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Admittedly, such histories take a toll on worker performance. MPI's retention rate for former welfare recipients is just 50%, compared with 80% for employees from more stable backgrounds. "They bring so many problems with them," says Hoekenga. "Outside influences like abusive boyfriends or drugs can drag them back into the pit they were in before they came here." Hoekenga hopes to raise the retention rate among his welfare-to-work employees to 75% by hiring them directly from Training, Education and Manpower (TEAM), the Derby, Conn., social-services agency with which he has developed a customized training program. The program runs for 8 to 10 weeks and covers basic workplace skills as well as specific subjects, such as an electronics-industry quality standard. Hoekenga has pledged to hire 20 people from TEAM over the next year.

But job preparedness is only part of the problem. Welfare recipients segueing into the workforce must cope not only with new demands and new situations but also with the remnants of an old bureaucracy that seems designed to make them fail.

Take Maria Ayala, her sister-in-law Carmen Ayala, and Alice Collins, members of the first class of TEAM/MPI trainees who now have jobs on MPI's production floor and have all recently received promotions and raises. The three qualify for state health-care and child-care assistance for two more years, but in order to get it they often have to interrupt their workdays with trips or phone calls to various agencies. Maria Ayala recently had to miss work, for instance, to attend a child-care-reimbursement hearing. And Collins, a single mother of four who has been on and off welfare since 1985, must frequently call social-service agencies from the office. "Every week, it's something different," she complains. "And if you don't have your paperwork done, they'll cut you off."

Those on the other side of the system agree that the process is unnecessarily onerous. "When you start peeling away the layers of the onion, you begin to cry," says Mary Hoppe, a spokesperson for the Florida State Wages Board. "When you look at some of the transitional benefits and what's required for people to access them, it's absolutely ludicrous. To get a free bus pass, you might have to leave work in the middle of the day, take a bus to your local social-services office, wait in line, then take the bus back to work. It isn't work friendly to the employee or the employer."

For small-company executives, the "procedural roadblocks" that Hoppe describes are exasperating. Time spent by employees running bureaucracy-related errands is time that isn't spent on the job. TCA Fulfillment Service, a $1.2-million telemarketing and fulfillment company in New Rochelle, N.Y., employs 30 former welfare recipients as entry-level data processors and in customer service. Those who are still eligible for medical, housing, and food assistance often take off a morning or an entire day to meet with caseworkers. "It's like social services doesn't really care if they have a job," TCA vice-president Lynn Giordano says. Then there's the paperwork that gets piled on the company executive herself. "I'm always writing letters to various agencies saying that they work here, how much they make, and how many hours they've worked," Giordano says. "It's a mountain of paperwork, and it's redundant. People who haven't worked here in two years still send me forms to fill out."

Even so, she says, "for the people I have now, it's all worth it, because they're so good. They're reliable and dependable, and they fit in very well." As she ramps up her company, Giordano continues to tap Opportunity America, a private employment agency that specializes in training and placing welfare recipients. Like many of its nonprofit counterparts, Opportunity America receives government contracts to find jobs for welfare recipients. Giordano pays nothing, so she saves on recruitment. And since Opportunity America takes just part of its fee up front and the rest in two installments after three and six months' retention, she knows that the agency will do everything in its power to keep people on the job. "I talk to the people at Opportunity America at least three times a week," she says. "I get advice on how to handle behavioral and attitude problems, and I know they'd intervene if I asked them to."

Welfare recipients segueing into the workforce must cope with the remnants of an old bureaucracy that seems designed to make them fail.

More prevalent than companies like Opportunity America are the community-based organizations that not only train and place welfare recipients but also provide case management and sometimes serve as quasi human-resources departments for the companies that hire from them. Frank Tucker has been drawing on CBOs for three years to staff Tucker Technology Inc., his $5-million telecommunications company with headquarters in Oakland, Calif. The CEO hires former welfare recipients on a project-by-project basis, putting them to work mainly pulling cable. "I learned the hard way," Tucker says. "I used to just run an ad or go to the employment-development office in whatever city I was working in. If I hired 10 people, on the first day there were two no-shows. The first Monday, I'd lose another two. And after the first paycheck, I'd lose another two to three. The turnover was killing us."

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Donna Fenn

Inc. contributing editor Donna Fenn is the author of Upstarts! How GenY Entrepreneurs are Rocking the World of Business and 8 Ways You Can Profit From Their Success (McGraw-Hill, 2009). Both this blog and the book examine the ways in which GenY is changing the entrepreneurial landscape with new approaches to starting, growing, and managing their companies. Learn more at http://www.upstartsrock.com/.

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