THE BLOG
02/12/2013 01:14 pm ET | Updated Apr 14, 2013

Subsidized Employment -- It's Good for Business

If you own a business and you haven't heard the words "subsidized employment" or "transitional jobs," you'll probably be interested to know that these effective employment solutions could help save you time and money.

Transitional jobs combine wage-paid work, job skills training, and supportive services to help individuals facing barriers to employment succeed in the workforce. Transitional jobs workers have all or part of their wages subsidized by the transitional jobs program for a limited period of time, which offers employers a chance to build capacity and try out a new worker with little risk. In exchange, the employer provides an environment in which the transitional worker can build skills and gain experience. This model helps small businesses and non-profits that can't afford to add staff find qualified workers at a reduced cost to increase capacity and productivity.

These aren't just theories -- these programs have been shown to benefit employers by lowering the cost of hiring new employees and increasing business productivity, financial well-being, and customer satisfaction.

As a job developer at Workforce Solutions for Tarrant County, I've seen it myself. The Workforce Solutions for Tarrant County Special Projects Workforce Center is home to the Next STEP and FACT (Fatherhood Coalition of Tarrant County) transitional jobs programs. These programs provide participants, who are mainly formerly incarcerated individuals returning home to Tarrant County, with thorough job readiness training and connect them to work with employers.

Southstar LLC, a Kroger distribution center in Keller, TX, is just one of many employers benefiting from the transitional jobs programs at the Special Projects Workforce Center.

"Special Projects basically acts as a temporary agency for me and really helps me screen candidates," says Debbie Averett, human resources manager for Southstar. "When I have a position available, Special Projects Workforce Center sends me candidates that fit the criteria that I require."

In addition to candidate screening and the short-term wage subsidy, getting good quality employees over the long-term is another major benefit for employers.

"With transitional employment I get the opportunity to try out the candidate and see if they are a good fit for the job and they have a chance to prove to us they will be an asset to our company," says Averett. "I have hired some exceptional employees through Special Projects and they are exceeding expectations."

In the past year, Southstar has offered full-time employment to more than a dozen (over 60 percent) of the transitional jobs workers who were originally hired on a short-term basis through the Special Projects Workforce Center transitional jobs programs.

Some might worry that subsidized jobs could erode private sector job growth or displace other workers. On the contrary, especially in times of high unemployment, subsidizing wages forestalls the erosion of jobs and supports employers in maintaining or increasing productivity. Because the individuals typically placed in transitional jobs would not otherwise be working due to barriers to employment and the need to develop work-readiness skills, the threat of displacement of unsubsidized or incumbent workers is very low.

It's also important to note that transitional jobs programs don't just lower business costs -- they can increase demand. The wages paid to transitional workers are often immediately spent in local communities. This in turn increases local demand for goods and services. One study showed that for a transitional jobs program in select Chicago neighborhoods that placed over 1,500 people in transitional jobs over four months, demand for goods and services increased by over $5 million because of the transitional jobs program.

In addition to the benefits transitional jobs can provide to employers and local economies, these jobs have a broader social impact. Both Next STEP and FACT teach participants not only job search and employment skills, but life skills.

"While the programs focus on careers, they also provide support services to participants assisting them in the transition to long-term employment," explains John Torres, program manager for Special Projects Workforce Center. "We provide training opportunities as well as necessary services to get them started on the job that they have voiced as a passion."

Vic Graffigna, co-owner of Shamrock Industries, Inc., a custom die cast manufacturer in Fort Worth, TX, states that he works with the transitional job programs not just because of the cost savings but because he believes in giving people a second chance.

"Our goal here is to help people," says Graffigna. "Our experience has been that the quality of employees that we have hired who are ex-offenders or have other barriers is that there really is no distinction between them and our employees who do not have barriers. In many cases, our employees with barriers are better employees because they really want to work and are grateful for the job."

And don't worry if you aren't in Texas -- there are transitional jobs programs nationwide. Workforce Solutions for Tarrant County is a member of a national coalition dedicated to getting chronically unemployed Americans back to work, the National Transitional Jobs Network (NTJN). NTJN is a great resource if you're looking to find a local program to work with your business and help fight the jobs crisis.

By Shannon Warmann, Job Developer, Workforce Solutions for Tarrant County Special Projects Workforce Center