A solution to the US worker shortage and inequity is hiding in plain sight

U.S. companies are in a bind. As unemployment rates decline, corporations are scrambling to fill more than 10 million open jobs. But many are looking in the wrong places. A promising solution to this big business challenge is hiding in plain sight. 

More than 30 million people in the United States are potential workers but are overlooked — whether because they once were incarcerated, have a disability, are an immigrant or refugee, or for other reasons. A growing number of workers who face employment barriers like these have found jobs with employment social enterprises — a growing movement of revenue-generating commercial and nonprofit businesses that train and employ traditionally-excluded workers and put them on paths to economic mobility. 

Take Pioneer Human Services, the Seattle-based aerospace industry supplier which employs people who were once incarcerated, as well as workers in recovery who need substance abuse treatment, housing, job skills, and income. Pioneer provides on-the-job training and work experience for more than 10,000 people annually. As an aerospace manufacturer, Pioneer partners with big businesses like Boeing Company to produce airplane parts and is rated among Boeing’s top 1 percent of suppliers for quality and delivery. 

Other inclusive worker enterprises include Annie Cannons, a digital commerce business on a mission to transform survivors of human trafficking and gender-based violence into software engineers, and Year Up, which connects employers with “opportunity youth” — teens and young adults who have become disconnected from school and work.

New research from Business for Impact of Georgetown University’s McDonough School for Business and Just Results shows how employment social enterprises like these put excluded populations to work and on paths to economic mobility. 

While government workforce education programs have similar goals, most public initiatives lack two key success factors. Private sector employment social enterprises generate revenue by selling goods and services and reinvesting that revenue to help their employees progress and their employees earn a paycheck while receiving on-the-job training and other supports which clear obstacles to sustained employment. Georgetown’s research shows that employment social enterprises are uniquely effective at helping excluded workers get jobs, keep them and eventually move up the career and income ladder. 

Conversely, what government programs have that most employment social enterprises lack is scale: employment social enterprises today reach just a fraction of the potential workers identified in Georgetown’s research. 

The golden opportunity for U.S. employers seeking to fill all of those open jobs is tapping into and scaling up employment social enterprises. Doing this could give millions of excluded people who want to work their fair shot while closing the hiring gap for employers seeking talent.

What can businesses do to help scale and grow employment social enterprises? 

Corporate leaders can start by hiring more workers from employment social enterprises, as well as sourcing more products and services across their supply chains. Take Bank of America, which has recruited more than 1,800 talented young personnel through Year Up. Bank of America also employs 300 people with intellectual disabilities through its in-house marketing and fulfillment operation, Support Services. And leveraging its supply chain purchasing power, the German software company SAP allocates 5 percent of its procurement spending to social enterprises and diverse businesses, buying products ranging from handwashing soap to food and drinks for its corporate cafeterias.

Policy leaders can also help by expanding access to employment social enterprise solutions. Progress is already underway in California, where the venture philanthropy Roberts Enterprise Development Fund (REDF) established the Resourcing Employment Social Enterprises Together (RESET) coalition. RESET members successfully advocated for legislation to define employment social enterprises in the state labor code — a necessary prerequisite to greater public investment. It also secured a $150 million state investment in a Caltrans initiative to clean up the highways while providing jobs to thousands of workers overcoming employment barriers and connecting them with higher-wage public and private sector jobs.    

To solve big, complex challenges like today’s worker shortages and long-term economic inequality, private and public sector leadership are required. While policy reform takes time, businesses can pivot quickly to find the workers they need now.

Employment social enterprises offer a ready pipeline of talent that has been hiding in plain sight. Let’s invest in scaling them up and get everybody in America working.

Leslie Crutchfield, executive director for Business for Impact of Georgetown University’s McDonough School of Business, and Carla Javits, CEO for REDF (Roberts Enterprise Development Fund), collaborated on Georgetown University’s new workforce study, Jobs for All.