Recruiting new employees is time-consuming — and expensive. Studies suggest it can take as long as eight months for a worker to become fully productive, and that average hiring expenses exceed $4,000 after accounting for equipment and opportunity costs. Furthermore, HR departments report that they spend about 33.5 hours getting new folks up to speed.
That’s why Ben Thompson and Dave Tong founded Employment Hero in 2014, a Sydney, Australia-based startup developing a software platform that aims to simplify onboarding. Ahead of a planned international expansion, Employment Hero today revealed that it has secured $15.38 million (AU$22 million) in a series C round led by Australia-based employment marketplace Seek, with participation from OneVentures and AirTree Ventures.
The company’s capital infusion follows on the heels of an $8 million series B round in March 2018, and it brings Employment Hero’s total raised to over $69 million (AU$100 million). Thompson said the new funds will drive the development of strategic integrations with Seek’s marketplace; the continued buildout of its cloud-hosted software suite; and Employment Hero’s launch into New Zealand, Southeast Asia, the U.K., Ireland, and other regions overseas.
“As an advanced employee management and payroll platform, working hand-in-glove with the largest employment platform, Seek, we can offer real value to businesses anywhere on the planet,” said Thompson. “We not only want to help our existing businesses to grow internationally, but we want to start supporting the businesses that approach us from outside Australia.”
Employment Hero’s tools address pain points like data collection, rostering, timesheets, and payroll chiefly with automation and digitization. For instance, its paperless onboarding experience enables employers to send offer letters and contracts that can be signed electronically. Employees can quickly add personal details to tax forms and other paperwork via PC or smartphone, while HR managers can create checklists that notify relevant people and departments at each step of the process.
The moment new workers create an Employment Hero account, they’re granted access to introductory materials through a desktop portal (and mobile app) with shortcuts to things like leave requests, payment details, timesheet submission, and payslips. (Another nifty feature — HeroThanks — lets them recognize and thank colleagues in a live chat stream that’s visible companywide.) As for HR professionals, they’re provided a library of guides, policies, and templates as well as an overview of staff qualifications and certifications.
Employment Hero claims that the bulk of the businesses on its service reduce time spent on people management and payroll processing by up to 80% and up to 60%, respectively, and it says that the discounts it negotiates with major retailers save employees up to $5,000 per year.
That’s perhaps why Employment Hero hasn’t had much trouble acquiring new clients. The company currently services more than 4,000 small-to-medium-sized businesses (up from 3,000 in May 2018) and manages over 150,000 employee files, which contributed to a doubling in recurring revenue over the past 12 months. To meet demand, Employment Hero expects its workforce will grow from 134 to 162 by 2020.
“By working with the teams at Seek, OneVentures, and AirTree, we have a genuine opportunity to change the employment landscape, giving employers more confidence to grow their business, and helping employees to better save, manage, and build their finances,” said Thompson.
Employment Hero has a free plan for businesses with fewer than 10 employees. Its standard plan starts at $4.18 per employee per month, and the company offers a fully managed implementation with data cleansing and setup services for larger enterprises.