Alternate Advantage dba

1. Alternate Advantagedba

2. Question for Springboard Given our commitment to employing those with barriers to employment, how do we refine our model and pay structure in order to grow as a viable business?

3. Mission Our mission is to provide flexible employment solutions and on-the-job training to those with barriers to traditional employment, and by doing so, to positively impact the quality of life of our employees and the community we serve. We accomplish this through • Creating a sustainable business which provides employment opportunities and funding for our social programs • Offering access to life and job skill development, education, and social resources for personal growth

4. Program • Regional supplier of light industrial services, including assembly, shrink-wrapping, packaging, warehousing, etc. • Employs and provides on-the-job training to those with: • lack of educational credentials or employment skills • lack of transportation • poor life skills • little or no work history • physical or mental health issues • limited proficiency in English • substance abuse • incarceration history • childcare or scheduling issues • lack of work ethic • limited awareness of opportunities for self-advancement

5. Program, continued • Worker distribution: • Core workers (about 30) • Have discrete skills, 500-1,200 hrs/yr, more consistent attendance • About 1/2 would be employable elsewhere, though this varies • Non-core (about 175) • Work 500 hrs/yr or less • Skill, reliability, and work ethic vary widely • Ideally, this is our pool of people to supplement the core • Our work has traditionally been “table work”, incorporating more “large form factor” • This means taking up more space for the job and incurring more overhead • We have dozens of ME companies as repeat clients, however… • …only one is responsible for the vast majority of our revenue • …customers are increasingly mechanized and/or moving offshore

6. History • 1996-1997: Founded Project Workshop in church basement, incorporated as Faithworks • 1997-2004: Experienced significant growth, 45+ partner organizations • 2003-2005: Experienced significant financial and organizational challenges • 2005-2007: Underwent significant reorganization • 2007: Closed Faithworks, opened Alternate Advantage dba OutsourceWorks, a nonprofit social enterprise • 2007-2010: Grew to the point where last year (2009) OutsourceWorks had $1,110,000 in operating revenue, provided 74,864 hours of work (the equivalent of 44 full time people), with 208 people having worked at some point during the year

7. Finances • Budget = $1.2MM • Revenues: • 90% from fees for services, about 70% from one customer • 10% or less from fundraising • Highly seasonal – bus. dev. has helped smooth out • Expenses: • $730k manufacturing labor cost • $264k administration labor cost • $108k facility cost • $101k other • $94k net operating loss • $50k grant and misc. income • $45k net loss for the year

8. Pay Structure • Pay is piece rate: • Jobs quoted based on $8 / hour productivity standard • Those most efficient can earn substantially more than $8 / hour • Those that do not meet minimum wage ($7.50 / hour) are subsidized to reach it • Challenges: • The gap between our standard and minimum wage is closing • The floor of $7.50 can be a disincentive to performance

9. Staffing and Scheduling • Difficult to balance mission and sustainability • Usually quoting jobs with incomplete information • If we cost a job using our productivity standard and staff it with a mix of workers, but… • As our work fluctuates, we may need to reassign core workers • This affects the profitability of jobs already in process • Some of our most productive workers are the most inconsistent in attendance and volume of hours

10. Success • Refining our approach – staffing, scheduling, and pay structure – to better address the realities of employing this workforce • Cultivate pipeline of workers into the core • Uncover “hidden” details of jobs that will affect cost up-front when quoting • Grow customer base to smooth out our business cycle • Minimize outside funding to subsidize operations

11. Help Wanted • With our unique situation, “best practices in a can” won’t work, but we are interested in: • Other models you’ve seen for pay structures in other assembly, manufacturing, and service businesses • Principles for managing labor with complicating factors • Best practices in quoting jobs and managing staffing with incomplete and ever-changing information

12. Question for Springboard Given our commitment to employing those with barriers to employment, how do we refine our model and pay structure in order to grow as a viable business?