Why We Invested: Claira
Heartland Ventures recently led an investment round in Claira, a competency analytics engine that helps employers both better utilize their existing talent and optimize hiring. Why?
Heartland regularly conducts an internal “Pain Point Meeting’’ where we discuss the operating challenges our investors’ businesses, and broader corporate stakeholders, are facing. These firms include manufacturers, logistics firms and construction companies all across the Midwest with revenues typically between $50 million and $2 billion. Since the inception of this meeting — well before Covid — there has been one consistent challenge that arose in each and every discussion: labor. Industrial firms across the Heartland constantly struggle with sourcing talent as well as onboarding, engaging, training and retaining those employees they do find.
Throughout our hundreds of discussions with CHROs, CEOs, line managers and the people those folks are looking to attract, two things became clear: (1) this is a long-term problem — it’s not going away at the “end” of the pandemic or any other time soon, and (2) existing HR best practices are not effective.
The number of Americans actively employed or actively seeking work has been in a state of general decline since the year 2000. The same can be said about the rate of population growth since at least the early nineties. Combine these macro-trends with the particular difficulty in attracting younger Americans to positions at industrial businesses and it’s no wonder that so many employers across the Heartland struggle to fill open jobs and keep the employees they do find. Traditional sourcing strategies like posting roadside placards, placing radio ads, using job boards like Indeed or leveraging word of mouth no longer work. And when it comes to retention, firms can no longer assume that even a well-compensated employee won’t jump to another business. A new approach is needed.
This is the reality Katie Hall recognized as she founded Claira. After a decade of working on the issue with multinational corporations and the federal government, Katie established herself as a thought leader in workforce development, as recognized by the Forbest Next 1000 list. She’s also a Midwest native with first-hand experience working in manufacturing. So Katie understands the talent dynamics inside industrial businesses better than just about anyone.
Claira comes at the problem from the starting point that hiring effectively is the most difficult thing an organization can do. Recognizing the macro-level hurdles confronting industrial firms, an employer’s first move when looking for a new resource should be to look internally. Claira empowers firms to do this by applying machine learning to create a dynamic digital twin of a company’s human capital. By taking the knowledge that Sally in accounting speaks fluent Spanish out of the head of just her manager and surfacing it instead to all managers across the firm, Claira enables business leaders to close a customer service Spanish-language gap more efficiently. And given the correlation between the utilization of one’s competencies and that same person’s job satisfaction, Claira’s competency-based approach increases employee retention. At the same time, the business-wide map of all employee competencies helps identify gaps, opportunities for upskilling, predictions for future workforce needs as well as diversity concerns.
Claira also provides customers with a marketplace containing competency-based profiles of thousands of external candidates looking for jobs today. As with the digital twin assessment of existing personnel, these profiles map more accurately to real world job functions and thus reduce the risk of bad hires. And because the marketplace goes hand in hand with an employer’s existing competency map, hiring managers are shown candidates for critical openings at the same time their hiring needs arise. That’s why Claira customers have decreased their time to hire by over 60%. And that’s after finding savings by filling openings first with current employees rather than bringing on new workers.
When it comes to human capital management, employers have to find a better way — and Heartland believes Claira is that way. We’re excited about Katie and her team’s ability to help employers unlock their employees’ hidden talent, better their employee engagement and optimize hiring. This is the solution our friends across all industries have been waiting for.
For more information, please visit Claira or contact Conor McGuinness directly at conor@heartlandvc.com.
