How was the year 2018 for startups in the HR tech space in India when it comes to adoption and talent? Read on to find out.
December is a time to look back and take stock-where did we start from and where have we reached after 12 long months. And when the startups in the HR Tech space look back, they will mostly say it has been a good year. From the degree of adoption to the amount of funds flowing in, the startup space has generally seen an increased awareness around technology in HR. With the talks of AI, automation, technology dominating the whole year around, HR Tech saw a definite uptake both in India and globally.
So if in the first quarter, Degreed, a global platform for discovery, learning & certification of skills, made news by raising $42 Mn in a funding round, back home, in the second quarter, Indian corporate social responsibility and sustainability management technology platform, Goodera brought raised around $12 Mn. Similarly, employee focused HR tech app Hush also saw itself raising three funding rounds in the year, a major thumbs up for employee engagement apps.
The space also saw major consolidations taking place in the HR Tech space this year. Globally, US-based job review and job hunting website Glassdoor was acquired by a Japanese human-resources and consumer-information provider, Recruit Holdings Co. Similarly, global consulting firm Mercer acquired India based HR tech startup Mettl.
A good year for HR Tech- more awareness, more funds
We talked to a number of startups in the HR Tech space such as game-based learning platform Quodeck, employee engagement startup Hush, sustainable credit provider SalaryFits, HRMS provider Zimyo, talent discovery platform Vyre, on-demand video platform Monjin, and Zeta which digitizes employee benefits, HR talent marketplace Noble House, among others.
Majority of the startups agreed that globally as well as in India, there has been a huge spike in interest and fund flow into the HR Tech space.
” Quodeck’s co-founder Kamalika Bhattacharya says, “There has been a marked increase in awareness for the need for technology-enabled employee engagement amongst the HR community and companies. For the HR tech startups that have kept up with the evolving needs of our clients, this year has been good, steadily moving up the value chain of the requirements for our clients.”
Most of the startups believe that the major acquisitions in India and globally point towards interest as well as consolidation in the space.
Kumar Mayank, co-founder of Zimyo believes that HR Tech startups had a great year in 2018. “From Recruit’s $1.2 Bn acquisition of Glassdoor to Mercer’s $40.5 Mn acquisition of Mettl in the Indian subcontinent, HR Tech is now drawing the long due attention it deserved. Incidentally, Mettl’s acquisition is not only one of the biggest HR tech acquisitions from the country but also one of the biggest SaaS acquisitions too thus making it the joker in the pack for drawing international investors’ attention to Indian SaaS startups.”
Ashutosh Dabral, Co-founder & CEO, Hush reiterated the same belief that it was a good year with multiple startups in the space raising one or multiple rounds of funding.
“This industry is poised to be a $400 Bn dollar industry so the funding activity reflects this assumption.”
Aye for adoption, aye for technology
The startups agreed that early-stage startups too have quite been successful in making inroads to mainstream HR with many of them raking in early customers and investments.
Sudev das, co-founder, Vyre shared, “From an adoption perspective more organizations specifically the ones which are growing have a larger appetite to try out newer HR Tech solutions to support rapid business growth and efficiencies.”
This was reiterated by Kunal Kapoor CTO, Monjin who believes that HR tech is gaining importance in the era of skilling and tech-based recruitment and employee management services.
Another major trend was that hiring has seen a big surge in adopting technology to screen and assess candidates. There has been an increase in off-premise interviews assisted by use of tech to shortlist resumes, online assessments, and video interviews. Similarly, there has been a significant uptick in interest shown by teams within large organizations and SMEs including startups for simple, attractively priced and quick to deploy Learning Management Systems.
“More than hiring, we believe that companies are taking definitive steps to enhance engagement and productivity in the workplace as a retention tool,” says Guilherme Mota, Head of Operations, India, SalaryFits.
Referral hiring has also become a preferred route but companies don’t find it easy to run effective referral programs, avers Ashutosh.
Then again, adoption of video in hiring, learning and engagement has significantly increased and will increase significantly in the next couple of years. This would be largely driven by Gen Z as we go forward. In fact, organizations from a hiring perspective will have to focus on Gen Z as they would significantly change the landscape of a workplace and drive change significantly as they become a part of the workforce.
Hiring talent in the non-tech world will become a major focus for organizations across the board, adds Sudev. Consumer-facing roles will be in demand but the supply will always be shorter. The current way of hiring this talent will go through significant change.
Moreover, recruiters will have to move beyond the traditional job board and platform sourcing to actually embed themselves in the real-life contexts of the candidates and attract them.
This leveraging of technology will only ramp up as the volume and quality of data increases and AI improves. While awareness of AI and acceptance of AI in the HR Tech has increased, however, it would take a couple more years for us to see the real benefits of AI as systems and tech matures in the AI world
Challenges ahead: A dearth of talent, funds and market access
Notwithstanding how highly hopeful and happening the year 2018 was for startups and HR Tech, there are still many significant barriers they have to cross before they can scale greater heights of success.
For instance, hiring talent itself in the space is a problem. Mayank of Zimyo shares that it is becoming difficult day by day to hire quality talent. He revealed,
“We floated over 20 openings during the year, each carrying a 40%+ hike & ESOPs and yet we failed to generate good interest among potential candidates. Many of our partner HR Tech startups (from our HR marketplace) complained of the dearth of quality talent too; especially, at senior levels.”
The same thoughts are shared by Sanjay Lakhotia, Co-Founder, Noble House Consulting Pte who reiterated that a significant challenge for HR tech startups is a scarcity of talent in the market, across all functions, technology, sales, operations etc. He also added that price realization continues to be a big challenge for most HR tech startups.
Bhavin Turakhia, co-founder of Zeta feels that a major challenge with HR Tech companies is that the user interface has mostly not been built from the standpoint of easy adoption, which is what makes ready adoption difficult. The real challenge he feels is creating that HR tech mindset among companies where the goal of HR Tech is beyond managing operations all the way to empowering and enabling people to be their best. With that as an objective, the scope expands 10X for HR Tech.
Unavailability of a ready-market they can sell their business to is another challenge, adds Mayank. For SaaS based HR Tech startups like Payroll or AI Chatbots, it is the lack of cloud adoption in the Indian subcontinent; for Niche HR Tech startups like Compensation and Benefits it is the lack of domain knowledge. Being enterprise solutions, HR Tech startups have to undertake a lot of shoe and leather cost to make every sale happen.
“While the market is there for the taking, quite a few of us in the HR Tech space find it difficult to get across to potential customers. We are not great at selling the product or even marketing or engaging customers. Even platforms which could help us do that are limited and very costly, adds Sudev.
The same is reiterated by Kamalika who shares that HR departments in companies face hurdles in getting business buy-in for tech products. A significant percentage of product/service acquisitions are led by the business teams rather than the HR team. Moreover, companies in India, view HR tech as a service rather than a product. This leads to delays in deployment due to discussions on feature additions and customizations. Ironically, companies still adopt an extrinsic motivation approach (reward vs punishment) as against intrinsic motivation approach (micro-learning, immersive experience, casual game-based learning), which hopefully should shift majorly in 2019.
Then there are global big incumbents in this space and for startups, it’s difficult to build a competitor. So most startups are looking at working on niche areas that can make them an acquisition target for the behemoths, shares Ashutosh.
Interestingly, though the year 2018 saw a lot of funds pour in, yet the number of VCs interested in investing in HR Tech startups are still far and few. Hopefully, the startups believe that in the next 1-2 years, HR Tech will hit the tipping point where investors users and businesses will invest significantly in HR Tech.
For now, some feel there need to be more cost-effective platforms where Tech HR startups can come together meet learn and share experiences, where seasoned HR leaders, tech leaders, and founders come together on a regular basis. An ecosystem that supports startups at a fledgling stage would be more than helpful in the current scenario. A little guidance in sales and early client acquisition would go a long way for the startups.
While technology (AI, video, automation) will definitely push up adoption and increased interest from both buyers and investors up the ante for HR Tech startups, we will have to wait till 2019 to see if the dreams and hopes of HR tech startups will materialize.
This article was first published on People Matters
Having spent a large part of my career in the financial services space driving traditional business growth, using gaming to achieve business goals was not a cause I expected to be championing. Gaming was always a personal interest, but the business parallels only became apparent after we started experimenting with service engagements for enterprises. Given the planet anyway spends 3 billion hours a week playing games, the challenge was really to figure out how learning could fit in that construct.
We formed QuoDeck in 2010 to bring gaming into learning for enterprises. Having started with some elementary game engines and simulations, QuoDeck quickly moved on to make an omnipotent system built with the changing business environment in mind. QuoDeck’s platform today is one of the most powerful and engaging learning platforms in the world, catering to enterprise requirements for mobile learning. And as a leading player in this category, our advice to new entrants is to stay true to course, understand that the market is huge and that innovation is the key.
Mobility is here to stay
Mobile learning was just about appearing on the horizon in India when we entered the market. In fact, it was still at a nascent stage globally as well. While enterprises saw the demographic shift coming, the speed at which the device shift happened took everyone by surprise. Within a period of 3-4 years, millennial users had junked tablets and wouldn’t access their desktops or laptops for anything but sit-down work. They wanted everything on their mobile – on-demand, anytime, anywhere. Being a generation bred on Twitter, Facebook, and YouTube, they also wanted content and technology that was easy-to-use, visually appealing and in bite-sized pieces. The learning evolution that needed to happen in enterprises was phenomenal and existing products just weren’t prepared for this. Mobility as a trend forced a change in behavior, technology, content creation and consumption patterns across all strata of business.
There is always an element of luck in startup success and we were no different. Perhaps being at the right place at the right time with the right thought process is what its all about. QuoDeck has been at the forefront of this shift, shoulder-to-shoulder with enterprises looking to stay ahead of the curve.
Gamifying the world
Our personal insight of gaming being habit-creating and creating long-term associative memories, was the inspiration behind the approach we took. Countless times, behaviors and constructs learnt in gaming had been translated by us to address real-world problems with excellent results.
We had a learning curve here as well. Having played on consoles such as PlayStation and Xbox, we assumed the world was ready to deal with highly complex games and constructs. However, working closely with business heads, HR teams and the Learning & Development function, we learnt that hyper-casual games create the best impact from a learning perspective. This is because they are somewhat repetitive in nature, with a greater level of participation & addiction to ‘scoring’.
While we initially worked on gamification applications on functions such as marketing, research, and learning, we chose to go with learning as a primary focus. Having started in this category long before games became the buzzword of today, we were fortunate to be able to take a pole position and we hope to actually drive the future of gamification for learning in the enterprise. But there are still a lot of white spaces to go after in enterprise gamification.
For New Players
Gaming as a learning solution is so vast in its scope, that it can’t be characterized or identified with any particular industry or even a clutch of industries. Wherever there is widespread staff or skilling required, gaming solutions can take charge and lead the change. So, when new players come in, they must remember that competition comes in various guises and is very rarely with another player. You will end up competing for mindshare against the likes of video-on-demand platforms or search engines where users can find information and content at their fingertips. Knowing what creates pull is perhaps the only challenge you should worry about.
Look out for learning opportunities
Gamification as an industry has a widespread application with learning being only one of them. A space was created for us because existing products failed to keep pace with what was required – large entrenched players became irrelevant in a matter of months. Overnight, enterprises recognized that resistance against this changing paradigm was futile, and mindsets started changing. Gaming and mobility were no longer bad words.
It would be foolish of us to think that we cannot be on the other side of such a trend. Keeping your offering relevant and at the cutting-edge requires you to have an innovation engine, which stops for no one. This requires tremendous willpower and a staunch refusal to settle into a comfortable spot.
This article was first published at YourStory
So why is Discomfort so essential for entrepreneurial success and how to embrace it?
Entrepreneurship has always been about seeking out the new, in uncharted waters. Across ages, be it explorers or individuals, who have made a mark in their chosen fields or Entrepreneurs who have sought to change the world, have stepped out of their comfort zones. In an age when comfort is the buzzword for consumers, Discomfort is the mantra with which Entrepreneurs need to live by. Discomfort is not about putting oneself in a tough spot. It is stepping out from what you know, to the unknown. Exploring new opportunities, new areas of interest and nurturing a vision. An Entrepreneur seeks of problems and makes solutions for those problems while tackling the new-world questions which arise with these solutions. And that is where discomfort stems from. From seeking the unknown, from seeing problems in a new lens and attempting new paths. So why is Discomfort so essential for entrepreneurial success and how to embrace it?
Discomfort comes from a change in what you have been doing. Change requires moving forward by going beyond what is holding you. Be it a safety net of certainty, an appraisal plan or just comfort with your work. To make yourself the next success, you need to embrace change as an integral part of your life. Start small but stay steady. A little change, one day at a time can bring success your way.
Say Goodbye to the Comfort Zone
Comfort zones are places which we are used to. We know how they will behave in any given situation. Coming out of this comfort zone is very important for an individual, especially for entrepreneurial successes because that is the only time when your mind is open to new opportunities and solutions where none existed. Discomfort is not just a punchline here, it is a way of life.
Nurture the Unconventional
Great ideas come from unconventional thoughts. The first wheel came because someone wanted to break the convention of walking. Discomfort makes you explore ideas and solutions which are unconventional and gives you the ability to experiment with varied combinations. It is the one thing which makes you think beyond what you think are your limits.
Risk taking is second nature to an Entrepreneur. But that doesn’t mean that you dive head straight into it. Study the problem, understand it, appreciate its presence and then find the solutions. Its okay not to have the perfect solution in the first go. Every failed attempt brings you one step closer to success. You may not have all the cards in your favour but a calculated risk towards your goals can get you there a lot faster, along with all the learnings.
Growing with Discomfort
There is only one thing for you to do- Get Up, Get Out & Get Moving. This is what will let you grow, explore opportunities and get a closer understanding of the world around you. You will start seeing things, you never did before. Go ahead to seek the new, forge your tools, mark your own paths and try your hands at everything that you can. It is Discomfort which will test you to the limits and will give you the experience to set on the right path.
This article was first published on Entrepreneur India