Employer Resource Networks Offer Valuable Help to Workers
September 17, 2019 | by Gene Mitchell
A look at the growth of a useful regional model to help workers address personal and career challenges.
A look at the growth of a useful regional model to help workers address personal and career challenges.
While many employers contract with employee assistance programs (EAPs) to offer a variety of work/life balance benefits to staff, another model involves groups of employers that partner to create similar programs for their workers.
Employer Resource Networks® (ERNs) are regional consortiums of small to medium-sized businesses that combine to bring in “success coaches” that are embedded in the members’ human resources (HR) processes. The coaches help staff with a variety of personal issues—housing, childcare, substance abuse, family issues, or financial problems—that can interfere with their work. ERNs can also help staff with career development by helping to facilitate educational and training options.
Businesses that form an ERN invest in shares of the organization, based on size. An ERN will typically partner with a lead organization, usually a 501(c)(3) such as Goodwill or the United Way, to deliver services. Success coaches are often employees of the lead organization.
ERN USA is a national network of ERNs with origins in Michigan. It provides technical assistance, help with ERN start-ups, customized metrics and a data platform, and peer learning opportunities. It has 27 area networks and 11 lead organizations in 9 states, with its longest-established networks in Michigan, New York, Wisconsin, Ohio, and Indiana.
LeadingAge spoke with James Vander Hulst, chief disruptive officer for ERN USA, to learn more about how ERNs work, and the positive outcomes they have produced. Vander Hulst has done presentations about ERNs for LeadingAge Ohio.
LeadingAge: What are the origins of the Employer Resource Network concept behind your organization?
James Vander Hulst: In 2000, I worked in HR for a manufacturing company when the labor market was tight. We were struggling with turnover and retention, because the unemployment rate was so low. We analyzed employee benefits, and found that when we polled the entry-level workforce, everyone had health insurance, but we needed to do more education about the value of primary care providers, or preventive care. Very few were doing anything with their 401(k), or [seeking] tuition reimbursement, and they didn’t trust the employee assistance program [EAP]. We had less than 1% use of the EAP.
We heard about a larger company that had a coach onsite to help people with work/life balance: issues like childcare, food security, transportation, utility shutoffs, affordable housing, etc. We got together with 7 other manufacturing companies, totaling about 2,500 employees, so we had critical mass to hire 2 full-time success coaches to help employees. Each of the companies paid a fee to have a certain amount of the success coaches’ time.
We were HR professionals, but we were not social workers, and in a tight labor market we didn’t know how to help employees navigate the social service networks. If we could have outside experts with dedicated time onsite at the companies where they could see the staff, they could develop more of a trusting relationship.
For the 8 companies, instead of creating a new 501(c)(3), we partnered with Goodwill of Grand Rapids as the fiscal agent, and a coach was hired out of the county department of health and human services. Another coach was contracted from Goodwill. Goodwill also had its own training space.
We were HR professionals, but we were not social workers, and in a tight labor market we didn’t know how to help employees navigate social service networks.
The next iteration was an Employer Resource Network. Instead of starting a new organization, we always looked for a lead organization—Goodwill, the YMCA, maybe an organization like HopeWorks in Memphis, TN.
Our staff may not want to talk to a supervisor, but they will talk to the success coach.
LeadingAge: How was ERN-USA formed?
James Vander Hulst: Instead of starting a new nonprofit every time we start an ERN, we created our organization as technical assistance providers. We administer some of the ERNs in our backyard, but in other parts of the state there are other nonprofits that are administrators. Each ERN in Michigan is part of that statewide network.
The cost of hiring 2 coaches and [having] an executive director and the bricks and mortar would mean a $200,000-$250,000 yearly budget, but just having the coaches, embedded in the 8 companies, doesn’t really require an office. So now, 90% of the cost is just the salary and benefits of the coaches. If Goodwill or United Way is already [providing space], why do we need to rent a space?
In 2012, we started ERN USA, because we started to get inquiries from around the country. We felt the need to create this umbrella organization, so each state could be part of this peer network.
LeadingAge: What is the role of the member companies that join? I note that you call them investors, not just customers.
James Vander Hulst: Yes. If an average budget for an ERN is $75,000-$80,000 per year, the time of the week is broken down into shares, depending on [company] size and number of employees. Maybe they have 200 employees and a half-day a week is enough, or maybe they’re a really big company, and they need 3 shares. They are buying shares to cover the cost of the ERN, but they are also the decision makers, so that the lead organization is more of a fiscal agent on behalf of the employers.
The ERN focuses on the existing employees of the company, so we’re not trying to duplicate what Goodwill does in a pre-employment setting, or what the workforce development one-stops are doing in a pre-employment setting.
Having 8 companies around the table allows us to discuss different opportunities. If we identify a common training need, and have 4 employers with that need, we can ask a local community college or workforce center to do things differently. We’re trying to align those systems as opposed to us getting into their turf.
Along with the lead organization, and the employer/investors who are voting members of the board, there are strategic partners, and they are the nonprofits that are developing [services]. In Saginaw, MI, for example, mass transit didn’t [serve] the townships, so the employers started a door-to-door van service for their employees, and partnered with a vendor to provide the vans and drivers. If we’re creating resources like that, that van company is a strategic partner, so they’ll be at our meetings every month.
LeadingAge: What are the qualifications required to be a success coach?
James Vander Hulst: Ideally, a bachelor’s in social work. But we give a lot of credibility to life experience as well. Some of our best success coaches have been former HR people. They can learn the case management aspects on the job. And if you have someone with 15 years of case management experience in the community, and they only have an associate’s degree, but have the personality to develop relationships with employees, we wouldn’t discount them either.
Employers participate in the interview process. The lead organization will do the first interview and the employers usually have 2-3 of their people to do the second interview to be sure there’s a cultural fit. Someone might be comfortable in a manufacturing setting but maybe not in a more professional health care setting.
LeadingAge: Is it accurate to say that the primary beneficiaries of this are low-income workers and entry-level workers?
James Vander Hulst: We’ve seen a little shift in the last 5 years. Coming out of the recession we saw that about 50% of employees coming to the success coach were receiving some form of benefits, such as food assistance. Probably 35% were those that have gone over the “benefit cliff” but are still struggling. They are the ALICE population, an acronym for “Asset Limited, Income Constrained, Employed.” It’s the person that gets a 50-cent raise that [thereby] loses the childcare benefit, and so is economically worse off than if they had just stayed on public assistance.
The program is available for anyone in the company, so you’ve also got $80,000-a-year managers going through a divorce, being in crisis, and the coaches can help them navigate it. Or in Dayton, OH, when they were first getting their coaches up and running, there were tornados that came through, one of the larger employers had 15 employees affected, and the coach helped triage help for them.
Over the last 5 years, as incomes have gone up, we now see that the people seeing the coach that are on public assistance are down from 50% to 30%, and the ALICE population has gone up to 50%.
LeadingAge: Regarding the ALICE population, what is the starting point for the coaches helping them?
James Vander Hulst: The coaches can meet with nonprofits and keep up with what’s out there. In Michigan, for instance, we have a thing called Great Start to Quality, an organization that provides technical assistance to childcare homes. We invited them to one of our ERN meetings, and found out that [for] a worker who lives in Detroit, The Kellogg Foundation has a childcare scholarship grant a parent can use for a year, and it’s specifically focused on where our public assistance has dropped off.
LeadingAge: What are your outcomes, and how do you track results?
James Vander Hulst: We have a common Salesforce database. All ERNs have common metrics and common access, so we have a monthly dashboard that tracks how many employees have seen the coach and how many referrals were generated. Of those, oftentimes the employee comes in with multiple issues. We track it for all employers month to month. We look at employee utilization, and it’s a little over 15%, compared to 1% participation in the EAP.
Not every company reports everything, but many will send their termination reports on a monthly or quarterly basis. Coaches will crosswalk employment data against the database. We see 95-98% retention for employees that go to see the coach as opposed to the general population. When we share those numbers with the company, they try to educate their own supervisors so they feel comfortable referring someone to the coach. It would be safe to say that 1 out of 3 individuals seen by a coach is a potential turnover risk. We use conservative numbers, and calculate a 500% return on investment across the ERNs. So it’s not too hard, once you get an employer in, to keep them in.
LeadingAge: Do you know how many aging services providers are involved with your ERNs?
James Vander Hulst: In Indiana, Michigan, New York, Ohio, Tennessee, and Texas, we had 23 long-term care and home health care organizations as of 2018. Lower wage CNA and other staff can experience the pressure of living paycheck to paycheck, work hours not allowing public assistance agency time, have transportation issues, and have low to nonexistent emergency funds.
At best, these pressures create stress and reduce the productivity of the worker, and it can also affect their health. At worst, these issues, sometimes basic needs, can cause absenteeism and loss of their job. With the cost of turnover and low availability of workers, Employer Resource Networks can help improve employees lives and increase retention.
Gene Mitchell is editor of LeadingAge magazine.