James A. Mitchell| Crain’s Custom Media
Applying basic business strategies to improve employee retention rates has proven a winning formula for Grand Rapids-based organization, The Source, and its member companies. Organizers said that approaching the issue from a sustainable, profit-producing perspective, can find the same success anywhere as seen in Western Michigan.
The program is simple: provide employees with resources beyond job-skills training – from day care to transportation solutions to English as second language courses and other services.
Could it work in Detroit? Executive Director Randy Osmun said Detroit has the basic elements needed for a similar program to work: A capable workforce, local resources and industry leadership. Since its launch in 2003 The Source has taken its model to Colorado, Washington and Vermont, and expects to soon launch the plan in Toledo.
“It’s not just focused on people in poverty,” Osmun said. “The middle class has barriers as well. Our business leaders understand that it’s a complicated situation, and taking care of employees is the most cost-effective practice.”
The program was inspired by Cascade Engineering’s outreach efforts in the late 1990s. Human Resources Director Linda Grund said that the “welfare-to-career” program was designed to do more than just offer a “hand up” out of poverty.
“When we started it we were having a hard time pulling in good people,” Grund said. “The owners also wanted to help people get off welfare. We all have barriers outside of work that keep us from being focused.”
The idea was to provide employees with resources beyond job-skills training – from day care to transportation solutions to English as second language courses and other services. Cascade’s program included having a state human services caseworker on-site to serve as a neutral advocate for employees.
In 2003, Cascade’s blueprint expanded with The Source, a coalition of more than 20 member companies and agencies that, Grund said, tackled the same issues with “strength in numbers.” Private caseworkers were hired to assist even more employees in need of resources, notably during the rise in housing foreclosures a few years ago.
The strategy paid off: Retention rates at Cascade improved in eight years from less than 50 percent to 97 percent. The organization operates across industry sectors and for union and non-union businesses representing more than 4,500 employees.
Osmun said the key difference between The Source and similar programs offered through state or federal agencies is being managed with an eye toward efficiency. Rather than each company re-inventing the wheel, Osmun said the Source provides connections to existing resources in a cost-effective manner.
“We’re different than those that take a charity focus; ours is around building better businesses,” Osmun said. “It takes a CEO champion to get behind the idea, recognize the value of employees and the cost of high turnover rates, and go to his CEO buddies and say that this has made a difference. That peer-to-peer relationship is what drives this model.”