American Enterprise Institute Report: 'Employer Resource Networks – A Review'
* Employer Resource Networks (ERNs) are an innovative model through which local networks of employers collectively provide work support services to their entry-level workforce.
* ERNs hold promise for addressing the societal challenge of unstable labor market attachment among low-earning workers while increasing worker productivity.
* While available evidence suggests considerable promise, a future rigorous evaluation could explore whether ERNs yield sustained impacts on employment, earnings, and well-being.
* A deeper examination of ERNs as a private-sector solution could reveal new and promising strategies for supporting workers and their families.
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Executive Summary
Employer Resource Networks (ERNs) are an innovative model through which local networks of employers collectively provide work support services to their entry-level work-forces, with the goal of enhancing productivity and retention. In this report, we describe the ERN model and detail the current state and functions of these programs nationwide. We explore existing evidence on their efficacy in enhancing employment retention, suggest a future research agenda, and offer proposals to support further expansion.
We find that ERNs hold promise for addressing the societal challenge of unstable labor market attachment among low-earning workers while increasing productivity by reducing churn among entry-level, low-income workers. However, ERNs are limited by the extent of available community resources.
While employer testimonials and program data indicate considerable promise, there is no rigorous evaluation of the model to date. A broader literature investigation finds that coaching and employer involvement in training--key components of the ERN model--can boost earnings and educational attainment. Due to the novel structure of ERNs--particularly the placement of services at work sites and the fact that it is employer initiated--we suggest a set of additional studies that would descriptively examine who the employees and employers are that are served, and we further propose a rigorous impact evaluation of ERNs to see whether they can produce sustained impacts on employment, earnings, and well-being for workers over time. As the debate over how to best encourage and support sustained work for low-skilled individuals receiving social service benefits continues, a deeper examination of ERNs as a private-sector solution could reveal new and promising strategies for supporting workers and their families.
Amid debates preceding welfare reform in 1996,
In response, Cascade Engineering collaborated with
The novelty of ERNs' origins is that the model developed in direct response to a business human resource need, identified by business leaders. ERN leadership comes from the human resource management world rather than workforce development or social services. In this way, ERNs are a market-based solution to a challenge facing both businesses and society writ large: to ensure that workers from low-income families can find and maintain employment over time.
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The ERN Model
ERNs are community-based, employer-led business consortiums created to share the cost of providing education, training, and support services to entry-level and low-earning employees. Established first in 2007, ERNs are licensed by
ERNs' primary objective is to increase job retention for participating employers, and a secondary goal is to improve worker productivity. ERNs are particularly focused on addressing job retention among entry-level workers who come from disadvantaged backgrounds, especially those on public assistance.
ERNs are employer led. They are established by groups of typically six to eight businesses employing around 50-250 workers./5 Businesses join together to take advantage of economies of scale to provide resources they could not afford on their own.
Each business plays two roles in an ERN. First, it pays a membership fee that is scaled to the size of the employer and usage of services. Fees range from
While a majority of an ERN's funding comes from membership fees, a significant portion also comes from public funds, grants, and donations. In
Second, businesses are representatives on the ERN governing board. Each governing board decides whether to contract out the ERN's administrative functions or hire internal staff to perform those functions. The board decides the types and intensity of services offered to employees and contracts with an agency for all direct services. One major benefit of business members' participation in the governing board is that it ensures the services provided are responsive to the needs of each firm and its employees.
ERNs develop relationships with nonprofits, public agencies, and training providers to leverage additional resources and financial support. For example, some ERNs choose to work with Temporary Assistance for Needy Families (TANF) and Workforce Investment Act programs to hire TANF recipients. This benefits businesses in that they can access both a talent pool and work supports for these workers available through TANF-funded programs./7
In sum, in the ERN model, employers are actively engaged in creating, funding, and leveraging consortium resources to provide a suite of services to entry-level and low-income workers. While all ERNs share a set of characteristics and the same model, each local ERN tailors its approach to its employers and community.
A Logic Model for ERNs. Once an ERN is established, the organization engages in three main activities to achieve its goals: It provides case management to address job retention issues, funds education and skills training, and coordinates supportive services./8 In Table 1, we offer a logic model for ERNs, which proposes a framework for program evaluation that shows the relationship between program components and the impact the model seeks to achieve./9 We use this model to show in detail how an ERN seeks to improve employee retention and productivity.
As stated above, the initial inputs into forming an ERN include the administrative, legal, and financial formation of the business consortium. Following that is hiring success coaches and identifying service providers. Through a series of activities and outputs, these inputs aim to primarily increase employee productivity and retention. Moreover, reaching these outcomes may in turn produce socially desirable impacts such as a more engaged and skilled workforce and greater economic self-sufficiency among those served.
How does an ERN affect retention and productivity? For starters, each ERN hires success coaches (also known as retention specialists) who provide intensive case management on a voluntary basis to all employees, with a primary goal of serving low-income workers and those on public assistance. Workers with performance issues can also be referred to them. Success coaches complement a firm's human resource department by bringing expertise addressing barriers to retention that all too often reside outside the workplace./10 Success coaches should be easily accessible to workers and knowledgeable about public benefits and community resources to address issues that the human resources department is typically ill-equipped to address, such as transportation, childcare, and personal family issues./11
Table 1. The ERN Model
[Table omitted]
View table at https://www.aei.org/wp-content/uploads/2020/08/Employer-Resource-Networks.pdf
One innovation of the ERN model is that success coaches are on-site at the workplace or a convenient, accessible location. These success coaches' schedules are patterned around the work schedules of those they serve. Success coaches are typically co-employed via a public-private partnership with public health and human services agencies. For example, the Southwest Michigan ERN uses case managers employed by the
ERNs also provide access to education, skills training, and supportive services. By leveraging the economies of scale available to the consortium, ERNs often receive discounts on general education (such as soft skills) and firm-specific education (such as industry training). For example, one ERN partnered with a community college to offer certification trainings in pharmacy and phlebotomy./13 Another ERN partnered with a local community college and received a grant to provide training in "green job" occupations.
In addition to training, ERNs can provide direct supportive services. In some cases, ERN members establish employee assistance programs (EAPs) that connect workers with support such as counseling for mental health issues./14 Other ERNs organize members to be program sites for Volunteer Income Tax Assistance programs.
Through these trainings, employees can learn skills that boost their productivity and potentially increase their qualifications for higher-paid positions. Higher wages could decrease reliance on public assistance. With these supportive services, workers can reduce their barriers to retention. This reduces turnover costs for the employer while helping the worker become economically self-sufficient.
The ERN model is novel among other employee retention and advancement initiatives because employers must organize themselves into an ERN. Unlike traditional retention programs, the ERN service is neither purchased by employers nor provided by a government workforce agency. For an ERN to exist, employers must take the initiative and bring in the nonprofit and public sector as they find appropriate.
Also unusual is the placement of success coaches at the work site, in contrast to public services typically offered at a government agency such as an American Job Center or a social service agency office. Moreover, unlike traditional EAPs, success coaches offer a confidential resource and provide active instead of passive referrals by assisting with access to other resources in the service environment.
Finally, services provided through ERNs are not means-tested. As we will discuss later, many prior employment retention initiatives are targeted toward low-income families and those on public assistance. Instead, ERNs are available to all employees, which may reduce stigma related to use.
https://www.aei.org/wp-content/uploads/2020/08/Employer-Resource-Networks.pdf
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Conclusion
ERNs are an innovative model through which local networks of employers collectively provide work support services to their entry-level workforce, with the goal of enhancing productivity and retention. It is employer driven, for the benefit of firms and with the goal of benefiting society for better outcomes for low-earning workers. As the debate over how to best encourage and support sustained work for low-skilled individuals receiving social service benefits continues, a deeper examination of ERNs as a private-sector solution could reveal new and promising strategies for supporting workers and their families.
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About the Authors
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Acknowledgments
The authors would like to thank the following individuals for contributing their time and sharing their knowledge of Employer Resource Networks with us:
Any opinions, findings, or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the
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View full report at https://www.aei.org/wp-content/uploads/2020/08/Employer-Resource-Networks.pdf
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