Staffing for Success
When Urban Works CEO Tim Styer was organizing his game plan for a cleaning business back in 1998, he was certain he would succeed. But he was even more certain that his main business objective – hiring low-income workers who deserved a living wage with full benefits — would be his key to success.
Four years later, Styer and his Philadelphia-based company are making waves in the cleaning industry where high turnover, low wages and a break-even mentality have doomed more than a few competitors.
“We are growing, we are turning a profit and we now have other companies coming to us for labor,” says the upbeat Styer. “It’s been work — hard work — but we are a successful company.”
Urban Works concentrates on long-term contracts and does not accept smaller jobs, Styer explains.
“Our target market is customers where we get at least a one-year contract and where we can employ at least three people,” he says.
“The level of service we have is what helps us retain those customers,” Styer adds. “Plus, our absentee rate is extremely low and that is another plus.”
Urban Works’ biggest claim to fame, however, is the background of its staff.
“A good profile of the work force is that 70 percent are people in recovery from drug and alcohol problems, 30 percent are welfare to work people — 5 percent whom are formerly homeless — and we also have some ex-offenders who work for us,” Styer explains.
How did this 40-employee-and-growing, $1.5-million maverick company pull it off in such a short time? Styer and his “can’t fail” attitude are a big part of the business’ success, according to Abby Kelly, a development coordinator who works with a local venture capital group that has invested in the cleaning company.
Kelly works for Resources for Human Development (RHD), a Philadelphia non-profit company that invests in businesses that can produce social benefits, such as employing low-income men and women, paying all workers a living wage and by giving employees benefits and ownership in the company.
“We invested in Urban Works about two years ago and they just started turning a profit a few months ago,” says Kelly. “One of the reasons this company is so successful is because they offer benefits and Tim never sleeps – he spends enormous amounts of time with his employees, coaching them. From a life perspective this company is his baby.”
When Styer approached RHD, his willingness to give people a chance, to employ people who might otherwise seem unemployable, was very attractive to investors.
“I really think Urban Works is on its way,” says Kelly. “It’s the kind of situation where you have to be willing to put in the time and patience and to try something new.”
A unique approach
The majority of Urban Works’ employees come from job training programs, so they have received job -readiness training before they start. Once they begin cleaning, they also receive 30 days of on-the-job training as well as classroom sessions.
This strategy has lowered Urban Works’ job turnover rates to just 30 percent.
“From what I am hearing that is pretty low for this industry,” says Styer. “Some companies have 80 percent turnover, some 130 percent, but as far as I am concerned, 30 percent is even a problem for us.”
“It also helps that some of the people we employ are coming from welfare-to-work programs where they have a job coach who insists on keeping the client employed for at least 90 days,” he explains.
When it comes to the employees Styer does lose, often he is happy to see them move on, because he sees it as a step up. “Even with a 30 percent turnover rate, we have employed a lot of people and I look at what that does for the local economy as a side benefit,” he says.
In fact, Styer offers non-cleaning classes for workers, such as basic computer training, in hopes that those skills will help change the lives of the workers and advance them to other positions – outside of Urban Works.
“We don’t expect our employees to stay with us the rest of their lives, and we encourage them to be productive and gain skills so they can go make more money elsewhere,” says Styer. “One of my employees right now is applying for administrative assistant jobs because she took our computer course and she now has the skills to move on.”
With the people Styer is able to successfully employ, his business has seen a steady increase. As of December 2000, Urban Works has reported a modest profit. Styer expects that margin to grow as the company expands and Urban Works continues to prove itself to customers.
He also continues to improve the working environment for the staff who have helped Urban Works become so successful so soon.
To start, workers get an immediate boost when they walk in the door, because their wage begin at $7.90 an hour, compared to about $6 an hour for Styer’s competitors. Within 90 days staff have full medical benefits and there also is an employee credit union. After six months, Urban Works employees become part owners of the company through a stock ownership plan.
“Our overhead, because of these benefits, is a lot higher than other companies but it has paid off for us,” Styer says.
In addition, the company structure does not have managers. Styer has helped create a system where leaders are trained to handle their own accounts. That allows the leaders to not only gain valuable work experience, but to see if they are breaking even or need to change how the operation is being worked. He also makes certain that each account has a series of quality inspections so the customer can get exactly what he needs.
Believing in employees
Styer encourages other entrepreneurs who might consider hiring a diverse work force such as his to try to understand what happens in their lives and be able to relate to them and their circumstances.
“With this type of work force the craziest things come up and you have to be ready to understand what is happening. In doing that, you can help the workers get through whatever they’re dealing with so they can continue to work,” he says.
Styer attributes the success of Urban Works to a combination of hard work and believing that you can make a difference not only in the lives of your clients but in the lives of the people who work and actually own part of the company. And he encourages other BSC to take that same leap of faith.
Kris Radish is a business writer based in Oconomowoc, Wis.