Tenacity, a big data startup that uses social incentives to increase employee retention rates, boost productivity and make workers happier and healthier, has moved its headquarters to Seattle’s University District.
The young company, born in an entrepreneurship class at MIT and a graduate of the Techstars Kansas City accelerator program, emerged from research in MIT Professor Alex Pentland’s media lab a few years ago.
“I’ve seen most of the great cities in this country and many all over the world,” said Tenacity CEO Ron Davis. “Seattle is one of the best cities there is, hands down, and I want to be here.” He said the city offers a healthy mix of talent, ambition, and entrepreneurial spirit.
Tenacity’s Davis recently moved to Seattle, and the company’s new CTO, John Vogel is from Mercer Island. Vogel is well known in Seattle tech circles, previously serving as CTO of GoAhead Software and co-founding Four Creeks, purchased by OneCommand in 2006. At this point, Tenacity’s COO, Hanna Adeyema, is the only member of the team still in Boston.
The company dubs its new approach “social physics,” saying it blends medical science and machine learning to engage employees in underserved job functions.
The goal? Gain insight into how social engagement can keep employee morale up and lower turnover rates.
In that regard, the concept is similar to Bellevue-based Limeade, which also focuses on increasing retention and happiness of employees. Limeade, which recently acquired online presentation company 9slides, raised $25 million near the end of 2014.
“A healthy employee is a happy employee, and also [one] that stays loyal to the company, and that loyalty translates to the bottom line,” said Tenacity’s Sam Wright. “Turnover rate is a very high cost to business operations, so our goal is to take a chunk out of that, and to truly affect the bottom line through that increased retention of employees.”
What the research at Tenacity’s core has shown is that social engagement actively influences the health and happiness of employees. Happy, healthy, engaged employees work efficiently and — perhaps more importantly — do not leave their employers, Wright said.
Tenacity has chosen to begin in the contact center industry, and is currently piloting its service with a large telecom company.
At many contact centers around the world, high employee turnover is a huge issue. New hires have to learn the ropes, and it takes months for them to become efficient enough to be profitable. While Tenacity is currently focusing only on contact centers, Wright said that the service is widely applicable, and could also be effective in other industries such as retail.
Through the Tenacity program, employees are encouraged to set goals and work hard to achieve them. The goals range from reducing stress to fitness monitoring.
Tenacity used social incentives to structure these employees’ reward systems, using a buddy system known as “accountability partners.” Any time that an employee achieves a goal, he and his partner receive Amazon gift cards.
Tenacity uses these kinds of constructions to build social capital within organizations and positively impact workplace culture. “The overall goal is to establish social fabric and social engagement within the call center so that [everyone] is more engaged with their fellow employees,” said Wright.
In its first test, Tenacity said the goal was to reduce the contact center’s monthly attrition rate by around one percentage point. The actual results exceeded expectations. Over three months, the pilot group’s attrition rate dropped by 4.4 percentage points per month.
Tenacity has raised about $400,000 from former U.S. Treasury Secretary Larry Summers, Techstars and three executives at Fortune 100 companies.