Health IT

Q&A: OnShift CEO Mark Woodka hopes to maintain momentum in 2011

Mark Woodka hopes he can keep OnShift Inc.’s recent hot streak going. The Cleveland- based company develops makes staffing software for long-term care facilities recently pulled in a $2.3 million round of investment and has seen its customer base balloon from 26 to nearly 200 during the last year.

Mark Woodka hopes he can keep OnShift Inc.‘s recent hot streak going.

The Cleveland-based company that develops staffing software for long-term care facilities recently pulled in a $2.3 million round of investment and has seen its customer base balloon from 26 to nearly 200 during the last year.

Notable clients include Massachusetts-based Five Star Quality Care Inc., which had $1.2 billion in sales last year, and Iowa-based Life Care Services LLC.

Now CEO Woodka hopes to use OnShift’s latest funding to grow its sales and marketing staff to help the company acquire more clients. OnShift says its Web-based scheduling software can help clients reduce labor costs by preventing overtime, mitigating regulatory risk and improving efficiencies through automated scheduling.

Woodka joined OnShift in 2008 after having worked as a consultant for the company, which was founded a year earlier. Previously, he was vice president of sales for Cleveland information technology company Flashline.

Woodka spoke with MedCity News about the company’s most likely exit scenario, its biggest competitor and why now is a great time to profit from helping nursing homes manage their staffs more efficiently.

Q: Why does OnShift focus on the healthcare industry when there are a lot of other industries that likely have staffing issues?

A: The primary reason we focus on healthcare is that the healthcare industry has a very strong need. There are a lot of regulatory issues around staffing levels, and staffing consumes between 50 to 70 percent of these organizations’ operating costs. In addition, there is downward pressure on government reimbursements for Medicare and Medicaid, so the industry has a significant focus  on managing labor costs today.

Q: What do you see as the biggest advantage that OnShift’s software provides to customers?

A: Our No. 1 differentiator is ease of use. We never forget that our end-user may not be a technically adept person, so we provide a lot of functionality in an easy-to-use platform. We also help customers save a lot of time. Let’s say you’ve got 15 nurses, and one is sick. What customers would do before us is get on the phone to try to find a replacement, which can take hours. Or, they’d use a staffing agency, which is very expensive.  For most of our customers, before OnShift, it took three hours to fill an open shift. With OnShift, it takes 5 to 15 minutes. So it’s a huge time-savings for customers.

Q: Talk a little about your latest fund raise. What do you plan on doing with it, and do you have any plans for another round?

A: We’re going to focus our investment on sales and marketing. We’ve gone from 26 customers to 200 in the last year, so this market is hot. We believe that expanding sales and marketing will help us grow more quickly. We have 10 people now in sales and marketing, and we’ll probably grow our sales team to 14 or 15, and then grow our customer service team to help manage the influx of new accounts.  We see a path to profitability with this most recent investment, but if our current trajectory continues, we will probably raise another round to be able to further accelerate our growth.

Q: Who do you consider your biggest competitors in the employee scheduling market?

A: Our biggest competitor is Kronos. They’ve been around since the late ’70s, so they’re the 800-pound gorilla in the time and attendance, or time clock, market. They’re by far the one that we run into the most.

Q: In the last year, your customer base has undergone a huge increase. What has OnShift been doing differently that it wasn’t doing before?

A: We’ve seen more market acceptance of our product and the need in the long-term care market is being felt more acutely among providers, so there’s a lot more interest in what we offer. We also shifted our focus to larger enterprise customers, and that certainly has had an impact.

Q: What’s OnShift’s most likely exit scenario?

A: Our most likely exist is probably an acquisition by a strategic partner, but the market for what we do is huge so I wouldn’t rule out an IPO. We’d be of interest to organizations in the workforce management space, human resources services or health information technology companies. Any of those three could emerge as a likely suitor.