When Companies Give, Employees Give Back
For 450 office professionals and production workers at Charlotte, North Carolina-based Wilton Connor Packaging Inc., this is a familiar scenario. The firm, which designs, produces, fulfills and distributes point-of-purchase packaging materials, started the employee service in 1989. The idea came from Wilton Connor, founder and CEO of the company, after he learned about one female employee's plight. She took two buses to get to and from work, cared for two children under age three and had to go to a laundromat to wash and dry the family's clothes at the end of long days. Connor thought a laundry service at work might help ease her burden so he purchased one washer and one dryer, recruited a worker from the production floor to do the cleaning and started the program. Today, the service is so popular that the company owns and operates three washer/dryer sets and employs two people to do the laundering.
But what about the woman's transportation problem? The company took care of that too. Diane Gist, a production manager, contacted the city of Charlotte for information on carpool services. Turns out that the city, in its efforts to encourage carpooling, makes 15 passenger vans available to companies that provide drivers. Wilton Connor surveyed the need for transportation service and discovered that nearly 20 employees were interested. So the company obtained two vans from the city and recruited some drivers from among the people who would be using the service. The vans provide door-to-door transportation to employees and even stop at day-care centers on the way to and from work. Riders pay $7 a week to the city for use of the vans.
These services are just two of many at Wilton Connor designed to help workers simplify their lives. In offering the programs, Wilton Connor joins a growing number of firms whose owners believe in a new employment contract—one of reciprocal investment—that has companies investing in the professional and personal development of employees either through additional employee services, enhanced training or increased opportunities beyond the job. In turn these companies invite employees to invest their energy and creativity back into the company.
The monetary investment for these businesses is often small. At Wilton Connor, for instance, the cost for the additional employee services is fifteen cents per employee per hour, or $540 a day. But in return, the company receives the rewards of turnover well below the industry average, high quality rankings and a productive work force free from some of life's everyday pressures.
Employee services rooted in real need.
The services that organizations employing the new contract offer—such as laundry cleaning and transportation—provide solutions to problems inhibiting employee productivity. Here's another example. Within Wilton Connor's racially diverse work force, seven languages are spoken, which was resulting in communication problems among the staff. So the company offered English classes, which have since ended as the need for them has been met.
The company also hired a nurse to educate its work force about the firm's medical plan and wellness issues after problems in this area arose. Some employees were going to the emergency room for non-emergency illnesses. Others were taking time off from work to go to a free clinic when the medical plan paid for visits to a doctor.
Despite these efforts to cater to employee needs, Wilton Connor is careful not to exceed its limitations. "We're a small and growing company and have to make the most of our limited resources," says Connor. That's why, rather than establishing a costly onsite child-care facility to meet its employees' child-care needs, the company offers a child-care subsidy instead—approximately $85 a month per child.
It also utilizes its own resources to provide its workers added benefits, such as a handyman service, started when Connor unsuccessfully tried to fix a doorknob at his home. He called in an expert, one of the people on the maintenance staff at his company, and had the idea to offer this service to all employees. Its intent is to provide emergency-type home repairs for employees.
The company uses its purchasing power to get good prices on paint, plumbing supplies, hardware, or whatever is needed, which employees using the service pay for through payroll deduction. The company covers the salary of the two maintenance people who do the work at employee homes as their work schedules permit. Because the service is so popular, (there's a waiting list of people hoping to use it) at least one of the two maintenance people assigned to it spends approximately 50% of his time on home repairs. The least senior employees get priority for this service because the company feels they have the greatest need.
Employees view these programs as ways to simplify life, proof that the company cares and affirmation of the wholeness of their lives. They respond by reinvesting their energy and ideas in Wilton Connor Packaging and making it one of the fifty fastest growing companies in the Charlotte area. "In the six years that we've been in business we haven't lost a customer or issued any credits because of poor quality," says Guy Forcucci, CFO at Wilton Connor. "I think that speaks for itself intuitively that the people are doing a good job and like working here." He adds that most of the company's new hires come from employee referrals.
Investments in training pay off with quality service.
Phoenix, Arizona-based The DELSTAR Group is committed to its work force in the same way that Wilton Connor is. Rather than providing an abundance of employee services, however, DELSTAR invests in its employees in the form of enhanced training. The education it provides goes beyond technical skills training. It's a continuous process that includes teaching life and job skills to a work force composed of many who have never worked before.
DELSTAR owns and operates a chain of retail specialty shops in airports and five-star resorts. To operate a store at an airport, which is federal property, the operating company must be a disadvantaged enterprise, which means at least 10% of its ownership must be in a minority class. Although Pam Del Duca, founder and CEO of DELSTAR, qualified to start the business because she's a woman, she believed in the spirit of the law and pursued a partnership with three community-based organizations—Phoenix Urban League, Chicanos Por La Causa and the Phoenix Indian Center. The community organizations recruit job candidates for DELSTAR. The retail firm in turn shares a percentage of the stores' gross sales with them.
Many of the stores' 160 employees—47% of whom are minorities and 67% of whom are women—were previously disadvantaged. For example, one of the company's top volume sellers came to DELSTAR from a homeless shelter. She was in her mid 50s, had no teeth and was shabbily dressed. DELSTAR got a charitable organization to give her a set of teeth, and taught her not only how to sell but how to manage herself.
Del Duca sees considerable value in the company's partnership with the community organizations: "Before we forged our partnerships, I felt successful but not fulfilled. I had always wanted to make a difference. The partnerships enable that to happen. Lives are being changed, barriers broken."
The original sales staff for the airport stores came directly from the partner organizations. Carol Gleason, director of training and development for DELSTAR, put approximately 100 people recruited through the organizations through a 20-hour training program. An offer was made to all of them for employment—60 accepted. "None of them, not one, had ever worked in a retail store before," says Gleason. "But they did wonderfully well. That whole program became a springboard for ongoing training."
Although new employees don't receive the extensive 20-hour training that those opening the stores went through, all receive four hours of orientation to the business of selling gifts. In addition, Gleason gives them individual help. Each employee has selling goals that Gleason assesses every two weeks. If someone isn't meeting his or her goals, Gleason goes out onto the selling floor and helps the person figure out how to succeed, giving him or her personal training in the areas in which the person is struggling.
The individualized training goes beyond sales skills, however. "We've had to teach people how to budget their money so they can pay their phone bills," says Gleason. "And I have people who never learned the concept of being on time because no one cared if they were home for dinner or in school or anything. Each of these people require different levels of education."
Once acclimated to the business, workers have numerous training opportunities to help them move up within the company. There's a supervisory training program that lasts 16 hours, two hours per week for eight weeks; an assistant manager training program that focuses on creating an environment to get people to succeed; an inventory training program; and a course in advanced selling techniques, which takes another 16 to 20 hours annually. In addition, Gleason will conduct training on such topics as team-building on an as-needed basis for individual units. All of this training is offered to employees on company time.
Workers also have the option of participating in a Small Business Entrepreneurial Training Program. Gleason conducts this 18-week training at three levels: 7th-grade level, 10th- or 11th-grade level and high school graduate level. Some of the courses include marketing, advertising and putting together a viable business plan. Employees take the course, which Gleason teaches on an ongoing basis, on their own time, and can take classes in whatever order they choose.
Approximately a dozen employees have used this training and their experience at DELSTAR to open their own businesses. For example, a Native American employee wanted to open a business on a reservation. His DELSTAR experience helped him discover a need for further education. He enrolled at Arizona State University and is using what he learned at DELSTAR to sell jewelry he makes to finance his education. "I hope that everyone who goes through our training will eventually be our competitor," says Del Duca. "There's plenty of room out there for everyone."
In the meantime, this and the other training has paid off well for DELSTAR. This past year, Dun & Bradstreet Information Services and the National Federation of Independent Business Education Foundation honored DELSTAR as the National Grand Prize winner of the "Best of America" Small Business Awards. The sponsoring groups conducted onsite visits and examined financial data to determine the winner. "DELSTAR clearly has a winning business formula," said Larry Winters, assistant vice president of Dun & Bradstreet's Small Business Information Services. "These shops are highly profitable and attract wide attention because of their visual excitement, merchandise displays, product variety and customer service."
A $25,000 cash award is part of winning the "Best of America" National Grand Prize. Del Duca has decided to reinvest this money into the company's employees: She'll use the money for education scholarships, for seed money for employees to start their own businesses and for emergency funds. The company believes that investment in employees directly contributes to their success. "As the people grow, the company grows," says Del Duca. Adds Gleason: "Our people buy into the business emotionally, it becomes their business."
What does it cost to get to this point? DELSTAR isn't sure. It hasn't calculated the cost of training because it's something ingrained into the culture. "This is what we do," says Gleason. "Our store managers and our head of operations and our security and everyone is involved in training in our company. It just never stops. We are of the idea that every person perform at their optimum level, and there isn't an optimum. People can keep on going."
Personal programs promote employee good will.
As DELSTAR does with its training, Ventura, California-based Patagonia, Inc. exercises its giving-precedes-getting philosophy by investing in personal growth opportunities. Its greatest example is The Internship Program. Started in 1993, this program allows employees to take a paid leave-of-absence from their jobs for one week to one month and work for a nonprofit organization of their choice. The purpose of the program is twofold. The company can support nonprofit groups with people in addition to cash grants, and employees can add to their own growth and personal knowledge about issues important to them.
Patagonia is a designer and distributor of technical clothing for use in extreme conditions in the outdoors, and is known for its commitment to being environmentally friendly. Therefore, most of the nonprofit groups the company supports work on environmental issues, and many of its workers who take internships take them with environmental groups.
An employee who worked at a company retail store in Maine, for example, helped tag and track 20- to 30-pound salmon for the Atlantic Salmon Federation. Another employee with the mail-order division became an expert with machete and pala in the Cani Chilean rainforest, where she helped monitor regrowth of trees and understory. Still another employee worked with a family-planning agency in Montana.
Paul Tebbel, who created the internship program, worked with a pro-forest group in British Columbia. He now works with the selection committee that decides which internships to fund. The selection committee is composed of five to six non-management people from throughout the company, "as one more way to keep things at lower levels and to encourage collaborative efforts among peers," Tebbel says. The committee members volunteer for the duty and serve for an indefinite period.
The committee evaluates employees' applications for internships. The employees wishing to serve internships must have completed two years of full-time employment with the company and be in good standing. They must include with their application: a type-written proposal identifying the nonprofit organization; the employee's reason for choosing the project; the nature of the work to be done; the benefits of the project to the nonprofit organization, to the employee and to the company; the duration of the project; and a budget.
The selection committee has an annual budget of about $2,500 per internship and the authority to decide which internships will be funded and at what level. The basic criteria for an organization to be selected for an internship is that it be nonprofit and not be religiously or academically based.
Patagonia covers the work of employees who receive an internship—which has been approximately a dozen so far—in several ways. The employees design a plan with their managers that could include cross-training another employee to do the work, hiring a replacement worker, or letting the work wait until the employee returns. The internship selection committee can use its budget to fund a replacement worker. The budget can also be used to help the worker, if he or she isn't management level, with transportation and other costs incurred.
Employees who go on an internship do have some obligations to the company. They must write a report of the project, which might be used in Patagonia Globe, a company newsletter. They're also encouraged to take pictures of the project for use in internal communications at the company. Most don't mind doing these tasks because the benefits from the opportunity are great. They get paid for doing something other than their regular job, they receive an education about the struggles nonprofit groups face every day, and they get the chance to contribute to a social or environmental cause—something they probably wouldn't be able to do if Patagonia were not paying them.
Unfortunately, some people like the experience so much that they leave the company when a position at the nonprofit organization opens up. This is rare, however. For the most part, Patagonia, which recently was cited by Consumer Reports magazine as one of the best catalog companies in the country, benefits from the program. How? By increasing employee appreciation of its environmental activism, creating public relations opportunities inside and outside the company, and developing trusting relationships with employees. But does the program contribute to the bottom line? Not directly, says Tebbel, although it improves employee morale, increases their loyalty to the company and, in turn, probably makes them better workers.
Therein lies the payoff of the new employment contract for companies—reciprocal investment. Although the lengths to which Wilton Connor, DELSTAR and Patagonia go may seem extreme, the philosophy they share makes good business sense: Invest time and resources in your workers and they'll invest their energy and creativity back into the company.
Personnel Journal, April 1995, Vol. 74, No. 4, pp. 75-83.