06 Jan Social recognition software rebuilds in-company cultures and communities lost to COVID
Eric Mosley, Co-Founder and CEO, Workhuman, explains how a tech platform developed in Ireland is helping 5 million employees in 170 countries form strong bonds with their colleagues
2020 has brought major disruptions to countries and economies around the world, forcing us, among other things, to rethink our work environment and our work organization. Digitalization has been the big winner of this crisis for the present and for the future. In that context, can you introduce us to Workhuman? How does your vision for the company integrate and fit in the new post-COVID reality?
Workhuman is the world’s leading tech platform for creating more inclusive and happier workplaces through social recognition and continuous performance management. At the heart of what we do is a software platform that allows companies to run social recognition programs. Social recognition programs are where a company will take a percentage of their payroll budget and instead of giving it to the employees directly, they will give it to all of the employees, to give to each other in small micro bonuses—basically, thank you moments for a job well done.
So the whole employee base is on the lookout for great performance and they will nominate their colleagues for a small award to say thank you. Our customer base includes some of the world’s largest companies, like GE, Procter and Gamble, Cisco, Dell and Johnson & Johnson, so major companies with employees all over the world. We now have 5 million employees live on our platform, rewarding each other and thanking one another.
The COVID pandemic put corporate cultures under attack, and so we became just much more relevant and much more urgent for our customers than ever before, because it was the only thing that they could do to try and rescue the feeling of community in their companies. While we all look forward to putting this pandemic behind us, it made Workhuman even more relevant to the world economy.
At the beginning of the pandemic, companies initially found an increase in productivity when all of their employees started to work from home, but that started to wane eventually and, in fact, the cultures that they had built up in their companies started to decay almost. Over time, their cultures were basically disintegrating, the relationship between employees was wearing away, because they weren’t interacting in anything other than transactional business, zoom meetings—which are very kind of transactional, you go online, you do the work and then get off—you’re not really bonding anymore with your colleagues and the relationship infrastructure around the culture of the company starts to decay.
Leaders who understood the importance of infusing a culture based on relationships resulted in a surge in our business at the start of the pandemic and the work from home reality. Some of our customers doubled down on recognition; they wanted to enable their employees to give goodwill and positivity to each other, to try and build up and deepen the relationships in their companies. Some of them also wanted to genuinely just say thank you to their global employee bases because they were working under duress.
This kind of goodwill goes a long way in the best of times. During the pandemic, it became a lifeline for many employees who were working under difficult circumstances, in difficult home environments and were being asked to even come in if they were essential workers. A lot of our customers actually gave massive amounts of recognition across the whole globe to their employees. As a company, we are on an incredible growth trajectory and our platform continues to be in high demand for all businesses, something that we saw increase in 2020 as organizations sought a way to build better relationships and foster trust with their employees in light of the pandemic.
You claim to make work more human with your solution. However, with Industry 4.0 and the advent of technology like artificial intelligence (AI) and big data, the workplace is getting less human in some ways. How is this compatible with your approach and solutions?
At the heart of work in a knowledge economy is creativity and innovation. That’s why we have the advent of these new AI techniques and machine learning. At the heart of doing well as a company, you have to beat your competition, you have to out think your competitors. To do that, you have to mobilize the brain power of all of your employees; you really want them to do the best work of their lives. By creating a more human workplace, you are basically solving the core human needs of employees. All of us, all human beings, we have this core need to have connection with other human beings, and to feel appreciated, to feel recognized. If those core human needs are not met well, we struggle, but when they are met, we are free to express ourselves and be more creative. Very large companies, with potentially hundreds of thousands of employees, realize that, in the future, to be the most innovative version of themselves and to get their employees to do the best work of their lives, they need to meet those core needs. There will always be a need to create community culture and to solve those core human needs of employees.
At Workhuman, we are dedicated to making a more human workplace. The act of recognition deepens the relationships between employees and then also solves that core need to be appreciated and just to be seen as a human being. In an era of AI and big data, the data that comes from a recognition program is a very special kind of performance data. It basically describes and gives a narrative to all the work that gets done in a company. You have a recognition program where everyone is recognizing everyone else over time, documenting in the data all of the work that gets done.
Our data scientists use AI to figure out insights into the work patterns of a company. This translates into incredible insights for our customers about how work gets done in their companies. Leaders are now able to answer new questions such as who are the hidden performers in their workforce as well as who are the unsung heroes—the people with the most impact that aren’t recognized for that impact. We use data science to uncover those people. Then we also are able to use AI to help with things like diversity and inclusion. If there are internal biases, our technology can help steer employees to overcome those biases. AI and data science are absolutely at the core of what we do because the data that we have is so unique and so powerful.
You co-founded the company in 1999. Going back a little bit to the inception days, what inspired you on this journey to found the company and what have been the milestones that you’ve been most proud of?
I was always looking to be an entrepreneur and to start a company. I probably didn’t do as much due diligence on the topic or the market as I should have. But I was so desperate to be a business owner and to be an entrepreneur that I just pushed forward, and didn’t have any other option other than to try and make a success of the company. It’s quite a thing to be completely responsible for what happens every day in the company from day one. You start to hire people, so you have the first team and then you’re responsible for their careers, you’re responsible for them. It was an amazing motivator for me in those early days. It makes very crystal clear the difference between success and failure. Failure is: you pack up, go home and everything’s over. Success means you get to the next level, you get one more step up the ladder.
In those early days, it was about winning the first customer and getting the first customer to pay for your service or your product. That’s the biggest milestone, because that means that an independent entity comes to the independent conclusion that your product is valuable. That is the number-one milestone for any business; to get the validation that somebody will actually pay money for your product. That’s a major moment, as is being able to replicate that to see whether there is an actual market for that product.
In the early days, a lot of our initial customers were U.S. companies and their subsidiaries in Europe, and so we decided to invest the majority of our sales and marketing investment in the U.S. market, because that was where we felt the corporate cultures were more amenable to our product. We hired sales people in the U.S., while most of our functions like software development and finance were still in Dublin. We were able to put sales people in the U.S. and start to build more and more customers across the country.
These big multinational companies have employees all over the world, so the 5 million employees on our platform are in 170 countries around the globe. We had to create a service that was suitable for those employees wherever they lived. It became a truly global product that was as powerful in New Zealand as it was in South Africa, Japan, Ireland or the U.S. Wherever large multinational companies had employees, we had to have a solution that felt local. Then, once we did that, we were able to then replicate our early success and build to the point now where we’ve been profitable for 10 years. We will hit a billion dollars in billings this year and we’re coming up on 1,000 employees. We’ve managed to hit a certain level of scale. It’s not now just a U.S. story from a sales and marketing perspective, but we have a lot of fantastic European customers as well. And it’s truly starting to go global.
Innovation is at the core of your company. How are you working to evolve your products today and what kind of new features, applications or concepts are you looking at to deliver more capabilities and value to your customers?
We’re a software company and everything that we do is to create an emotional impact for our customers’ employees. There are two sides to our innovation. The first side is that we want the product to create a more human workplace; we want to evoke emotion in our users. And the more we can inspire them and make them feel good about themselves and their colleagues, the more we can deepen the relationships and the more powerful our product will become. We are investing in new product capabilities to help celebrate moments in an employee’s life inside and outside of the four walls of their places of work. For example, if they get a promotion, they earn a certification or a life event such as getting married, buying a new house or having a baby—our platform provides a place to celebrate the lives of these employees, thereby creating a more human workplace. That’s one half of all of our innovation.
The other half of our innovation is all about the data that comes from all of that activity. It really is unique in that it’s voluntary and authentic, nominating a colleague for a thank you moment. They’re not a manager so they’re not forced to do it; they’re not trying to manipulate their colleagues, they are just genuinely inspired by the work that they’ve seen. That creates an honesty and authenticity in the data, which means it’s incredibly powerful. We are ramping up our investment in data science. We have a whole division now within the Workhuman Analytics and Research Institute (WARI), with a lot of data scientists and organizational experts who look for insights into our data. They’ve been able to see things that we never would have expected, even things around gender and race in companies and how companies operate.
For example, seeing patterns into data, which show that women ultimately receive less value for the same work from a male counterpart. We have 50 million data moments in our database and we can see that women receive 12-percent less value than their male counterparts, even when the givers are women. It’s an incredible insight for companies to see that that’s happening and then be able to put plans in place to mitigate that issue. These are things we never would have thought would come out of a recognition database. All that has changed; our data science team has been able to see that there’s an endless number of insights, very important societal-level insights, for the world. We want to invest much more in that, because we feel it can help our customers but help society as well.
Your solutions seem to be developed mainly for large global corporations. To what extent are you looking to tailor solutions for the needs of mid-market or smaller companies?
That is a big focus for us now. In the past, we were focused mostly on very large multinational companies. We have now created a version of our product that works much more efficiently for smaller enterprises. Over the next few years, you’ll see us be much more active in the mid-market and then also with small- to medium-sized enterprises and businesses (SMEs). Because what we do is as powerful if you have 100 employees as when you have 100,000 employees. We’re all just humans, so it affects everyone, no matter how many employees they have. We’ve had to evolve our go-to-market strategy to work at the mid-market level and then, in the future, at the SME level. Yes, that’s very much part of our strategic plans for the next three years: to build much more of a presence in the mid-market.
WorkHuman is present in 170 countries. Which markets are your priority right now and how do you see your international expansion going forward?
Historically, we’ve been very focused on the U.S. market but, over the last five to seven years, we’ve had big European companies come to us. We started to win some very important customers, like BP, Schneider Electric, AstraZeneca. That opened their eyes to the fact that our product is now much more accepted and this way of managing employees, by inspiring them and creating great cultures, is much more developed than it was maybe 15 years ago. So now we are starting to invest in sales and marketing in Europe; that is our number-one next market. After that, we see countries like Australia, New Zealand and then Asia. But primarily so far, it’s been North America, so the U.S. and Canada. Now we are investing in northern Europe, then going forward Australia, New Zealand and beyond that will be Asia.
What are the next steps in the U.S. market? Are you looking at creating more partnerships to accelerate your expansion?
In the U.S., we’re going to continue to do what we’re doing now. We are adding more sales capacity and we’re investing more in marketing. We are doubling our budget in sales and marketing. We’re also starting to look at partnerships and other channels. But our main focus is our own go-to-market. We are a company that can help. We’re only at the tip of the iceberg for the market in the U.S., it’s such an enormous market that there’s a lot of runway for us there. If you add in to that our European investment, then we can be in almost any sized company with those two markets alone, because our product is suitable for all industries, all sectors. For all enterprises that hire human beings, we are relevant, so that makes for a very large market.
How do you see the future for your company and where would you like to take Workhuman?
I mentioned earlier that the culture and community infrastructures in companies really came under attack during COVID. Relationships were not being built or cultivated. When we all go back to work, there will still be a percentage of people who will work from home by choice forever. Therefore, mobility in the workforce will go up and there will be a lot more workers who will go from job to job. Retention will be an issue for big employers. You see this in the technology space, where there is intense investment in trying to retain talent. The pandemic is only going to make that worse because, after the pandemic, there’ll be even more recognition that people can be transient and move very fast.
The good news for us is that we help companies build relationships and culture in their companies. If they want to retain their employees they will need to do new things, because what they used to do in the past is not necessarily going to work anymore. In the next few years, even after we’re all back at work, culture won’t be the same as it used to be, unless it’s invested in, unless it’s maintained. Creating a recognition culture in the company will help those remote employees feel more connected to the company and to their colleagues. We know from the data that the more somebody is recognized, their retention rate is much greater. People don’t tend to leave organizations where they have colleagues, friends, a community and they feel good about where they work. That’s what recognition can do, it can create that environment. Companies are all going to need to invest in the next five to 10 years to create a corporate culture and make a much more human workplace.
What’s your final message to our Newsweek readers?
The number-one thing we’ve learned over the last year is that we are all human beings. We are all strong and fragile at the same time. For companies who want to thrive today and in the future, you have to look after your people, and you have to look after them at a meaningful human level. If you do that, you will create very strong, powerful companies, powered by those human beings. My parting remarks would be: focus on the human capital that’s in your company, on the relationship infrastructure of your company and you’ll be more powerful.