Feature
The global deskless workforce comprises around 2.7 billion people representing about 80% of all workers. Yet, despite their prevalence, these employees have historically been overlooked by technology providers, according to a study by Emergence, an early-stage long-term investor in workplace innovation.
Large portions of the workforce in agriculture, education, healthcare, retail, hospitality, manufacturing, transportation and construction are deskless, and many of them are frontline workers — those crucial to the daily functioning of our societies. It took a worldwide pandemic for companies to fully realize their importance and the necessity of implementing better technology to support them.
“The pandemic forced every company to think of and label their frontline workers as what they are, which is essential,” said Dan Johnston, co-founder and CEO of WorkStep, an employee engagement platform. “It created this mentality of, ‘This workforce is the engine of our company. This workforce is our business.’"
“And when you combine that shift in mentality with structural labor shortages that show no signs of improving, you have this moment in time when every company is starting to say, ‘It’s a business imperative to be a business of choice.’”
Johnston calls the result a power dynamic shift, where workers have more power than they did before — and it has been gaining ground across organizations of all types and sizes.
A Massive Opportunity
Perhaps one of the most public displays of this mentality shift was Amazon, with the announcement by CEO Jeff Bezos that the retailer’s mission would add a focus on employee wellbeing alongside its long-time commitment to customers.
“We have always wanted to be Earth’s Most Customer-Centric Company,” Bezos wrote in his 2020 letter to Amazon shareholders. “We won’t change that. It’s what got us here. But I am committing us to an addition. We are going to be Earth’s Best Employer and Earth’s Safest Place to Work.”
For many employers, this realization of the vital importance of frontline workers has been accompanied by a new appreciation of the need for more effective tools to support this group of employees in their roles.
In its report, Emergence wrote that these workers “have continued to suffer from using clunky technology solutions — or even manual, paper-based processes.” This mismatch between worker needs and the tools they have available has opened up a huge opportunity for transformation.
This comes at a time when companies are realizing how much they need to rely on digital technologies just to get things done, said Cris Grossmann, CEO of Beekeeper, an all-in-one frontline worker productivity app.
“We see a lot of companies saying, ‘It’s time to evolve; we need to drive digital transformation. We need something very concrete that empowers the workers.’"
All of these changes have accelerated private equity’s budding interest in the frontline workforce management technology space. Skedulo raised $28 million in a Series B in 2019, followed by a $75 million Series C in 2021. In 2020, WorkJam and Connecteam raised $50 million and $120 million respectively in Series C funding rounds. In 2022, Beekeeper joined them with a $50 million Series C, and WorkStep raised a $25 million Series B.
“The interest of the investment community is increasing,” said Grossmann. “The level of conversation we’re having with investors right now is a whole other level than what it was a few years ago.”
Related Article: Employee Apps Emerge to Engage Frontline Workers
A Good Market for Technology Vendors
The increasing population of deskless employees has propelled the mainstreaming of these technologies.
In 2021, Microsoft began creating tools and functions targeted at frontline workers, such as a walkie-talkie app on Teams. And in March 2023, the company went all-in, announcing the launch of Microsoft 365 Frontline, a comprehensive frontline worker management solution.
As we move into 2024, these technologies represent a promising pathway for entrepreneurs and investors. More dynamic shifts are likely, as the field rapidly matures.
“I would expect in the next couple of years a big, big consolidation of this space,” said Grossmann. “And I think platforms that have a very varied set of capabilities and that integrate naturally with other solutions will definitely be the ones that can win this frontline success space.”
Consolidation is already underway. In 2022, Beekeeper announced integration with eduMe, a mobile-based training platform for deskless workers, and the acquisition of operational workflow platform Lua.
Also in 2022, online learning provider Go1 and digital frontline worker platform WorkJam announced a partnership, and frontline enablement solution Axonify acquired employee communication platform Nudge.
Then, April 2023 saw Indian frontline workforce management platform BetterPlace acquire Malaysia-based Troopers, provider of pre-screened, part-time frontline workers to businesses.
Such movement is likely to continue apace, as new entrants work to create the solutions that employers and their workers need to succeed during a tight labor market that shows no sign of easing.
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“It doesn’t take a macroeconomic prognosticator to see that the challenge is likely to persist if not get worse,” said Johnston. “The labor market is going to remain strained for a long time. That makes for a good market for technology vendors.”
And when every organization wants to be a better employer with happier employees who stay longer, he said, then “every company understands the ROI of solving this people problem.”
