The Critical Need for Frontline Worker Solutions

Securing and maintaining a skilled frontline workforce is arguably more vital now than ever before, particularly given the challenges presented by the ongoing pandemic.

WorkStep, a startup established four years ago, has emerged to address this need. The company focuses on assisting large supply chain employers in attracting and retaining employees. A recent announcement detailed the completion of a $10.5 million Series A funding round, supplementing prior seed funding totaling $6.7 million, which included both equity and convertible notes.

Series A Funding and Key Investors

FirstMark Capital spearheaded the Series A financing, with continued support from Prologis Ventures, a returning investor and strategic partner.

According to Dan Johnston, co-founder and CEO of WorkStep, their Employee Lifecycle Management (ELM) software platform is engineered to streamline the entire employee journey. This includes sourcing new frontline workers, facilitating onboarding and training, and enhancing overall job satisfaction to encourage long-term retention.

Johnston’s personal experience managing a warehouse in Portland, Oregon, over a decade ago provided firsthand insight into these challenges.

The Impact of the Pandemic on Frontline Workers

The COVID-19 pandemic has underscored the essential role of frontline workers – those involved in food service, package delivery, and similar critical functions.

However, increased reliance on supply chain labor has coincided with unprecedented turnover rates, Johnston notes. This has left many companies understaffed and placed significant strain on existing employees.

WorkStep’s Solutions: Transparency and Reduced Churn

WorkStep asserts it delivers complete transparency throughout the employee lifecycle to HR, recruiting, and operations leaders. This transparency is intended to help companies minimize employee churn.

The company initially developed its cloud-based Hire™ offering and subsequently launched its Retain™ product last autumn.

“The pandemic has compelled organizations of all sizes to prioritize the well-being, safety, and satisfaction of their frontline teams,” Johnston stated.

Customer Base and Reach

WorkStep’s clientele encompasses hundreds of industrial, logistics, transportation, and warehousing companies across North America.

This includes regional 3PLs (third-party logistics companies), distribution centers, and 16 companies featured on the Fortune 500 list. Notable customers include Kroger, Alpine Food Distributing, and TransPak.

The company reports having connected with 500,000 supply chain workers to date.

Proven Results and Financial Performance

WorkStep claims its Retain offering has resulted in turnover reductions of up to 29% for a Fortune 100 food and beverage company, as demonstrated in a case study.

These reductions translate into significant cost savings related to replacement and retraining expenses.

The launch of Retain last fall spurred a doubling of WorkStep’s business in the latter half of 2020. This growth enabled the company to achieve profitability in the final two months of the year.

Future Growth and Investment

Despite not being in immediate need of additional capital, WorkStep recognized an opportunity to accelerate its growth and decided to pursue funding.

“This round was strategically timed,” Johnston explained to TechCrunch. “The issue of turnover within this sector has become a primary concern.”

The new funding will be allocated to more than doubling the current team of 14 employees across engineering, product, sales, and customer success this year, with a goal of tripling the team size by the end of fiscal year 2022.

Investor Confidence and Long-Term Vision

Adam Nelson of FirstMark Capital was involved in WorkStep’s early conceptualization and believes the company is addressing a substantial market opportunity.

“We believe WorkStep’s key advantage over existing solutions lies in its rejection of temporary staffing as a primary solution,” Nelson told TechCrunch. “Instead, they view it as a symptom of a significant economic inefficiency stemming from employers’ inability to effectively find, train, and retain qualified personnel.”

Nelson added that WorkStep’s comprehensive approach to the employee lifecycle, coupled with data-driven insights, empowers frontline workers and enables employers to be more proactive and informed.