Business Intelligence
Connecting Vulnerable Job Seekers With Employers
Françoise Carré, 09-13-2009
Job seekers who face hurdles accessing and retaining jobs in normal economic conditions have been having a particularly difficult time in this severe recession. In the coming months, they will be at high risk of chronic unemployment and underemployment. Staffing services started by community organizations and national nonprofits — named alternative staffing organizations (ASOs) — can help vulnerable job seekers succeed in their job search, finding temporary and temp-to-perm jobs for them. This will be a particularly important role as state governments implement job creation programs as part of economic stimulus policies.
A study of alternative staffing organizations in four U.S. urban areas suggests that these unique social-purpose staffing businesses can help low-income workers succeed in the labor market by finding them temporary and temp-to-perm jobs, while also meeting the needs of employers.
A study on this topic by the Center for Social Policy (CSP) at the University of Massachusetts Boston’s McCormack Graduate School of Policy Studies is summarized in the report “Brokering Up: The Role of Temporary Staffing in Overcoming Labor Market Barriers,” by Françoise Carré, Brandynn Holgate, Helen Levine and Mandira Kala.
ASOs, which are operated by community-based agencies, integrate the business goal of mainstream staffing services — connecting workers and employers — with the social mission of helping marginalized job seekers find and retain better jobs.
To help workers succeed in job placements, ASOs also offer access to tools such as access to reliable transportation and child care to address barriers to employment. Also of particular importance is that they invest in monitoring worker performance and checking in with customer businesses to ensure quality staffing services. Nationwide, there are about 50 ASOs in operation.
ASOs first emerged in the 1970s as social-purpose businesses created by community-based organizations and national nonprofits. They place their job seekers — those who face barriers to steady work — in temporary positions with employers with whom they contract with the goal that employees will learn needed skills to make them more employable and, in the best case, that the temporary job will become a permanent one.
In 2005, the C. S. Mott Foundation launched the alternative staffing demonstration, which funded four ASOs and a three-year research project to assess the value of the ASO model. The Mott Foundation contracted with the CSP ASO structure, organization, scale of operations and customers. This research by CSP examined how each ASO structures the services it provides, how it handles day-to-day management issues and how it sells its services.
The four sites funded for this study include staffing services created by two community-based organizations: FirstSource Staffing, created by the Fifth Avenue Committee of Brooklyn, N.Y., and Emerge Staffing, created by the Emerge Community Development, an affiliate of Pillsbury United Communities of Minneapolis, Minn. The ASOs also include two created by local affiliates of national nonprofits: Goodwill Staffing Services, created by Easter Seals-Goodwill of Boise and Nampa, Idaho, and Goodwill Staffing Services, created by Goodwill Industries of Central Texas, in Austin, Texas.
Connecting Employers With Employees
ASOs have two customers: the workers who face barriers to employment and need job experience, training and jobs, and the employers who need workers. The personal attention paid by the ASOs to their workers’ needs and job preparation as well as their candid approach to prospective employers give them the ability to meet the goals of each group and serve their mission-directed ends. Feedback on the fit between business strategy and mission is immediate. Workers perform or not; customer businesses are satisfied or not. Adjustments to the service are possible because of frequent interaction with customer businesses.
The ASOs in the study varied greatly in the volume of temporary job assignments that they generated over the 18-month study. Their volume ranged from 1,128 workers placed in 2,085 assignments for the largest ASO to 332 workers placed in 994 assignments for the smallest one. Clerical jobs made up 75 percent of the assignments generated by three of the four ASOs. The type of work available varied depending upon the economy of each ASO’s local environment.
This study revealed that on average, 15 to 25 percent of the sites’ active customer accounts in a given quarter needed to be replaced in the next quarter. How to approach potential customers is a major concern. Some of the ASOs sell their services by emphasizing their service quality and efficiency, others by promoting their social mission. All agree that the quality of service and their ability to customize their service to meet the employer’s needs are necessary to retain customers.
Customers use ASO services to screen potential hires when they are staffing up, to fill routine entry-level positions and to fill staffing gaps generated by absences or unexpected workload peaks. In some cases, state agencies use ASO services to fulfill state set-aside requirements to hire those with disabilities. Representatives of the customers themselves, often the HR director or a department manager, provided a number of reasons, which were closely aligned with their business imperatives, for using the ASO as a vendor:
- The ASO staff understands their business priorities better than many conventional staffing companies.
- The quality of candidate screening and the ASO staff’s detailed knowledge of job candidates’ skills, capacities and limitations are important.
- The responsiveness of ASO staff, handling of problematic supervisory issues and its involvement when troubleshooting is needed.
- The provision of supports or the ability to refer workers to supports is perceived as an important form of customer service.
- The ability to deliver workers who are better supported and thus better able to perform is appreciated by long-standing customer businesses.
As for the workers themselves, when asked to compare their ASO experience with conventional temporary companies, they report that the ASO staff advocates for better positions for them.
The close alignment between assignments, target population and customer business characteristics that the successful operation of an ASO requires is tempered somewhat by adjustments necessary for the sustainability of the enterprise. For example, ASOs mix the kinds of assignments they fill, including some higher-paying assignments with low-pay assignments, in order to protect revenues. They may also take higher-level assignments from a steady customer business simply to maintain the service relationship.
In this study, ASO sales revenue ranged from $1.7 million in sales per quarter in one organization to $280,000 per quarter in another. A start-up satellite office of one ASO had smaller revenue still. In all, revenue generated by the markup on assignments charged to businesses helped pay the administrative costs — such as testing, job matching and payrolling — of the job-brokering function of the ASO. This income stream enabled ASOs to reserve private grants and public resources, when they have access to them, for supporting job candidates’ personal needs and meeting mission-related costs. This choice is deliberate. In so doing, ASOs stretched grant resources targeted at job preparation and other support services across a larger group of workers.
