New Sources for Human Resources

By: Tom Wisniewski, Managing Partner, NVP

Human resources is one of the last corporate functions to fully adopt data-driven decision making. However, as the labor market continues to tighten, and traditional recruiting channels (e.g. Job Boards, LinkedIn, etc) continue to lose effectiveness, more and more HR executives are looking to HR tech to provide new solutions that can fit within the already complex and crowded suite of 20+ HR applications most corporations are already using.

The daily operations and responsibilities of an HR manager have shifted in the last decade.  Workforce needs now require HR teams to maintain flexibility and evaluate employee potential and success with new – more exacting – metrics.  There are also new demands of HR: teams are required to be more diverse; employee engagement has become integral to job satisfaction and long term commitment; and millennials have proven to be a hard generation to recruit, and even harder to retain.  These trends, which we think are likely to stick around, have caused a surge in HR tech startups, and have made it an exciting investment vertical, with new solutions taking shape.

Upsider, for example, is an HR Tech platform that turns candidate sourcing into a science. Instead of relying on traditional overused channels–LinkedIn, Job Boards, etc– focused on recruiting from the same tired set of competitors, Upsider uses artificial intelligence (AI) to analyze the job recruitments more deeply and identify key characteristics/needs of company to create a robust proprietary 100+ data point job profile.  Upsider then uses AI and NLP to compare this detailed target profile to jobs and people within its proprietary database of 70 Million companies, to both surface new target companies, and locate higher quality candidates. The candidate list and target profile is further improved based on input from hiring managers use a “tinder-esque” approve/deny one-tap to refine the machine learning model. The result is a data-driven sourcing system that helps their clients find more higher quality candidates and get them  5x faster. It’s not only saving companies money and time on fruitless job-board advertising, its helping them to match with quality candidates that are the most likely to produce and become long term assets.

Similarly, Talentegy is tackling recruiting from the candidate experience side – which is becoming more and more important. Talentegy sits on top of the increasingly complex HR tech stack to monitor a candidate’s progress through the application. How many times has a recruiter pursued a great candidate, only to have them disappear halfway through the hiring process?  It’s beyond frustrating – and can even be damaging. Leading industry research indicates that over 50% of candidates will sever a business relationship with a company due to a poor candidate experience and over half will abandon an application process because of a technical issue. Not only will you lose a candidate, and potentially a customer, but it’s nearly impossible to know what caused the change of heart.  Talentegy shows recruiters why a candidate abandoned their application and how to fix it.

Beyond recruiting, we are seeing more solutions that can help understand and direct employee performance, like RankMiner.  RankMiner is an AI tool currently being marketed to call centers to analyze staff/customer conversations, beyond the spoken word. Unlike speech analytics, which analyzes conversations based on word use and frequency, RankMiner’s patented algorithms analyze 383 voice features.  By monitoring and measuring qualities like energy, intensity, and frequency, RankMiner is able to extract the emotions and behaviors expressed during a conversation with more preciseness and a greater sense of authenticity. (Adheres to the old adage, “It’s not what you say, but how you say it.”) From here, RankMiner is able to predict future outcomes, such as employee attrition, as well as customers likely to be up sold, collection agency success, and more. RankMiner is the only company in the market today able to provide predictive insights from voice data – and their clients have realized business improvements of up to 200% over previous methods.

To further explore the outlook of HR Tech as an industry as well as an investment vertical, we invited Daniel Chait, CEO of Greenhouse Software to speak with our current cohort of founders.  Greenhouse Software, a Series D startup, which has raised just over $100 million since its launch in 2012, makes software tools that help companies automate all aspects of hiring throughout their organizations, helping them compete and win for top talent.  

Chait said, “With over $2.38B of venture capital investments in HR tech so far already this year, and new entrants from Google and Microsoft, there’s a huge amount of energy in HR Tech right now. Greenhouse has always understood the massive opportunity in helping companies grow quickly, and a major part of that enablement comes when companies have the right hiring capabilities to help business leaders make better, more informed hiring decisions. People and talent are what make companies succeed which is why there is so much interest in the HR Tech market right now.”

Competition to hire and keep top talent today is fierce, and the growing HR Tech market is making it easier for HR teams to identify, hire and retain the highest quality candidates.  In the cases mentioned above, these disruptors are changing and updating traditional processes, but they are also helping employers and employees work more efficiently and to greater satisfaction than ever before.  As the HR Tech market expands, we can expect to see companies in the space empower more people to excel at jobs that they enjoy, while allowing companies to enhance their balance sheet and build better communities for those on the payroll.

 

Disclaimer: Upsider, Talentegy and RankMiner are part of NVP Labs Fall 2018 cohort.  

 

3 Reasons for Founders of Startups to Choose New Jersey

By Joanne Lin, Senior Investment Associate, Newark Venture Partners

Last week, Governor Murphy made his second visit to NVP to talk about the important role that startups have to play in New Jersey’s expanding economy.  In a room full of “Founders & Funders,” Governor Murphy, along with representatives from the NJEDA talked about the resources that are currently available to startups and small businesses, and their vision for how innovative founders and strategic venture capital can change the game for job growth, the regional talent pool and the revitalization of cities like Newark.  Governor Murphy also spoke about his new Economic Development Strategic Plan and the $500M NJ Innovation Evergreen Fund (NJIEF) which has the ability to create a multiplier effect for companies that want to put down roots and grow in New Jersey. (If you missed it, the NYTimes highlighted the NJIEF in this article.)  

It’s been great to see NJ’s start-up scene finally getting the prime-time attention it deserves, but a recurring question from skeptics is whether or not founders actually want to come to New Jersey.  Our current NVP Labs cohort of eight companies was chosen from a pool of over 1,800 contenders who chose to come here from North Carolina, Florida, Louisiana and even San Francisco, so the short answer is yes!   However,  if you still have doubts here are 3 reasons entrepreneurs want to grow their companies in New Jersey:

1)    New Jersey is home to more scientists and engineers per square mile than anywhere in the world.

If you’re a CEO looking for a technical co-founder, or are a CTO building your dev team, NJ has more technical talent packed per mile than anywhere else.  In fact, there’s a strong pipeline of STEM graduates to help keep the state at the top of this list. According to data from the National Science Foundation, New Jersey has a higher percentage of science and engineering degrees as a percentage of overall degrees conferred (33%) than New York, Pennsylvania, Connecticut, or Massachusetts. With Princeton, Rutgers and NJIT as the leading higher education institutions in the state, the quality of this growing workforce is exceptional. When a tech company has little to show in terms of traction, early-stage VCs and angel investors look to the next best indicator of future success, a strong team. Where will you find your next tech hire?

2)    Access to NYC, without paying NYC prices.

Full disclosure, I live and work in New Jersey now, but I was born and raised in NYC. There is no place like New York.  Full stop. Period. However, that doesn’t mean a start-up needs to subject itself to sky high NYC office prices to succeed. If anything, a start-up that elects to pay $900 to sit at a desk in Midtown when they can, for example, pay $0 to work from our 25,000 sqft co-working space in Newark may need to revisit their priorities. It takes 20 minutes to get from our office to Herald Square. I can’t even say the same when traveling from Brooklyn.

For growing companies looking for their own private office, New York city has the highest office asking rent in the country at $74.88 psf/year according to a report by CBRE. The Newark annual average asking lease rate was $26.24 per square foot.  

3)    Innovation climate trumps tax climate

Business tax climate is important to the state’s overall economic health, but poll any early-stage entrepreneur for their top five business concerns and I highly doubt their state’s tax rate will make the list. To the Governor’s point, taxes are a non sequitur when it comes to start-up activity because you can’t tax profits that don’t exist yet. Perhaps a better ranking to reference would be CES’ US Innovation Scorecard. The annual ranking grades every state on 12 qualitative and quantitative criteria that indicate how strongly a state supports innovation including technology-related jobs per capita, percentage of the population with advanced degrees, tax friendliness, small business job creation, VC & Corporate R&D spend per capita, innovation-friendly laws/policy, fast internet, etc. New Jersey ranked 17th in the nation jumping into the “Innovation Leader” category, ahead of New York and California.

 

If that’s not enough, come to NVP and talk to the founders that are growing their companies here, like Sam Caucci, Founder and CEO of 1HUDDLE.  He founded his company in New York and moved it to Newark in 2016 when he was chosen for NVP Labs. NVP went on to invest in their Seed round and 1Huddle moved into NVP’s direct investment portfolio. He now employs 12 New Jersey residents and four of them have relocated to Newark.  

Sam says: “When I moved the company here I immediately made it an initiative for our team to be a part of the community, and that’s paid dividends.  The atmosphere at NVP really encourages collaboration and community, and the corporate partners and local government officials have welcomed us by mentoring our team, helping us to connect with decision makers, and cheering us on as we grow.”

 

Newark Venture Partners Hosts 55 Newark Youth as they Begin Innovative 12-Week Leadership Program with All Stars Project of New Jersey

The All Stars Project of New Jersey (ASP of NJ) kicked off its Fall 2018 Development School for Youth (DSY) program in Newark on Tuesday, September 18 at an event hosted by Newark Venture Partners.

Fifty-five young adults from Newark and 25 from Jersey City are enrolled in DSY – an innovative afterschool development program that includes 12-weeks of workshops run by business professionals that will use the All Stars’ unique performance-based approach to help them learn new things, build community and connect to the mainstream.

Tuesday’s event began at the All Stars Project of New Jersey’s Scott Flamm Center for Afterschool Development in Newark’s Washington Park cultural district, and concluded one block away at Newark Venture Partners, where entrepreneurs from BoxCar, Industrial/Organic, LeadBird, MoCaFi, Modelshop, and Vydia held breakout sessions with the new DSY students.

“Since we began our efforts here in Newark in 1999, nearly 2,000 youth have graduated from DSY, where we use performance training to help them develop a wide set of skills – everything from conversation and building resumes, to job interviews, hosting events, giving presentations, and much more,” explained Shadae McDaniel, Director of Youth Programs for the All Stars Project of New Jersey. “There was no better way to begin the fall 2018 class than with the help of Newark Venture Partners and six of their entrepreneurs. DSY has a transformational impact for both our young students and the business leaders involved – and that was truly evident from the energy and excitement shared by all on Tuesday.”

Graduates of the program will also become part of the ASP of NJ’s successful summer internship program, where business partners provide paid internships that continue to help these young adults develop and grow. This past summer in Newark alone, 33 different companies sponsored 109 paid internships.

“The All Stars has connected Newark Venture Partners and our portfolio companies with an amazing group of interns from their program. Part of Newark Venture Partners’ mission is to help catalyze development within Newark’s technology sector – and having the opportunity to mentor Newark’s future workforce and its aspiring entrepreneurs has been a rewarding experience for our companies and our community,” said Dan Borok, Managing Partner for Newark Venture Partners.

The All Stars Project is a 100% privately funded national nonprofit organization, and a national leader in the field of Afterschool Development, a new way of engaging poverty. The All Stars Project believes that afterschool is the best way to bring youth from poor communities into the mainstream and spark their desire to learn and grow.

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