Closer (New Work Relationship Tech)

Latinamerican firms (SMEs), are facing this challenge: Without a budget they are forced to innovate, include their workers and adapt to unusual business circumstances. Just in Ecuador, 508.000 jobs will disappear and 233.000 people will go to the informal sector. Similar projections have been made for all countries in Latinamerica.

Firms must negotiate a new working relationship. Closer provides a platform for employers and workers to reach dignifying agreements based on negotiation theory. Furthermore it trains those who stay for digital adaptation and better teamwork. It also avoids informality as those who they have to let go are also trained in entrepreneurship and preparing for the labor market. All of this at no additional cost to workers or the company since it is covered with the cost of agreements.  Closer is the ideal massive channel for SMEs and workers to improve working agreements and upskill workers in the region.

The new normal has brought market volatility, it has also generated massive unemployment and a necessity to change labor conditions. In Ecuador, the business ecosystem is composed of one million productive units, which create three million jobs. SMEs are 99% of that network and give 68% of national employment. On may 31st, economic losses ascended to more than 15.000 million dollars and 66.400 people  had lost their jobs. Besides, most firms have taken emergency measures reducing salaries without asking their workers. 

70% of the three million jobs will be affected by the new circumstance. Globally, the situation is similar but in much greater proportions. Right now, Brazil, Mexico and Peru are the most affected countries by the pandemic. So, in Latin America more than 60 million jobs are in real danger. 

At Closer we are asking ourselves this question: How can we make it easy for firms to negotiate long term agreements with workers and upskill them even if they stay or if they have to leave? Can we help to stabilize the relation and then retrain workers to match employer demand or guide them to start their own venture? How can we do this with empathy, dignity and justice?

Closer is a human centered designed technology based system. In order to rebuild trust, we created an algorithm which creates fair negotiation combinations with minimal human intervention, reducing subjectivity and friction between parties. The process is as follows: 

1) We prepare the employer to communicate to workers, in an emphatic and direct way, what will happen.

2) Our algorithm generates ranges for a fair agreement to be reached based on the previous salary, the hours of work needed by the firm, the cost of retraining and the length of the agreement, among other parameters.

3) The worker enters the platform and chooses how much time the agreement will last and/or his or her new salary from the ranges created. At all times, the worker can verify the agreement conditions (such as holiday regime and social security) and legality. 

4) Once the agreement is reached, the worker receives online workshops. If the relationship continues, he or she will receive intrapreneurship training so they can collaborate with firm reactivation. And if relationship does not continue, he or she will attend two kinds of workshops: a) entrepreneurship workshops to face informality and get over it; and, b) preparation for job interviews. 

We have two target populations: SMEs owners and SMEs workers. Before creating Closer we interviewed dozens of workers so we can understand what they feel and need in the current situation. Also, we are interviewing owners everyday. With both sides’ perspectives, we try to find common ground between them on a daily basis.  We want to avoid the escalation of conflict due to isolation, lack of empathy and misunderstood identities (we are not just employers and not just employees), so we are learning and improving the system everyday. Right now, we are also working with allies in other Latin American countries to better adapt the solution to their legislation and territories. 

We are addressing their needs in the following way: 

1) Employers don't have clarity about how to negotiate or how to establish fair negotiation ranges. They also find the existing solutions are expensive and complicated (lawyers), so we automatized the solution for them. 

2) In their own words, employees are feeling sad, excluded, without opportunities, betrayed and not committed to the firm anymore. We not only give them voice and control, but also retrain them so they can thrive in the new normality.

We are aligned to the challenge as we enable small and new businesses to prosper and create good jobs, generating fair and fast strategic savings but also giving workers durable skills needed to stay apace with the changing job market (both in digital skills and entrepreneurship). Most importantly, we have access to the channel to capture workers interest to upskill at the cost of firms to retrain both those who stay and those who they have to let go.

We are doing this under the scope of moral leadership as we are convinced this is aligned with the Challenge's core.

Traditional solutions for labor negotiation in SMEs may include: direct owner participation, an internal delegate (generally CFO or CHO), a lawyer or even a mediation center. Though online training in English is varied and has different price ranges, it is rarely available in Spanish.

The problem with traditional solutions for labor negotiation is that they tend to take care of their own interest, many times abusing their power over workers (sometimes voluntarily and other times unconsciously) excluding workers from the negotiation process and many times forcing them to quit their jobs. Besides, the emotional stress and possible conflict in ordinary courts increase costs for both sides in the traditional agreement channel dehumanizing the process. 

Our solution innovates as it almost eliminates every conflict point, closing agreements faster than any other option in the market, while allowing the employers to be fair without effort. Furthermore, we train workers in digital skills and entrepreneurship without increasing the budget. Moreover, we charge the price only when the agreement is 100% closed. 

We are also changing training market as we use the same budget to make an agreement and to train workers not only in what SMEs needs but also in what they need (in case they are leaving the company), for starting a new venture or preparing for the job market. In other words, with solidarity and empathy, SMEs can invest in their workers even when they are forced to leave the firm.

Our technology consists of an algorithm that estimates no negotiation costs, calculating both sides’ worst scenario. Once it performs the calculation, it divides the cost between both sides in a fair manner, returning the amounts and ranges that should be fair for both sides. 

Online training processes for both employers and employees are supported in the platform, because without the recognition of dignity in the agreement processes which allow people to move on, trust would be lost and any training would be useless and even counterproductive. 

The technology works under the same principles as negotiation theory and has been adapted to the current labor situation.

You can use our test account in https://portal.bridgel.legal/authentication/login 

User joseantonio@l4i.company

pass AbfiOsw

More information about the theory we use can be found in: 

Getting to Yes by Roger Fisher, William Ury, and Bruce Patton

Women Don't Ask: The High Cost of Avoiding Negotiation─and Positive Strategies for Change by Linda Babcock and Sara Laschever

Negotiation Genius: How to Overcome Obstacles and Achieve Brilliant Results at the Bargaining Table and Beyond by Deepak Malhotra and Max Bazerman 

Thinking, Fast and Slow by Daniel Kahneman

Dare to lead by Brené Brown

Leading with Dignity by Donna Hicks

https://patents.google.com/patent/US20050010537?oq=negotiation+process

In our platform we enable automatic, easy, useful labor agreements so we can start the path of rebuilding trust and engagement in the working relationship. In a post COVID reality this path is based on common ground and the capacity to adapt.

Current number: 100 workers (we launched the solution 2 weeks ago)

In one year: 5 million workers (5% of market share in Ecuador, Colombia and Mexico)

In 5 years: 25 million workers (8% market share in Ecuador, Colombia, Mexico, Peru and Chile)

Our one year goals are:

1) Serve 20% of SMEs in Ecuador, that means closing 600.000 individual labor agreements and train 600.000 people. Our key performance indicators will be: a) proposed negotiations vs closed agreements; and, b) # people in workshops. 

2) Serve 25% of workers who lose their jobs, that means 100.000 people in our entrepreneurship workshops. Our principal metrics will be: a) proposed negotiations vs closed agreements; b) # new formal ventures among our trainees which last at least 6 months. After the sixth month, the follow up will be made by ally incubators. 

3) Refine our algorithm and negotiation variables in order to avoid negative effects on labor rights and increase closing rates. 

4) Replicate the initial strategy in Colombia (August 2020) and Mexico (September 2020).  

Our five year goals are:

1) Build a community around trust between SMEs and employees. 

2) Expand workshops offer inside platform for upselling strategy. 

3) Build an intrapreneurship pipeline affordable and specialized for SMEs. Our metric will be: # intrapreneurship initiatives proposed by workers after six months of training. 

4) Generate a micro investment (peer to peer) ecosystem within the Closer community, with the data from compensation packages. 

Our currently barriers are:

Financial: 

High cost of research, workshops and communication.  

Technical: 

We have to invest in personnel for algorithm analysis and improvement. We also need to adapt the solution for multiple jurisdictions (compensation packages vary, so does the calculation). 

Cultural: 

1) Our principal challenge is to build trust between two traditionally contrary sides: employers and employees. It does imply a new organization philosophy (more aligned to B-Corps) and additional information for employers. 

2) Modifying the social norms around working relationships in Latinamerica must be possible without sacrificing labor rights and finding common ground between stakeholders. In the meantime, we are asking our clients to do something heterodox with their working relationship.

2) Workers’ lack of trust in technology in certain segments. 

Market: 

1) Workers access to technology in certain segments (i.e. we would prefer to generate documents with electronic signature than print and sign them, but having an electronic signature is expensive for many workers).  

2) There is no solution in the market which integrates all we do. Our competition (specially lawyers) are starting to notice us as threats, so it is possible that many of them advice their clients not to use Closer.

We are overcoming described barriers with the following strategies:

For the Financial barrier:

1) We are building a catalog of workshops to be 100% automated. Before fully automating any workshop we need to know they are helpful to our users.

2) We will reinvest our revenue in fully automating workshops so we can dilute time and costs.

For the Technical barrier:

1) We are raising data on negotiation process to improve its design and work in its simplicity with more information;

2) We have partnerships with teams of lawyers in other countries that help us adjust the legality by jurisdiction.

Cultural:

1) To build trust and "being more common", we are creating several communication strategies in partnership with human resources specialists who seek to change the way we understand the working relationship. We are also sharing information for employers, facebook groups, linkedin groups and public relations campaigns aimed at workers.

2) To fight lack of trust in our technology we are being extremely strict with agreements accountability and offering workers free legal aid related to labor regulations. 

Market: 

1) We are choosing our initial industries carefully so we can avoid the technology gap.

2) Our main entry strategy is to seek the endorsement of recognized trusted organisms (as legal studies and Chambers of Commerce). Presenting ourselves accompanied by traditional subjects who already have the trust of SMEs facilitates our entry. This same strategy must be reproduced until we gain public trust.

-

3 full time staff.

3 part time staff.

5 workers.

2 contractors.

Core team is integrated by:

Melanie Valencia, who has large experience in innovation and entrepreneurship and who is in the process of obtaining her PhD in business economics focused on inclusive circular economy. She is an academic and expert in behavioral economics. Moreover, she has an excellent academic network. 

Jorge, is a Computer Science graduate with specialization in Data Analytics. He is currently the CEO of a successful analytics enterprise and has a programmer team. 

José, is a experienced lawyer, legal designer, entrepreneur owner of the first legal innovation company in the country. He has excellent relations with many law firms, chambers of commerce and incubators. 

The three of us are currently references in our fields of practice. Also, all of us have initiated ventures in the past learning from all of them. We have also worked together many times successfully. The team has experience as mentors in multiple hackathons and therefore we have a great network overseas to scale the solution.

The rest of the team is integrated by programmers, innovation experts and lawyers, all directed to the same objective.

Sempertegui Ontaneda Abogados.- they are the UN Global Pact representatives and are helping us to work with Global Pact Members and multiple organisms to attract SMEs. 

Bodero Abogados.- They are helping us to pilot our solution in multiple big enterprises so they can advise their providers to use us.

Callejar Herdoiza Abogados.- They are helping us to reach SMEs in the most commercial province in the country. 

Handytec.- They are our programming support for generating fast improvements in the platform. 

Impaqto Quito.- It is an incubator and important link between us and SMEs with Webinars and endorsement. 

Innovation and Industry Chambers.-  It is an important link between us and SMEs with Webinars and endorsement.  Estrategia Legal Abogados.- They are helping us to adapt Closer to Colombian legislation.

We are generating immediate savings to organizations while we retrain their workers. 

Workers who stay in the organization feel included and valued in the new normality, while they experience an upskilling process.

Workers who leave the organization are prepared for the transition. We avoid that they enter the informal sector with training that helps them to start their own venture (and prepare them for seeking a new job in the process).

Organizations make a one-time payment for all those benefits accounting for 10% of the last monthly salary of the worker.

We charge the organization an amount equivalent to 10% of the last monthly salary of the worker involved in the agreement. We charge the price only if the worker accepts the deal. 

We are also raising capital to accelerate workshop automatization, communication and overseas expansion (by the end of first year).

Once we can determine with certainty which workshop structure is adequate for the majority, we can have a more varied offer and generate upselling (year 3).

Also, once we can structure an internal intrapreneurship platform for SMEs, we can charge for licenses (year 3).

So we can be part of Solve community, we know we have an excellent team and product, but we also know we can not do this alone. 

We have been reviewing Solve page and we found very interesting peers and members who maybe can help us understand how workshops can help more people. Specially does peer dedicated to digital education. 

Also, tech members and mentors can help us with a better understanding of managing intrapreneurship and innovation inside an organization. 

Finally, we will be delighted of having more exposition in our seek of founding.

Partnership goal in Product: we are interested in mentoring about digital and entrepreneurship education so we can have a better product.

Talent recruitment: As Latinamerica has a lot of cultural differences we need to hire right and fast a core team in every country.

Marketing and exposure: Changing a social norm is not an easy task, that is why we need to sum all possible points of views so we don't affect human rights.

We have created a solution that generates a channel to reach working-age adults in the necessity of building new skills and resources, so we think we do apply for The GM Prize. 

We will use the money specifically to improve workshops and automate them so we can reach thousands of adult workers and entrepreneurs. 

Closer was created to advance inclusive economic growth through upskilling and greater digital literacy among adults. We are absolutely opened to start a pilot in Portugal as they have a similar labor legislation and custom as Latinamerica. We will use the money to adapt our solution to the portuguese version, start a pilot in Portugal expand there and get back the solution to Brazil.