Julien Codorniou
Hospital nurses. Construction crews. Garbage collectors. Factory workers. Flight attendants. Restaurant servers. An estimated 2.7 billion people work in an environment without regular access to a desk, a mobile phone, or a PC. And yet, shockingly, little technology is being designed for these frontline workers.
Major tech players, investors, and entrepreneurs focused relentlessly on workplace innovation for white-collar workers like themselves for decades. This has brought a revolution in the office for a narrow band of employees while leaving far too many rank-and-file workers behind who’ve never been touched by what Bill Gates calls “the magic of software.”
A blue ocean market for “IT that leaves no one behind”
In 2015, I was part of the team that pioneered Workplace at Facebook, the company’s first SaaS venture. Initially targeting knowledge workers and tech companies, we serendipitously stumbled upon the untapped “frontline tech” market in 2016. This pivot proved strategic, amassing over 10 million paying users from renowned organizations like Starbucks, McDonald’s, Kering, Leroy Merlin, Walmart, Lixil, and Petrobras. Our original underestimation of this market segment proved to be a blessing in disguise as we embraced the competitive void it presented. I witnessed firsthand the rising demand for connectivity among frontline-heavy organizations of all sizes. Moreover, I saw the tangible impact frontline-friendly software had on employee engagement, retention, and productivity.
Tech is on the cusp of a SaaS revolution for the 99%. Because this market is open and ready for disruption, I see an opportunity for savvy software entrepreneurs to build the Microsoft or the Salesforce of the frontline workers’ world.
Conventional wisdom held that building products for these workers could have been more efficient and impracticable due to the restrictive nature of their working environments and IT budgets. Still, a confluence of trends is changing that mindset. Not only is it becoming clear that tech can improve conditions for these employees, but also there is a mounting sense of urgency that the benefits of SaaS workplace solutions must be extended to those who have been overlooked.
The pandemic brought into stark relief just how vital frontline employees (aka “critical workers”) are for keeping our lives and economy moving in ways that we had taken for granted for far too long. They watched as white-collar employees at the central office received increased workplace flexibility while they continued to grind away.
John Waldmann, the CEO of Homebase, a leader in the frontline tech space, told me, “two-thirds of workers have not and will never work from home. The public conversation and technology investment are way over-indexed to hybrid work, which is your archetypal ‘high class’ problem affecting a limited number of workers. Everyone values flexibility, but for most workers, it means something entirely different — and technology can help.”
A recent Microsoft report on frontline tech noted that 51% of non-management employees don’t feel valued, and more than 57% wish employers were doing more to address physical and mental exhaustion. A recent Beekeeper survey showed that four in 10 frontline workers have quit in the last year, and managers and head office staff don’t know how to fix it.
But for Big Tech execs and entrepreneurs who lack firsthand experience in these professions, it probably has been noticeable how to use tech to fix these problems just now. Fortunately, we are seeing a groundswell of interest from the tech industry to develop ways to serve these workers. Additionally, AI enables the creation of innovative products and experiences specifically designed for frontline employees, making previously impossible tasks achievable and significantly enhancing their work environment.
Historical headwinds
Despite the massive total addressable market, the emergence of significant frontline tech platforms has been slowed down by various factors.
The diversity and fragmentation of the sector, ranging from SMBs to global giants across industries like manufacturing and logistics, make it challenging to create universal solutions, resulting in fewer comprehensive software platforms. Pricing limitations further complicate matters, as the varied nature of the sector and lower GDPs in many countries where frontline workers are based lead to lower average contract values, often below what is typical even for essential email services (around 5$ per month per user), making it less appealing for investment. The regulatory landscape, particularly stringent in the U.S., forces many providers to focus on specific regions to simplify compliance and operational hurdles.
Additionally, there is a perception of lower tech literacy among blue-collar workers, fueling a belief that they are less likely to adopt or benefit from sophisticated software. This demographic is often viewed as a mobile-only, no-email workforce, and the slower pace of digital transformation in many blue-collar sectors, often due to the physical nature of the work and a historical focus on immediate operational needs over worker productivity tools, has also delayed tech adoption.
Furthermore, upper management’s lack of visibility and support for frontline roles leads to fewer dedicated tech solutions. The unclear immediate ROI of software investments in these sectors makes it difficult to justify spending, all contributing to the slow emergence of big frontline tech platforms.
Tailwinds
Despite the daunting challenges in the frontline tech market, a significant shift is occurring.
I recall a conversation with the CEO of Honest Burgers, Phil Eeles, whose forward-thinking use of technology to empower employees left a strong impression on me. I remember vividly his response when asked to justify his IT investments in frontline tech: “Happy employees = happy burgers = happy business.”
Eeles manages his restaurant chain with the ethos of a software company, firmly believing in the value of investing in employee tools and convinced that happy employees lead to a thriving business.
A friend of mine, Sharan Pasricha, CEO of Ennismore, told me that the “next CEO of the very hospitality company he created could be working today as a waiter in a hotel in Scotland” and that “he needed tools to help identify her, share her best practices as fast as possible with the rest of the company, promote her and reward her.”
This perspective isn’t unique. In 2021, the global market for frontline employee SaaS apps was valued at $21.3 billion and projected to rise to $68.9 billion by 2028, marking a CAGR (compound annual growth rate) of 17.6% from 2022 to 2028.
Frontline workers are increasingly vocal about their desires for greater job transparency, stability, work-life balance, connection with colleagues, flexibility, health benefits, career advancement, autonomy, and problem-solving tools. As they strive for excellence and recognition, their satisfaction becomes a cornerstone for resilience, performance, productivity, retention, and advocacy for their employers, signaling a transformative era for frontline workforce technology. In an industry where churn is 40%+, every percentage of retention gained directly impacts the bottom line.
Where are the main opportunities?
Frontline, and more generally, serving hourly workers, is an excellent opportunity for emerging software vendors, but “every part of the work experience is different in ‘hourly work.’ The innovation here will come from something other than a company focused on professional work. We have to rethink every part of the ‘HR’ stack,” John Waldmann from Homebase told me.
Tools like communication, task management, training, health and safety monitoring, and real-time feedback represent sectors where SaaS can provide immense value. Yet, these tools are still in the process of being democratized and evenly distributed across industries. With the advent of general AI and more sophisticated chatbots, there’s potential for innovative solutions that are just beginning to be explored.
Employers are starting to lay the groundwork for these advanced technologies by taking initial steps toward adoption. There is a growing recognition of the need for specialized tech solutions explicitly tailored to the needs of the frontline workforce, indicating a ripe market for development and investment in these areas.
In frontline workforce management, SaaS applications are revolutionizing task management and scheduling by offering real-time updates and efficient coordination tools, exemplified by companies like Homebase, Sona, Connecteam or Combo. Shift marketplace platforms further enhance flexibility in scheduling and finding replacements, with Shiftsmart leading in this space. Payroll and HRIS systems such as All Gravy or Homebase streamline the payment and management of wages in customer-facing roles, while communication and collaboration tools from providers like Yoobic, Flip, Workplace from Meta, and Humand facilitate better team interaction and information sharing.
The importance of training and onboarding in the face of rapid technological changes is addressed by innovative, flexible solutions from WorkJam and Beekeeper. Additionally, ensuring health and safety compliance, a critical aspect of frontline work, is made more manageable through real-time reporting and analytics tools offered by companies like Beams and eduMe.
Give workers a voice
Technology can give frontline workers a voice and help them feel more valued, part of the team, and effective. This engagement can reduce staff turnover and build community and a recognizable and attractive company culture.
Once an ignored segment, frontline worker technology is now positioned at the convergence of technological advancements like AI, evolving work dynamics, and market potential driven by the need for greater efficiency, automation, compliance, and connectivity in various industries.
Companies of all sizes that make these investments will gain a competitive advantage. Entrepreneurs who build the tools and platforms that address this growing need — and yes, the VCs who back them — are poised to create a robust new market. There’s no doubt there will be one day a Microsoft of the frontline.
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