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Moving People to Jobs UPS's Transportation Plan

February 18, 2001
Related Topics: Candidate Sourcing, Workforce Planning, Featured Article
The economy is booming. New jobs arebeing created at a record pace - approximately 70 percent of them in thesuburbs. Yet despite these opportunities, many residents of urban neighborhoodsdon’t apply.

    Why? The jobs are available. The peopleare qualified. Where’s the disconnect?

    This was the situation faced by UnitedParcel Service in the late 1990s as the company tried to staff its largepackage-sorting plant outside Chicago. The problem was - and is -transportation. Without their own transportation, job candidates living in urbanlocations simply don’t have a way to get to work in the suburbs. They don’tapply for these jobs because they just can’t get there.

    The solution to the problem is a bitmore complex. It involves issues that employers sometimes like to avoid:grass-roots politics, deep community involvement, working with public agencies.But over the past two years, UPS, the nation’s fourth-largest employer, facedthe challenge head-on and created a transportation solution - and a blueprintfor solving this growing dilemma.

Employee retention rate: five times greater than average

    The result? Through this uniquepublic-private access-to-jobs transportation program, UPS now moves 3,300part-time employees per day from the inner city to the company’s sortingfacility in the suburbs. Turnover rates are low. Employees are thriving. UPS hasa motivated, dedicated labor pool.

    For 93 years, UPS has been in thebusiness of delivering packages to people. In Chicago, the company has founditself in the business of delivering people to jobs. 

Build it and they will come...ifthey can
   The UPS Chicago Area Consolidation Hubis located in Hodgkins, Illinois, a suburb west of the city. It’s the largestpackage-sorting facility in the world, requiring a workforce of nearly 10,000part-time employees to staff its four daily shifts. UPS carefully chose thesuburban location for its proximity to rail lines, major interstates, and -presumably - a ready workforce.

    Our research showed that the majorityof the population base needed to staff our facility resided outside theimmediate area. When we built the location, we knew that a natural pool ofapplicants lived in the inner city, on the south side of Chicago. They were onlyabout 35 miles away, but they didn’t have an easy, reliable way to get toHodgkins. Very limited public transportation to the site existed. But busesdidn’t run directly from the city to the facility, and existing schedulesdidn’t mesh with UPS shifts.

    Yet the company was dedicated tofinding a solution. We needed people. Plenty of people in the city needed jobs.How could we bring the two together?

    The concept of creating atransportation solution had been tossed about early in the life of the facility.So the idea was there, but UPS wanted to take it to a whole new level. 

Routes: eight from Chicago inner city to UPS suburban hub

First things first
   Although UPS had experience withsmaller-scale transportation initiatives in New Jersey and Philadelphia, theChicago project was a major undertaking. For others considering this solution,some initial homework:

  • Define corporate goals. Before anyprogram of this nature is launched,it is imperative to articulate the desiredoutcome. At UPS, the answer was simple and economic: the company believed thatproviding a transportation optionwould attract and retain quality employees.

  • Put someone in charge. Dan Bujas, a24-year UPS veteran skilled in workforceplanning, labor relations, and operations, was tapped for the job. Bujas, nowtransportation coordinator for UPS’s North Central Region, had two keyattributes: enthusiasm and determination. Ask Dan, and he’ll tell you, “Tomy knowledge, no company had ever done this. My only qualification for the jobof planning and implementing a transportation solution was that I’d been on abus before. But I was confident that the idea could work because logistics isour specialty at UPS.”

  • Learn a little abouttransportation. First, does existing public transportation address thereverse-commute needs of riderscoming from inside the city to the suburbs? And can it accommodatearound-the-clock shift workers in a safe and reliable manner? Second, afixed-route bus system is most cost-effective from a recruitingstandpoint.

    Choose an area densely populated with potential employees, create atransportation “hub,” and move people from there. For UPS, this is afamiliar concept; it actually mirrors the UPS delivery principle ofconsolidation: bringing packages to one location and distributing them from thatpoint. 

Establishing a triangle of support
   An effective access-to-jobs programrequires three key players: a company with jobs, a community with interest, anda transportation entity willing to work with both. Putting together - andnurturing - this triad is the most important and perhaps most difficult step.Equal commitment from all three “legs” is required for the program to stand.And it is the company’s responsibility to maintain the relationship.

    As UPS assessed the communitysituation, it became clear that a lack of personal transportation often isolatedresidents from good-paying, career-oriented jobs. In the Chicago area, thiseffect was most dramatic in the Seventh Congressional District.

    “Local employment opportunities havediminished dramatically in my congressional district,” says RepresentativeDanny K. Davis. “We estimate that the district has lost about 130,000 jobsover the past 30 years. Furthermore, studies show a current unemployment rate of40 percent in my particular area.

    “Many of our citizens are hardpressed to find employment because a significant number of available jobs are inplaces away from where the people live. Because you can’t always bring thejobs to the people, we had to figure out a way to get the people to where thejobs are. People view a lack of reliable transportation to and from work as arecipe for failure. They don’t apply if they’re not sure they can get thereregularly.”

Riders: approximately 3,300 per day - one-third of hub workforce

    At UPS, we took Davis’s words toheart. Our mission reflected a philosophy to develop an access-to-jobs plan thatwould remove the perception that alack of transportation was a barrier to employment. Our solution was to develop,implement, and communicate a reliable, affordable, and safe mode oftransportation. If we didn’t meet those three criteria, it would fail.

    The Seventh Congressional Districtwould be the initial focus of the UPS effort. And Congressman Davis and hisconstituents would be the crucial community partners that UPS needed to begindesigning a workable long-term transportation solution.

    The next step: the transportationagency. Pace Suburban Bus System, the public agency serving Hodgkins, originallywas not interested in participating. “We were a newly formed agency, and wewere not interested in any major route restructuring,” says Thomas J. Ross,executive director of Pace. “We already had two routes serving the facility,but they didn’t carry many people. The relationship with UPS was stormy.”

    Dan Bujas worked to normalize andsolidify the partnership. His sensitivity to Pace’s overall mission andbusiness needs was reflected in his expansion proposal. He edged the UPS programforward by developing the preliminary sketch of a proposed bus route.

UPS unit cost: about 70 cents per day per employee

    Dan’s team identified suggested stopsand departure and arrival times, with no commute longer than one hour. They thenpresented the plan to Pace, which performed afeasibility study, emphasizing route compatibility, connecting service, andother factors. Pace then determinedan operating cost for the implementation of the new service. UPS agreed to coverthe cost of the dedicated routes.

    In exchange, UPS received that samevalue in monthly transit passes, valid all over the city 24 hours a day.Employees do not have to buy the passes; they can continue to pay cash. But theUPS employee discount is compelling. The face value of the card is $75; UPSoffers it to employees for $50. If the person rides only Pace to and from work,a monthly commuter pass is $49. We offer that to our employees at $25.Basically, it works out to a little over $1 per day that the riders pay to getto and from work.

    This arrangement is a winner. Thetransit agency expenses are covered. UPS can recoup some of its seed money byselling the passes to employees. And riders have access to bus transportationcitywide.

    The cost to UPS? About 70 cents perrider per day.

    Davis couldn’t be happier about thebenefits for his constituents.

    “The bus is a reliable, safe andaffordable means of transportation, and effectively breaks down the barriers toemployment for our community,” he says.

    “What really pleases me is the kindof work that our citizens are able to secure with UPS. They receive good pay andexcellent insurance benefits. They are also able to receive tuition assistancefor school or college. This provides workers with the opportunity to grow andmove beyond where they are to get where they really want to be.

    “This has been a successful programbecause UPS has empowered people with the responsibility to coordinate,facilitate and take a hands-on approach to make this initiative happen. I feelthat through this program, UPS has bettered the lives of people within mycommunity and given them hope for a brighter future.” 

The blueprint for success
   According to Bujas, the success of theprogram has spawned continued growth. “Northwest Indiana is one of our biggestopportunities right now,” he says. “And we’re also finding more ways totie in with UPS’s many employee-assistance programs. Transportation is thecatalyst to make improvements in the quality of life of our employees and theircommunities.”

    UPS offers the following five lessonslearned:

  1. Be willing to fund the project.Securing outside funding is often slow and cumbersome, with little or noguarantee of success. A successful, proactive organization must be willing toseed these initiatives, and that takes a substantial investment on the part ofthe company. This financial commitment is a tangible sign of the organizationallevel of dedication.

    "You can’t expect something fornothing,” says Bujas. “Even at 70 cents a head, it gets into serious money.But we’ve demonstrated that we’re in it for the long haul. We need employeesnow and we’ll need them in the future. Our financial commitment gives us thecredibility we need.”

  2. Develop a good working relationshipwith a public sector transportation agency. The arrangement with Pace has beenintegral to the success of the UPS model. “We recognize that partnering withUPS to provide access to these jobs satisfies our mutual goals,” says Pace’sRoss. “It’s been successful because neither side has been greedy. We knewwhat we needed to do, and so did UPS. We made a decision to communicate clearlyand quickly. Both sides have done a great job of developing the habit of sayingyes to each other.”

  3. Identify and develop communitysupport. UPS and Congressman Davis had alreadyworked together on a pilot jobs program called ICAN, an acronym for Investing inCareers and Neighborhoods. Adding a transportation component was a natural nextstep. Congressman Davis’s support - and his relationship with other communityleaders - keeps the program vital.

    “We approached Congressman Davis with aconcrete way to impact the unemployment problem in his district,” says Bujas.“His belief in the solution spread deep into the roots of the community. Thatongoing support is crucial because we are at the mercy of communityorganizations. We’re only as effective as they are in terms of getting ourmessage across.”

  4. Market it. Once the program isestablished, ensure that the company’s human resources group is able toproperly “sell” candidates on the idea. In employment ads and at job fairs,UPS always notes that transportation is available. Plus, word of mouth andnetworking make recruiting much more effective. We want people to look at whatwe have to offer and say, “That’s the company I want to work for. Andthat’s the job I’m going to apply for first.”

  5. Keep working. UPS is committed tothe transportation program for the long term. But to keep the programuser-friendly, the company has made a dedicated effort to stay aware of changingdemographics, political considerations, and funding opportunities.

    To finally assess the success of theprogram, consider the bottom line. What are the benefits? For about 70 cents aday, UPS gets a dedicated, quality employee, with a retention rate five timesgreater than average. The community receives a transfusion of the economiclifeblood that keeps it vibrant. The public transit agency is fulfilling itsmission, with 2 percent of its ridership guaranteed and 100 percent costrecovery for the dedicated routes.

    The program also has receivedrecognition from The Conference Board, which spotlighted UPS’s success in itsreport, Innovative Public-Private Partnerships: Easing the Path from Welfare toWork.

    “Through grassroots efforts, thecompany developed an elaborate infrastructure comprised of local transportationagencies, community colleges, social service agencies, and local leaders,”according to the report.

    “The program’s success hasencouraged  state officialscollaborating on these initiatives to pursue additional funding to expandreverse commute programs.  UPS’spartners assert that the company’s commitment level has created transportationand employment alternatives that have not developed when working with otherconstituents in the public or private sectors.

    “By using a variety of communicationsmethods, the program has been widely received. Effective communicationsstrategies like the multimedia campaign...broaden the scope of the initiativesto reach larger audiences.”

    It wasn’t an easy solution toconstruct; public-private partnerships rarely are. But for UPS, the benefitscertainly outweigh the costs. It’s a solution that works. For the company andfor the community.

Workforce, February 2001, Vol80, No 2, pp. 106-111  SubscribeNow!

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