Employer Resource Networks (ERNs)
Intervention: Employer Resource Networks (ERNs)
ERNs are consortia of small- to mid-size businesses that pool resources so they can provide workforce supports to their employees—especially entry-level and low-wage employees—to remove employment barriers and improve employee retention. Success coaches are critical to the ERN model and serve as on-site case managers for employees. They can connect employees to local resources, nonprofit organizations, and public agencies or can be a resource themselves by providing guidance on any challenge or situation that might affect someone’s ability to work. By offering supports that enable employees to retain and advance in their jobs, ERNs also benefit the member businesses by strengthening their workforce and ultimately increasing their bottom line.
As of April 2020, there are 30 active ERNs in the following nine states: Arizona, Indiana, Kentucky, Michigan, Ohio, New York, Wisconsin, Tennessee, and Texas. Presently, ERNs are under development in Nevada, Minnesota, Florida, Pennsylvania, and Massachusetts.
Year first implemented
Member employers invest in the ERNs by purchasing shares of the ERN. Their investments finance the ERN’s annual budget, which is, on average, around $75,000 (2020 dollars) . The actual amount member employers invest depends on how many shares they want to purchase. The cost of a share depends on the specific context of the ERN, such as the number of member employers, local cost of living, and number of success coaches in the ERN.
Further, each ERN determines its own cost structure, but commonly used structures include the following: a flat-fee structure in which every member employer pays the same amount, a tiered flat-fee structure in which member employers’ fees are based on the share of time that success coaches spend on site, or a use-rate fee structure that charges member employers based on the percentage of success coaches’ time they use.
ERNs usually receive start-up funding for their first year from grants, donations, or government subsidies for a portion of the membership dues. After the first year, member employers must cover the full operating costs.
The bulk of the operating costs (about 85 percent) for ERNs are for salaries and benefits for success coaches. Technical assistance and licensing account for about 5 percent of the cost. The term “ERNs” is a registered trademark, and lead organizations must be licensed with ERN USA; also, licensed lead organizations offer technical assistance for developing and implementing ERNs alongside ERN USA. General administration of the ERN accounts for about 10 percent of costs.
The focus of ERNs is to support entry-level and low-wage employees—many of whom receive public assistance; however, services are available to all employees of ERN member companies.
The main goal of ERNs is to boost workforce retention by helping remove or mitigate any barriers preventing employees from succeeding and excelling in their jobs, primarily by connecting them to success coaches. The success coaches serve as case managers and help employees strengthen work-based skills and life skills, as well as navigate daily challenges that affect their performance at work. Success coaches can assist employees themselves or can connect employees to other organizations. A success coach might help employees with communication skills, conflict resolution, or financial education. They might help employees navigate situations in their personal life such as communicating with the IRS or with a utilities provider if issues arise. They also connect employees to government or social services agencies, including those providing resources regarding food assistance, domestic violence, mental and behavioral health, GED and language classes, and free income tax preparation, among others. Success coaches split their time among member employers, offering services on-site at each employer’s location. Success coaches also can meet employees off-site in public places and at alternate times to accommodate different shifts. Small- to mid-sized member employers often are unable to pay for success coaches or similar resource-intensive services on their own. By forming an ERN, employer members can share the costs of these services among the consortia of network members.
ERNs have the potential to benefit employees and employers. For employees, particularly the population of entry-level or low-wage workers, access to community supports can offer stability, particularly if personal and family challenges affect their capacity to hold a job. In turn, decreased job turnover rates and increased worker productivity can boost member employers’ bottom lines. Because member employers pay fees to the ERN and essentially are purchasing shares of success coaches’ time, they are considered both customers and investors in the intervention.
Research on intervention to date
This intervention has not been rigorously evaluated for effectiveness.
There have been no standardized evaluations of the effectiveness or impacts of ERNs. ERN USA does track data on key performance indicators. In its 2018 Annual Report, ERN USA indicated that the networks in Michigan, Ohio, Indiana, and New York served 5,668 employees and their families and completed more than 14,000 service requests. The report identified coaching as the number one service need among employees, followed by financial education and housing.
A 2012 policy brief from the Upjohn Institute for Employment Research, the Ford Foundation, and Disruptive Innovations for Social Change explored broader themes and preliminary takeaways of what creates a successful ERN through interviews with 13 representatives from 6 ERNs in west Michigan. These interviews suggested that the optimal number of employers constituting an ERN is between 5 and 10. Fewer than 5 employers might not achieve cost-effectiveness or adequate economies of scale, and a group of more than 10 employers risks exceeding a success coach’s caseload capacity.
The interviewers also asked respondents about the geographic proximity of member employers. Although ERNs need to have enough members to achieve scale, a large geographical expanse can be inefficient for and impede access to success coaches. In a similar vein, respondents said having a success coach schedule regular time on-site at the workplace helped increase access and built trust among employees that they could regularly stop by and discuss an issue.
More information on this intervention is available from the following resources:
ERN USA (2020). The model. Available at https://www.ern-usa.com/model.aspx.
Hollenbeck, Kevin, George Erickcek, and Bridget Timmeney (2011). An assessment of the BC CAREERS Employer Resource Network: Its contributions to the ERN model, Kalamazoo, MI: Upjohn Institute. Available at https://www.ern-usa.com/blob/site-files.ashx?ID=3.
ERN USA (2018). Key performance indicators. Available at https://www.ern-usa.com/blob/site-files.ashx?ID=15.
Khemani, D., and M. Mack (2018). Expanding employer engagement: A guide to developing & sustaining an Employer Resource Network, Oakland, CA: Social Policy Research Associates. Available at https://www.spra.com/wordpress2/wp-content/uploads/2018/11/ERN-Implementation-Guide-Final.pdf.
Mandsager, N., and J. Saccocio (2016). Employer Resource Networks: Improving job retention through private-public partnerships, Policy & Practice 8–10, 28–29. Available at https://www.ern-usa.com/blob/site-files.ashx?ID=10.
Derr, Michelle, and Pamela Holcomb (2010). Issue brief: Employer Resource Networks, Washington, DC: Mathematica Policy Research. Available at https://www.ern-usa.com/blob/site-files.ashx?ID=1.
Mitchell, G. (2019). Employer Resource Networks offer valuable help to workers, LeadingAge 9(5). Available at https://www.leadingage.org/magazine/september-october-2019/Employer-Resource-Networks-Offer-Valuable-Help-to-Workers-V9N5.
Intervention: Greyston Bakery’s Open Hiring Model
Greyston Bakery is a social enterprise that hires individuals looking for work, no questions asked. Individuals interested in working for the bakery simply add their name to a list, and new employees are hired from the list as openings arise. In practice, this Open Hiring Model allows individuals with barriers to employment (such as limited work history, criminal records, substance dependence, or homelessness) to gain employment with Greyston. In addition to a job, employees have access to an on-site case manager and other services offered through the broader Greyston Foundation to mitigate their barriers to employment. By providing individuals with necessary supports and job experience that can help them get promoted within the bakery or find employment elsewhere, Greyston hopes to address not only participants’ experience of unemployment but also homelessness, food insecurity, educational attainment, nutrition, recidivism, and crime rates.
Greyston Bakery is located in Yonkers, NY.
Year first implemented
Greyston Bakery is a for-profit social enterprise that uses profits from selling its baked goods to reinvest in the bakery to grow the business and support the bakery’s Open Hiring Model.
The bakery also pays a management fee to the Greyston Foundation, which provides a variety of services to bakery employees and supports other initiatives in the local community.
Greyston Bakery focuses on providing job opportunities and support to individuals with any barriers to employment, regardless of background.
Greyston Bakery has operated using an Open Hiring Model since 1982, hiring individuals to work in their industrial bakery, no questions asked. Any individual who can verify U.S. citizenship status, is interested in working at Greyston Bakery, and can perform the physical tasks required of the job can put their name on a list and is hired to work in the bakery when an opening becomes available. By not requiring any background checks, interviews, or résumés from candidates, the model is designed to eliminate systemic barriers to employment while growing the local economy.
The waitlist for a position at Greyston Bakery is, on average, 6 months long. When individuals are first taken off the waitlist, they are hired as apprentices. It costs around $1,900 to onboard and train a new employee through the apprenticeship. The apprenticeship lasts 6 to 10 months, and apprentices receive job-specific training and training on soft skills such as effective communication and punctuality. During this period, apprentices earn $13.00 an hour (as of 2019) and are supervised by a manager with whom they meet every two weeks to discuss their progress. If they complete the apprenticeship in a satisfactory manner, they are hired as an employee making $13.50 per hour and receive health benefits, life insurance, disability insurance, and an annual share of the bakery’s revenue. Apprentices and employees work full time, 40 hours a week.
Employees and apprentices also have access to other services through the Greyston Foundation. The Foundation is the umbrella organization that oversees the for-profit Greyston Bakery, offers workforce development training programs, and operates a supportive care housing facility for formerly homeless individuals living with HIV or AIDS. These services are available to Greyston Bakery apprentices and employees, as well as members of the local community. Greyston Bakery partners with Westchester Jewish Community Services to provide apprentices and employees with an on-site care manager who offers individualized case management, including referrals to those services offered by the Greyston Foundation and other services available in the community.
Research on intervention to date
This intervention has not been rigorously evaluated for effectiveness. Although there have not been any evaluations of the Open Hiring Model, Greyston Bakery tracks the services it offers. According to data provided by Greyston, the bakery accomplished the following:
- Currently employs 67 individuals
- Hired 40 new Open Hire employees in 2019
- Employed Open Hire employees for an average tenure of 3.6 years
- Paid $2.3 million in wages to Open Hire employees in 2019
- Offered a mean annual gross pay of $37,617 across Open Hire employees who were employed for all of 2019
- Served 59 percent of Open Hire employees through the on-site care coordinator since 2016
According to the chief executive officer of Greyston, the Open Hiring Model has not led to higher employee turnover rates, with Greyston’s turnover rate matching the industry average. Greyston Bakery has also been able to grow its revenue while operating the Open Hiring Model, working with large customers such as Ben & Jerry’s and Whole Foods. Greyston was able to further increase its visibility after becoming a benefit corporation, a legal designation in some states (including New York) that requires the business to focus on social impact in addition to profit. In 2018, Greyston Bakery earned $20 million in revenue.
More information on this intervention is available at the following sources:
Anderson, Jacquelyn (2015). Impact to last: Lessons from the front lines of social enterprise – Greyston Bakery, San Francisco, CA: Roberts Enterprise Development Fund. Available at https://redfworkshop.org/wp-content/uploads/2015/12/GB-Case-Study.pdf.
Leipziger, Deborah (2013). Greyston Bakery: Combatting poverty by making a profit, Washington, DC: The Aspen Institute. Available at https://assets.aspeninstitute.org/content/uploads/2019/01/Greyston_121813.pdf?_ga=2.225495706.1249414186.1576154911-880145117.1574642102.
Van Wert, Chet (2018). Case study: Greyston Bakery, New York, NY: New York University Center for Sustainable Business. Available at https://www.stern.nyu.edu/sites/default/files/assets/documents/Greyston_Chet%20Van%20Wert_07.2018.pdf.
Rosenberg, Tina (2019). No background check, drug test, or credit check. You’re hired!, New York Times, Wednesday, May 29, 2019, Opinion section. Available at https://www.nytimes.com/2019/05/29/opinion/greyston-bakery-open-hiring.html.