Not All Digital Workforce Vendors Are Immune To COVID-19

Image credit: iStockphoto/ksenija18kz

Sydney HR tech company Deputy was on the way to Unicorn status, but then COVID-19 hit.

While many tech businesses could ride out the pandemic in safety, and some even thrived, this was not the case with Deputy.

The reason is that the company’s business model is more dependent on the daily usage of its clients, many of which are in industries such as hospitality and travel, which were severely hit by the pandemic.

Deputy provides software for businesses to manage employee rosters, days off, and holidays. Many of these workers are casual employees. Their work dried up in 2020 as the businesses closed and went into hibernation. As clients suffered, so did Deputy.

The company was valued at as much as AUD 423 million in late 2018 when it raised  AUD 111 million in Series B funding. But the number of shift workers logging in to the platform halved in three weeks after March 2020, almost sending the company into oblivion.

Even a pivot to rostering COVID-19 testers in the healthcare sector was not enough. One third of the workforce was retrenched.

It made for a wild ride for founder Ashik Ahmed, who had created the company with the concept of a rostering platform available on mobile devices, which used automation to match the best workers to the best shifts.

Killing pre-pandemic chaos

Deputy began in Australia in 2000, built on the concept of helping fast-growing companies manage the exponential increase in employee administration which came with rapid growth.

It made for rapid growth for Deputy too. The company now has more than 250,000 workplaces subscribed to its platform, representing over 100,000 businesses in Australia and the US, which delivers around half of the revenue.

Some of Deputy’s customers are iconic Australian businesses, such as the Bondi Vet Hospital, which has its television show in Australia.

While the company uses the latest technology in the care of animals, the practice's success was creating administrative headaches for founder Dr. Kate Adams.

By her admission, her staff rostering practices were “chaos.”

“There were Excel spreadsheets, text messages, and worse, people didn’t really know exactly what days they were supposed to be working,” she said.

Deputy, she says, has “revolutionized” her work, and she spends less time on administration. A mobile app enables staff to clock in and clock off, and this is visible to management.

It has also improved communication through the workplace, as Deputy has a news feed tool through which staff share important messages and contribute to workplace conversation.

Designed for SMEs

Deputy works well for smaller companies that grow fast but don’t want to spend resources on HR managers and prefer an outsourced, cloud-based solution with as much automation as possible.

Another typical case study is Azzuri Concrete. It began in 2004 with two employees but quickly grew to 10 and now has more than 300 staff, many of them contractors.

For Azzurri, old-style paper-based record-keeping needed six people. But, even then, there was no clear visibility of working hours for each worker on site. In addition, payroll and subcontracting disputes were starting to grow as the company expanded, and these incidents were proving expensive.

A 2014 decision was taken to automate as many of the company’s business systems, and Deputy was one of these.

Peter Martino, Azzurri’s managing director, estimates the switch to Deputy saved the company around AUD 160,000 in headcount alone.

The ability to keep track of staff is another, and there is a safety dimension.

“In any given time, we’re working on multiple building sites, which can be 50 to 100 levels high and located several kilometers away from each other,” said Martino.

Deputy has a mechanism where supervisors can see who is on any site, has finished work, and left for the day. It enables forward planning and has reduced the number of pay disputes.

In Australia, many companies have been caught up in non-compliance with wage accords, and “wage theft” is a hot issue. Deputy helps drive compliance, tracks an employee's time at work accurately, and integrates this data with payroll to minimize payment errors.

Comeback… maybe

Like the global economy, Deputy may be coming back into its own as vaccinations increase and the world re-opens.

Its business model may be tied closely to the vagaries of economic activity. While that proved a risk in 2020, it might deliver a reward in 2021.

Lachlan Colquhoun is the ANZ correspondent for CDOTrends and HR&DigitalTrends and the editor of NextGen Connectivity. His fascination is with how businesses are reinventing themselves through digital technology and collaborate with others to become completely new organizations. You can reach him at [email protected].

Image credit: iStockphoto/ksenija18kz