When accelerated changes in the workplace meet with stringent regulation mid-pandemic, the resulting growth for the HR Tech sector is extraordinary. Maya Dadoo, CEO and co-founder of Worky, a leading HR tech start-up based in Mexico, sustains that the country’s thriving HR tech sector gives a preview of what’s to come in other markets in Latin America and beyond.
The shifting environment brought about by the pandemic has led employers all over the world to search for new ways to manage remote and hybrid workers, but few (if any) countries have simultaneously had to adapt to drastic regulatory reforms while still dealing with the effects of the pandemic.
Mexico’s government was in the process of implementing profound labor reforms before the pandemic even started. It has brought about three key regulations over the past year: abolishing outsourcing of workers, implementing a home office payroll stipend, and enforcing psychosocial risk surveys for all employees. This month could bring a fourth one; congress is voting on a policy that seeks to double vacation days up to 12 in an employee’s first year at work.
These new regulations, together with an added spotlight on HR managers, are leading to strong innovation in the sector. The need for comprehensive HR solutions bundling HR and Payroll has become a necessity. HR teams simply cannot effectively manage all this operational and regulatory complexity with their traditional solutions, which in most cases continue to be spreadsheets, emails chains, or on-premise tools. There is one key concept: HR offerings are only now starting to be collaborative as HR cloud solutions gain penetration in Latin America. Finally, real-time information is at an organization’s fingertips.
To date, 15 Latin American Tech companies, including Worky, have raised rounds greater than the US $1M since 2018. Dadoo points out that HR Tech companies in Mexico are highly attractive to investors given that they have the highest profit margins and growth rates of any SaaS segment with year-on-year sales growth of 45% according to a recent study by Endeavor. For instance, Worky grew its user base by 224% in 2021. In the same period, interactions within the platform grew by a factor of 10X, signaling how employees start engaging with HR systems and their need to start solving their own HR needs.
“My co-founders and I are very optimistic about growth rates in the industry,” states Dadoo “Not only is HR Tech one of the hottest sectors globally for Venture Capital right now but we’re also located in the region with the fastest growing and most new unicorns.” She adds that Worky has already gained backing from some major investment funds.
Launched in 2018, Worky is the cloud solution for Mexican companies to manage human capital without paperwork and with agility. We understand that HR administration is one of the most important areas in companies, however, it is the last to incorporate technology to its processes. That is why we built a tool so that, in an innovative and secure way, all small and medium-sized companies can adapt to the changing HR environment.