Levee: Democratizing Access to the Labor Market while Ensuring Operational Intelligence
Levee is a workforce intelligence platform that uses big data and AI to match operational job seekers with employers. Founded by Stanford Graduates who moved to Brazil to start the company in 2013, Levee targets companies in the services sector that experience high hiring volumes and turnover. According to the company’s CEO, Jacob Rosenbloom, Levee captures and centralizes data, conducts analysis and runs algorithms that will positively impact companies’ indicators related to operational effectiveness.
Value Creation
As a two-sided employability product and platform, Levee creates value for both employers and job seekers through cross-sided network effects.
For Job Seekers
Emprego Ligado (“Connected Jobs”) is the cell phone app workers download to have access to job postings. The platform functions like a marketplace between people looking for jobs and Levee’s clients who are seeking to automate the hiring process. The product is free to job applicants and easy to use. Within minutes, users create profiles by including their work history and location. Traditionally, job searching for operational positions required applicants to hand in hard copies of their CVs. With Emprego Ligado, they are spared the hassle of traveling long hours for CV distribution and have access to clear information on the job openings. After candidates fill in their profile and preferences, they see the “best fitting” job openings ranked first, with the jobs “least fitting” ranked last. After clicking on a specific job, a candidate can pick an interview slot and location, based on the availability of the company’s recruiting team.
By using geolocation, Levee further adds value to job seekers by matching them with postings that are within an optimal threshold distance of their homes. In Sao Paulo, where commute time can be over 2 hours each way, applicants are more likely to find jobs that will increase their quality of life by using Emprego Ligado. The algorithm that ranks and displays the job-matches to the candidate doesn’t simply take distance into account. The algorithm uses google maps to see which public transportation route is quicker and smoother. In São Paulo, two locations that are one train ride apart is a cheaper and quicker commute than two locations physically close to each other, with a nonlinear route that might require a train switch.
There are currently over 2 million people on Emprego Ligado and 85% of users rate the app as excellent or good.
For Employers
Levee caters to companies with high volumes of low skilled, “blue-collar” jobs. Value is created to employers as they can connect with potential job applicants on a centralized platform. Levee streamlines the hiring process and makes it more efficient. The company seeks to make hiring decisions more assertive. In times of high hiring volume, HR is pressed for time and will often select people who can do the job, rather than those who are best suited for it.
The video below explains the process in greater detail.
Recruiters and HR are spared administrative steps and are left with only conducting the interview and making the offer, reducing the selection process by over 60%.
Levee also identifies productivity bottlenecks. Value is created by matching employers and employees so that companies’ productivity and retention is increased. On average, turnover dropped by 32% for clients who have implemented Levee in their recruitment workflow. In Brazil, where local legislation is extremely protective of workers, turnover is quite costly, independent of the reason for which the employee separated from the company. Research also shows that employee productivity is 25% higher when AI is used to optimize the matching process.
Since its founding, the company has automated over 20 million job applications in Brazil and currently services some of the countries’ biggest employers in retail, food services and outsourcing.
Levee also differentiates itself by offering an inclusive product that is accessible to anyone looking for a job. For companies, that translates into more diverse workplaces, another element that boosts team performance and workplace environment.
Capturing Value
Levee was the first company to enter the mass labor market in Brazil and offer a digital, AI-backed solution to companies in the services sector. The Brazilian market was a strategic choice. It is the second biggest low-skilled labor market after China. The services sector represents 76% of economic activity.
Levee still holds an unchallenged position in the mass market workforce. It competes withtraditional jobs platofrm sites like Catho that target s both “blue collar” and “white collar jobs.” Catho, however, charges a high subscription fee from candidates and has an almost perverse model: the company makes more money the longer its users remain unemployed, searching for jobs.
Levee’s pricing strategy is built on credits. Levee sells pre-paid credits of job-matches on a quarterly or annual basis, based on the hiring history of each company. The company then uses the credits as its hiring progresses, creating an easy billing cycle for both the company and Levee.
Challenges
One of Levee’s challenges is breaking into HR’s workflow. The disruptive nature of the product can be seen as a threat to those working in talent acquisition and retention and who are usually the decision makers in the sales processc. For some, the return on the upfront payment needed to install the software is uncertain, given that the algorithms and the operational efficiencies associated with it require large amounts of data and a few months of integration to generate any visible results, like a decrease in turnover and an increase in productivity.
On the one hand, by servicing companies looking for low-skilled workers, Levee is able to capture greater synergy from one dataset to another. The number of variables and data points needed are lower and less complex than middle and high skilled postings. On the other hand, it makes the product less defensible from consolidated platforms like Linkedin if they were to enter this segment of the market. In addition, a certain amount of data is initially necessary for the algorithms to work with. Sales efforts are necessary to expand the database and further improve the algorithms, a conundrum that exists for any machine learning solution.
As the only b2c solution in the workforce intelligence space, Levee has a first mover advantage and is likely benefiting from network effects associated with it. It is still an early stage company and has successfully attracted important players in the services sector in Brazil. The product offers democratized access to job seekers and greater efficiency to companies. The total addressable market is undoubtedly huge. The question is given the lack of complexity of job postings, can Levee find an edge to really defend its product if others were to come in?
Sources:
https://levee.com.br/wp-content/uploads/2019/08/infografico-levee01_Novot%C3%ADtulo.pdf
https://www.crunchbase.com/organization/levee#section-overview
https://technewsbrasil.com.br/melhores-aplicativos-de-vagas-de-emprego/
www.levee.com.br
Hi Fernanda! Thanks for a great post about an impressive company. Can’t believe this doesn’t exist already, as one often thinks about the most successful ideas. I didn’t exactly understand the credit / payment model part, but I’m curious to understand where the tipping point is when it is worth it for companies to hire Levee in terms of number of relevant employees? Is it possible to make the product valuable enough also for medium sized (and perhaps smaller?) companies for whom hiring is still time-consuming and who have less resources to direct at hiring, although not concerning as many? Of course, such that it is cost-efficient also for Levee. Seems like another possible untapped market in need of help.
Another thought is – would it be valuable enough for companies to use Levee also for high-skilled jobs? Obviously requiring a slightly different model and with more human involvement, but I’m sure it can be made more efficient as well (booking interviews, collecting CVs, etc.). One could perhaps go to other markets if translated into other languages before copy-cats emerge elsewhere, or try to conquer all aspects of hiring (medium-sized, high-skill, etc.) in Brazil and then bring a more comprehensive product to the next market. Or any other ideas? Would be interesting to hear your thoughts.