Edtech for employee engagement: how startups can support onboarding, retention and a strong learning culture

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Emerge Edtech Insights

14 min readMar 15, 2024

Onboarding and employee engagement market map, by Emerge Education.

We’re building our annual list of the top emerging edtech companies in workforce development for 2024 with our Workforce Development board chaired by Donald H Taylor. As we do, we’re diving into the trends and opportunities for innovation along each step of the workforce development journey, for individuals and for organisations → from job discovery, pre-hire assessment and interviews to onboarding, upskilling, talent management and reskilling for the future of work.

In this second article, we’ll look at how edtech startups can help organisations and individuals solve their biggest challenges in onboarding, retention, employee engagement & communication, and organisational culture.

Future pieces will then plot these issues in relation to upskilling and talent management agendas.

The employee journey in workforce development

Read on for:

Challenges, trends and opportunities, including our predictions for the transformative impact of genAI
Views from sector experts, plus tips for founders
A mini-market map of key players and top emerging startups in this space

Keywords: onboarding, learning culture, employee engagement, wellbeing, mental health, perks, benefits, rewards, recognition, employee experience, communications, workplace culture

💡 Why it matters

Failure to engage new hires from day one is a key factor in employee churn — those who have a negative onboarding experience are, unsurprisingly, twice as likely to look for other job opportunities, and 20% leave within their first 45 days. (For context, the average tenure of a US employee hovers around 4 years.) According to Work Institute’s 2023 Retention Report, the vast majority of employee turnover occurs within an employee’s first year.

Onboarding, then, is critical to reducing time to productivity, improving long-term retention and guaranteeing workplace safety — but it’s also vital for building community and culture, and instilling a sense of belonging within your workforce. It’s well known that employees who are largely satisfied with their experience are consistently more likely to report high intent to stay at their current organisation and more likely to be a high performer.

“Employee engagement is a key indicator of your company’s health. If your blood pressure or cholesterol are too high, a quick fix won’t work. You need fundamental change.”
Donald H. Taylor, chair of workforce development edtech board and Emerge VP

🏈 State of play

The Covid-19 pandemic cast a spotlight on ‘bullshit jobs’ (conceptualised by David Graeber in 2018) and triggered a so-called ‘Great Resignation’, focused mainly in the US. The shockwaves, however, were felt much more widely, dialling up the importance of employee wellbeing. This focused organisations on understanding and managing the growth path of their employees, starting from onboarding all the way to happy leavers.
The 2024 Engagement and Retention Report, based on surveys of more than 5,000 people, found that two out of every five employees (41%) say they will definitely job hunt in 2024, with an additional 24% saying they aren’t sure yet. This has dropped since a high in 2021, when more than half of employees said they would job hunt, but overall job hunting intentions are still higher than they were pre-pandemic. The main reason given to job hunt in 2024 is better compensation, as the cost-of-living crisis begins to bite. (Again, this differs from previous years when career progression topped the list.)
What gets measured gets managed. A 2021 study by California State University, Northridge found that job satisfaction not only improves employee retention, but also boosts individual performance — suggesting that monitoring employee satisfaction metrics can bring short- and long-term benefits.
On the flip side, disengaged employees cost money — approximately 18% of their salary, according to Gallup.
Many organisations still rely on offline onboarding methods which are time-consuming, costly and ineffective. OC Tanner’s 2023 Global Culture Report found that only 43% of employees surveyed had an onboarding experience consisting of more than a one-day orientation and a packet of information about benefits. Another recent survey found that 52% of new hires feel undertrained after onboarding, with employees of small companies (66%) and remote workers (63%) suffering the most.
In this rapidly-evolving post-pandemic context, ‘employee engagement’ is perhaps the most overused and misunderstood term in HR which, at worst, becomes a kind of catch-all buzzword. Employees can have varied relationships with the software being used to ‘engage’ them, and with the activities that this software encourages. Culture comes first — organisations need to lead with a learning culture and find the technology to support it.
According to Glint data, having opportunities to grow and learn is now the number one factor that people say defines an exceptional work environment. Development opportunities are not in themselves as important to employees as employers might think, as this McKinsey research shows, but employers may be underestimating their contribution to a sense of belonging and feeling valued by your organisation. Learning can power organisational culture.
In short, successful organisations are learning organisations. L&D must lead on creating a shared understanding across an organisation of what learning is, how learning happens in the flow of work, and why it matters.

“The Great Reshuffle is slowly transforming into a ‘great negotiation’. I have read that 70% of organisations are facing a 10% drop-off rate of employees pre-joining, despite all the efforts put into sleek and fast recruitment processes — and I experienced even higher rates in scale-ups without a strong employer brand. Key reasons for this include a disconnect between the hiring and onboarding process, mismatches in candidate/employer expectations, easier access to global employers and unskilled/underwhelming hiring managers.
‘Revamping the onboarding process’ has been heralded as a key priority of HR ever since I started my career 25 years ago. In the age of automation and genAI, it’s still very much work-in-progress. The four C’s of onboarding — Connection, Culture, Clarification, Compliance (plus an “I” for inclusion) — must start from day -90 instead of day 1. Pre- and on-boarding needs to become an engaging but realistic ‘work sample’.”
Catalina Schveninger, corporate learning expert and Emerge VP

🚨 Challenges

HR teams need the right tools and the right data to play a strategic role. There are now plenty of solutions to automate payroll, manage shift-planning and securely store employee data, which should enable HR to focus on more strategic missions such as quality of life at work, learning and development, cross-functional talent management and future of work skills planning. But administrative tasks still account for 63% of their time. Ironically, the multiplication of tools and datasets means their jobs are becoming ever-more complex.
As Harvard Business Review pointed out recently, wellness programmes are like learning and development, or any other people-focused initiative: some demonstrate ROI better than others. That doesn’t mean the ideas are doomed to failure but rather, as we’ve explored before, there remains a persistent disconnect between the ‘impact’ HR often seeks to prove and the business value that tends to resonate with C-suite.
Big legacy players will put up a strong defence. SAP, Cornerstone OnDemand, Oracle and the rest have far too much invested in this category to go down without a fight, despite the challenges of retrofitting a legacy tech stack for the genAI-era. For the time being, there is a healthy market in selling these solutions because they serve the needs of traditional, compliance-driven HR. But the next-generation solutions in this category will become tempting acquisition targets. The big question will be whether any of these emerging players will have the opportunity to grow into major brands, or if they will be acquired by bigger players seeking to buy in pieces they need to remain competitive.

🔥 Trends

Just a few years ago, you would have been hard-pressed to find a sleepier category than employee engagement measurement. For a long time, it was the domain of big consulting firms such as Gallup, Aon Hewitt and Towers Watson (now Willis Towers Watson), as well as small internal teams at mega-enterprises. The approach was to field an annual survey, analyse the results and produce a lengthy report that no one would really read or act upon. But the post-pandemic competitive need to centre employee-focused culture, shifting workforce demographics and mobile-first capabilities for tech-driven pulse surveys have shaken things up. Companies that offer employee engagement surveys have certainly had their moment in the sun. LinkedIn acquired Glint. Workday bought Peakon. Perceptyx bought Waggl and CultureIQ. 15Five acquired Emplify. Culture Amp has attracted mega-investment as it has pushed into performance management. Last year Zendesk walked away from a $1.4b deal to buy Momentive, the owners of SurveyMonkey.
Many companies are still stuck trying to figure out meaningful approaches to measurement. Others are using measurement as a first step toward culture activation, adopting goals, feedback, recognition and robust analytics.
One aspect of employee engagement that’s flying under the radar is the need for deep, high-quality benchmarking data. Benchmarking data is vital for strategic decision-making, especially if bottom-up employee feedback is to be combined with meaningful coaching. UKG acquired one such in 2021 with the Great Place to Work Institute.
This has created a hybrid space in between engagement and learning, with continuous performance management solutions such as Lattice, 15Five and others operating across employee engagement and talent management. Similarly, workplace wellbeing solutions such as Virgin Pulse and Limeade saw an opportunity to improve employee engagement by gamifying efforts to improve employee health. The result is a set of cross-functional demands for dynamic, future-ready organisations.

🌍 Key players

Four years after the start of the Covid-19 pandemic, we are now seeing more clearly the long-term HR trends related to changes in work habits and employee priorities that are going to stick. HRtechs are no longer excluded from ‘super’ fundraising rounds: in October 2021, Personio, the German workflow automation platform for SMEs, raised $270m at a valuation of $6.3b, becoming one of the most valuable startups in Europe. The global employee engagement market is estimated at $77bn, with onboarding software alone another $10bn.

More recently, Munich-based employee enablement platform Zavvy raised $4 million in seed funding to help growing companies easily automate employee experiences that drive performance and increase talent retention with solutions such as onboarding, continuous development and connecting employees in hybrid setups.

“Learning cultures can’t be created from scratch. Every organisation has one. The question is whether it’s one that celebrates and supports learning, or one that ignores it.
To understand your organisation’s learning culture, just look at how you deal with failure — the lost customers, the projects that go wrong. Can employees talk honestly about what happened, and the organisation learn from it? If they can’t, you don’t just have a lousy learning culture, your organisation is doomed.
Employee engagement and learning culture are two aspects of the same thing — a positive workplace. Creating that workplace takes time, and trust. If your employees aren’t engaged, don’t try to fix it with superficial employee perks. Start creating a better workplace.”
Donald H. Taylor, chair of workforce development edtech board and Emerge VP

🔭 Who is getting ahead?

Read the full case study here.

Read the full case study here.

🔮 Predictions

We’ll see the crumbling belief in performance management create an opening. Employee engagement solutions share the ultimate goal of displacing talent management solutions as foundational. The opportunity here is to create and deploy software solutions that employees actually want to use and that provide measurable, meaningful insight into employee and organisational performance.
We’ll see more focus on innovation, not automation. The first wave of AI-powered solutions in this space have focused on optimising existing processes and workflows; nextgen solutions will fundamentally rethink talent processes instead of simply mirroring traditional analog processes.
We’ll see a flow of information that moves in all directions, not just from the top down. Learning and engagement communications channels in the flow of work will facilitate the exchange of information from the bottom up and horizontally across the org chart. The priority is on-demand access to information: pull, not push. This means designing based on how work actually gets done in today’s workplace: mobile, social, collaborative, employee-centric and focused on delivering strategic value.
We’ll see workforce analytics continue to morph into business analytics. Throwing out the performance review does create the challenge of how to manage and measure employee goals. Where workforce analytics have historically been firmly entrenched in talent management metrics (not least NPS and ‘satisfaction’ scores), we expect a continued push to integrate with non-HR systems such as financials, CRM, supply chain, etc to link employee engagement more concretely to business value.
We’ll see organisations thinking in much more integrated ways, so that pre-hire assessments flow seamlessly into a single view of an employee’s lifecycle. Platforms like Kinfolk and HelloHire use AI to help hiring managers generate customised onboarding plans to help new hires meet development objectives and connect quickly.

🎯 Opportunities for startups

GenAI engines of opportunity for workforce development.

In this category, we see particular opportunities for AI-driven solutions that offer:

Employee benefits solutions that reduce the pressure on employees so that they can fulfil their professional potential → Problem: Employees are struggling to juggle pressures across many areas of their lives. Solution: Support with issues such as financial education, elderly care and childcare for employees.
AI-powered Enterprise knowledge search → Problem: Enterprises have a huge amount of internal knowledge that is hard to tap into and find, adding friction to employees’ day-to-day experiences. Solution: Easier ways to discover and apply information that could either be horizontal or vertical.
AI-powered second brain → Problem: We constantly come across new information and struggle to retain it. Solution: Better capturing and processing of things you read or come across and helping you to apply it in your day to day. One big feature of this would be AI-powered automated tagging.
Learning networks and communities of learning → Problem: One of the most valuable ways to learn as part of a culture, yet not really scalable. Solution: Tech that enables masterminds/other communities to form and support each other.
Company-specific LLM for skill assessment → Problem: Tribal knowledge in companies is not systematically collected and organised to power hiring and development. Solution: Connecting all of a company’s performance, goal management and career development data to train a company-specific LLM that can power other applications/use cases such as hiring, performance coaching, feedback and career progression.

💎 Tips for founders

Focus on ecosystem integrations. Make sure your product clearly fits within the broader HR and workforce development data and tool ecosystem, and has an extended value chain vision. Odds are your early stage product won’t (and shouldn’t) be solving the full value chain of your customers’ problems. As such, don’t expect your clients to replace their longstanding SaaS infrastructure and download new software. Integrate with existing systems and data through APIs, and minimise friction and time-to-value while maintaining an ambitious product vision that can deliver more value over time in the workforce development journey.
More specifically, integration with collaboration and communication solutions becomes imperative. “Is Slack integration on the road map?” This is an oft-asked question of product leads over the past year. Why? Because employees don’t want to leave the system they work in to accomplish any HR-related tasks. Seamless integration with non-HR work systems is the key driver of user adoption, and therefore success, in this category. One desktop is the goal.
Sell to employers, build for employees. You have two clients to satisfy: buyers are more important for the short run, end users for the long-run potential of your business. It is incredibly rare to come across a workforce development product that employees can’t get enough of. Unused learning budgets, products sitting on the shelf and a lack of time are the norm for L&D. This will change once founders start building more products with end users uppermost. Strong pitches to buyers can open up big markets but even then only products that employees genuinely want to use will bring sustainable growth and help close the skills gap.
Be creative with selling. Workforce development is not just about selling to L&D leaders. Find ways to engage managers and the rest of the C-suite in the process. We see too many companies banging their heads against the wall and complaining how selling to L&D/HR is impossible. Companies should find ways to speak HR leads’ language and empower them to use the right language and questions to communicate benefits and understand priorities from C-suite colleagues. In parallel, they should find ways to directly link with other leadership personas with a direct business interest in the product. This could mean selling a recruitment product as a foot in the door for HR or an indispensable tech tool for engineers. Research from BCG below shows that many C-suite roles are involved in a lot of purchasing decisions.
Use tech to create communities. Chatbots can support parts of employee onboarding and in-the-flow-of-work processes by providing answers to basic questions and generating necessary document links. But according to Harvard Business Review, 56% of new employees want a buddy or mentor. Employees report that 1:1 time with their direct manager and socialisation are crucial to good organisational culture, so design solutions with communication and community in mind.

🔗 Read on

Read more news, views and research from the only fund backed by the world’s leading education entrepreneurs, in Emerge Edtech Insights.

📣 Call to action

We are now building our list of the top emerging edtech companies in WD in 2024.

👇 If you have seen an exciting company in this space, please tell us in the comments 👇

Our list analyses 100s of companies operating worldwide, using public and private data — it is crowdsourced, and voted on by our Workforce Development edtech action group, led by Donald H. Taylor.

Please share companies you think we should consider in comments 👇and join us on 2 July to discover who has made the final list!

🙏 Thanks

At Emerge, we are on the look-out for companies (existing and new) that will shape the future of workforce development over the coming decade.

If you are a founder building a business addressing any of these challenges in L&D, we want to hear from you. Our mission is to invest in and support these entrepreneurs right from the early stage.

So if you are looking for your first cheque funding do apply to us here: https://lnkd.in/eWi_9J5U . We look at everything as we believe in democratising access to funding (just as much as we believe in democratising access to education and skills).

Emerge is a community-powered seed fund home to practical guidance for founders building the future of learning and work. Since 2014, we have invested in more than 80 companies in the space, including Colossyan, FutureFit AI and Skills Trust.

Emerge Education welcomes inquiries from new investors and founders. For more information, visit emerge.education or email hello@emerge.education, and sign up for our newsletter here.

Thank you for reading… I would hugely appreciate some claps 👏 and shares 🙌 so that others can find it!

Nic