2012

A Perspective on Employers: Put Illinois to Work

Presented at Creating Employment Opportunities through TANF: Lessons Learned from TANF ARRA ECF, National Transitional Jobs Network 2012 Conference

Amy Terpstra

Program Impetus: The Recession

New ARRA money available through TANF Emergency Contingency Fund for subsidized jobs 764,825 unemployed workers in Illinois and an unemployment rate of 11.5% Poverty rate was at 13.3% and household incomes were declining

Program Partners and Timing

A public-private collaboration:
Illinois Department of Human Services (DHS) Heartland Human Care Services (HHCS)

Launched April 2010, ended in January 2011 Extended by Governor when the TANF ECF ended 9/30/10

Program Goals: Workers

Provide unemployed and underemployed low-income job seekers with paid work experience that would:
help them support their families gain job skills make professional connections that they could use to find employment in the future

Program Goals: Businesses

Provide businesses an opportunity to:

try out new workers for a period while wages are 100% subsidized train these workers explore whether they are a good long-term fit have the option to hire them once PITW ends

Program Eligibility: Workers

A Trainee-Worker Must

Be legally present in the U.S. and authorized to work Be an Illinois resident Be a parent of a minor child (custodial or noncustodial) or be between the ages of 18 and 21 and living with a parent or caretaker relative

Have a household income under 200% of the FPL Be willing to work at least 30 hours per week Not be a registered sex offender

Program Eligibility: Businesses

An Employer Must

Not be in default on payroll or business taxes Comply with applicable labor laws Provide a minimum of 30 hours of work per week per
trainee-worker

Provide necessary training and supervision Not hire trainee-workers to comprise more than half of
the workforce at each worksite

Not rehire individuals that were laid-off after 3/15/10 Not belong to certain sectors

Program Design: Statewide Reach

26 subcontractors:
recruit employers and job seekers within geographic regions make matches between job seekers and employers
IDHS

Subcontractors and HHCS receive a fee for each job placement HHCS is the employer of record for all trainee-workers Trainee-workers are paid $10 an hour
Employers

HHCS

Pays Wages
26 Subcontractors

Job Seekers

Program Scale
PITW

Gross Wages and Trainee-Workers Paid

25,000 $18,000,000 $16,000,000 20,000 $14,000,000 $12,000,000 15,000 $10,000,000 $8,000,000 10,000 $6,000,000 $4,000,000 $2,000,000 0 $0

put 27,000 lowincome people to work through 4,200 employers paid over $213 million in wages generated over $26.7 million in federal income, Medicare, and Social Security taxes

5,000

Gross Pay

Worker-Trainees Paid

Picture of Employers

Majority for-profit or nonprofit Majority small 62% never participated in subsidized jobs program
Worksites by Type of Business
Corporation 42% 16% Individual Non-Profit Other Public
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Size of Employer by Total Number of Employees

1.6% 7.1% 5.1%

19.1%

500 or more 100 to 499 50 to 99 15 to 49 5 to 14 Less than 5

5% 5% 31%

34.6%

32.4%

Employer Reasons for Involvement

Help struggling community and neighbors with jobs Create an opportunity for somebody who wants to upgrade skills/get trained Opportunity to "test" new workers without risk but with potential to hire later Opportunity to have subsidized labor for a few months Help struggling business Test partnership with a social service agency for another program Other

60% 58% 53% 45% 25% 14% 3%

Top two reasons: altruistic? Significant portion testing involvement in more permanent way

Recessions Business Impact

27% report that businesses were financially unhealthy or very unhealthy before PITW Only around 1 in 7 reported experiencing no negative impacts of the recession on their business

49% experienced cash flow problems 36% experienced reductions in sales 31% had an increase in customers paying late or not at all

Weathering Recession

36% reduced employee hours 36% put off upgrades and expansions 35% operated with a deficit 35% froze hiring

As a Result of PITW

74%: productivity increased 69%: current workforce satisfaction with workload improved 67%: able to serve more customers 61%: quality of work improved 58%: saw customer satisfaction improve 58%: financial health was better or somewhat better
47% attributed at least half of that improvement directly to participation in PITW

Employer Satisfaction

88% indicate they would participate in PITW or a similar program if it were offered again If the wage subsidy were halved, 40% of employers report they would participate, and 43% might participate

Employer Satisfaction

67% would give an employment reference for more than half or all of their TW 52% of employers would permanently hire half to all of their TWs if they were financially able to do so Half of all employers stated that they are more willing now to hire low-income parents and young adults than before PITW.

Takeaways Related to Businesses

Program had important outcomes for businesses Changed minds about hiring certain population Lessons for employer engagement

For More Information:

Amy Terpstra aterpstra@heartlandalliance.org www.heartlandalliance.org/research