Supply Chain Social Responsibility: Business4Better Event Recap

We just wrapped up the Business4Better conference in Anaheim, where our President & CEO Dave Shaffer spoke about social enterprise, and where we gathered some great customer and partnership leads for staffing and packaging services around the country.
The impetus behind the conference was to spur more creative partnerships and collaborations between commercial business and social causes than just simply writing checks. In fact, in many discussions with program attendees and participants, we found that several commercial businesses (small, medium, and large) are very interested in full supply chain social responsibility…

The Conduit Between Business & Disability

With recent articles on the number of people receiving federal disability benefits rising (“Unfit for Work” by Chana Joffe-Walt, NPR) and the growing employment gap between people with and without disabilities (“Scant Progress on Jobs for Disabled Americans” by Jennifer Kerr, Associated Press), concerns are high regarding people with disabilities—their disparity in their rates of employment, the reasons for the increase in disability benefits, and especially, their economic contributions to or drains on society.

Joffe-Walt discloses that 14 million people receive a disability check from the federal government each month—a check that is often seen as a disincentive to find work, though the average payment is at poverty level—and also discloses that states actually pay companies like Public Consulting Group to move as many people as possible onto federal disability.

Kerr points out that although the Americans with Disabilities Act of 1990 was passed over twenty years ago, the job numbers for people with disabilities haven’t budged, and that the number of people with disabilities working has actually decreased in the last four years.

This is, quite obviously, a massive issue, with billions of dollars spent by the federal government only to result in fewer people with disabilities actually participating in the labor force.

But it doesn’t represent the entire picture. There are organizations and businesses successfully working on the opposite side—actively creating viable employment opportunities for people with disabilities and reducing the number of people on federal disability programs. Most people with disabilities truly want to work, and when given the right opportunity (and in some cases the right accommodations, which average less than $500) can become extremely dedicated and valuable employees. The right conduit—an organization that is able to speak to the needs of both people with disabilities and the businesses where the jobs are—will make that happen on a large scale. It’s just going to take an effort on the part of commercial business to want to engage with that conduit, to tap into this overlooked and under-leveraged workforce as a strategic advantage.

There is a solution here: We need to realize that disability doesn’t have to be seen as a detriment to a successful worker. In fact, in some cases it can be an asset, with statistics showing that workers with disabilities are often more loyal, less absent, and more productive. Commercial companies hire workers with disabilities from successful conduit organizations like DePaul Industries and others because they’re right for the job and get the job done—and, as a bonus, they benefit from a healthy dose of corporate social responsibility.

If we’re really serious about moving more people with disabilities off of federal and other governmental support and into the workforce, the biggest slice of new hires needs to be in the commercial sector. Running the numbers on the Bureau of Labor Statistics disability figures, it will require that approximately six million jobs will need to be filled by people with disabilities in order to close this employment gap between people with and without disabilities. The 110 million job commercial sector, five to six times the size of the public sector, is the only sector with the realistic capacity to create those jobs.

There will always be individuals who, unfortunately, will try to game the system. But the reality is that many people with disabilities are already key assets to commercial companies, and many more want to be—they just need to be matched to the right jobs. To eliminate barriers and to benefit businesses, individuals, and the federal government, it’s going to take strategic efforts on the part of business to collaborate with organizations making that match.

Looking to Improve Your Bottom Line?

Are you concerned about reducing costs, increasing productivity and reducing employee turnover? Of course you are, and of course every successful business owner would explore any and all ways in which to do so. So, have you considered hiring workers with disabilities?

There is strong evidence that supports the business case for employing people with disabilities, outside the traditional corporate social responsibility argument that it’s good for your business image. (Although, this alone could be a compelling enough case: according to The Conference Board, 87% of consumers agree or strongly agree that they prefer to give their business to companies that employ people with disabilities.) Companies that have started to employ people with disabilities show that their hiring decisions positively impact its bottom line in the form of reduced costs, increased productivity, and reduced employee turnover. It’s true: When Walgreens started employing people with disabilities in their distribution centers, they cut costs by 20%. Simple workarounds, like replacing words and numbers with colors and symbols and decreasing the distances employees need to travel within the facility, was all it took to increase profitability across the board.

Moreover, small changes to tailor jobs to the needs of employees can also increase productivity. As you can imagine, productivity for everyone—workers with and without disabilities—increased at Walgreens’ distribution centers after they implemented those workarounds. And at Carolina Fine Snacks, productivity rose from 70% to 95% after they started hiring people with disabilities.

Companies that employ people with disabilities see lower rates of employee turnover, which is especially significant as the hidden cost of employee turnover really can extend far beyond the bottom line. Marriott Hotels found that among employees with disabilities, its turnover rate was just 6% as compared to 52% in their overall workforce. Similarly, Washington Mutual (now JP Morgan Chase Bank) found an 8% turnover rate among employees with disabilities, as compared to 45% in the general population. Pizza Hut, too, found a 20% turnover rate among employees with disabilities, as compared to 150% among employees without disabilities.

These established companies show there is a clear business case for hiring people with disabilities. As a smart business owner, why wouldn’t you give this a try?

Interested in improving your bottom line by hiring people with disabilities? Ask us about it.

A Snapshot of the Economic Impact of Employing People with Disabilities

Ever wonder how you quantify the economic impact of employing people with disabilities, who have historically been out of the workforce?

We certainly have, and we are pleased to announce that The Philanthropic Collaborative has calculated just that. Assessing the impacts of foundation grantmaking on the U.S. economy, the report outlines the short-term, medium-term, and long-term economic impacts of those contributions on a variety of different organizations.

For DePaul Industries, the report took a portion of generous equity contributions made to the organization by the  M.J. Murdock Charitable Trust and measured the impact those contributions had on DePaul Industries’ economic output to society. The analysis, conducted using an economic IMPLAN model and representing results from contributions that totaled $527,000, found that DePaul’s work contributes $295.97 million in economic transactions, adds $194.80 million to the Gross Domestic Product (GDP), and is responsible for almost 4,000 jobs and $165 million in annual payroll.

As the report puts it: “These returns on investment come from the lifetime streams of income that disabled workers may not otherwise have if not for DePaul Industries’ training programs and employment programs. If DePaul Industries secures a job for one worker, and that worker remains employed for a lifetime, the lifetime net present value of an average job can be over half a million dollars.” It is clear that beyond the economic benefit to the worker employed and the employer benefiting from his/her skills, there is real, tangible economic benefit to society as a whole that exponentially multiplies over time. At DePaul, we’re focused on efficiency and ensuring that we considerably leverage contributions for the greatest impact on society.

Impressively, the study finds that, in the long-term, total U.S. Foundation grantmaking contributes to 8,888,624 jobs and $570.56 billion to the GDP. Grantmaking also can be linked to $117.96 billion in total federal, state, and local taxes. Contributions, even as minor as a half a million dollars into a multi-million-dollar organization, create ripple effects throughout the economy, which manifest themselves over the course of the first year or two after being enacted.

Below is the table of the various economic impacts that this Murdock contribution to DePaul Industries is responsible for creating:



 

We’re extremely grateful to the M.J. Murdock Charitable Trust for recommending us as a subject for this study, definitively establishing that core equity investments to support the employment of people with disabilities generate strong contributions to the economy many, many times over.

Read a press release digest, or read the full economic impact report.

Alternative Staffing Organizations: Better for Business?

You’ve heard of staffing organizations, of course—but ‘alternative’ staffing organizations? So, is that just a different way of running a staffing agency?

Actually, yes—and there’s new research that proves that Alternative Staffing organizations, or ASOs, are better equipped to provide quality service for entry-level worker positions than many ‘regular’ staffing agencies.

First things first: ASOs are businesses that place temporary and temp-to-hire employees into jobs for business customers, with the dual agenda of both providing a quality service for the customer and helping a specific under-served demographic of job seekers find successful employment. For example, EMERGE Staffing of Minneapolis, MN focuses on providing staffing solutions for its customers while simultaneously working to provide economic self-sufficiency for its associates. DePaul Industries focuses on flexible outsourcing solutions for its customers while simultaneously serving people with disabilities who face barriers to employment. Essentially, these businesses are where ‘mission and market meet’. There’s no compromise of the market side in order to serve the mission side—in fact, the mission side enhances the market side, as we’ll explain below.

A new study from the Center for Social Policy at UMass Boston, “Why Use the Services of Alternative Staffing Organizations: Perspectives from Customer Businesses,” highlights ASOs from the perspective of the business customers they work with—in other words, the ‘market’ side of things. The report finds that though most business customers select the ASO as their staffing vendor based solely on the quality of their services, the customers do recognize that the mission side of things drives the quality of service they receive. For instance, “… ASOs provide a higher quality staffing service for entry-level, low wage workers because ASOs, themselves, need the worker to succeed.” The mission side of an ASO drives the quality of the service up on the market side in an indirect manner by paying more attention to qualities and abilities of the job candidate, more heavily screening candidates, more accurately matching candidate qualifications to job qualifications, and more carefully communicating with both the candidate and the employer to ensure success for both parties. Indeed, as the report points out, ‘regular’ staffing agencies and recruitment firms perform these functions to a degree and, of course, advertise for them. However, due to the investment made by ASOs in the candidates they serve and their specialized knowledge of the populations they work with, ASOs can more accurately and consistently deliver the quality described above.

We’re not ruling out that some companies might find great appeal in the fact that ASOs have  a dual focus and this ‘social’ side to them—in fact, many do. However, that’s not the reason businesses are engaging with them: They need their bottom line met, and they’re relying on the ASOs to do just that. The reason that the businesses engage ASOs is “because its approach to job brokering services is distinctive, adds value to the performance of their business, and also connects to the improvement of economic conditions in the community where they are located.” In other words, ASOs get the job done better for everybody and create tangible, economic benefits for their business customers.

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