In the HR world, the “Great Resignation” has been the big talking point of 2021. But as veteran HR professional Sarah Rodehorst told Hypepotamus, companies have long struggled with handling involuntary terminations, which hit upwards of 14% of the workforce each year.
“Separations are time-consuming, they’re difficult, and they’re very error-prone,” she said.
Companies of all sizes have to navigate corporate policies, union rules, and employment laws, particularly when employees are let go during restructuring, M&As, or other involuntary terminations.
After starting out as a software developer, Rodehorst grew her career in the HR and compliance space in Atlanta at Connecture and ADP. Along with co-founder Janice Yu Edwards, Rodehorst started Onwards HR to provide an automated solution for companies working through involuntary separations.
Onwards HR helps companies aggregate employee information like commission, equity, and other employee information to automatically generate separation-related agreements through its risk mitigation platform.
While companies are often working through many separations throughout the year, most are done through a very manual and costly process, leading to headaches both on the HR and legal sides of the business.
This traditional lack of structure can also have a huge impact on a company’s bottom line, as many end up overpaying severance due to clerical errors.
While presenting at Venture Atlanta this year, Rodehorst shared the nightmare scenario in which one company overpaid an employee $500,000 during the exit process.
On average, the startup says it saves a company $4,700 per separation, and this year alone has streamlined over 1,000 separations.
Companies realized just how painful the process can be over the course of the pandemic when many were forced to reduce workforce numbers and are now dealing with the ramifications and legal problems associated with noncompliant involuntary terminations.
Onwards’ automated process, Rodehorst added, is about “helping companies really achieve equity” during the termination process and creating the most “positive experience for the exiting employee as possible.”
Beyond calculating severance and working through the paperwork process, Onwards’ platform assesses compliance and adverse impact to identify any potential bias in the termination. “We believe the separation process is actually the area where companies have the biggest risk of undermining their DEI strategies because it ultimately is a black box,” she added. “There are policies, but there’s really not an audit trail to be able to confirm that they’ve been consistently applied.”
Building HRTech in Atlanta
Onwards raised a pre-seed round from Atlanta-based Overline this year, presented as a seed-stage company on the Venture Atlanta 2021 stage, and has already turned heads across the HR space. Unlike most HRTech companies, which focus on the onboarding and hiring part of the funnel, Onwards HR has carved out a niche in the exit process.
This niche helped the team earn first place at the third annual Pitchfest at the HR Technology Conference this year.
While Rodehorst and Edwards both worked in Atlanta before, building Onwards HR in the city was intentional because of the strong local startup ecosystem and the number of large enterprise companies that could benefit from the platform.
Atlanta’s strong diverse talent pool and focus on social impact, Rodehorst said, are also important since Onwards HR looks to bring transparency to the exit process as a whole.
The team is also expanding in Atlanta, announcing this week that Jen Bender, SVP People Solutions Shared Services at Change Healthcare, is joining the Onwards HR Advisory Board.