HR software startups are booming
Welcome back to our Workplace newsletter. Today: an interview with Lattice CEO Jack Altman, workplace tool preferences, and job satisfaction.
Welcome to the future of HR
HR tools are having a moment. Last month, Lattice, an HR software platform for tasks like performance reviews and goal-setting, announced a $175 million series F funding round, putting its valuation at $3 billion.
Lattice’s success is somewhat a reflection of the VC world’s massive interest in the people management space: Investors and companies are eager to find new tools to help people do their jobs better and manage their relationships at work. Those tasks are more important and daunting than ever before, as the way we work has fundamentally altered.
I spoke to Jack Altman, the company’s co-founder and CEO, about what’s next for the company and the industry, as well as the future of HR tools in general.
Here are excerpts of our conversation, edited for clarity and concision.
What do you think is behind the success of HR software startups right now?
The way that companies have to treat employees has really changed. And I think that has led to the birth of a lot of different processes that require new tools, new thinking and new best practices. You can see that in the way that performance reviews are conducted, the existence of things like surveys, the way that people think about compensation, the way people think about promotions and career development, the way companies need to invest in onboarding, development and growth. That backdrop has led to companies needing to retrofit their processes for a much more employee-centric world. And that has created opportunity for us.
Can you talk about some features on the product roadmap that you're excited about that you haven't launched yet?
Here are two we're really excited about. As the backdrop, we currently have three product areas: performance management, which is where we started; employee engagement, which is surveys; and Grow, which is career development, basically job architectures, levels and ladders for people to understand how their careers are progressing. We have two more [product areas] that are in the works. One is a dedicated goal and OKR platform to set, track, align and plan goals. We've always had a product for that, but now we're building that out into a much more fully fleshed-out product. And the other is compensation management, which will launch this summer, which we're passionate about.
What's an example of a big gap in what people want from their compensation management system and what's currently available?
Oh, man, there's a lot. Everything. There's pay equity analysis and understanding what's fair and what's the market. And there's benchmark data, which there are versions of, but there's nothing that's great and in real time and all of that.
There's these moments when companies go through and review everybody's compensation at the same time. And they might do that once or twice a year. And it's chaos for HR teams to manage: spreadsheets everywhere, stuff out of date, manager conversations and approval chains. It's a real headache.
There’s also how people can understand what their own comp and equity are. Equity compensation has such a long way to go. Where is it today, what will it be like in the future and how are employees able to understand what their risks are? What's the real value? What does the strike price mean? What does this mean for my taxes? How does this unlock what happens if I leave the company? I think nearly every aspect of compensation can be improved.
I'm curious about AI-based automation: Is that currently part of Lattice? Is it going to be, in the future?
It's not yet, but I do think there's a big role for it. AI is an inevitability. The thing that scares me would be if we got to a place where performance reviews, self-reflections and feedback were all done by a robot. I wouldn't like that. It's not just about the feedback itself, it's about the process of thinking, “What has this person done well in the last year, and how can I best influence the way that they're thinking to help them grow and succeed?” And I think the process of thinking about that stuff is really valuable. A lot of people, myself included, sometimes find doing things like performance reviews draining … but so is exercise, so is eating vegetables, and the process of these things is really important.
What do you think has changed the most in the last year or so when it comes to what employers and employees are expecting from their people management systems?
So, the last year has been wild for this. You don't have in-office drop-bys, you don't swing by someone's desk anymore. You can't have an impromptu meeting, you don't overhear people in the office. So people are going to demand more from their tools, because people still need community and connection, and they need to understand that they’ve got their manager’s ear when they want it. I think that’s going to put more pressure on software systems to stand in for the water cooler and the three-hour, in-person meeting and all the rest of it.
How often are you expecting or wanting people to check in with Lattice? Daily, weekly, monthly or just when they're doing their performance reviews once a year?
If I'm a manager, one of the things that's important is that I give recognition and feedback. And I can't do that as easily in a remote context. And I can't just walk by and say, “Great job.” In lieu of that, it’s important to have a system that captures those things for me. So it's not that I'm going to do it all day, every day. But there's a shift from verbal to written, and that gets captured in a place like Lattice.
Lastly, let’s talk funding. What are you going to do with $175 million?
We're just gonna, you know, buy bitcoin [laughs].
We're going to use it to hire and grow the team. We're a software company. All our costs are people costs, more or less. So this [will go toward] funding that. It lets us continue growing the team, investing in product, hiring around the world, building our go-to-market teams and all the infrastructure that we need to keep scaling the company.
On the calendar
The dawn of the tech union
What are the key drivers at play leading tech workers to form unions? What does this mean for employers? How can companies better adapt to the needs of their workers? Protocol’s Anna Kramer will chat with tech unions about their needs, companies about their strategies at the bargaining table and labor experts about how workers and employers can best collaborate at 10 a.m. PT Feb. 22. RSVP here.
Could your workplace tools be a deal-breaker? Some job candidates say: Yes. It might sound petty, but it does happen on occasion. “I literally told the recruiter: 'I’m sorry, using Microsoft Teams is not for me.' I never thought I would be passionate about this. But I am,” said Alex Torres, a San Francisco-based writer with experience in the tech industry.
The world of work is still overwhelmingly binary, my colleague Lizzy Lawrence wrote this week. You’re either a Slack person or a Teams person. Outlook or Gmail. And though these preferences are highly subjective, they matter in a time when candidates are king and the talent shortage persists. “If you're not using the most mainstream platforms, candidates can be put off — or, at least, that'll prompt them to dig in way more on tools and processes,” said Medium's head of People, Lauren Newton.
A MESSAGE FROM INTEL
New process control technologies and improved operational efficiencies will deliver the necessary quality, precision and cost-effectiveness to move next-gen therapeutics forward. This can only be achieved if the industry embraces the shift to smart manufacturing, particularly with the use of IoT and edge applications.
Are you in an open relationship … with your job?
TopResume recently surveyed over 500 U.S. professionals about their “relationship status” with their employer (because what’s Valentine’s Day without a little themed data?). Unsurprisingly, workers' relationships aren’t quite as exclusive as leaders might think. Here are the sentiments from TopResume’s latest job satisfaction survey.
- 72% of professionals said they are in an “open relationship” with their employer: They have a job, but remain open to new opportunities.
- 13% of respondents said, “It’s complicated”: They don’t love their job, but are uncertain about leaving their current company.
- 8% of respondents were unspecified, unsure how they feel about their current job.
- 7% said they are in a “committed relationship” with their job. A minority, these respondents have no plans to seek other opportunities.
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Thoughts, questions, tips? Send them to firstname.lastname@example.org. Have a great day, see you Tuesday.