At Work-Bench, we divide and conquer our investment areas in enterprise software as follows:
- Jonathan Lehr — AI & ML
- Vipin Chamakkala & Priyanka Somrah — Cloud-Native Infrastructure
- Kelley Mak — Cybersecurity
- Jessica Lin — Future of Work
I often get asked what Future of Work means from an investment perspective, which for us at Work-Bench has spanned:
- Unified communication & sales intelligence (Dialpad)
- AI for meeting scheduling (x.ai)
- AR for industrial workers (Upskill)
- AI for mental health (Spring Health)
- Next-gen customer success platform (Catalyst)
A core part of our investment thesis at Work-Bench is understanding painpoints directly from enterprise buyers to identify massive and timely market opportunities. We then play matchmaker with leading startups based on our research.
I would love to connect if you’re a startup building in this space, or if you’re a corporate executive evaluating new tools and platforms for adoption.
Below are a few research areas I’ve been digging into, from my own experiences as a GED educator, what we’re reading, and conversations we’ve been having with large enterprise executives on painpoints.
While there are robust reports out around the future of work (McKinsey, Accenture, World Economic Forum, and Axios Future) and specifically the doom and gloom of challenges and stats ahead for our country and our workforce, I’ve largely found there to be few, if any tech-enabled solutions, included in the discussion to solve these challenges. I hope we can continue to surface some promising tech companies through this series.
Thesis #1: Retain vs. Retrain
HR startups we meet are largely focused on solving problems of acquiring and retaining talent (which I believe is a reflection of Silicon Valley-specific challenges of retaining top talent in a hyper competitive Bay Area ecosystem). This is supported by $5B in aggregate VC funding for recruiting startups alone, according to Crunchbase.
However, what may be counterintuitive to many founders but what we at Work-Bench believe is going to be one of the largest and looming problems for years to come for large Fortune 500 enterprises is actually in redeploying and retraining workers. Employers surveyed by the World Economic Forum estimates that, by 2022, no less than 54% of all employees will require significant reskilling and upskilling. When you think about the scale of these companies — in the hundreds of thousands of headcount — this is going to be a massive problem.
Large enterprises now struggle to retrain or move aging members of their organization, whose skillsets are increasingly obsolete given the rise of tech and automation. Furthermore, many of these jobs are actually “white collar” desk jobs — jobs that historically have been considered to be secure.
IBM made the news recently with their “resource actions”, reducing their US workforce by as much as three-quarters from its 1980s peak, and replacing a significant share with younger, less-experienced and lower-paid workers and sending many positions overseas. General Motors has cut 8,000 salaried employees, many of them engineers and designers in product-development roles, and Verizon granted buyouts to 10,000 people in 2018.
In fact, there are are entire agencies and companies focused on redeployment and outplacement services — organizations that help employees who have lost their jobs to be considered for redeployment elsewhere within the organization, i.e. “internal mobility” (but not the way that most startups are defining it).
While I would like to believe that most companies do not want to lay off such large portions of their workforce — the fact is that reskilling a workforce is arguably even harder. From the WSJ piece “Why Companies are Failing at Reskilling:”
“Thousands of companies across the country are in the thick of a digital revolution that requires them to transform their operations. They need an employee base that’s ready to do new kinds of work, filling roles that are just emerging and adapting existing jobs to integrate more data and automation.
Still, letting go of people whose skills are becoming obsolete remains a stock response to shifts in business strategy in part because shareholders can more readily understand a plan that calls for simultaneous layoffs and hiring rather than a resource-intensive training initiative, workforce planners say.
Sometimes the required skills aren’t easily taught to existing employees, experts say. It’s also often because companies have only a hazy sense of what their internal talent is capable of, and migrating large numbers of employees into new positions requires time, money and commitment.”
Large enterprises that have committed to retraining:
- Amazon — spending $700 million over about six years to retrain a third of its U.S. workforce
- Accenture — retrained 300K employees over 4 years
- JP Morgan Chase — spending $350 million over the next five years for its New Skills at Work initiative.
- AT&T: Planning to retrain 50% of its 250K workforce and launched Future Ready, a $1 billion web-based, multiyear effort that includes online courses; collaborations with Coursera, Udacity and universities; and a career center that allows employees to identify and train for the kinds of jobs the company needs today and down the road.
Below are a selection of companies tackling parts of this problem space of retraining and internal mobility:
- Skills Assessment / Competency Benchmarking: Imbellus, Fuel50, Viridis Learning
- Job Title Analysis / Taxonomy: HR & people analytics teams owning this job title classification with machine learning
- Labor Market Analytics: Burning Glass, Engage Talent
- Internal Mobility: Gloat, Flux
- In-Person Training Delivery for Enterprises: General Assembly
- Learning Management Systems (LMS) Degreed, NovoEd, Workramp
- Microlearning Platforms: QStream, Edume
- Function-Specific Training: Treehouse for developers, Correlation One for data science, Flockjay and SV Academy for sales, Hone for leadership training
- Knowledge Sharing Platform: Bloomfire, Guru
- Customer Training / Digital Adoption Platforms: Walkme, Simpo, Strigo
I’d love to meet companies who are tackling this retraining problem in a tech-enabled way, beyond video. Are there new models of training delivery that can truly scale (beyond instructor-led training)? Is this training space one tech can fundamentally enable? Or will it continue to be dominated by large consulting firms and services?
Thesis #2: Empathy as Job Security?
I’ve been largely influenced by Harvard Business School’s framework around Routine vs. Cognitive labor market skills.
Here I’ve mapped the Cognitive vs. Routine framework, against automation risk:
While it’s commonly assumed that software engineering jobs will be impervious to automation, the recent rise of low-code/no-code fundings and programming language abstraction, I would argue that a key vector missing in the job security discussion is the empathy vector — specifically, soft skills that are customer or human-facing.
Jobs with high degrees of human interaction and engagement continue to rise and be in high-demand, including:
- #3 Enterprise Account Executive (sales)
- #6 Customer Success Manager
- #7 Engagement Manager
(Note: the far stickier question is around why wages have not kept up for human-to-human workers in retail, food & beverage, healthcare, teaching).
That said — if we’re still early days in AI for empathy, or artificial empathy, and if there is such a demand for empathy and soft skills to fill jobs — why are we not seeing a corresponding rise of skills education in market? Can soft skills training truly be taught, and moreover, tech-enabled?
While soft skills training has long been promised in AR/VR (and generally still under-realized), the bulk of tech-enabled companies and startups building in this space has largely focused on voice intelligence and sentiment analysis for sales and customer support use cases. It’ll be interesting to follow where technology can next influence, coach, and guide human behavior.
There has been a rise of startups building solutions in the conversation and voice intelligence space. By recording and transcribing calls, companies like Dialpad* can uncovers key insights about the conversations in real-time, analyzing calls and capturing key tasks, due dates, and action items. Their product VoiceAI can provide a customer service operator with feedback in real time on a call, or give managers visibility as when to intervene or provide support in a call.
For customer service, Cogito has designed AI-enhanced software that listens to calls with customers and assesses their agents’ emotional intelligence. Agents are assigned an “empathy score” based on their interactions and speaking behaviors with their customers, and can provide in-call guidance and feedback to coach the agents.
If the future of (good) jobs x skills x tech is an area where you are spending time, I’d love to chat more.
Many thanks to great investors and thought leaders in the Future of Work space who have generously swapped notes with me: Sara Eshelman of Spero Ventures, Nashilu Mouen-Makoua of First Round Capital, Jomayra Herrera of Cowboy Ventures, Romeen Sheth, and Stela Lupushor.