Managing recruitment, retention and engagement in 2022

2021 was a great year for HRtech, with many successful fundraisings, some of them conducted by portfolio companies (360 Learning raised €200m, Skello raised €40m). HRtechs are no longer excluded from “super” fundraising rounds: in October 2021, Personio, the German workflow automation platform for SMEs, raised $270m at a valuation of $6.3b, becoming one of the most valuable startups in Europe.

In this edition of our HRtech mapping, we’ve chosen 172 startups with different focus on:

• Recruitment (sourcing and assessment: 41 startups),
• Temporary workforce (23 startups),
• Workforce management (employee engagement, data analytics, performance optimization, payroll & benefits, training: 108 startups).

NB: We have not included startups on the Future of workspace in this mapping – feel free to check our specific mapping on this subject.

Recruitment is the first challenge for HRs

According to the 2022 Edition Tissot and Payfit HR report, recruitment is among the three top challenges faced by HR, with the management of the Covid-19 crisis and the retention of existing employees.

The Talent War is raging. To help companies recruit, HRtech companies are offering various solutions to find the right candidate at the right time. The traditional sourcing methods are paired with:

• Marketing and programmatic recruitment solutions (Bonanza, Hiresweet, Seeqle): job offers are broadcasted on the web and on social media through recommendation algorithms.
• Cooptation solutions (Trusty, Keycoopt, Basile acquired a few weeks ago by HelloWork): companies rely on existing employees’ networks to source the best potential new candidates.

Diversity is increasingly a top priority. Each One, 50 in Tech or Chance are working on the inclusion of women, minorities or refugees in recruitment processes.

Once candidates have applied, recruiters need to assess their personality and skills. Companies are trying to find more efficient and less biased solutions to assess candidates than traditional CVs:

• Applicant matching solutions (HrFlow.ai, JobyPepper, Jobgether) are easing the recruitment process by automatically matching candidates with offers, based on experience, personality, career perspectives, leveraging the power of AI.
• Assessment solutions (Maki, Goshaba) evaluates candidates’ hard and/or soft skills through tests and games.

Employees’ wellbeing is a top priority for talent retention.

In the US, the Covid-19 crisis shed light on “bullshit jobs” (conceptualized by David Graeber in 2018) and triggered the Great Resignation: 38 million Americans resigned in 2021.

This new context has dialed up the importance of employees wellbeing  and startups offer different solutions to improve talent retention:

• By improving the “employee experience” during onboarding or other key moments (HeyTeam, Workelo). Employees are provided with the same level of care as clients.
• By enabling more communication within the company, to create cohesion and a better corporate culture (RandomCoffee, Zest).
• By addressing employee health and safety, be it mental health (MindDay, Moka.care, Teale) or physical health (Kiplin).
• By giving employees the opportunity to take initiatives within the company        (Teamstarter) or for external purposes, notably environmental or social causes  (Vendredi, MicroDon).

What matters is how the employee feels and if he/she is engaged at work. eNPS (employee Net Promoter Score) reflects employees’ opinions and allows HR and managers to make decisions to improve quality of life at work (Supermood, TeamMood).

To retain talents, companies need to address career and skills management. We invested in Neobrain (€20m in January 2022) with our fund La Poste Ventures, which allows for more efficient internal mobility, by deploying the right skills to the right projects.

Employees are paying more and more attention to their benefits. Beside traditional benefits, we’ve created two new benefit categories in this mapping:

• On demand pay solutions (Rosaly, Spayr, NessPay, Stairwage) give employees access to their pay as they earn it to improve financial well-being.
• New liquidity or tokens for employees (Caption, Futurz, Semper) give employees new liquidity options and provide companies with new opportunities to incentive employees.

Hybrid work is now mainstream.

The Covid-19 crisis sped up the digitalisation of the workspace. Hybrid work is the new normal. Many HRtech startups are seizing this opportunity by providing tools to facilitate the management of hybrid teams and to increase their productivity. It goes from easy meeting organization and collaborative meetings (Letsmeet, Klaxoon, Aster) to workspace and project management tools (Slite, Get collective).

The desire for flexibility goes further for some people who make the transition from employee work to freelance work. The segment of temporary workforce is still an important part of this mapping edition:

• Freelance marketplaces (Malt, Bruce, StaffMe for students).
• Staffing solutions on different verticals (Hublo or Medelse for hospitals) or scheduling solutions (Skello).
• Tools to organize as a collective (Collective.work).
• Solutions to manage status and access benefits (Jump, Wemind) which intend to give freelancers similar benefits as employees.

HRs need the right tools and the right data to be more strategic.

HR teams now have plenty of solutions to automate payroll, to manage absences and to store employee data… It enables them to focus on more strategic tasks such as quality of life at work, training, career and skills management (even if administrative tasks still account for 63% of their time according to Tissot and Payfit). But they also have to face a complexification of their job with a diversification of the missions and a multiplication of tools and data.

We therefore added the new category of Benchmark & Analytics in our 2022 mapping. It includes companies which tackle the need for visibility and actionable data. 70% of company executives quote People Analytics as a top priority. Startups are developing solutions to gather fragmented and unexploited data and provide new kinds of insights and benchmarks. Figures, for instance, has quickly become the reference when it comes to salaries benchmarks, while Reflect is building a people analytics platform with a focus on data shareability and benchmarks.

The past year has been busy for  HRtech and we believe VCs will continue to bet big on it. We see massive opportunity in some trends initiated this year such as people analytics, new benefits for “customer” employees, and solutions promoting diversity and inclusion through unbiased recruitments.