I. An innovative project to tackle today and tomorrow’s problems on the labour market

A) Why does our project matter?

Many stakeholders would benefit from our solution, both in the short and long run.

• Employees who face loosing their jobs will be able to easily experiment and discover new jobs in sectors that are sustainable without facing an income loss and social stigmatisation. The shift from a dead-end job to a promising new one would of course be extremely rewarding for workers.
• Why establishing a partnership with us is in the companies’ best economic interest? First, our flexible solution enables « host » companies to quickly hire motivated and eager to learn workers (whose wages during the trial will be paid by their “official” companies) as we will carefully screen and select candidates in the first place for them. Second, our solution allows companies to smoothly let go their employees without incurring high financial costs (severance pay, expensive court battle,…).
• There are also benefits for the State and society as it will prevent inequalities from skyrocketing since these very precise unskilled workers would not be marginalized as a result of our initiative. It will also contribute to improve States’ primary balances through a decrease in social subsidies as a result of an overall lower level of unemployement. By internalizing the negative externalities generated by innovation throughout the “creative destruction” process [Schumpeter], our action will enable the society to achieve a higher level of economic efficiency.

B) Major risks and actions to reduce them

Our project will face certain difficulties that will need to be taken into consideration. On the one hand, threatened workers could be resistant to change. In order to overcome their initial skepticism, we will spend time to highlight that by attending one of our retraining programmes, they will develop new skills and learn to build a new career path that fits their expectations (location, wage, kind of tasks, size of the company…). Our company strives to develop a permanent dialogue between trainers and workers since both will work hand in hand all along the professional retraining programme.

Nevertheless, one of the main challenges will be to convince companies to take part into our programme. To do so, we will highlight the strong business rationale for joining our programme. For instance, the cost of keep paying workers during the retraining programme is far below the one the company would otherwise have incurred to fire these employees. Beyond the sole ethic argument, joining our programme would also help companies to further enhance their flexibility and as a result strengthen their ability to supersede their rivals.

A challenge that we must address in the first place consists in demonstrating the project viability. Some people may call our project into question by pointing out both our inexperience and lack of legitimacy from not being a public player. Hence the necessity to get positive results as soon as possible as it is the only way to earn companies’, workers’ and regulators’ trust. In the meantime, in order to minimize moral hazard, it will be important to underline that our company commits to take any step necessary to prevent the existence of “free riders” as well as to limit the number of times a worker can refuse an offer (setting that limit to 3 times). Finally, by developing adequate measuring instruments to quantify the outcome of our action as well as by publishing the overall results of our action, we hope to overcome the initial lack of legitimacy me may suffer.

Furthermore, we aspire to work hand to hand with public authorities either at local level or at the national level. Being recognized of public utility by the State will be a first necessary step. Once achieved, we hope public authorities will back our initiative by implementing adequate public policies such as tax deduction for companies taking part into our programme or by granting us subsidies. With public authorities’ support, it will be easier to earn trust and will enhance our bargaining power when brokering partnerships with companies.

II. Implementing our action plan

A) Deployment strategy and major milestones

Developing our programme will require in the first place to hire qualified people that will be up to determine jobs that are about to appear/disappear (and the related skills required for such jobs). Then, we must target and establish partnerships with companies in order to build as soon as possible the most extended network of partners. From then, we will have to figure out how to shape the retraining programmes taking into consideration companies’ expectations as well as workers’ interests.

Our programme is divided in a 3-stage process. The first step is about discovery: a one-week shadowing of a spectrum of potential jobs that would fit their expectations. The goal at the end of this step is for the worker to choose a specific field of interest in a given sector or start over in a new one-week shadowing. The second step consists in training the worker in said field that interests him. He will be then integrated in a training programme offered by one of our partnership companies. In case of a successful second step, the worker will get to step three : a 3-month (or more) trial period within the company.

We believe this solution is within the reach of Sciences Po students because it lies at the centre of society and bridges the economic and the social spheres.

Positive impacts: this programme offers long-term positions in sustainable sectors to workers who otherwise would have faced severe difficulties in finding a new job once sacked.

B) Return on investment analysis

Considering the length of time required to complete a whole professional retraining, it would be madness to adopt a standard fee/hour price system. We should adopt a standard fee/worker price system.

• In this pricing system, companies will pay a standard fee for each worker who successfully finds a new job after getting through the retraining programme. In the meantime, companies that use our professional retraining programme to hire new workers will also have to pay us a fee/worker. In that respect, one should consider the fact that companies using our services to let go of their workers should pay a higher price than companies using our services to hire workers.
• The fee paid by employers should be set in such a way that it incentivizes employers to use our service rather than directly firing their employees. The fee paid by new employers should be low enough to incentivize them to not hire employees by their own means. Finally, both fees should be set in such a way that it minimizes the Payback Period, allowing our company to break even as soon as possible.
• We can expect subsidies from the State and other local public authorities, though their contribution would only account for a small part of our overall budget.

As explained in the business model, the main costs incurred by our organisation would be 1) human resources 2) buildings 3) IT 4) other discretionary expenses. Human resources cost may account up to 60% of our total costs since we need to hire talented and motivated people. As one can quickly realize, our cost structure will be mainly made up of variable costs.

Our organisation is a profit-seeking company which incorporates social good at the center of its business model. Therefore our ROI will reflect the business model we decided to adopt : lower than a hedge fund’s ROI, high enough to run the company smoothly over time.