Martin Trenkle and Jannik Keller really wanted to found a company. And not just any hip start-up with a cool product to brag about at parties, quite the opposite. “We deliberately wanted to address a boring topic,” says Trenkle. “We specifically looked for an industry with outdated structures.” The two industrial engineering students thought of construction or real estate, but then came up with recruitment. “Because there are just so many companies that work inefficiently.”
The result of their market research and foundation was first called Campusjäger and is now called Workwise and is one of Germany’s most successful start-ups in human resources work. Workwise is a platform that primarily allows small and medium-sized companies to find applicants for jobs.
The two founders have known each other since school and then studied economics together in Karlsruhe. They didn’t have any money for their start-up, so they rented out a room in their flat share and slept on the sleeping pad on the floor themselves. It was clear: your company had to start making money immediately. “Those were the really wild early days,” says Trenkle. “Investments and venture capital and things like that weren’t even known to us as freshmen.”
And it worked. Campusjäger was a digital placement of working students, soon Trenkle and Keller hired their first employees, the turnover and the team doubled every year. The founders, now 29 and 30 years old, dropped out of college. They no longer had to sleep on the floor. They now have more than 140 permanent employees and not only place students and young professionals, but also all other workers – for a fee of usually 18 percent of the annual salary. “We just hit a nerve,” says Trenkle. “Especially in smaller companies, one person often does the human resources work and also bookkeeping and all sorts of other things. There is a great need for professional support there.”
The Workwise founders are not alone in experiencing that the need is great. Personnel work, also known as Human Resources (HR), is booming in times of a shortage of skilled workers. Companies are taking this area, which was once neglected as a soft topic, more and more seriously and are increasingly willing to spend more money on it, for example on better software to help with the search for new employees. Accordingly, the number of start-ups that promise a business opportunity with HR technology and services is increasing. In 2015 there were only 69 HR start-ups in Germany. In 2022 there were a total of 310 in Germany, Austria and Switzerland, the shows “HR Startup Monitor” of the Munich University of Applied Sciences in cooperation with the management consultancy Quantum Partners. Almost half of the young companies deal with personnel selection and marketing.
Many of the HR start-ups can hardly save themselves money, venture capitalists and other investors are very interested in the booming industry. According to the Industry Analysts from Work Tech Investors have already given $11.2 billion in venture capital to fledgling HR tech firms around the world in the first three quarters of this year alone. In 2021 it was a total of 17.9 billion – a record.
There are now a number of HR unicorns, as start-ups are called, that are valued at at least one billion euros, including Gusto from San Francisco, Darwinbox from Singapore, Coachhub from Berlin and, since the last round of financing in October, Factorial from Barcelona. The German star of the industry is Personio from Munich, one of the most valuable start-ups in Europe, which now has around 1000 employees and produces and sells software that wants to take over and simplify all HR processes in companies. The pandemic has given a boost to the digitization of HR work, because many employees working from home can only be reached digitally and, for example, cannot invoice expenses on paper.
Martin Trenkle, Founder of Workwise.
(Photo: private)
“Sometimes I come into the office and think: awesome.”
While it’s far from a unicorn, Trenkle and Keller’s company, Workwise, this year also accepted venture capital for the first time, €12 million from Armira Growth and LEA Partners, after the founders proudly went without capital for nearly eight years to have got along with big investors and to work profitably. On the one hand, the shortage of skilled workers is a driver because many smaller companies simply cannot find people without help, but on the other hand it also makes the search more difficult for digital recruiters like Workwise, says Trenkle. “The pressure is great.” The more tense the situation, the less Workwise has to explain how important good HR work is and how expensive it is to leave a position vacant for a long time.
Workwise not only wants to fill vacancies, but also advise on how companies can better present themselves as employers, what salaries are appropriate and how to integrate new people well into the company. “There are still many managing directors, especially in small companies, who don’t realize that recruiting is actually the most important issue,” says Trenkle. “Any product is only as good as the people who make it.” On the one hand, interest in HR work is increasing due to the shortage of workers, on the other hand, many managers are also increasingly concerned with the other major crises, such as inflation and supply bottlenecks.
This year, too, Trenkle predicts, his company will double both sales and the number of employees. Workwise does not publish exact financial figures. The students with the sleeping pads from back then are now bosses of almost 200 people. Sometimes it’s still a pretty overwhelming feeling, says Trenkle. “On the one hand it was a development, you don’t become managing director Martin overnight,” he says. “But I still come into the office sometimes and think: awesome.”