Low-income workers, with generations of poverty in their family history, have particular challenges that can keep them from being successful at work or even just making it to the workplace. The Vermont Society for Human Resource Management (SHRM) State Council wants to help employers give their employees the tools to overcome poverty and stay on the job.
A number of indicators point to deepening poverty and widening gaps between rich and poor in Vermont, according to David Murphey, senior policy analyst for the Vermont Agency of Human Services. The average annual wage of Vermonters has remained consistently under the national average for over a decade. And about one in 11 Vermonters lives in poverty. But drawing a paycheck doesn’t put an end to those problems.
“Low-income workers have barriers in their lives—child care, literacy, health care and transportation, for example,” said Beth Kuhn of the Vermont United Way. “There can be high turnover among people coming from backgrounds of poverty.”
Kuhn said that a major local employer has 40 percent annual turnover among its cleaning and housekeeping staff, which is much higher than the national average for its industry, and that nearly half of those who leave do so in the first 90 days.
“They never quite get established in a job,” Kuhn said. “Our hypothesis that we hope to test is that if you intervene a lot up front and get employees over the hump and established, then they stay.”
In 2006, the Vermont State Council developed an innovative training program to raise workplace awareness of poverty. The training built on the work of Ruby Payne, Ph.D., of the aha! Process Inc. , which began in 1994 focusing on the difficulty that poor children experience in most schools. A Michigan corporation, Cascade Engineering, adapted Payne’s work and gained an 80 percent retention rate in its welfare-to-career program. Based on the Cascade experience, the Vermont State Council asked aha! consultant Phil DeVol to conduct two-hour training sessions at six locations throughout the state.
Next, Vermont SHRM partnered with the United Way, Chamber of Commerce and other groups to use that awareness to launch a more ambitious project: identifying best practices to help companies hire and retain employees coming from backgrounds of generational poverty. Vermont SHRM called the project Working Bridges, and by June 2007, a work group had been created and almost 100 participants had attended two training sessions.
Working Bridges now includes two active work groups, one focusing on financial stability assistance and the other on training. A third group, just getting off the ground, is looking at employee mentoring.
Financial stability. “Families that are struggling to make ends meet have different issues than families that aren’t living from paycheck to paycheck,” said Gina Catanzarita, HR director for Engelberth Construction of Colchester, Vt. “If a car breaks down, or a heater stops working, or a light bill comes due sooner than expected, families experience stress, and sometimes they come to HR and ask for cash advances.”
The Working Bridges financial stability project has researched best practices in handling employee requests for advances and emergency cash assistance and has identified a credit union that will advance employees the money.
“HR doesn’t want to be a lender,” said Kuhn.
“Sometimes these employees had no prior relationships with a financial institution,” said Justin Worthley of Rhino Foods, another project participant. With the help of Working Bridges, Rhino set up a program to use the credit union to authorize loans of up to $750, to be paid back by payroll deduction. “Otherwise, the employee might not even qualify for a loan,” Worthley observed.
Worthley would also like to see the day when all employees who ask for loans or advances would receive a financial assessment and financial literacy training to allow them to get out of the cycle of living from paycheck to paycheck.
“The financial stability group is our best success story so far,” says Johan Maitland, an attorney with Burlington law firm Downs Rachlin Martin, and Vermont SHRM’s diversity director.
Training. The project has also set up a subgroup to develop programs to train organizations about economic class issues.
“Most of our supervisors are middle class, and they think that if a car breaks down or a child gets sick, the employee should just deal with it and get to work,” said Catanzarita. “They need to be sensitive to the way these issues affect people in generational poverty.”
For a meeting planned for fall 2007, for example, the group planned to bring in the CEO of Cascade Engineering to speak to other CEOs and work group members. By the end of 2007, the training group hopes to have developed a best practice approach to training and a resource list of external training programs.
Mentoring. A third subgroup, still in its infancy, will focus on employee mentoring approaches.
“The mentoring program will help get low income employees over the barriers they face,” said Kuhn. “We’ll also be working with senior managers to understand those problems.”
Meanwhile, Working Bridges has produced a one-page resource guide that it distributes to HR and other managers. “ What Gets in the Way ” lists resources available to employees to help with heating costs, ride and carpool information, how to access state health insurance programs, and information about low-cost legal services. The guide instructs recipients to either call the United Way or 2-1-1, the state’s free health and human services information and referral service.
For more information on the Working Bridges project, visit the Vermont SHRM web site at vtshrm.shrm.org.
Diane Cadrain is an attorney and freelance writer in Connecticut.