The challenges of hiring, retaining, and training employees in the inner city are the same as they are elsewhere -- and then some. Here's how several CEOs of Inner City 100 companies build and manage their staff.
The challenges of hiring, retaining, and training employees in the inner city are the same as they are elsewhere. And then some.
At Jen-Cyn Enterprises Inc. (#91), in Camden, N.J., workers who come up a little short of cash know just whom they can turn to: their employer. "It's kind of like an unspoken thing out in the warehouse," says CEO Carol Ann Clements. But it adds up to serious money. Last year Jen-Cyn, a galvanized-steel distributor, advanced more than $26,000 to 30 of its 50 workers for unexpected contingencies. Sometimes the loans were for a few hundred bucks, money to buy an old car to drive to work in or to put down as a security deposit on an apartment. Part of the job of the human-resources director, whom Clements hired in 1998, is to keep track of all the loans, which employees repay, $50 to $100 a week, out of their wages.
Why pay people for work that they haven't even done yet? After all, the employees could easily quit before paying back the money. But Clements thinks the risk is worth it. "That kind of stuff goes a long way with these guys," she says of her employees. "They know that if they get behind the eight ball, they can go to HR."
In Camden, it's all too easy to get behind the eight ball. Clements hires from a labor pool in which the median household income is about $20,000 and the unemployment rate is 13%. But she has found good employees there. New hires may come in without skills or experience, Clements says, but if they have the motivation to show up on time, stay, and learn, they'll do fine at her company.
But how do companies find such workers? And how do they keep them, once they've found them? The CEO of a business based in a suburban office complex might woo employees with stock options or concierge services. In fact, some inner-city businesses are offering those perks, too. But they're also offering less glamorous, more pragmatic benefits. Clements reimburses all employees once a year for their OSHA-required steel-tipped shoes. And she gives new employees an advance to buy them. "Many of them don't have $30 to $40 up front for work boots," she says.
When you get right down to it, say Clements and other Inner City 100 CEOs, inner-city employees don't have goals or desires that are vastly different from those of any other employee. A regular paycheck. A chance to rise. A place where they feel they belong.
But don't forget about the work boots, either.
Searching out the best
For Scott Wolfe, good employees are like customers. Step one is getting them in the door. And to do that Wolfe relies on the same techniques that he uses to attract customers to Wagner's Meats (#31), his minichain of convenience stores, which are in some of the poorest neighborhoods in New Orleans. "I think inner-city people want the same thing suburban people want," says Wolfe. "They want to be in a nice, clean, safe environment, like everyone else."
So Wolfe has engineered his stores to create a sense of security in high-crime districts. He doesn't sell rolling papers or "adult magazines." He packs his stores with a range of services -- grocery, meat counter, and check cashing -- to keep them full of people. He uses shorter shelves to keep sight lines free. And his efforts have paid off, both in growth and security: $8.5 million in revenues and zero holdups.
When Wolfe hires someone for a job working a cash register or cutting meat, the odds are, that person was a customer first. Finding the best employees is more complicated than offering a safe environment, of course. That's why if you're looking for a job at Wagner's, don't even bother asking for an application. Wolfe doesn't accept them. Too easy to fill out, he says. "We only take résumés," Wolfe explains. "We ask for résumés from everyone, because we have discovered that if someone leaves our facility and goes home and writes up something, even if it's handwritten, we find that person really cares."
In interviews Wolfe prides himself on asking questions that candidates won't be prepared for. Who's your favorite band? What's your favorite TV show? What do you usually do on Saturdays, starting from the time you get up to the time you go to bed? He got the idea when his son applied to a selective high school and was hit with the same questions in his interview. Assessing an applicant's motivation is key. "You find out about character," Wolfe says. "Gee whiz, you can learn everything about a person!"
Or almost everything. Since an applicant's TV preferences won't necessarily reveal a past criminal record, Wolfe also takes advantage of the services of the Louisiana State Police, who check criminal histories on all managers free for stores that, like Wagner's Meats, offer video poker. Jen-Cyn's Clements relies on local employment agencies for similar screening, including drug testing.
"Drug testing wasn't something that we were eager to get involved in because it's a hassle," says Donna Pierson, human-resources director at Belkin Components (#30), in Compton, Calif. "But all the companies down the street were doing it, and we were getting all the people who failed the process."
In hiring, it also helps to know your neighborhood, say other Inner City 100 entrepreneurs. When Gary Fails, CEO of City Theatrical Inc. (#43), needs an entry-level employee, he just asks around in the South Bronx neighborhood where his company is based. "There's one guy who has an auto-repair shop and his own apartment building, so he literally owns a corner of the South Bronx," says Fails, whose company manufactures lighting accessories for the entertainment industry. "He knows all the young people getting out of school and the people getting out of the service."
Giving them what they want
Once a quarter A.J. Wasserstein gets to work early with doughnuts and bagels and makes himself available to his 45 employees for what he calls "the breakfast club." Any of the people who work at his records-storage company, Archives Management Inc. (#78), in Watertown, Conn., can come in and chat with the boss. That's how he found out what his employees really thought of the company's health-insurance program. "Our health-care program used to suck," Wasserstein says. "And someone made me aware of it."
His employees, it turns out, wanted an HMO-type plan that would be easier to use than the fee-for-service plan that Wasserstein had picked out. "There was an overwhelming desire from people to have a program that provided a health-plan card," says Wasserstein. "They wanted to go to the doctor or pharmacy and whip out a card." No paperwork, no deductible. "Don't make me pay $500 for a deductible," one employee told him, "because I'll never have $500."
When Scott Wolfe hires someone for a job working a cash register or cutting meat, the odds are, that person was a customer first.
So Wasserstein changed health plans. No big deal -- he likes tinkering with benefits and pay. Just like the government, Wasserstein says, he tries to do a little social engineering from time to time. Every month, for instance, he gives out $50 gift certificates as prizes in different, unpredictable categories: for the employee who pulled the most orders or the driver who made the most deliveries. They're a bit of recognition for excelling at jobs that, Wasserstein admits, are often boring and repetitious. Warehouse employee Eddie Santiago says he's worked at companies where "you get a smile if you're lucky. Here, they let you know when you've done a good job."
Nevertheless, employee turnover is a recurring problem. "Someone who works for us 12 months, that's a winner," Wasserstein says. Santiago, for instance, is actually on his second stint at Archives Management. He quit the first time after a disagreement with another employee and recently returned through a temp agency. "Eddie drifts in and out -- that's OK," says Wasserstein. "We've brought some stability to his life."
Still, Wasserstein tries to slow down the departures with a "Pay to Stay" bonus: $100 for every six months of continuous employment. "To the extent that you can defer departures, and the deferment costs only $100, you're ahead of the game, because turnover is expensive," he says. Another new benefit may help cut turnover: thanks to a Connecticut program, Archives Management may be eligible for $25,000 to lend or give to employees to help them buy their first home. If the grant comes through, the company could lend a worker money for a down payment at 2% interest and no principal payments for five years. If the person is still employed by Archives Management after five years, the loan will be forgiven. "They can afford the $500-a-month mortgage," Wasserstein says of his workers. "Never in a million years can they get the money for the down payment and closing costs."
How often employees are paid can also make a difference, Scott Wolfe of Wagner's Meats has found. He used to offer annual bonuses -- a flop. "We found that no one focused on it. We're typical of groceries and convenience stores in that we have high turnover," he says. Monthly bonuses got his employees' attention, he found: on the employee-retention front, "85% of locations met their target." In January, Wolfe switched to weekly bonuses in the hope of motivating workers even more. For instance, cashiers collect an extra $20 a week based on their scan rate, their void rate, and storewide profit targets for meat and cigarettes.
Breaking the language barrier
Rodger Zepka can't strike up a conversation easily with many of his employees. Zepka runs New York City's Envios, R.D./Pronto Envios (#27), a money-wiring service directed mainly to Hispanic immigrants who want to send funds back home. Like his customers, most of his workers are native Spanish speakers. Although all employees are supposed to be bilingual, in practice many have limited English proficiency. And despite some high school Spanish, Zepka is really an English-only guy.
The language barrier can be frustrating, and it makes Zepka somewhat dependent on his bilingual management team, he admits. But in another way, Zepka figures that having a company that functions in Spanish is a distinct advantage. In a tight labor market, it's an intangible benefit that helps him recruit and keep workers from the Hispanic neighborhoods that Envios serves. "You don't have to speak English to work in this company," Zepka says. "That's what keeps a lot of people in."
The people include employees like Alejandro Hurtado, an accountant who emigrated from the Dominican Republic four years ago. Envios has encouraged him to learn English and helped pay for some classes. Although Hurtado understands a lot of the English he hears, he still can't speak it very well. But he doesn't need to speak the language to do his job as accounts-receivable manager. If he can't communicate with someone in English, there's always someone around to translate.
Rodger Zepka figures that having a company that functions in Spanish is a distinct advantage. In a tight labor market, it's an intangible benefit that helps him recruit and keep workers from the Hispanic neighborhoods that Envios serves.
In fact, Zepka says, it's possible to recruit highly qualified immigrant professionals if you don't insist on English skills. He occasionally hires recently arrived doctors and lawyers for sales and customer-service positions, since those professionals are used to working with people. Typically, they stay about a year until they bring their English up to speed and acquire their U.S. licenses.
Cabinetmaker Bill MacWilliams of Chicago's Ameriscan Designs Inc. (#23) tells a similar story. "Looking back on it, I hired many people who weren't that good," he says. The turning point came when he brought on a recent Cuban immigrant who had an engineering degree but spoke no English. That didn't matter much. "He didn't even have many skills, but he was a talented and hardworking person," says MacWilliams. "As we hired new people and trained them, they came in here and saw him, how hard he worked." That one hire and his work habits ended up setting the tone for the entire shop, MacWilliams says.
Of course, hiring large numbers of non-English-speaking recent immigrants does force companies to adapt. For instance, Belkin Components has offered to provide on-site English classes for its employees and has sent human-resources director Donna Pierson to Mexico for a monthlong immersion program in Spanish -- twice. "I use Spanish, I'd say, every day," says Pierson. She often finds herself dealing with matters far removed from run-of-the-mill HR concerns like vacation time and sexual-harassment policies. Instead, an employee might ask her to explain a car-recall notice or a note from his child's school. "We can serve as a resource for our employees," says Pierson.
At Davies Office Refurbishing Inc. (#96), in Albany, N.Y., CEO Bill Davies hires regularly through the International Center of the Capital Region, a nonprofit agency that serves the city's immigrant population. "It's difficult," says Davies. "I don't speak Vietnamese; I don't speak Serbo-Croatian; I don't speak all that much Spanish; I don't speak Russian." But his employees and potential employees do. When he interviews a non-English speaker, Davies usually enlists bilingual employees to help out or lets the candidate bring along a friend to translate. With new hires without English skills, Davies relies on the buddy system. "We try to pair them up with people who speak English as well as their native language," he says.
Getting up to speed
Like most CEOs these days, Al Fuller worries a lot about finding good employees. For the past couple of years, he's been relying on temps from the surrounding neighborhoods in New Brunswick, N.J., to fill openings at his company, Integrated Packaging Corp. (#8), with the hope that they'll work out well enough to be taken on as permanent employees.
The problem is, they hardly ever do. Usually, says Fuller, the temps don't have the skills to operate the company's high-speed machinery, which presses giant spools of paper into corrugated cardboard and then slices and folds it into packing boxes. Or sometimes they need drilling in basic work habits, like showing up every day.
Last year, however, Fuller saw an opportunity to open a fulfillment center -- and to develop the skills he needed in his employees. "In urban areas what we found is, you have to invest in training," he says. "We anticipate that not everyone who comes in the door is a ready-made employee." The new facility, I-Pac, draws on temps and welfare-to-work placements, paying them minimum wage to $9 an hour. "We're teaching them work skills: how to get to work on time, how to fill out time sheets, the rudiments of customer service," says Fuller. So far one I-Pac employee has graduated to a higher-paying job at Integrated Packaging, where wages are $10 to $15 an hour. Two more are likely to make the move soon, Fuller says. "We think that two or three years from now, for nonsupervisory manpower, I-Pac will be the sole source."
At Chicago's Ameriscan Designs, very few of the new hires have any cabinetmaking experience. But as soon as those employees can demonstrate to their foreman that they have mastered the 10-step process of building cabinets, they get a raise, says CEO MacWilliams. Then MacWilliams encourages them to assume more responsibility -- sending them alone to job sites to take measurements, for instance, so that they'll have "more of a vested interest in getting the job done," he says.
For some CEOs, the biggest hurdle in inner-city hiring is a cultural one. For entrepreneurs with middle-class, suburban backgrounds, there's often a big gap in education, wealth, and language between them and their employees. The challenge is to bridge that gap to motivate people. "I always feel that I as an individual and company want my employees to succeed more than they do," says Wasserstein. "They don't believe that if you work hard and are energetic and enthusiastic and stick with something, there are rewards. They don't believe in the system."
"People are a product of their environment, and if they didn't grow up with the spirit of getting up every day and going to a job, they won't be that kind of adult," says Integrated Packaging's Fuller. Fuller -- from a poor urban background himself -- knows whereof he speaks. His remedy: teaching his employees to care about keeping the company's customers happy. Fuller hangs signs in the plant that list the company's top customers and their criteria. He makes a point of introducing workers on the plant floor to visiting customers or potential customers. "They get a chance to engage with the customer directly; there's a relationship they build," he says. "When they run that customer's box, they know it's important."
Emily Barker is a senior staff writer at Inc.
For a detailed list of Inner City 100 companies, please see The Inner City 100: America's Urban Superstars.
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