations, and support employee workflows, Honey makes internal communications easy.
CultureAmp: This Melbourne based startup focuses on staff surveying and analytics. Their product is being used by growing companies like Warby Parker, Etsy, and Box.
Learning & Development
The 21st century employee wants easy to use learning approaches and resources. With a top global priority for HR Leaders being gaps in their leadership pipeline, they will need to develop their talent effectively and leverage more impactful solutions for organizational learning.
Trend 1: LMS platforms are currently going through a major facelift with the rise of MOOCs (Massive Open Online Courses).
Trend 2: Traditional top-down goal management is beginning to disappear from some forward thinking companies. Current tools for performance management are too complicated and tedious for the current generation. Meanwhile, the OKR model, which was started at Google, is beginning to resonate in the Fortune 1000. Though scaling OKRs to larger organizations is a challenge, BetterWorks is leading the charge here with customers like Viacom, Schneider Electric and Capco.
Pathgather: Pathgather provides a new approach to enterprise learning that puts employees in control. They actually motivate individuals to learn and connect around professional development, so companies end up with a smarter, more effective workforce.
Degreed: Degreed allows companies to track and measure all organizational learning, including what happens outside the LMS, while providing the right learning resources to employees at the right time.
BetterWorks: Betterworks offers an enterprise goals platform for driving operational excellence and providing powerful insights about how work gets done.
We previously wrote about the importance of HR Analytics as a major trend for 2015. HR has historically consisted of a series of individual departments, most with their own systems and processes. As a result, information about compensation, job promotions, job injuries, turnover, absenteeism, and employee survey results end up uselessly scattered across massive databases.
Trend: There is a compelling need to combine siloed internal and external datasets to derive insights on your employee populations. These can in turn lead to significant cost saving opportunities. One new tool that has been helpful here is Tamr, a data unification platform that can prepare and connect data for analytical purposes. According to Josh Bersin, predictive people analytics are only being used by 4% of organizations today and the 14% that believe they regularly use data to make HR decisions had 30% more higher stock returns than the S&P 500 over the last three years.
Entelo: The Entelo platform leverages big data, predictive analytics and social signals to help recruiting organizations find, qualify, and engage with in-demand talent.
Visier: Implemented in just four to eight weeks, Visier delivers answers to over 300 workforce questions. From simple metrics, like turnover, to complex predictive analytics, like which top talent is at risk of leaving, Visier provides actionable insights on demand.
Volometrix: VoloMetrix is an enterprise analytics company focused on improving organizational effectiveness and knowledge worker productivity.
This covers the full lifecycle of tools for HR Technology. In terms of the next 6-12 months, the three trends I see being most ready for large scale corporate adoption are the applications of data science for top of the funnel employee sourcing, utilizing MOOCs for better LMS learning materials, and combining massively siloed datasets to derive insights on employee populations. If you are working on any of these technologies, please feel free to reach out to me!
See our past landscapes here:
- Predictive Analytics Landscape
- Big Data Security Analytics Lanscape
- AI-Powered Business Applications Landscape
Oration, Tamr, and True Office are Work-Bench portfolio companies.
BetterWorks, Honey, Pathgather, and Pymetrics are members and/or alumni of Work-Bench’s enterprise community, but Work-Bench has no ownership in the companies.comments powered by Disqus