WorkHere Pivots From High-Tech to High-Touch in Turnaround Attempt

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Feb 23, 2018

“Oh yeah, they’re definitely out of money.”

There are fewer red flags quite as red as “no more money” if you’re a startup. So, when someone close to WorkHere, wishing to remain anonymous, told me the well had run dry, I went digging. I’ve known of the Indianapolis-based company and the guys who launched since its early days. They showed me the demo more than two years ago.

The idea, using the power of geotargeting, unique to mobile devices, was to connect job seekers with local opportunities. In the initial model, sales reps would visit small businesses, get them to join the service and even promote the app with a Yelp-like sticker in the window, and use the platform to interested candidates.

Since launching, it has raised over $2 million in private capital and tout tens of thousands monthly active users. I wrote about them last year. “So far, it looks like it’s on to something,” I wrote in 2017. “The organization touts 40,000 app users, as well as 100 paying customers, including FedEx, Goodwill, and McDonald’s. Additionally, it’s growing into nearby metros Cincinnati and Chicago. Headcount is projected to rise north of 20 by the end of the year.”

Sitting down with the management team, it’s safe to say things didn’t go as planned following that initial interview in 2017. Wrestling with its initial business model and long-term prospects, the company laid off its two sales folks in November, raised an additional $600,000 in bridge funding and pivoted from a high-tech focus to a high-touch one.

“We moved from passive engagement to active engagement,” said CEO and co-founder Howard Bates. “Job seekers were downloading the app and we had great companies using our service, but the two weren’t talking to each other. It became clear there needed to be something in the middle.”

That something became what WorkHere calls community coaches. With currently seven on staff, coaches work with employers to find out what kind of candidates they need and then connect directly with job seekers in the database to point them in the right direction. Guidance such as not being late to an interview with FedEx is a given. Seems obvious, but the company says that it is surprising how few people have such experience, especially in entry-level, part-time, and seasonal jobs. “Too many people seem to think that just registering for a service means getting a job,” said Bates.

With the change in direction comes a change in pricing as well. In the old model, WorkHere expected small businesses to pay a fee of around $500 per month to use the service, which wasn’t working. In the new model, employers pay for applicants. Numbers from $50 to $200 per were thrown around in my interview. It works with customers to determine the actual amount.

With vendors moving more and more toward automation, the WorkHere move seems counterintuitive to current trends, but leadership feels confident based on feedback. “An intern outperforms automation in our model,” said Mike Seidle, cofounder at WorkHere. “Everyone from employers to ad agencies and especially job seekers love the fact that we have real people bringing everyone together. The overwhelming opinion is jobs are important enough to talk to a human.”

Time will tell whether or not the new direction will work. Competitors like Snagajob already do part-time, entry-level, and seasonal pretty well. However, WorkHere says current customers are very happy. “I strongly believe after using WorkHere is a valuable tool especially for the DC Warehousing/Retail/Service industry, for employers and for job seekers,” said Rachel Alonzo when she was HR Coordinator at GNC Logistics. “WorkHere is a fantastic application and I’m eager to see it grow.”

“With other recruiting tools we hire one out of 100 candidates. With WorkHere we hire five out of 100 candidates,” added Dave Zapp, CFO of Crew Carwash.

To drive job seeker traffic, WorkHere believes it has cracked the code of creating hyper-focused ads based on geofencing, a mobile-specific strategy of showing advertisements only to users in a very specific area. It uses this strategy with a variety of social media platforms, such as Facebook and Snap. Once a job seeker downloads the app, a community coach goes into action.

With an eye toward the future, the company is looking to expand nationally and move beyond its original city-by-city strategy. WorkHere is also looking to add credentialing to its service, so job seekers can prequalify themselves for specialty jobs. Additionally, the company is actively looking to raise a Series A round of funding.