Assured Labor Colombia Expansion

Allen Kramer

2013.5 Economics allen.p.kramer@gmail.com

(646) 335-2251 There are many factors that lead to unemployment, including macroeconomic trends, structural adjustment periods, and frictional search time. In developing countries such as Colombia, which is marked by poverty combined with stark economic inequality, one critical cause of high unemployment levels among low-income populations is the lack of access to fully functioning information networks and formal job-search channels such as the Internet. In Colombia, only about 22% of low-income households have access to the Web, as compared with over 67% of higher class groups. However, nearly everyone in Colombia has his or her own cell phone. This creates an opportunity to leverage that access and turn it into a system specifically designed for this middle and low-income group. Assured Labor does just that. The company is a for-profit social enterprise that seeks to reduce the burden of unemployment in emerging markets by connecting low- and middle-wage workers with jobs using mobile and Internet technologies. The enterprise was founded by CEO David Reich and a small group of peers in 2008 out of MIT Sloan School of Management. Under their brand, Empleo Listo, they piloted operations in Nicaragua in 2009, expanded to Mexico in 2010, and to Brazil in 2011. To date they have registered over 200,000 users throughout the three countries and have posted jobs by more than 3,000 employers. The business generates revenue by charging employers for hosting the job postings and facilitating the intermediation with the workers. A critical aspect of the business model is that the workers who receive the job offers do not pay for the service; this reduces one of the major barriers to alternative formal mechanisms of employment. The impact that Assured Labor creates is largely generated in two principal target groups: the employers who gain access to more qualified candidates faster, and the workers who are provided with more and better job opportunities. Overall, the principal indicators and variables in which there is an expected impact include: users registered and employers posting jobs; jobs facilitated; reduced costs and time for businesses in employee acquisition; decreased average time spent in search between jobs; better quality employment positions. Not all of these variables are currently assessed due to prohibitive costs associated with measurement. In order to facilitate the expansion of Assured Labor into the Colombian market, this Starr Fellowship project concentrates on executing key elements in the companys standard pre-launce process for a new country. Activities leading up to and during the fieldwork in Colombia during the summer of 2012 largely fall into five categories: market research; operational research; business & bottom of the pyramid (BOP) strategy; customer development; and business development.