According to a 2016 Material Handling Institute Industry Report, 58% of survey respondents hiring and retaining a skilled workforce is the number one problem in the supply chain. In the last few years, Merchandise Warehouse was given a unique opportunity to build skilled warehouse labor and help their community; something called a shared value opportunity. The opportunity lies in the intersection where a social need merges with corporate assets and expertise.
 
Merchandise Warehouse chose to take a chance on building an alternative workforce from at-risk workers. They believe “Employers can build a valuable workforce that will meet the challenges of a shrinking, less-skilled labor pool, as well as effectively address many societal problems plaguing the local community by systematically recruiting, hiring, onboarding those who have traditionally been overlooked, the “at risk” worker.”

 

Let’s look at the benefits to all stakeholders and look at a case study you may find surprising which supports the alternative workforce model.
 

Benefits to the Community

Community-Based Organizations (CBO) who provide “wrap-around services” like housing, transportation, and life and financial skills among others, can partner with local businesses, like Merchandise Warehouse, to help the individuals they serve get on-the-job training, skills, and employment. By gaining skills in a market that is always actively hiring due to the “Amazon Effect,” this position them well to get and keep gainful employment and eventually rise in the company.

By working on a packaging line, at-risk workers were given a “large, strong first rung on the ladder of gainful employment.” It’s a great on-the-job training opportunity. They learn critical job skills they can use while building a work history and getting a paycheck, as most at-risk workers cannot afford to attend training sessions for free.
 

Benefits to the Company

The company not only benefits from a new labor force during a shortage, but also tremendous employee loyalty from at-risk workers who often have difficulty landing a job due to any of several reasons like former addiction, prison, or homelessness. Companies also experience greater appreciation and esteem from their community for giving the at-risk population employment and a skill set to grow on.
 

A Case Study and Its Undeniable Results

 
Merchandise Warehouse worked with a CBO, Edna Martin Christian Centers in hiring for its packaging line. Here are the results of a two-month period.

Of the 88-people hired:

  • 38 completed training and went on to permanent jobs of at least $12.50/hour (19 with Merchandise Warehouse)
  • 12 were terminated
  • 12 were sent back for additional training
  • 26 remained on the line

Of the 64 working at the end of the two-month period:

  • 12 were homeless
  • 10 had a history of drug abuse
  • 4 had children removed from the home, 3 had reunification, and the other is in the process
  • 58 were in arrears of child support when they started, and all 58 were paying as agreed by the end of the two-month period
  • 2 domestic violence victims were living independently

Of the 19 workers hired from the packaging line to a permanent position with
MerchandiseWarehouse:

  • 3 have been promoted to a “lead” position
  • 1 moved to a better job elsewhere
  • 13 are still on board

 

As of February of this year, six of the ten top workers came from the packing line!

 
Challenges
There are a few challenges to the program. You need to have a clear understanding of the roles and responsibilities of all parties, and wherever possible, written agreements should be in place. A skilled on-site caseworker is essential to the success of the program. Equally critical are systems and methods of collecting meaningful data for long-term analysis. Be sure to have legal counsel careful reviewing all screening materials. Finally, prepare your current culture for the shift.
One final thing to remember is strong social responsibility programs drive employee morale and loyalty, business process efficiency, and public image.