Paying companies to hire the unemployed

@CNNMoney May 18, 2012: 5:18 AM ET

NEW YORK (CNNMoney) -- Would you donate $6,000 to subsidize someone else's job?

The WorkPlace, a Connecticut non-profit agency, believes the best way to get the long-term unemployed back into the workforce is by paying companies to hire them.

But instead of turning to the government for the money, the agency is trying something different: asking private companies and citizens to support subsidized jobs.

"In order to get long-term unemployed people a chance to demonstrate they can do the job as well as anybody else, you have to use unusual tools and that's one of them," said Joseph Carbone, the agency's chief executive.

More than three dozen companies, non-profits, foundations and individuals have donated more than $580,000 to fund The WorkPlace's initiative, called Platform to Employment. The AARP Foundation kicked in another $200,000 to assist the jobless over age 50.

The program is one of the latest efforts aimed at tackling the thorny problem of long-term unemployment. Millions of people have been jobless for months or years in the wake of the Great Recession, and it's much tougher for them to work their way back into the labor force, particularly if they are older.

Some labor advocates say that subsidized jobs are a good way to smooth the transition for these longtime jobless Americans to return to the payroll. There's little risk for the company, and the workers get to demonstrate their value and pick up skills.

The WorkPlace's program focuses on those who have run out of unemployment benefits. Some 91 people went through it last fall and another 20 just finished the initial training.

The initiative is divided into two phases.

After going through a career evaluation, skills testing and mental health counseling, participants enter a five-week training program. There, they learn to craft their résumés, hunt for jobs and burnish their interview skills.

The second phase consists of an eight-week fully subsidized internship, which makes Platform to Employment different than most other job training programs. The WorkPlace doesn't put people in positions, though it collaborates with them to identify ones that might be suitable. It's up to the participants to seal the deal.

The WorkPlace hopes the subsidy gives its participants the edge. It markets itself as an unpaid headhunter, directing employers with open positions to people who meet the requirements.

"Our approach is to say to a business...we're going to find a candidate that matches that person's skills with your needs and then we'll offer a wage subsidy for a period of eight weeks," said Carbone, who is now looking to replicate the program nationwide. "That's like one of those offers that's hard to refuse."

The so-called internships are designed to turn into jobs, though not everyone from the first group of 91 has been placed and four were not hired.

So far, 59 people have landed full-time employment and another four are still in their tryouts. The positions range from supervising a warehouse to working in marketing for a large health care provider. The average salary is $36,000.

Minh Nguyen was out of work for two years before getting placed through the Platform to Employment program. The single mother of two is now employed as an office assistant at Action for Bridgeport Community Development, a non-profit agency.

"When I was doing my eight-week internship with them, they discovered that I'm not so bad," said Nguyen, who is making 35% less than her previous employment. "I'm employable and I have skills. Without that little boost from the agency, they probably wouldn't get to know me."

The WorkPlace is now gearing up to place its latest class, which finished training on Wednesday. This group, which had its training paid for by AARP, are all older than 50.

Subsidized employment allows older workers to dispel the myths many employers have about those over age 50, said Emily Allen, a vice president at AARP. Older workers have the highest long-term unemployment rates of any age group.

"This allows older show first-hand what skills they bring to the table after a lifetime of employment," she said.

Subsidized employment isn't a sure-fire solution, however. It remains unclear whether the payment really makes a difference or just serves as a windfall for companies that would have made the hire anyway, said Harry Holzer, professor at the Georgetown Public Policy Institute.

Also, many of the jobs available through subsidized employment may be lower paid or lower status, he said.

"When the subsidy ends, will the employer keep them on and will they be interested in sticking around?" Holzer said. To top of page

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