SemperVirens’ Colin Tobias: Total People Investment Is Critical to Scaling Businesses
The employer/employee relationship is changing, and with that, organizations must adapt to new dynamics in order to attract, engage, and retain top talent. Colin Tobias, partner at SemperVirens Venture Capital, examines how new innovations in workforce technology and an uptick in digital benefits are creating more value for workers across industries.
KEY POINTS FROM COLIN TOBIAS'S POV
Why is total people investment such an important category moving forward?
The pandemic has changed the way people work and live, and new employee expectations are propelling employers to respond accordingly. Talent investment is no longer just a priority for HR teams; today, employers must treat it as an essential layer that connects all business functions. As a result, the employee/employer relationship is changing as:
Employers need to attract, engage, and retain talent in a distributed environment where highly skilled employees are in demand globally and can work from anywhere in hybrid environments.
Employees expect modern, tech-enabled interactions with employers and are increasingly seeking meaning and community at work.
An uptick in remote work has created a need for navigation, analytics, and the optimization of benefits administration.
What are the business models, use cases, or applications that might be attached to this category?
Workforce technology that optimizes culture and efficiency will become table stakes. “Employers are increasingly looking to shift budgets away from talent acquisition and into talent activation. This has led to a focus on retention & productivity, culture & community development, and new labor marketplaces promising both flexibility and upside for demanding employees,” says Tobias.
Healthcare technology that improves accessibility and offerings will enable employers to reduce costs and attract top talent. “Large, self-funded employers that are directly bearing the risk of the healthcare costs of their employees are particularly well positioned to pioneer new, value-based point solutions where they can capture ROI through reduced claims costs. For mid-sized, fully-insured employers, the push to expand, diversify, and democratize healthcare & wellbeing benefits is driven by a desire to recruit and retain top talent,” he says.
Financial technology innovation that improves employee experience. “The employer channel creates value for fintech entrants in both distribution efficiency and the product itself. New companies are able to improve the underlying product by tapping into employment-related data – typically payroll – and efficiently scale through the channel to reach end users.”
What are some of the potential roadblocks?
Constrained budgets and a saturated market will make it more challenging for companies looking to sell point solutions. “As employers are inundated with point solutions and the stress of macro-conditions influence buying decisions, a focus on quantifiable ROI will be critical for new companies looking to sell into an employer’s Total People Investment budget. Increasingly, companies must position themselves away from point solutions and solve end-to-end problems for their target user, ideally replacing more than one existing solution,” says Tobias.
IN THE INVESTOR’S OWN WORDS
We are amid the fourth industrial revolution – a monumental shift in how we live and work. There has been a fundamental change in the employer/employee relationship, which was only accelerated by the recent pandemic.
An organization’s Total People Investment has historically sat within HR and siloed to an administrative function. Now, employers must treat it as an essential layer that connects all business functions and is strategic in moving the success of the business forward.
Employers must now think about their Total People Investment strategically and focus on new emerging technologies across workforce and healthcare to appropriately support and scale their people and businesses.
WHAT ELSE TO WATCH FOR
Employers are increasingly justifying more spend on talent given its already large weight within total expenses. "Often, other investors and market participants view this category as too narrow to support large, standalone businesses. We’re seeing that employers are increasingly cognizant that 70% of their spend – both direct and indirect – is on their employees and, as such, they are willing to allocate large amounts of strategic resources and budget to ensure their Total People Investment is improving employee experiences while also creating business resiliency," says Tobias.
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