The rise in popularity of remote work has significantly exacerbated the issue of employee retention and engagement. It’s a significant and pressing problem. However, the catch is that it can be addressed using the same mechanics that are applied to retain and engage users. Here is a simple example of a startup that followed this recipe—and began to grow very well and attract investments.
The essence of the project
Workshop is a platform designed for conducting internal corporate distributions.
These distributions can be sent via email, as messages in Slack, Microsoft Teams, SMS, or employees can read them in a Workshop app installed on their phones.
The platform allows for the creation of many different mailing lists—for example, by categories of employees or by the offices they work in. Workshop can be integrated with corporate HR systems, which means these lists can be automatically updated, regularly pulling information from the current database of employees and their contacts.
There is no need to create distributions from scratch, as the platform contains a catalog of ready-made distribution templates for various occasions and topics. Newly created templates within the company can also be saved for future use.
Typically, special personnel are tasked with creating content for the distributions, though the final distributions should be sent in the name of the employees responsible for the area. To reduce the hassle of approving distributions, there is a simple approval process on the platform—where the draft prepared by the editor can be sent to the responsible person in one click, who can also approve it in one click and initiate the distribution.
The effectiveness metrics of each distribution are tracked and saved. This allows for monitoring which distributions genuinely engage the audience and which employees are interested in company news and who are less so.
To simplify the analysis of distribution effectiveness, a special module is integrated into the analytics section, which automatically highlights distributions with unusually high or low effectiveness metrics and notifies the responsible parties along with recommendations for possible actions.
Distributions do not necessarily have to be created by hand each time. Some types of distributions can be sent automatically based on events occurring within the company—for example, to congratulate an employee on their birthday and remind their department colleagues of the event, congratulate a salesperson on closing a deal and inform colleagues in the sales department or even the whole company depending on the size of the deal.
The logic of such distributions can be as complex as desired and use various internal corporate sources of information, which can be integrated using the Workshop API.
The subscription price for the platform depends on the number of employees who should receive distributions, the number of editors with rights to create distributions, and a set of additional features, including integration with corporate HR systems, use of internal corporate communication channels, and so on.
Workshop is developing at a good, steady pace. The startup was created in February 2021, and in April of the same year, it attracted its first $3.5 million in investments. In July 2022, when I first noticed it, it attracted another $5.2 million. And now it has raised a new round of $12 million.
What’s Interesting
Formally, Workshop can be attributed to the market for internal corporate communications. Surprisingly, it’s a large market that is also showing steady growth.
In 2021, the size of this market exceeded $1 billion, and it is expected that by 2031 it will grow more than twice—to $2.5 billion.
However, internal corporate distributions are not only about conveying the plans and instructions of management. An important role of such distributions is also to inform about the achievements of employees, which helps to stimulate both the successful employees themselves and everyone else.
The market for platforms dedicated to employee recognition systems (Employee Recognition Systems) is another substantial area that Workshop is involved in. In 2021, this market was valued at 11 billion dollars, with a projected increase to 34 billion by 2030.
The growth in both this and the training market is largely due to a significant global shift toward remote work. The main issue with remote work is that it can create a distance between employees and the parent company. Employees may be less aware of company happenings, which can significantly affect their engagement and work efficiency. Platforms and tools that can actively inform and involve them are thus becoming essential.
A rough comparison might be that a remote employee is more like a user who needs to be constantly engaged and retained, rather than a soldier who simply follows orders without question.
While this has always been somewhat true, the rise of remote work has exacerbated the issue to a point where occasional efforts are no longer sufficient. Regular communication processes are necessary to maintain a sense of belonging and engagement. This requires the implementation of corresponding business processes and the use of platforms like Workshop to facilitate these needs.
There are several other less obvious examples of such platforms:
Spokn started as a platform for creating and listening to corporate podcasts. It has since evolved into something akin to a corporate TikTok, where companies share videos about their employees. The startup has raised 4.5 million dollars in investment.
Groopit is another startup. Its stated goal is to conduct employee surveys that can influence the company’s product development plans. However, a side effect is that it involves employees in the company’s overall activities at a substantive level. This startup has raised 12.8 million dollars in investment.
Bonusly, which I wrote about in the spring, increases employee engagement through rewards. The twist is that these rewards are given to each other by the employees from a budget allocated to them each month. This startup has raised 31.4 million dollars in investment.
Where to Run
Today’s Workshop is yet another example of how investments are not given to those who come up with unusual solutions, but to those who solve problems that have become big and relevant today, even if by simple, old methods.
The problem of employee engagement and retention has become acute recently. And while newsletter platforms are a well-known thing, by combining a new problem with an old solution, Workshop has created a relevant product that is growing well, generating interest from both companies and investors.
It’s worth recalling the comparison made earlier that the modern employee is more of a user than a soldier. This leads us to the idea that the same tools used for user retention and engagement could be applied to solve the problem of employee retention and engagement!
Workshop was created exactly according to this recipe. Newsletters have usually been used to bring back users, and this startup decided to apply the same mechanism for ‘bringing back’ employees.
Thus, the possible direction of movement is the creation of platforms for the retention and engagement of employees, which essentially represent the transfer to the corporate market of already known mechanics of user retention and engagement.
So, what user retention and engagement mechanics can be transferred to the corporate market—applying them for employee retention and engagement?
About the Company
Workshop
Website: useworkshop.com
Last round: $12M, 10/30/2023
Total investment: $20.7M, rounds: 3″