- The Work From Home (“WFH”) trend has benefitted HIRE’s current and future prospects as well as its candidates;
- Exiting the COVID-19 pandemic, several industries cannot find qualified candidates and how HIRE can help, and;
- HIRE Technologies is poised to benefit from both WFH and return to office trends.
We continue our discussion with Mr. Dealy to understand how HIRE Technologies fits into the HR staffing and consulting industry and how its acquisition strategy (including Pulsify, HIRE’s most recent acquisition) positions the Company for growth.
Q: Simon, we can name a few industries that have been slow to adopt Software-as-a-Service (“SaaS”). Is the HR industry slow to adopt as well?
A: Certain segments have been slow to adapt. We see large portals like LinkedIn that recruiters gravitated to years ago. On the short term or “gig” side, Fiverr and Upwork are popular in a market segment we currently do not serve. However, several established companies like Trinet, Paycom, Workday, Recruit holdings, and Paylocity have successfully extended SaaS technologies to the larger HR industry.
Q: Interesting. Soto confirm, HIRE does not compete against platforms like Upwork and Fiverr?
A: That is correct. Those businesses do not compete with us; Fiver, Upwork, and Toptal are essentially dis-intermediating the traditional the gig economy staffing business. In the short-term we are moving our business mix towards more on-occurrence permanent placement staffing, which characteristically offers higher margins than contract staffing, and which will see significant growth as economies start to recover from impact of COVID-19. With the addition of Pulsify, we have begun to add high-margin, recurring revenue, human capital related SaaS products into our “hidden” distribution network made up of managers and executives that we have placed into client operations.
Q: Can you shed some more light on SaaS delivered, value-added solutions that can be offered through your platform in the medium term?
A: We have the foundation to build several, HR-relevant, value-added solutions that we can sell through our existing customer relationships. By virtue of our business, we already have deep relationships with key decision makers. They provide us with the ideal sales channel to generate incremental revenue. With Pulsify for example, managers can better engage their teams and manage performance. Proprietary tools on the platform, such as the Net Manager Score, give managers predictive metrics to drive engagement and reduce turnover. With WFH expected to continue in some form even after COVID, this use case should remain relevant across our customer base.
Q: Beyond partnerships with major HR industry firms, HIRE also has been active on an acquisition strategy.
A: Human Resources is an industry ripe for consolidation, and it’s fair to categorize HIRE as a Human Capital industry consolidator. In the last two quarters of 2020, we closed three acquisitions. Our most recent acquisition was Pulsify, a cloud-based people management platform that makes it easier for businesses to build engaged and high-performing teams. Strategically, Pulsify gives HIRE a foundation for our SaaS aspirations. We have more opportunities in our acquisition pipeline, which is only growing.
HIRE Technologies acquisitions
Q: Your most recent acquisition was Pulsify in April. Can you give us some of your thoughts about that acquisition?
A: Pulsify is an important foundational acquisition for us. Pulsify raised US$1.1 million in an initial funding round led by prominent tech executives, including the co-founders of Okta (NASDAQ:OKTA) and Hubspot (NYSE:HUBS) — two of the largest SaaS companies in North America, highlighting the credibility and quality of the team at Pulsify. In a previous life, the founder of Pulsify was the CEO of a VC-backed company. The company grew quickly to almost 50 employees. As a first-time CEO he realized that he had to learn how to manage people and got help aligning people around strategic goals, doing regular 1-on-1s, the importance of understanding morale, and managing perception. It was a crash course on how to manage a team by plugging into a structured, easy to follow, and effective operating system. This operating system changed the way he thought about team management. And this operating system became Pulsify. Pulsify facilitates and guides the touch points between a manager and an employee in an easy to use, intelligent and actionable way. Pulsify gives managers predictive insights which makes manager to employee communications better.
Q: How does Pulsify fit into today’s employment model?
A: Whereas WFH has created opportunities for candidates, it has also created challenges for managers and team leaders. Today, many companies have embraced a hybrid work environment increasing the need for more choreographed communication between managers and employees.. Pulsify helps companies parametrically understand employee morale across the organizational chart by using data driven approaches to guide decision making. Over the past 15 months, individuals and teams have become more siloed due to WFH. How they operate, engage, and get motivated has also changed with the lack of daily office interactions.. Being in an office helps leaders naturally identify dissatisfied workers and how to resolve their frustrations. This is far more difficult under WFH, and Pulsify helps mitigate these risks for our clients.
- What the three acquisitions that closed in the back half of 2020 bring to HIRE;
- How HIRE values acquisition targets and how it structures deals, and;
- Details about HIRE’s revenue profile.
The information and recommendations made available through our emails, newsletters, website and press releases (collectively referred to as the “Material”) by Sophic Capital Inc. (“Sophic” or “Company”) is for informational purposes only and shall not be used or construed as an offer to sell or be used as a solicitation of an offer to buy any services or securities. In accessing or consuming the Materials, you hereby acknowledge that any reliance upon any Materials shall be at your sole risk. In particular, none of the information provided in our monthly newsletter and emails or any other Material should be viewed as an invite, and/or induce or encourage any person to make any kind of investment decision. The recommendations and information provided in our Material are not tailored to the needs of particular persons and may not be appropriate for you depending on your financial position or investment goals or needs. You should apply your own judgment in making any use of the information provided in the Company’s Material, especially as the basis for any investment decisions. Securities or other investments referred to in the Materials may not be suitable for you and you should not make any kind of investment decision in relation to them without first obtaining independent investment advice from a qualified and registered investment advisor. You further agree that neither Sophic, its, directors, officers, shareholders, employees, affiliates consultants, and/or clients will be liable for any losses or liabilities that may be occasioned as a result of the information provided in any of the Material. By accessing Sophic’s website and signing up to receive the Company’s monthly newsletter or any other Material, you accept and agree to be bound by and comply with the terms and conditions set out herein. If you do not accept and agree to the terms, you should not use the Company’s website or accept the terms and conditions associated to the newsletter signup. Sophic is not registered as an adviser or dealer under the securities legislation of any jurisdiction of Canada or elsewhere and provides Material on behalf of its clients pursuant to an exemption from the registration requirements that is available in respect of generic advice. In no event will Sophic be responsible or liable to you or any other party for any damages of any kind arising out of or relating to the use of, misuse of and/or inability to use the Company’s website or Material. The information is directed only at persons resident in Canada. The Company’s Material or the information provided in the Material shall not in any form constitute as an offer or solicitation to anyone in the United States of America or any jurisdiction where such offer or solicitation is not authorized or to any person to whom it is unlawful to make such a solicitation. If you choose to access Sophic’s website and/or have signed up to receive the Company’s monthly newsletter or any other Material, you acknowledge that the information in the Material is intended for use by persons resident in Canada only. Sophic is not an investment advisor nor does it maintain any registrations as such, and Material provided by Sophic shall not be used to make investment decisions. Information provided in the Company’s Material is often opinionated and should be considered for information purposes only. No stock exchange or securities regulatory authority anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. Sophic and/or its principals and employees may have positions in the stocks mentioned in the Company’s Material and may trade in the stocks mentioned in the Material. Do not consider buying or selling any stock without conducting your own due diligence and/or without obtaining independent investment advice from a qualified and registered investment advisor. The Company has not independently verified any of the data from third party sources referred to in the Material, including information provided by Sophic clients that are the subject of the report, or ascertained the underlying assumptions relied upon by such sources. The Company does not assume any responsibility for the accuracy or completeness of this information or for any failure by any such other persons to disclose events which may have occurred or may affect the significance or accuracy of any such information.
The Material may contain forward looking information. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible,” “projects,” “plans,” and similar expressions, or statements that events, conditions or results “will,” “may,” “could,” or “should” occur or be achieved or their negatives or other comparable words and include, without limitation, statements regarding, projected revenue, income or earnings or other results of operations, strategy, plans, objectives, goals and targets, plans to increase market share or with respect to anticipated performance compared to competitors, product development and adoption by potential customers. These statements relate to future events and future performance. Forward-looking statements are based on opinions and assumptions as of the date made, and are subject to a variety of risks and other factors that could cause actual events/results to differ materially from these forward looking statements. There can be no assurance that such expectations will prove to be correct; these statements are no guarantee of future performance and involve known and unknown risks, uncertainties and other factors. Sophic provides no assurance as to future results, performance, or achievements and no representations are made that actual results achieved will be as indicated in the forward looking information. Nothing herein can be assumed or predicted, and you are strongly encouraged to learn more and seek independent advice before relying on any information presented.