As the battle for talent in Silicon Valley rages on, more tech companies here are recognizing the importance of how company culture affects their ability to attract and, more importantly, to retain their employees. But putting your finger on the pulse of employee happiness isn’t easy, and it usually isn’t cheap.
In the past, companies looking to gain insights into employee happiness would turn to expensive outside consultants to measure how well they’re doing relative to their peers. Either that, or HR departments would run their own internal surveys to collect data, but they then might not have the tools or expertise to apply the learnings from those surveys.
A startup out of Australia called Culture Amp wants to provide an easy, more cost-effective solution to conducting employee surveys and getting real, actionable insights back from them. And while it’s already attracted a number of major clients along the way, the company hopes to expand further thanks to $6.3 million in Series A funding led by Felicis Ventures, with participation from Index Ventures and Blackbird Ventures.
Culture Amp provides a platform that enables human resources departments to get a better feel for how employees feel about the organization they work for, and how their company culture stacks up against competitors in the industry.
By combining a knowledge of psychology, statistics, and user experience design, Culture Amp helps human resources departments to prepare surveys that get at the heart of the issues are most important to employees, and what the companies they work for can do to improve their experience.
That starts with taking a template of typical employee survey questions and working with companies to choose those which are most relevant to the insights they would like to learn. “We’re a product company, not a service company, but we’re also not zero touch,” Culture Amp co-founder and CEO Didier Elzinga told me by phone.
Being sure to pick the right questions is key to ensuring the quality of the data that’s returned. But none of that matters if employees don’t actually take a survey, or if they don’t take it seriously.
To ensure that surveys are completed, Culture Amp has done a lot of work around the user experience around taking them. Once a survey is prepared, employees are sent a link and asked to answer approximately 40 or 50 questions about the company and how they feel about it.
Survey questions typically take the form of a five point agreement scale, of which employees are asked to determine how strongly they agree with a statement about their current employer or workplace conditions. The goal, according to Elzinga, is to prepare surveys in a way that they could be completed in just a few minutes.
Culture Amp’s real competitive differentiator is not its ease-of-use in setting up or taking surveys, but in the speed with which it can provide actionable insights back to companies and HR departments.
While consultants can take weeks to complete an analysis of employee happiness and things management can do to improve it, Culture Amp provides real-time feedback once a survey is completed. But what’s more important to most companies is how that information is displayed.
“It’s a difficult problem to take the data and present it in a way that allows people to make good decisions. We spent an enormous amount of time determining not just what we show you, but what we don’t show you,” Elzinga told me. He said Culture Amp not only helps design the surveys but also helps companies learn what to do off the back of the data.
Part of that is understanding not just how employees feel within an organization, but how their results stack up against their competitors. Culture Amp has aggregated responses from various different clients to enable companies to compare the answers their employees give against the broader industry.
To compare their results against the benchmark, companies must provide an anonymized version of their own data to become a part of it. So far, every client has agreed to do so, Elzinga told me.
Companies pay between hundreds of dollars a month to thousands of dollars a month to use the platform, according to Elzinga. They typically introduce new surveys at the cadence with which they can make actionable adjustments within the organization, he says. Some conduct surveys every three months to help set quarterly objectives, while others run surveys with smaller groups of employees every couple of weeks to track how they are doing over time.
Regardless of how they use Culture Amp, the combination of lower cost, ease of use, and immediate feedback has already led a number of clients to sign up, including the likes of Uber, Airbnb, Pandora, Adobe, Pinterest, and Warby Parker, among others. And it was that client base which, in turn, helped attract Felicis and others to invest.
According to Felicis managing partner Aydin Senkut, the firm took an interest after hearing that four or five of its portfolio companies mentioned they were using Culture Amp in their organizations. Like many companies in Silicon Valley and beyond, they wanted to find ways to better retain talent in an increasingly competitive market for tech workers.
Of course, employee retention isn’t just a tech or Silicon Valley problem, even if many of Culture Amp’s early clients came from that realm… It’s a global problem.
That’s why Culture Amp plans to keep its headquarters, as well as its research and development team, in Melbourne, Australia where the company was founded. With the funding, the company will be expanding its headcount and opening a sales and customer success office in Silicon Valley. But for the most part, it’s happy to stay put as it sees a global opportunity for expanding its offering around the world.
“From the very beginning, we always thought of this as a global company, as opposed to just an Australian or a Silicon Valley or a New York City company,” Elzinga said. While there’s a huge opportunity for serving the English-speaking world, Culture Amp has bigger ambitions, and believes it’s well positioned to serve a growing number of businesses in the Asia/Pacific region who will also be thinking about employee retention.
“The world is a big place, and [it’s] moving to the East,” Elzinga said. “Depending on how you look at it, Australia is the Western-most tip of the East or the Eastern-most tip of the West.”
In the meantime, the company’s new funding should help it take its next small steps to global domination.