Making a Difference With Startups

Suresh Madhuvarsu, Partner, P10x Ventures

There is a talent war going on and it’s not becoming easy to attract and retain great talent, even for the best of the companies in the world. We no longer are in the era of candidates applying to any job; in any company; in any team, but candidates want to consciously understand culture, social impact, career progression, seek learning opportunities and the ability to live their personal life. Traditional talent process has failed candidates and companies. The current HR tools are ineffective to market, attract, recruit, onboard, manage, develop and grow the talent.

Entrepreneurs interested in disrupting vertical software should find a great opportunity in the HR suite of applications. The global HR software market will be worth $38.36 billion by 2030 based on the analysis by verified market research. In 2021, the market was worth $23.32 billion with a constant growth from 2022 to 2030. With the market in perspective, we need to understand the tailwinds helping the much further growth.

1. The pandemic has given power to employees and thereby changed the bargaining power from employers to employees.

2. While the hybrid work environment is here to stay, the challenges only multiplied. Most importantly, how do we engage and retain the employees.

3. With the widening skill gap from what is being taught at universities to what employers what, the need to bridge the gap is becoming critical for company success.

If you are thinking of disrupting the HR industry, you should look at HRTech industry in a simplified landscape. There are thousands of startups worldwide that are starting in one segment and move to expand into the whole suite of HR applications based on their success. For startups, it’s not really about providing a suite of applications for the HR teams, but it’s about solving one problem, landing in a company, providing value, and then expanding with other products in time.

CANDIDATE EXPERIENCE MANAGEMENT (TALENT ACQUISITION)

• Candidate Marketing: How do you provide power and tools to recruiters to reach out to candidates about their next move or reach out to ex-employees to engage them about talent needs?

• University Recruiting: How do you reach out, engage and recruit talent from the universities?

• Candidate Sourcing Events: What are the different avenues (such as Google, LinkedIn, TikTok, Facebook) to source candidates into your recruiting system so that recruiters can evaluate and reach out?

• Candidate Engagement: Once a candidate is on your website or in your database, how do you engage them? You only get a few chances to impress the candidates in a highly competitive environment.

• Interview Management: Let’s face it, interview experience sucks. You give the interview and you will never hear back or you don’t know what to expect in those 5 rounds of interviews. All about how you make the experience of a candidate attending better from a pre, during and post interview process.

"It’s not really about providing a suite of applications for the HR teams, but it’s about solving one problem, landing in a company, providing value, and then expanding with other products in time"

• Candidate Assessment: Gone are the days where my resume is taken on the face value. All the jobs including the leadership roles need to demonstrate the skills and expertise. No wonder many of the sales roles assess video presentations and personality traits.

• Offer Management: Face it that offers are too complex and not easily explainable. Do you have an idea to make a visual offer that easy to understand?

• DEI Initiatives: This is the time to execute the DEI initiatives rather than talking about it in the board rooms. Do you have a way to easily represent and report the efforts and outcomes?

EMPLOYEE EXPERIENCE MANAGEMENT (TALENT MANAGEMENT)

• Employee Onboarding: Several organizations do a very poor job at employee onboarding. If you have an idea to derive onboarding from corporate and department strategy, you would be the winner.

• Skill Assessment & Performance Management: Business changes are coming at a much faster pace and, employees and employers must embrace the ability to train, re-train skills.

• Career Management: Just because someone joined as an engineer, they should not limit themselves in that role. Defining employee’s aspirations in a way that is aligned with the company strategy and your team is super important.

• Internal Mobility: Internal mobility is a great way for the employees to experience different work environments and learn a lot. Do you have HR policies and practices that encourage internal mobility? Do employees know what they can do and their flexibility?

• Employee Engagement (culture, social): We are living in a multicultural society and apart and as part of the work, it’s very important to understand employees deeply and bring in the social and cultural bonding for the wellbeing of the employees.

• Hobby and Volunteering Opportunities: Work is not life and to encourage and promote the mental wellbeing of the employees, it’s important to provide opportunities within the organization. Interested employees will find ways anyway and its best for the employers to provide those resources in-house. The startup idea here is how do you bring partners and manage that relationship with employees and partners?

• Benefit Management: This is an age old problem but no easy way to describe the question, “what am i eligible for?”. The startup idea here is to help employees understand their benefits in an easy way and give them access to the benefits on their finger tips.

• Succession Management: Many countries now have an aging population and companies fail to plan for “Who’s next?” Regardless of the seniority, companies need to understand the top talent and nurture them for the future roles.

• Payroll Management: You will immediately be impacted if you didn’t receive your salary, even if one day later. Payroll management is very crucial yet, the experience is very cumbersome.

• Shares/Stock Option Management: Stock issuance has become part of the compensation for many growing companies. Make it easy to manage the overall option pool and its allocations for startups and SMBs, and it’s a huge opportunity.

• Mental Health & Wellness Management: For many companies helping their employees to be happy and healthy is imperative and not a choice. That’s the right thing to do. Providing the right resources for the employees to manage their wellbeing via a mix of apps, counselors and health networks is a space that is still evolving.

• HR Compliance Management: How easy is it for the employees and hiring team to understand the local laws and industry regulations?

In 2021, venture capital investors invested $12.3 billion into global 809 HR tech startups according to PitchBook. You might think that there is not much innovation in the HR space but a Paris based payroll software Payfit closed a $287 million Series E that brought its total funding raised to nearly half a billion. Darwinbox, another HR tech platform for recruiting and virtual onboarding, landed $72 million at a valuation of over $1 billion.

With the latest trends of hybrid work, upskilling of employees, renewed candidate experience and DEI initiatives, there is a huge opportunity for the startups to make a big difference. Are you ready to make that difference?