They have a name that sounds like a bakery, they operated straddling Brexit threatened London and, for some people; still, – Riga, Latvia. Despite these seeming obstacles, the modular human resources (HR) management platform CakeHR has kept expanding its services, growing its user base and gathering accolades for the innovativeness and popularity of its solutions. The company now has around 30 000 employees using its services at small and medium enterprises (SMEs) in around 50 countries around the world.
CakeHR co-founder Kaspars Upmanis recalls how the company started with his web development company offering other small companies a so-called leave application/module where any employee could request vacation, sick days and various other kinds of paid or unpaid leave.
Kaspars explains that he used to have a digital agency that did web development. The company built a simple leave management application as a side project. It was churning along. The team didn’t pay much attention to it until they realized that it had actually grown to some decent monthly recurring revenue. And at that point, the company shifted focus and moved the team focusing 100 percent on CakeHR. They started targeting smaller companies, then adding additional functionality by implementing additional modules. This modular structure helped them to win customers globally because the team can build its product around customer needs and requirements.
The company, though now operationally based in Latvia, got started and got most of its early customers in Great Britain because it was easier at the time to make recurring payments for CakeHR’s services with a credit card. It was not possible in Latvia at the time. In 2015, Norberts Erts, also from Latvia, came aboard as the other co-founder of CakeHR and, as Kaspars says, acted as a kind of “governor” to keep him on track and moving away from the web development mindset to growing the company using his skills in programming and managing programmers.
Comprehensive and Customer-Oriented Services
Step by step, CakeHR developed a total of six HR-related, employee accessed and used modules that customers – mainly SMEs – licensed according to their needs. As Kaspars recalls that CakeHR started offering leave management, to which they had added timesheets, shift scheduling, performance, expenses, and the latest one – recruitment. CakeHR’s product suite contains everything what one need from finding an employee to managing his or her onboarding to the last day of the person with the company.
CakeHR, or rather its SME customers now have some 30 000 employees and their data on the platform, which brings the company to the threshold of having the data to use for industry-wide analytics related to, say, retention rates in a particular field. It lists Latvia’s national airline airBaltic and the audit and consulting company Deloitte among its customers. As Kaspars explains, at the company level, the CakeHR suite offers analysis of key indicators such as employee retention rates, trends in employee feedback (reactions to new HR policies or practice and other issues). Employee activity on the platform and employee numbers are close to a kind of “tipping point” where the data gathered will make the use of sophisticated and predictive analytics to enhance current services viable in the near future.
However, as Kaspars notes, SMEs are a diverse customer group – while some HR departments will soon appreciate a tool, based on “big data” from their industry to flag employee satisfaction or retention trends as they develop and remedy ‘the bad” and accelerate “the good” – other customers still need help with basics.
A Cakewalk Over the Challenges
Citing some significant issues as writing as onboarding checklist, Kaspars says that the company hasn’t sorted out the lower level problems in order to need something like predictive AI (artificial intelligence). And the problems CakeHR is solving are actually the real day-to-day issues it has.
Looking back on the challenges CakeHR has faced, Kaspars says that thanks to a frugal approach, the company has been self-funded. Its rapid expansion to around 50 countries has also been a challenge because HR departments have to follow local labor laws and practices, that can differ between countries.
According to him, the biggest challenge is linked to exposure in different countries. CakeHR has more than 50 countries and each country, obviously has different local laws and regulations. However, the company has been successful in managing to adapt to these customer need.
Finally, there is the obvious “cake” issue and Kaspars says, yes, there have been calls asking for wedding and birthday cakes and the people answering the phone politely explain that this is not exactly what CakeHR is all about.
Kaspars explains that the idea with the name was that HR management should be ‘a piece of cake’ and now that the company has the suite, that ‘it is like a cake with several layers and one can take as much as he needs.’
Significant Recognitions Across Industry
The company has not gone unnoticed. This year CakeHR got recognition from Newsweek, the US-based magazine. They made a “top 20” business tools ranking, and the company was included on it. The IT-focused research and advisory company Gartner has a B2B (business to business) marketplace of applications listing the top HR software in the world. CakeHR is currently number eight on that list.
So far, the secret of CakeHR’s success has been the classic formula of doing what customers want and following their lead in developing and adapting services. Focusing on the customer that’s a very big thing. It’s what’s been a driver all these years as well as the user interface and generally the ease of use. Customers are coming to CakeHR with specific business needs or specific workloads they have or something from real-life situations.
That’s very good because it allows the company to think of and implement the right solution for them. Since everyone is using the same automatically updated version of the suite or module version, when CakeHR build something good for one specific customer, that’s actually being rolled out at the same time to everyone.