Ecient

job-markets, successful growth January, 2013

Problem: Firms struggle to nd & retain talent

Workers lack soF skills Firms underinvest in training

Firms prefer proven workers

Increased wages, high cost to retain talent

Poaching between rms

Problem: Job-seekers struggle to nd work

Inated experience & training requirements limit possibiliMes for able workers. Job applicaMons are costly: proof of educaMon, police report, etc. can add up to $20 for applicants in nal phase. Even outside capital, preference for experience favors Lima workers.

Enter Farolito:
Firms iden*fy untapped talent at low cost
Farolito test highlights important professional skills such as A"en%on to Detail, and Social Comprehension. Farolito maintains database of workers, facilitaMng quick hiring where norm exceeds 6 weeks.

Job seekers incur apply to several jobs easily

Job seekers demonstrate their abiliMes through Farolito test, are guided towards jobs they do well. Once in the Farolito database, workers can apply to several jobs at no addiMonal cost.

The Farolito Test

Content
Measurement of skillsets such as Ability to Learn on the Job or CriMcal Thinking idenMes workers with talent for job in quesMon. Assessment of preferences such as work in teams, or work moMvaMon determines likelihood of quick turnover.

Implementa*on
Test is online, which facilitates implementaMon anywhere. Same-day scoring allows rms to interview best candidates quickly. Applicant score depends on job: algorithm emphasizes dierent skillsets in dierent posiMons.

View of the test

Farolito compeMMon: pricier, low presence in target regions

Examples DescripMon Recommend candidates Presence in the provinces Presence in Target Basic Jobs Market Aordable for SMEs BoFom line Established Hiring Agencies Manpower, Adecco Outsourced hiring Yes Somewhat Small, but growing. Not target. Psychometric Tes*ng Centers Reid, Vangent, Hoegan Tests screen for honesty, personality No Yes Through phone calls to Lima-based providers. Online Job Boards Bumeran, Computrabajo Online classieds No Yes Yes

Somewhat Somewhat PracMces beaer suited Tests may be inappropriate to managerial posiMons for these posiMons No They could be our clients. No We have localized test at lower price.

Per post. $ We do more for marginally higher price.

Farolito has high prot potenMal

Untapped client market
SMEs outside typical full-service operaMon clientele can aord Farolito.

Economies of scale
MulMple sales of data collected once.

Two-sided market
Job-seekers will purchase premium services.

Eventual add-ons further support job- market eciency.

Searchable database for employers by type of job/ locaMon. Premium op3on for job-seekers oers training materials and videos through Farolito website. Third party licensed testers through use of biometric recogniMon soFware to ensure test integrity. Skill-specic tes3ng ensures candidates have requisite knowledge such as MS Word. Test for illiterate workers using video instrucMons supports hiring competent workers for basic jobs.

Farolito saves rms money

100 workers, 8% monthly turnover. Full produc%vity 2x wage.*

Dollars saved, Total Savings one-*me per year Benet Explana*on Adop%on of Farolito exam for hiring purposes Turnover decrease 1 pp per Cost of replacement Mmes $ 2,308 $ 27,692 month salary Mmes twelve Dierence in producMvity, New workers 8.3% more $ 154 $ 96,923 reaped from month 3 of new producMve. hire on the job Use of Farolito exam to iden%fy poten%al managers from lower-level employees PromoMon possibility Increase in producMvity, from increases producMvity by $ 15 $ 8,769 rst month 0.83% 2 workers promoted ProducMvity improvement at manager, 8.3% more $ 192 $ 4,615 managerial level over twelve producMve months Total Savings $ 138,000

*Es%mates developed in conjunc%on with poten%al partner rm.

High growth, impact potenMal

Peru is growing
Peru added 1.5 million formal jobs 2004 2010 (Ministerio de Trabajo) GDP growth 2005 2010, $79.34B - $127.32B (60% growth!) (IADB) Number of workers with terMary educaMon increased by 1.3 million, almost by 50%. All growth in provinces. (Ministerio de Trabajo)

If Farolito places 1% exis*ng workforce in a beFer job & chooses beFer workers for 10% of new jobs over next 6 years
Beaer jobs for workers: 350,000 workers placed through Farolito once. Beaer workers, beaer rms: $472,500,000 in savings for rms. High Revenue PotenMal: $35,000,000 in revenues

Interest in Farolito is signicant.

250 people in have taken the test. 3 rms have hired through us. 2 universiMes will use us to place graduates. 4 Firms discussing naMonal pilot with us. $100,000 commiaed seed funding.

Summary
Farolito resolves labor-market ineciencies by signalling worker abiliMes. Low cost & speed helps Farolito reach nancially insecure clientele compared to compeMtors. High prot poten3al from economies of scale. Signicant development impact by improving job opportuniMes and lowering rm expansion costs.