Back in the 1990s, the field of HR had a beleaguered reputation. It was deemed ineffective, incompetent, and costly, which led Harvard Business Review to publish an article in 1998 calling for “a new mandate for human resources.” Fast forward to the turn of a new decade, the doubts that used to plague HR have been effectively dispelled.
According to a PwC’s research survey conducted in 2019, HR tech expenditure across companies from six continents has increased as human capital challenges mount. From talent acquisition and retention to employee engagement, companies are increasingly turning to modern HR tech solutions as a panacea for their organization’s problems. With the onset of the COVID-19 pandemic, it had cemented HR’s role as a critical function. HR was given the task of helping organizations navigate turbulent change.
Daniel Callaghan, CEO and managing partner of The Workplace Accelerator, still believes that HR tech remains underrated given the plethora of impactful opportunities it offers. Callaghan, also the CEO of London-based HR tech firm Veremark, believes that it is now a USD 400 billion global market with a real impact on our work lives, but still does not get the same air time as other less profitable categories.
The Workplace Accelerator claims to be APAC’s first dedicated HR tech accelerator which recently announced its inaugural cohort of 7 startups. The companies hail from the Philippines, Singapore, Australia, Hong Kong, Vietnam, and India and provide solutions relating to talent acquisition, talent management, core HR, and productivity, as well as collaboration. KrASIA spoke to Daniel Callaghan to find out more about the program.
KrASIA (Kr): As a current CEO of London-based HR tech firm Veremark, what was the rationale behind setting up The Workplace Accelerator in Southeast Asia?
Daniel Callaghan (DC): Veremark operates a global pre-employment screening platform. We mostly focus on high-growth tech ventures and fintechs who want to ensure compliant hiring practices and protect their workplace culture. Our HQ is in London but we do have offices in Singapore, the Philippines, and Hong Kong so we are heavily focused on this region.
We chose Southeast Asia as a starting point because there is so much potential within the market. There is population growth, economic growth, the young population, and the growing maturity of HR as a function—all of which makes for very exciting times from an HR tech perspective. There is also a natural moat to the region due to local market idiosyncrasies that make it harder for the big US players to gain traction over here.
Hence, launching the Workplace Accelerator here made the most sense. Although we do intend to launch subsequent cohorts in Europe and the USA to build a global ecosystem.
Kr: The Workplace Accelerator aims to help drive the “next wave of workplace productivity,” according to its website. What do you think is this next wave?
DC: I think the next wave of productivity will eliminate the inefficiencies of bureaucracy and traditional work practices. It will be made easier with the new remote and flexible working practices that we are now getting used to. COVID-19 has reportedly crammed 5 years of digital transformation into a 5 month period. The Workplace Accelerator was established to help champion the latest HR tech innovations that could help organizations adapt to the new normal.
I think it is also undeniable that AI and automation are going to eliminate a large number of tasks and roles. Of course, new roles will be created and in the long run, it will create more roles than they took away but it will take a generation for the gap to be made up.
Kr: The inaugural cohort represents less than 10% of all applicants to the accelerator. How did you finalize this list of 7 startups? What do you find exciting about this cohort?
DC: It was a very tough and thorough process that started with the usual application. This is followed by 3 rounds of interviews with the partners of the Workplace Accelerator and a mentor or operating partner from the program who had specific subject-matter expertise in their product area.
Finally, all the founders had to undergo a psychometric test to ensure they had the right entrepreneurial mindset and willingness to collaborate within the cohort. Additionally, all businesses are revenue-generating with fully-built products and a great client list.
The exciting thing about the cohort is the diversity of the businesses. None of them are in competing sectors so they can help each other build their own partner network from day one. We also have a wide range of businesses that go beyond traditional HR like Fitbots, a productivity and collaboration tool focused on objectives and key results (OKRs), as well as Rushowl, a micro-transit platform, that is helping to re-invent the commute.
Kr: How was the program formulated? What are some key highlights?
DC: It was based on a lot of personal experiences and conversations with entrepreneurs about what they would like to see in the program. It is designed to take the cohort through 3 key phases of learning, executing, and then fundraising over a period of 16 weeks. Each section is designed to compound on the step and interaction that came before.
Having spent a lot of time with private equity funds, I am a big believer in their operating partner networks and the value creation plans that they put together over hundred days. We have recreated this within the program and now have 12 leading HR tech professionals and entrepreneurs. Each one of them have their own “functional superpower” and will spend a lot of time with the businesses throughout. Additionally, we built out one of the largest market-specific mentor lists that I have not seen anywhere before. More than hundred senior HR leaders and key decision makers from the likes of DBS, Google, Aviva, and UOB have offered to contribute their time and meet with the cohort.
Kr: What gaps do you think the Workplace Accelerator is filling in the HR tech industry?
DC: We are the only HR tech-dedicated accelerator in APAC and possibly globally. There is no program that is intensive in structure and support, specifically in this category alone. Now, there are lots of fantastic businesses being built in HR tech, so whether there is a gap that needs filling remains to be seen. However, we do aspire to help more companies become aware of what tools they can use and ultimately help more HR tech ventures become successful in the region.
Kr: There is a plethora of HR tech startups in Southeast Asia. Do you think the industry is getting saturated?
DC: There are a lot. It’s a wonderfully rich ecosystem being built not just in Singapore, but across the region. It’s definitely not saturated although it is increasingly competitive.
We are particularly excited about the areas with a real impact on the future of work. How do you manage teams or get alignment in teams when they are not physically next to each other? How do you really know this person is exactly who they say they are when you have never met and might never meet? How do you build and communicate a culture virtually? Why should I wait a month to get paid when I need the money now and have done the work? All of this can be solved by HR tech and presents impactful opportunities.
As a category, HR tech delivers better exit valuations to investors than e-commerce or marketplaces. As such, I think the whole category remains underrated. I also think areas of innovation like blockchain in HR will provide a massive opportunity for investors and companies to win.
The interview has been edited for brevity and clarity.