Data-driven human resources management platform Hibob has raised $70 million in a series B round of funding led by Seek and Israel Growth Partners. The raise comes at a time of rapid growth for the startup, which has offices in New York, London, and Tel Aviv and is reporting “triple-digit year-over-year growth” in 2020. This surge is largely due to companies embracing cloud-based tools to support a rapid transition to remote work.
“Companies are now seeking ways to help their people remain engaged, productive, and connected while remote, and that provides major opportunities for continued growth in the HR tech sector,” Hibob CEO and cofounder Ronni Zehavi told VentureBeat.
Founded in 2015, Hibob’s core platform — which it calls Bob — serves HR departments with most of the technology they need to manage their workforce, remote or otherwise. This spans onboarding tools that automate workflows for new employees, including requesting documents, setting up accounts, disseminating policies, and so on. It also enables timesheet and attendance management, time-off approvals, payroll reporting, surveys, and company directory searches.
At the heart of this is data and analytics, with HR teams able to generate reports using filters to establish broad trends and individual employee status spanning any time period. According to Zehavi, data helps companies avoid coming to the wrong conclusions about people and can back up any decisions they make using hard numbers.
“As humans, we rely heavily on intuitions, in that we’re constantly seeing what’s going on around us and drawing conclusions,” Zehavi told VentureBeat. “To avoid wrong assumptions when hiring or managing employees is to empower executives and HR leaders to make smart, data-driven decision-making. People analytics is about identifying and quantifying the human drivers of business outcomes.”
Analytics cover areas such as employee engagement, allowing companies to improve their culture to retain talent, while surveys can garner real-time feedback on workers’ sentiments. Permeating all of this is the need to conduct comparative analysis across every strand of the company by, for example, “comparing employee retention, compensation ratios, gender or ethnicity biases, and performance analysis,” Zehavi explained.
Hibob leans heavily on machine learning for many facets of its platform. To do things like predict employee turnover rate, Hibob offers companies an “attrition rate KPI” that analyzes the percentage of employees leaving a company over a 12-month sliding window.
“By collecting many data points throughout the employee life cycle, we are able to direct and point at risk factors, providing us the ability to predict and alert talent attrition,” Zehavi explained. He said this boils down to the question: “What is the probability that your top talent will quit their job?”
Each employee is given a “flight risk” rating based on a composite of various data points, including time in their current position, position and seniority, team turnover, time off, and even demographic information such as their age and number of children. While this data may well shed light on flight risk, it’s easy to see how some employees could resent being profiled in this way.
From a company’s perspective, such data can unlock a veritable goldmine of insights and help mitigate attrition.
“HR can extract reports seeing how many flight risk employees each manager has, each site has, and if one group is more at risk than another,” Zehavi said. “HR can also see if measures taken to eliminate flight risk — such as a learning and development plan, promotion plan, or other measures — made the desired effect and if a person is no longer a flight risk. From the HR leader’s perspective, the ability to compare between teams and locations helps to proactively take care of management issues.”
The global HR technology market is pegged at $148 billion, and in 2020 alone a slew of HR startups have raised sizable sums. Payroll and payment platform Papaya Global recently secured $40 million, while Factorial raised $17 million to automate HR processes. Meanwhile, Remote — which helps companies set up and manage their global remote workforce — raised $35 million.
Hibob had previously raised $54 million, including a $20 million tranche last year. With another $70 million in the bank, it’s well-financed to “drive wider global expansion” and build on growth this year. As many companies floundered or were forced to completely overhaul their core propositions to survive the pandemic, businesses such as Hibob have thrived.
“The market in 2020 has proven that HR tech tools are mission-critical in today’s ‘work-tech stack,’” Zehavi said. “At Hibob, we didn’t have to pivot, in fact, we were built to thrive through these unfortunate circumstances. Ultimately, in working with the world’s most forward-thinking companies, the ideas of remote work, remote onboarding, and engaging top talent digitally were all becoming commonplace. The pandemic just accelerated it.”