Every need creates a space of opportunities in the market. With the issue of managing absenteeism and medical certificates, this is no different. This scenario deals both with the issue of executing errors through misinformation and with fraud. In this sense, the different actors are moving to achieve more effective management and greater accuracy in the process.
Part of that challenge was embraced by Closecare, invested company from Green Rock. In an interview, André Camargo, CEO of HRTech, talks a little about the operation and value of managing medical certificates, in addition to how the company is able to cover one end of this latent scenario of health fraud.
What gap did you see?
Well, Closecare started with me, Petrus and Fábio. We had already started a business back there and decided to start again with a B2B business. We decided to investigate recurring problems in different sectors within HR, but that were related to the health of the worker. I think that was the big point to start with: focusing on how corporate health was managed and how companies were treating people who were sick. That was the starting point.
We started interviewing HRs and discovered problems we didn't know about. For example: “I have a lot of trouble closing my sheet because the certificate doesn't arrive” or “we have an excess of certificates in certain factories”. There we went to investigate what the certificate was and discovered that within that document there was an indication of who was sick, what illness the employee had, something that no one knows within the health chain. I think it all starts there in 2018.
How do you view this issue of fraud?
Fraud is a specific point within the certificate. His problems are a bit broader, something that nobody knew, not even us. It's the following: you have rules in the Labor Code, rules in collective agreements, which are the agreements with the union, which determined the certificates that should or should not be accepted.
What does that mean? The certificate must be, for example, a document stamped by a doctor or dentist. If you are a nutritionist, a psychologist or a physiotherapist, the company does not have to accept it. In many collective agreements, the certificate must be submitted within a deadline. The union determines, for example, that an employee has 48 hours to submit the document. If you go beyond that period, the company may refuse.
There are several rules. We discovered this over time, but no customer knew. In addition, they also vary. So, for example, the rule in São Paulo is different from the rule in Rio de Janeiro. In this scenario, there was a great lever for creating value for customers and fraud is a subset of these refused certificates. Today, 14% of the certificates on average are outside those company rules. Some of that 14%, perhaps something close to 20%, are frauds, which include a redacted certificate, for example. So, many employees end up drafting certificates, passing the corrective and changing the dates; many deliver certificates, for example, with a name that is not theirs, with a CRM that doesn't exist, etc. So, these are all reasons for fraud that we point to to HR and then they give whatever deal they see as the best.
Can you measure the impact of this?
Yes! How do we do the math? Each certificate lasts for a period of time. So, one person's certificate is two days old and the other's is three. When I refuse that second person's certificate, for example, the company stops paying the employee for three days. That is, the company discounts the employee, because the absence was not justified. So, for example, that person's day costs 20 reais. What you saved would be 20 x 3, that's more or less the idea.
Can you count the main types of fraud that are most common for you to see on certificates?
The most common is the CRM that does not exist, the stamp of a doctor that does not exist. Another thing is erasure: then, on a 3-day certificate, the person puts a “zero” on the side and it becomes a 30-day certificate. That also happens quite a lot. A third point was the digital certificates with telemedicine. What started to happen was the falsification of a certificate by Word. The person places a header and any QR Code. Once we took a QR Code that led to an e-commerce page for diapers. The employees were fired.
These are the most common types of just cause motives. We don't give just cause or say that to the customer, we just point out the problems. Usually the client approves the certificate to have one more argument that he was harmed, and then he gives just cause.
When you were studying, did you ever see how this part of fraud works in international markets? What is Brazil's internship?
That's a good question. There is almost no international data, because they are normally physical documents that are transactional. We don't have much data about that. What we know about the international market came from customers. I have already heard that “Atento”, which is the largest call center in the world, indicated that it is a very recurring problem in Turkey, in emerging countries and countries with stronger labor laws. So they already quoted that to me. The impact is very clear on operations in Latin America and it basically works the same way. You have conditions to justify your absence and what changes are the social services.
Finally, an article appeared, some 40 days ago, from Battery Ventures, in which they talked a lot about this problem in the United States, because there wasn't much of that there. Since, in general, people receive there per hour worked/day worked, if the person was absent, they did not receive it. What started to happen is that labor laws, with Covid-19, brought more protection to workers and there was a narrowing of the issue of paid leave. From then on, there started to be problems with that as well. In the article, they report a bit about those bureaucracies that emerged post-Covid.
And does Closecare have any references to a company that served as Benchmark?
So, for the management of the certificate of absenteeism, no. But that's just a gateway for us. Regarding automated document management, we have some references. We started with the certificates, but we took more than 30 different types of documents and we are moving on other fronts, such as, for example, an occupational health document, which is acting on this validation based on pre-established rules. For that, we have Benchmarks, but which are not about absenteeism management as such.
As you said, most of the time what happens is not exactly a fraud, but rather a lack of education. How does Closecare see this and is directing this part of the instruction not only to the certificates, but also to other documents?
That point is super interesting. Like you said, not everything is fraud. Sometimes the doctor misstamped it. The company is not required to accept and the worker must go to the health center to get the correct stamp. What does that mean? I think we have a long way of relating to stakeholders so that we can improve this and not harm the worker.
The market needs to develop on top of these rules. The clinic must know that it must issue with the correct header, which the doctor must stamp correctly and cannot be a stamp of reception. So, I think that there is a path of maturation that starts with clinics, doctors and unions. That's point number one.
For other documents, the big point I see is that everything is very manual. We went to a supermarket chain that is our customer and they showed us three huge boxes with physical documents that they had to enter. So, like that, the problem is very big. There are a lot of physical documents and a lot of deadlines and records of past transactions are lost. I think there is a lot of interference because of the current management flow.
Like you said, it's very manual. What is the process to show the value of managing documents and certificates? Is this easily recognized?
I'm going to break that answer in two. In general, for the”Persona” of the company's director, document management is not an explicit pain. For the person involved in the tip, it's a much clearer pain. How do I bring in the manager so that he can see that this pain is latent for him too? When I show that he has an opportunity to reduce 14% of his absenteeism with an investment in a platform that delivers at least four times ROI. It must be shown that it is not simply a reduction in cutting-edge operational work, but rather that we are taking on and taking care of a relevant issue. With that, I have the attention of this manager and I can scale the project.
Finally, what can you share regarding Closecare's next steps?
Well, I think the big point is that we are moving away from the design of a specialized tool and we are expanding the focus to make that intelligence that we brought in relation to the certificate much more comprehensively for other types of documents. That's a lot”Gamechanger”. We joined HR and began to reach out to other areas that are just as important, such as operations, purchases, marketing, etc. We are now launching the first document outside this reality of the certificate, which are occupational health certificates. We had to change the entire architecture for that. So this is already a small step in the history of Closecare.
