The latest big raise in the increasingly crowded performance management and feedback category is 15Five. They’ve raised $30.7 million in a Series B.
15Five has largely operated on the edges of the HR technology category, seen as more of departmental solution that gets implemented by managers that subscribe to the 15Five methodology: having employees set aside 15 minutes per week to answer 5 questions that roll up into standard reports. They’ve expanded that core philosophy to include 1:1 reviews, goal and OKR setting, self assessments, and a recognition social well. Like most apps in the category, they boast integrations into collaboration apps like Slack and middle market HRIS systems like Namely and BambooHR.
When it comes to performance management, what HR and talent leaders have learned is that change is just as hard there as it is everywhere else in an organization. On it’s face, replacing the annual review with a process that gets managers more engaged with employees makes a ton of sense. In reality, the market hasn’t been replacing the annual review which sets the baseline for salary increase/adjustments and any annual bonuses. What’s happening is more of an augmentation of the process with feedback integrated in the flow of work.
You can see it in our data from the Workplace Intelligence Report. We asked more than 1300 businesses with 1,000 employees or more in the UK and US about the frequency of their performance process. We also asked about the amount of time they spend on all people-related issues per month. 70% still run an annual performance process. 51% of leaders spend less than 3 hours per month on ALL people issues, including feedback and performance.
While $30.7 million sounds like a lot of money, we’re certain 15Five will need every penny of it to become competitive across the enterprise, not just in departments.
While the 15Five methodology has believers, HR tech that gets enterprise adoption allows for flexibility of process from customer to customer and even department to department. The features found in pulse surveys, recognition, feedback, and goal setting/tracking have made their way into most talent management and HCM platforms.
Then, there’s the issue of app-exhaustion. Leaders are becoming dubious of throwing another pulse survey, request for feedback, or work-related notification to employees mobile devices. For the enterprise, the spectrum of manager/employer to employee survey, feedback, communication, and collaboration is shifting rapidly to a platform. This not only has the employee experience in mind, minimizing the number of apps and notifications they have to engage with that are outside of the flow of work, but it also more directly delivers the prize that enterprise is still searching for: people analytics that can tie engagement metrics, feedback and performance metrics, and employee sentiment to business results.
This new breed of people communication and analytics platform is where 15Five’s competitors are all moving to very quickly.