Technology firms that target so-called “deskless” workers continue to reel in investment dollars.

San Francisco-based WorkStep Inc., which has a database of more than 1 million frontline workers and software that matches them with prospective employers, today announced it has raised a $25 million Series B round, bringing its total funding to $42.2 million.

The company’s core job-matching service is “like LinkedIn for the frontline,” said co-founder and Chief Executive Dan Johnston. More recently the company launched an application called Retain that provides a continuous feedback loop to measure employee satisfaction and understand the reasons why people leave or stay. It surfaces that feedback to designated leaders in the organization and also ties it to downstream results so organizations can better understand the factors that drive turnover.

An estimated 80% of the global workforce is composed of people who don’t sit at a desk, yet they have been largely forgotten in the drive to equip remote workers with knowledge-sharing tools. Venture capital firm Emergence estimates that only about 1% of software funding goes to software startups that target frontline workers. Its late 2020 survey found that 65% of deskless workers said their employer had not provided them with any additional technology to get their work done during lockdowns.

Johnston said the idea for the company grew in part out of his experience managing a warehouse where most of the workers were furnished by a staffing agency. “I saw how detrimental the legacy temp staffing model was; we were paying our agency $18 an hour and the employees were seeing $11 or $12,” he said. There was little connection between employer and employee.

Hourly workers turn over at a much higher rate than salaried ones and the cost of replacing a single person can run as much as one-third of their annual pay, according to Employee Benefits News. Retain “automates the process of collecting feedback at scale at key milestones,” by polling at intervals such as the seventh, 15^th, 30^th and 90^th days, which is when people are most likely to leave. Johnston said users of the application have reported turnover rate reductions of between 10% and 33%.

Why do people quit? Insufficient pay is actually not the biggest reason, Johnston said. The No. 1 turnover driver is lack of career growth, followed by jobs that don’t align to expectations, safety and health issues, poor orientation, lack of coaching and inadequate feedback. Pay comes in seventh.

Tech companies that target deskless workers are suddenly hot. When I Work recently raised $200 million for what it calls an “employee-first” scheduling platform that gives workers a say in their schedules. Legion Technologies has raised more than $85 million for a similar application that balances employer resource requirements with worker preferences and thus reduces turnover by between 25% and 40%. That jibes with several studies that report that half or more of American workers would take a pay cut to have more scheduling flexibility.

The investment was led by NewRoad Capital Partners LLC with new investors Latitude Ventures LLC and Engage Ventures LLC. Existing investors who participated include FirstMark Capital LLC, Prologis Ventures, Social Capital Ventures Inc. and Quiet Capital Management LP.

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