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By Carol E. Bonner and Neil Silverston
Boston Business Journal, Inc.
Volume Nineteen, Number Forty One
November 19-25, 1999
Businesses today have a unique opportunity to contribute to the community while realizing returns for their own bottom line. In today's economy, many companies struggle to fill jobs because of a shortage of skilled labor. At the same time, most individuals working in entry-level jobs do not earn enough to support their families. Ultimately, the most important investment businesses can make to address our economy's labor shortages is also the most significant step we must take to help poor families move forward: invest in the potential of entry-level workers.
Solid workers who have the desire and the potential to work hard and move up in the company are readily available for companies that seek them out and give them the support and training they need. Individuals coming off of public assistance, recent immigrants and under-employed men and women in a company's own workforce represent a tremendous untapped resource for the business community.
Boston's experience with welfare-to-work programs demonstrates the enormous return we gain by tapping a new labor force. Recently, a roundtable of national and regional experts on welfare reform, with corporate sponsorship by Fleet Bank, spoke to a large audience at Simmons College about their perspectives. Key to the success of welfare reform is business recognizing he value of investing in workers, as a critical input in the company's success.
Organizations such as TJX Cos. have developed a formula for success. They recruit highly motivated individuals off the welfare rolls and provide these new employees with ongoing support and mentoring in the workplace. In addition to expanding their pool of potential employees, companies say they have substantially reduced turnover with these hires. The individuals in this new labor force are proving themselves to be a strong, viable and productive group of women and men who are contributing to many organizations today.
Unfortunately, many entry-level workers still receive wages what keep them in poverty. In Wisconsin, one of the states with the longest running welfare-to-work programs, the number of welfare recipients decreased by 67 percent from 1986 to 1997, but the number of people in poverty fell by only 12 percent. Nationwide, this translates into 14 million children growing up in poverty-one of every four children- a frightening statistic when we consider the future of our country.
Corporations have a major role to play in reducing poverty and supporting the success and growth of this new labor force. However, we need to examine more closely the tendency to neglect a critical dimension of successful business-work force development.
According to a recent study by the Conference Board (a global business membership organization), 40 percent of American workers have inadequate literacy skills. Yet through business investments in ongoing training, mentoring, and continuing education, we can dramatically increase the skills of our work force. In the same survey, the Conference Board reported that 80 percent of the companies that helped employees get basic education had an increase in the quality of work.
Making these investments in people will yield substantial returns to business: Employees recognize that loyalty is a two-way street. Not only will organizations realize gains in skills and productivity, but they will see dramatic increases in retention. Furthermore, an effective work force development strategy will significantly enhance a company's ability to recruit in-house candidates for higher-level positions.
Increasing the level of skill and education will increase wage-earning potential, which, in turn, decreases poverty. For example, in a MassINC study, "Closing the Gap: Raising Skills to Raise Wages," it was reported that college graduates earn on average, 69 percent more that high school graduates. This is a dramatic rise from 1979, when the average premium was 40 percent.
There are too few times in history when the interests of business, our work force and our communities are so closely aligned, as they are on this issue. Now is one of those times. We should seize the opportunity.
(Carol E. Bonner is the associate dean of the Simmons College Graduate School of Social Work. Neil Silverston is president of WorkSource Partners, Inc. of Boston)
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