UPDATED 10:22 EDT / MAY 11 2021

BIG DATA

Legion raises $50M to change the rules of hourly workforce scheduling

Legion Technologies Inc., a maker of software for scheduling hourly workforces, today announced it has raised $50 million in a Series C funding round, bringing its total funding to $85.5 million.

The Redwood City, California-based company said it grew nearly 400% last year, fueled by the need for businesses to schedule their hourly workers more rigorously during COVID-19 lockdowns. The company’s platform uses artificial intelligence to help companies optimize workforce deployment in such industries as retail, distribution, manufacturing, hospitality and food service.

Legion’s software-as-a-service platform automates demand forecasting and overlays it with hourly schedules so businesses don’t get caught shorthanded or with too many idle workers. What’s different about Legion’s approach is that it also allows workers to specify their own scheduling requests and attempts to reach a balance between employer requirements and worker preferences.

No going back

“The gig economy has brought this need to the fore and there’s no going back,” said Chief Executive Sanish Mondkar, a former executive at Ariba Inc. and SAP SE who founded Legion in 2016. “It’s not just helping employers deploy their workforce more efficiently but thinking about it also from the employee side.”

There are more than 73 million hourly workers in the U.S., according to the Bureau of Labor Statistics. That’s in addition to a red-hot market for gig labor, in which people work temporary jobs often for several employers. That market has been growing at three times the rate of the U.S. workforce overall since 2014 and is on track to comprise a majority of American workers by 2027, according to a survey commissioned by Upwork Global Inc. and Freelancers Union Inc. Statista Inc. expects gig work to generate $455 billion in billings in 2023, up 53% from 2020.

Legion says its software not only improves efficiency but also employee retention. “Lots of studies have shown that schedule ownership is, in most cases, higher than pay as a factor in retention,” Mondkar said. “Over half of attrition comes from schedule conflicts.”

The software connects to a company’s line-of-business applications to uses machine learning to forecast demand at the daily level. The algorithms “will tell you how many sales you’re projecting and derive how much labor you need to meet that demand,” Mondkar said. “We generate a schedule to put the right person at the right place at the right time.”

Tenfold return

The company claims most of its customers realize a tenfold return on investment in the first year with savings in labor efficiency, scheduling time, regulatory compliance and employee satisfaction. Involving employees in the scheduling process also typically results in a 25% to 40% reduction in employee churn. That’s a plus in industries such as retail, where annual turnover rates can exceed 60%.

Mondkar had no background in hourly workforce management when he started the company. Following his departure from SAP, he said, “I took time off and dug more into this phenomenon out of curiosity. I came to the conclusion that there’s a great business opportunity because it’s a large area and there hasn’t been a lot of innovation in this space.” His research included working several hourly jobs, including as a barista at Philz Coffee Inc.

The funding round was led by Stripes Group LLC with participation from existing investors Norwest Venture Partners VI-A LP, First Round Capital, XYZ Venture Capital LLC and Webb Investment Network. Legion said it will use the financing to support new customers and expand into additional vertical markets, including healthcare, call centers, financial technology and branch banking.

Photo: Unsplash

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