Experiences in International Outsourcing

This month, your EFBC president, lent a direct look into his companies experiences in outsourcing employees internationally.

2 weeks ago I traveled to Aguascalientes, a city in Mexico in a state with the same name. The name, “hot waters”, doesn’t describe the sunny shoreline and sandy beaches. Aguascalientes is located in north-central Mexico and unfortunately this wasn’t a vacation to an all inclusive resort. However, I did happen to be there during the San Marcos Fair which is the largest fair in Mexico and one of the largest in Latin America.

Over the past 2 years, we’ve been growing a team of remote employees. What started out as hiring 2 estimators in Aguascalientes has multiplied to 12 in various roles as well as 1 in Macedonia. The roles include estimating, engineering, graphic design, logistics and account management. If you would have asked me 3 years ago whether I thought it would be possible for us to have any remote employees, let alone 13 in a foreign country, I would have have said “No.”

Changes due to Covid, ease of access thanks to technology and shifts in lifestyle are a few reasons why a small business like ours even thought about nearshoring to Mexico. We quickly experienced the great benefits of moving specific operations to a nearby country with a qualified workforce, reduced cost of living and no time difference.

How did we take the first step? With a little bit of luck. A client of ours had offshored their entire sales support and purchasing team to India. I asked myself “If they can do something like that, why can’t we?” I initially felt like India would be tough because of the time difference and not having any business contacts there. We eventually thought about Aguascalientes due to connections that several of our team members have to the city as well as the international business presence – Nissan has 2 factories there which combined produce more than half a million cars per year.

Managing and training the team members in Mexico and Macedonia was the most difficult considering we’re in the Visual Marketing industry. We offer creative design solutions to our clients and follow through with manufacturing. We’ve created a structured onboarding process which incorporates training videos, reading materials and other visuals all kept well organized in Monday.com, a project management workflow application.

During this recent trip we began our search for an office space to allow our team members in Aguascalientes an opportunity to collaborate with each other a few days each week. While we’ve been faced with some resistance to this change but we feel it is key to our company success as well as the individuals.

We’re still learning as we move forward. It isn’t always perfect but it has been exciting to see the team grow in a way I never expected.

Andy Sanghani
EFBC President 2022-2023

ChatGPT – Incoporating AI Into Your Business In Any Way That Makes YOU Feel Comfortable!

This month features member, Alex Argianias. Alex and EFBC decided to take some time to ‘interview’ ChatGPT using its interface. While some answers have been edited for length, the content has not.

I’ve always been a fan of technology and arguably an early adopter (rightly or wrongly). From the first time I plugged in our family’s Macintosh Performa to urging my dad to purchase Amazon stock in 2000 when I came home from a Disney vacation and found buying a CD revolutionary – I’ve always been hooked on the new and exciting. For the record, I was 11, and no Amazon stock was purchased unfortunately.

It now seems that there is a paradigm shift in artificial intelligence as it increasingly becomes less of a novelty and more of a tool that is ready for real world application. For the uninitiated ChatGPT was built by OpenAI. OpenAI is a private artificial intelligence laboratory consisting of the non-profit OpenAI Incorporated and for-profit subsidiary OpenAI Limited Partnership.

What would you tell a small business owner is the most important thing to understand about AI?

As a small business owner, the most important thing to understand about AI is that it is not a magic solution to all your business problems. AI is a tool, and like any tool, it needs to be used in the right way to be effective. It’s crucial to understand that AI is not a replacement for human intelligence, creativity, or decision-making.

AI should be seen as a complementary technology that can augment your existing business processes and help you achieve your business goals more efficiently and effectively. It’s important to identify the specific areas of your business that could benefit from AI and focus on implementing AI in those areas. You should also ensure that you have a solid understanding of the data and algorithms that drive the AI systems you are using.

Additionally, it’s important to recognize that AI is still a rapidly evolving technology, and it’s essential to stay up-to-date with the latest advancements and best practices. By having a clear understanding of what AI can and can’t do, you can make informed decisions about how to integrate it into your business operations and reap its benefits.

As a small business owner, adopting AI can offer significant benefits to your business, what are some reasons why AI is important to adopt and learn about for small business owner?

• Increased Efficiency and Productivity: AI can automate many of the mundane, repetitive tasks that are necessary for your business, such as data entry, email management, and scheduling. This frees up time for you and your employees to focus on higher-level tasks that require more creativity and critical thinking, increasing productivity and efficiency.
• Improved Customer Experience: AI can help you improve the customer experience by providing personalized recommendations, addressing customer inquiries, and even predicting customer needs based on their behavior. This can lead to increased customer satisfaction, loyalty, and retention.
• Competitive Advantage: As AI becomes more ubiquitous in the business world, failing to adopt it may put your business at a disadvantage compared to your competitors who are using AI to their advantage. By adopting AI early, you can stay ahead of the curve and differentiate yourself from the competition.
• Data-Driven Insights: AI can analyze large amounts of data and provide valuable insights that can help you make informed business decisions. These insights can be used to improve operations, optimize marketing efforts, and increase revenue.
• Cost Savings: AI can help you save costs by automating tasks that would otherwise require hiring additional employees or outsourcing to a third-party provider. Additionally, AI can help you optimize your supply chain and reduce waste, leading to further cost savings.

Overall, by adopting AI, you can improve your business operations, enhance customer experience, gain a competitive advantage, make data-driven decisions, and save costs. As AI technology continues to advance, it will only become more important for businesses to adopt and integrate it into their operations.

What is one simple thing that a business owner can do right now to implement AI in their business?

One simple thing that a business owner or small family business can do right now to implement AI in their business is to start using a chatbot on their website or social media pages. A chatbot is a type of AI-powered software that can interact with customers in a conversational manner, answering their questions and providing support 24/7.

By using a chatbot, you can automate customer service inquiries, reduce response times, and improve customer satisfaction. There are many chatbot providers available, and some of them offer free or low-cost options that are easy to set up and customize. You can also integrate your chatbot with your existing CRM or other business tools to streamline your customer support process.

To get started with a chatbot, you should first identify the most common questions or issues that your customers face and create a list of responses. Then, choose a chatbot provider that meets your needs and start building your chatbot by configuring its responses and workflows. Once your chatbot is up and running, you can monitor its performance and make adjustments as needed to ensure it continues to provide value to your customers.

There are many chatbots available in the market, ranging from simple rule-based bots to more advanced machine learning-based bots. Here are a few examples of popular chatbot platforms that small businesses can use:

• Dialogflow is a natural language processing (NLP) platform that allows businesses to create conversational agents for their website or mobile app. It offers pre-built templates for different use cases, including customer service, booking, and e-commerce.
• ManyChat is a platform that enables businesses to create chatbots for Facebook Messenger. It offers a drag-and-drop interface and allows businesses to automate messaging sequences, collect lead information, and offer customer support.
• Tars is a chatbot platform that focuses on lead generation and customer acquisition. It enables businesses to create conversational landing pages and automate their sales funnel using AI-powered chatbots.
• MobileMonkey is a chatbot platform that allows businesses to build chatbots for multiple channels, including Facebook Messenger, SMS, and web chat. It offers features such as appointment booking, lead generation, and customer support.
• IBM Watson Assistant is an AI-powered platform that enables businesses to create conversational agents for their website or mobile app. It offers pre-built templates and can integrate with other IBM Watson tools for more advanced use cases.

When choosing a chatbot platform, it’s important to consider factors such as ease of use, cost, scalability, and the specific features that your business needs.

What would you say to a small business owner who is afraid of AI?

If a small business owner is afraid of AI, it may be because of misconceptions about the technology or concerns about its impact on their business. As an AI language model, here are a few things I would suggest:

1. Educate yourself about AI: It’s important to understand what AI is and how it works. AI is a tool that can help businesses automate tasks, make data-driven decisions, and improve customer experiences. By learning more about AI and its potential benefits, you can make informed decisions about how to integrate it into your business.
2. Start small: If you’re hesitant to adopt AI in your business, start with a small project or pilot program. This will allow you to test the technology and see its impact on your business without making a significant investment.
3. Partner with experts: Consider partnering with AI experts or consultants who can help you understand the technology and how to integrate it into your business. They can also help you identify areas where AI can provide the most value and ensure that you are using the technology ethically and responsibly.
4. Address concerns with transparency: If you have concerns about the impact of AI on your business or your customers, address them with transparency. Be upfront about how you are using AI and how it will benefit your customers. This will help build trust and alleviate concerns.

Overall, it’s important to approach AI with an open mind and to understand its potential benefits and limitations. By taking a measured and informed approach to adopting AI, small business owners can improve their operations and stay competitive in an increasingly digital world.

What is your favorite type of AI?

As an AI language model, I do not have emotions or personal preferences, so I do not have a favorite type of AI. However, I can tell you that there are many different types of AI, each with its own strengths and limitations.

Some examples of types of AI include:

1. Rule-based systems: These AI systems use if-then rules to make decisions and take actions based on input data.
2. Machine learning: This type of AI uses algorithms to learn from data and improve over time.
3. Deep learning: Deep learning is a subset of machine learning that uses neural networks to learn and make predictions.
4. Natural Language Processing (NLP): This type of AI focuses on understanding and processing human language, including speech and text.
5. Robotics: AI-powered robots can perform a wide range of tasks, from manufacturing to healthcare to customer service.

Each type of AI has its own unique capabilities and applications, and the choice of which type to use depends on the specific needs and goals of the business or application.

What is one AI tool that can greatly increase profitability of a small business?

One AI tool that can greatly increase profitability of a small business is a predictive analytics platform. Predictive analytics uses machine learning algorithms to analyze historical data and identify patterns, which can then be used to make predictions about future events, such as sales trends, customer behavior, or supply chain demand.

By leveraging predictive analytics, small businesses can make more informed decisions about pricing, inventory management, marketing, and other areas that can significantly impact profitability. For example, a small business owner could use predictive analytics to forecast demand for a particular product or service, and adjust pricing or inventory levels accordingly to maximize revenue.

There are many predictive analytics tools available on the market, ranging from standalone platforms to integrated solutions within larger business management software suites. Some popular options include IBM Watson Analytics, Microsoft Azure Machine Learning, and Google Cloud Machine Learning Engine. However, it’s important to choose a tool that is tailored to the specific needs and capabilities of your small business.

Can you explain why AI is going to be an important tool for small businesses in the coming years?

It has the potential to help them work more efficiently, make better decisions, and grow their revenue through automation, data analysis, personalization, efficiency and growth of competitive advantage over companies not actively using AI. Overall, AI has the potential to be a game-changer for small businesses, helping them to work smarter, not harder, and achieve greater success in an increasingly competitive marketplace.

While I did ask a number of questions I was continually impressed by the usefulness of ChatGPT, particularly in generating lists. While I did ask it a number of questions on the nature of existence as well as trying to get it to spill the beans on SkyNet, ChatGPT never waivered.

So my final appraisal? I will not be letting it run my inbox or work any time soon, but I will continually utilize ChatGPT to help me work more efficiently and with a database that helps me access information much faster than I’m able on my own.

Your Previously Used Employment Forms Need Attention!

On February 21, 2023, the National Labor Relations Board (“NLRB”) issued a decision turning the issue of severance agreements with employees on its head. I am not being dramatic; this was big news for the employment law world for two reasons: First, keep in mind that the NLRB is the body that enforces the National Labor Relations Act (“NLRA” or “the Act”). Second, contrary to public option, the NLRA and, therefore, the NLRB decisions also apply, in many instances, to non-unionized workforces.

The McLaren Macomb decision held that employers violate the NLRA when they offer employees severance agreements that require employees to broadly waive their rights under the Act. By doing so, the NLRB overturned decades of prior precedent to hold that non-disparagement and confidentiality provisions commonly used in severance agreements are broadly unlawful when imposed on employees (as opposed to managers or supervisors.

In addition to obtaining a release of claims, maintaining confidentiality, and obtaining an agreement not to disparage are the main reasons that employers enter into most severance agreements. Employers do not want the terms of a severance agreement broadcasted and also don’t wish to be disparaged by the departing employee.

The McLaren Macomb case involved a hospital in Michigan that permanently furloughed eleven union employees and offered each of them a severance agreement. Each agreement at issue in the McLaren decision contained the following provisions:

• Confidentiality Agreement:“The Employee acknowledges that the terms of this Agreement are confidential and agrees not to disclose them to any third person, other than spouses, or as necessary to professional advisors for purposes of obtaining legal counsel or tax advice, or unless legally compelled to do so by a court or administrative agency of competent jurisdiction.”
• Non-Disparagement:“At all times hereafter, the Employee agrees not to make statements to Employer’s employees or the general public which could disparage or harm the image of Employer, its parent and affiliated entities and their officers, directors, employees, agents, and representatives.”

Historically speaking, these are incredibly common terms to be included in a severance agreement with an employee; Not any longer according to the NLRB. The decision specifically highlighted two things: First, the NLRB noted that the confidentiality provision broadly prohibited employees from disclosing any information regarding the terms of the severance agreement. Thus, the NLRB reasoned that such a provision could prevent an employee from discussing the terms of the severance agreement with co-workers and it could “reasonably tend to coerce the employee from filing an unfair labor practice charge or assisting [an NLRB] investigation into the [employer’s] use of the severance agreement.” Accordingly, the NLRB determined that the inclusion of this provision constituted an unfair labor practice and violated federal labor law. Second, the NLRB held “[p]ublic statements by employees about the workplace that are central to the exercise of employee rights under the [NLRA]” and, therefore, the non-disparagement provision violated an employee’s rights under Section 7 of the Act because it prevented employees from making statements that the employer engaged in unfair labor practices and could potentially discourage an employee from cooperating with an NLRB investigation. Moreover, the NLRB found the provisions to be so onerous and the penalties so severe, that merely proposing a severance agreement containing those terms violates the NLRA, regardless of whether the employee accepts the agreement or not;  Pretty harsh!.

Understandably so, this decision has caused a major shake-up amongst employment attorneys. Realizing the ripple effects of the decision, on March 22, 2023, the NLRB issued detailed guidance for employers. Here are the takeaways that employers should be aware of:

Retroactive

• McLaren has “retroactive application” in that it applies to severance agreements signed before February 21, 2023. In addition, the six-month statute of limitations to bring an unfair labor practice charge relating to an overly broad severance agreement would be construed as a continuing violation by virtue of the employer’s maintaining and/or enforcing a previously-entered severance agreement containing unlawful provisions.

Supervisors

• Supervisors are not protected under the NLRA. Therefore, agreements with supervisory employees may contain these provisions.
• The term “supervisor” means any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing

the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.

Severability

• Generally, the voidability of a severance agreement with overly broad provisions would be decided on a case-by-case basis. However, the NLRB’s Regional offices generally make decisions based solely on the unlawful provisions and would seek to have those voided out as opposed to the entire agreement.

Employee Request

• These employee protections under the NLRA cannot be waived even if the employee knowingly requests or consents to an overly broad confidentiality or non-disparagement provision.

Confidentiality

• Confidentiality agreements may still be lawful, so long as they are narrowly-tailored to restrict dissemination of proprietary or trade secret information for a period of time based on legitimate business justification.

Non-Disparagement

• Non-disparagement agreements may still be lawful so long as they are narrowly-tailored and limited to employee statements about the employer that meet the definition of defamation as being maliciously untrue, such that they are made “with knowledge of their falsity or with reckless disregard for their truth or falsity.”

The bottom line is that recycling severance agreements that have been attorney-approved in the past is no longer a good practice and could result in potential legal liability on behalf of the employer which could lead to voided out agreements.

-Rachel E. Bossard, a partner at Burke, Warren, MacKay & Serritella, P.C., chairs the Firm’s Labor and Employment law practice group. She represents employers in all aspects of the law including client counseling, training, litigation and benefits. She can be reached at 312-840-7029 or rbossard@burkelaw.com