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The Rockefeller Foundation Recognizes Small Businesses with Innovative Approaches to Youth Hiring

NEW YORK—The Rockefeller Foundation announced today the honorees of the Innovations in Youth Hiring: Small Business Program, which aims to recognize small businesses throughout the United States that have adopted a unique and effective business-centered approach to youth hiring. The Foundation funded research by the Economist Intelligence Unit (EIU) to identify and screen candidates, establish an advisory board, and select the honorees.

Small businesses—those with fewer than 500 employees—are responsible for 67 percent of all new jobs created from mid-2009 to 2011 and nearly 50 percent of all jobs in the private sector overall. This award recognizes businesses that have implemented innovative and replicable ways to hire young workers from all backgrounds in today’s job market.

Youth unemployment in the U.S. hit record levels in 2010, and threatens to leave an entire generation behind. More than three million American youth are unemployed today, and millions more are unable to secure full-time positions, or jobs that match their skills or draw on formal training. Young people who are unable to transition to stable jobs by their early 20s face a lifetime of lower wages and greater difficulty building a secure financial future. These challenges have devastating consequences for individuals and the country, jeopardizing the lives and livelihoods of an entire generation, and putting the social and economic future of the nation as a whole on the line.

“The honorees of the Innovations in Youth Hiring: Small Business Program present powerful examples of the positive impact that comes when employers are committed to innovative approaches in hiring—impact for a company’s bottom line, for the young workers they employ, and for the local community as a whole,” said John Irons, managing director at The Rockefeller Foundation. “The Rockefeller Foundation is focused on addressing the youth employment crisis at scale by engaging employers to support young workers’ entry into the workforce, and it is our hope that these noteworthy businesses will provide models for success that can be replicated throughout the country.”

Selection criteria, developed by the EIU, included how innovative a company’s process for engaging youth from all backgrounds has been, how easily the company’s models can be replicated by other businesses, and how successful these innovations have been in supporting and growing their business’ bottom line. An expert panel convened by the EIU reviewed the candidate companies and chose the three honorees—one each from the East, the Midwest, and the West.

In the coming months, regional industry stakeholders will highlight the honorees’ business models through local events so that other businesses can benefit from their social impact solutions.

The Rockefeller Foundation is committed to addressing U.S. youth unemployment by engaging employers—from major corporations to small and medium sized businesses—to support young Americans’ entry into the workforce. By creating more meaningful career opportunities for young adults, particularly those who are poor or vulnerable, employers have the potential to meet their business needs while simultaneously helping to build a stronger and more resilient workforce.

The Innovations in Youth Hiring: Small Business Program honorees are:

LiveWatch Security in St. Marys, Kansas: Security-systems company LiveWatch was rapidly expanding, but had a problem attracting enough local, well-trained talent. So the company introduced its own innovative recruiting, training, and retention program in December 2012 that uses a game-like approach to reward employees for their performance.

LiveWatch has embedded itself in its community’s high schools and colleges to attract and recruit entry-level youth. Trainees are assigned to real work with customers, and earn points based on how well they perform and their willingness to try new tasks. Points translate into dollars and hires have the opportunity to greatly increase their weekly pay. LiveWatch employees receive benefits and start at more than double the minimum wage—and because of the point system, some earn quite a bit more.

Among trainees, 12 percent have been promoted to managers or supervisors and 25 percent have been promoted into other roles. After a year on the job, retention is at around 90 percent.

LiveWatch has grown its ranks fivefold from about 20 employees in 2010 to just over 100 in 2014, with youth hires following the same trajectory. About 64 percent of its workforce is made up of youth. The company has also won awards for its customer service, and its growing list of clients includes the U.S. State Department and Department of Justice.

Precision Body & Paint in Beaverton, Oregon: Precision Body & Paint, a two location auto body shop uses a contract-based system to attract promising young workers and train and develop them into master technicians. Master technicians are the revenue center at Precision and in the industry generally. The gross labor margin on a new worker is slightly negative or zero for a few years, so it’s crucial not to lose an investment in training if a worker leaves before he or she becomes a master technician.

A long-term commitment to their education, combined with financial incentives, keeps the company’s talent pipeline full in an industry fighting to produce and retain master technicians. The contract system, which launched in 2006, works because young workers get free on-the-job training and paychecks, as long as they work for Precision during the five-year training period. The company provides training through an unsecured loan that doesn’t require the worker to put up any collateral. If a worker leaves before five years, he or she is obliged by the contract to repay the cost of training received. Workers also sign a non-compete agreement stipulating that they will not leave for a competitor in their first two years of training. Precision has never had to enforce the contract, because no worker has ever left during the term of the contract.

Trainees are paired with experienced mentors to usher in a new generation of workers who have systematically learned how to be skilled auto-body shop technicians. Because trainees work side-by-side with seasoned experts, Precision is assured that its youngest workers will master sophisticated skills that will keep the company competitive and profitable. Since the program began, the average age of Precision’s workforce has fallen by 20 percent, providing reassurance about the future pipeline of talent.

Sharp Decisions in New York City: Sharp Decisions is an IT consultancy that has made the Inc. 500,Inc. magazine’s list of the fastest growing privately held companies in recent years. The company’s innovation is the recruiting, hiring, and training of young veterans using a squad-based approach that places them in a career that often excludes those without connections to the technology community.

Through the Vocations, Education, and Training for Service Members (V.E.T.S.) program, Sharp Decisions offers returning veterans paid training in quality assurance and software testing. After four-to-six weeks of training, the company deploys them in teams of three or more to clients’ offices. This is by design: the idea is that they will be more comfortable in a unit, as in the military. Sharp Decisions evaluates trainees’ skills by placing them on a sample project—they will be placed on a real project with clients only if they demonstrate competency. If trainees are not ready, coursework continues. Veterans receive a performance review at the completion of a project or client assignment by program managers, with input from clients.

Employees in the V.E.T.S. program make a yearlong commitment, resulting in more stability for the company and its clients, and a more predictable cash flow. Sharp Decisions has trained 50 veterans since the program started in March 2013.