September/October 1994
A variety of scrap recycling companies are finding unconventional sources of labor and experimenting with other creative personnel strategies to cut fixed costs, improve performance, and boost morale.
By Sarah Hart Winchester
Sarah Hart Winchester is a Duluth, Ga.-based writer.
Can you reduce turnover by hiring temporaries, prison inmates, or disabled people? Is it efficient to cross-train personnel and have them work in teams? Are there tangible benefits to providing employee education and wellness programs? Can a four-day workweek enthuse workers while cutting wear and tear on equipment?
The answer to all these questions is a resounding yes, according to some resourceful scrap recycling firms that have tried and benefited from such innovative approaches to managing personnel.
A Captive Labor Market
Strategy number 1: Combating high personnel turnover by hiring prison inmates.
Before East Coast Recycling Associates Inc. (Millville, N.J.) teamed up with nearby Bayside State Prison, the plastic scrap recycling company's most-pressing labor concern--maybe even its biggest business problem in general--was dealing with the "revolving door" through which its workers came and went. "It seemed like employees were in a turnstile coming in and going out the door," recalls George Glenn 111, the firm's president.
Now that almost 80, percent of East Coast Recycling's employees are inmates from Bayside, the revolving door has nearly slowed to a standstill and the company can direct efforts previously wasted filling vacancies toward building a more-profitable business.
Bayside worked closely with East Coast Recycling to develop the inmate employment program, and only after touring the scrap facility to see firsthand the nature of the company's operations and the work required of prospective employees. Today, employees hired from Bayside operate equipment, work in shipping and receiving, and perform just about any other job around the company's plant.
Though other local companies also hire Bayside prisoners, the inmates face limited job prospects, so they are less likely to flit off to another job than other workers who may have more options, says Glenn. Another reason workers stick with East Coast is that the company has earned a reputation for integrity, Glenn reports. "We've been doing this for four years now and the prison population knows we'll treat them fairly." In fact, he says, the inmate-employees are managed, evaluated, and paid just like the other workers at East Coast Recycling. "We treat them like anyone else," he says, adding, "They're not guarded, they police themselves."
While the main reason for hiring prison inmates was to reduce excessive turnover, the recycling company has ended up with more than just a less-transient work force, says Glenn. "The program's widely accepted here because the prisoners end up doing more than their share," he notes, pointing out that in general the inmate-employees, who are chosen from a pool of prisoners nearing the end of their prison terms, have a positive attitude and are willing to work hard. Plus, according to Glenn, "They're stronger and in better health than the other employees."
Another unexpected benefit: Since East Coast began its prison employment program, its facility has suffered no vandalism, while other nearby plants frequently struggle with such security issues. "It's a different world out there with different rules," explains Glenn. "There's a government housing project nearby, but the word is out that we hire people from the project [who are now in prison], and they don't touch us."
But hiring inmates is not for everyone, cautions Glenn. "Your work environment, your work ethics, and the structure of your management have to be very strong," he says. "You can't let these guys get out of hand. You've got to nail any problem from the beginning." Overall, the company takes a very practical attitude toward its inmate-employees, says Glenn. "We offer a nice atmosphere and a congenial place to work, but we don't ever forget that they're our employees and we're not here to befriend them," says Glenn. "We're firm, but we're extremely fair."
A Responsible Answer to Difficult-to-Fill Jobs
Strategy number 2: Tapping another unusual labor resource--handicapped people.
Among the "most attentive, regular, and prompt" workers at OmniSource Corp. (Fort Wayne, Ind.) are four employees who are intellectually disadvantaged--whose IQ level falls below the normal range--says Ben Eisbart, the company's corporate director of administration and human resources.
OmniSource, a metallic scrap processing and brokerage firm, has been using mentally handicapped workers for 25 years, working with a social services agency to make job matches that are beneficial both to the company in terms of productivity and to the employee's sense of self-worth. To begin the process, the company and the applicant get a chance to check each other out in a leisurely way. "We bring the potential worker and the agency caseworker on-site and let them get acclimated for a week or two," Eisbart explains.
And when the match works out, both benefit, according to Eisbart: "We've found that jobs that are repetitive, such as taking something from point A to point B over and over again, make good jobs for these workers. They can get a sense of satisfaction and accomplishment from this work." The recycling company, meanwhile, gets a job well done, with no reduction in quality. In fact, Eisbart stresses, the handicapped workers are expected to perform just like other workers. They are evaluated in the same way as other employees and are similarly expected to arrive on time and observe all other company rules. "We don't give them any special treatment, and that's the way it should be," he says.
Cutting Fixed Overhead, Limiting Hiring Mistakes
Strategy number 3: Hiring temporaries to ease crush periods and evaluate potential permanent workers.
Hiring temporary workers gives Cohen Brothers Inc. (Middletown, Ohio) and E-Z Recycling Co. (Portland, Ore.) flexibility in managing their work forces. The two companies find they can use temporaries as little or as much as they need without paying for work not performed during down times or shelling out for health insurance or vacation pay-at least until the company is convinced additional permanent staff is necessary and a temp has proven his worth.
"We're not obligated to eight hours of pay" week in and week out, points out Ray Petermeyer, vice president and general manager of E-Z Recycling, which has been supplementing its work force with temporaries for about a year. "If we only need someone for four days in any week, we can send him home on Friday."
The paper recycling company also uses temporaries to learn more about potential permanent employees and how they will perform on the job. "By using temporaries, we have time to look at those employees' records," says Petermeyer. "We know if they're showing up on time, and it gives us a period to try them out."
While most temporary agencies recommend a 30-to-90-day trial period, some employers will keep individual temps for much longer, as part of a pool of workers that varies in size with the company's volume of business. "We have people who are still on temporary service after eight or nine months because we only need them on a temporary basis," says Kenneth Cohen, president of Cohen Brothers, which handles the gamut of scrap materials. The firm eventually hires about a third of its temps as permanent employees, a number that pleases Cohen, who points out that paying temps the same salary as permanent employees reduces turnover.
In arrangements such as these, the employment agency usually pays the temporary worker a base salary and the scrap processor pays the remainder of the salary as well as a fee to reimburse the agency, but other terms may be available. "Remember that while the temporary service pays a certain percentage of the employee's pay, you can negotiate that percentage," advises Cohen. "Even though it's written down, it's not set in stone."
If things don't work out and the company decides not to hire any individual permanently, the employer can let the worker go without suffering the disruption and loss of morale in the work force that often accompanies the dismissal of permanent workers, according to the two firms. This, they say, makes it a lot easier to nip potential personnel problems in the bud. "We can terminate a temporary worker at any time without any ill effects," says Cohen. If there is trouble with any temp, it is the responsibility of the agency to handle it, says Petermeyer. "It makes it easier if there's a problem with someone. We just call up the temporary service and say we don't want that employee back."
Of course, no system of picking hires is foolproof, and if there's a downside to trying workers out as temps, it's that you can't predict behavior, and even the best temporaries can adopt bad habits after being hired full-time. "It's just human nature," says Cohen. Virtually all workers “slack off after they become permanent unless they're real go-getters."
Building a Skills Bank
Strategy number 4: Cross-training workers to improve labor flexibility.
Not an organization to be hampered by unpredictable employee behavior, David J. Joseph Co. (Cincinnati) ensures that all of its laborers are able to fill in for others who don't show up for work. "Absenteeism is a significant problem in the scrap business," explains Alan Crouch, the firm's vice president of operations, "so we cross-train our employees to perform several functions."
Thanks to this approach, if, say, the loader operator is out, the company can quickly substitute someone who knows how to operate the machine. "To my knowledge, there's not a single person in our operations who is not trained to do at least two and possibly even three or four very different jobs," observes Crouch. "Cross-training has been extremely beneficial to our company."
Not only does cross-training enable Joseph Co. to run smoothly despite unavoidable absenteeism, it gives employees a better understanding of the way various parts of the plant work, which also benefits the company. For example, says Crouch, "As part of training for a new job classification, we do a program on the potential hazards of the new job." The result is that even "when employees are performing their regular jobs, they understand the dangers in other areas," he explains. "I think that's helped our safety program immeasurably." In addition, cross-training engenders greater harmony among workers because they realize they don't have the worst job in the plant nor does their immediate coworker have the best. It also gives workers a chance to develop new skills, enhancing their opportunities for promotion and improved wages while introducing variety into sometimes-monotonous jobs.
The key to successful cross-training is to explain it to prospective employees before hiring, says Crouch. "Inform the individual of your intent to cross-train and let him know up front that it's not acceptable for employees to perform only one job." And once you've decided to begin cross-training, you've got to apply the policy rigorously. "It has to be a concentrated program and effort," says Crouch. "Regularly move employees from job to job, even if it's only for 20 minutes each day while a particular machine operator takes a break," he suggests. "It takes three to four months of part-time operation and training before you really feel comfortable leaving someone alone to perform a different job."
Encouraging Self-Management
Strategy number 5: Reduce the costs of managing employees by training skilled workers to supervise their peers and by dividing the work force into self-managing teams.
Like cross-training, so-called lead-hand programs encourage workers to broaden their skills and take more responsibility for company operations.
Advance Metals Recycling (Buffalo, N.Y.) has been using a lead-hand program to supervise its laborers for a decade. The idea is to train hourly production employees to supervise their peers working alongside them instead of paying a foreman to watch over them. The result, says Chris Charlebois, president of the metal processing firm, has been a need for fewer foremen and an increase in productivity.
Advance Metals draws its lead hands from among the more highly trained members of its work force, including welders, crane operators, and others, and pays them 50 cents an hour more than their regular salary. In addition to the wage hike, the lead-hand program, like cross-training, gives employees a chance to develop a broader base of skills and more opportunities to prove themselves, says Charlebois.
Organizing the work force into teams is another personnel strategy that spreads responsibility among workers and puts each employee in a position in which other team members in complementary positions depend on him. Chaparral Steel Co. (Midlothian, Texas) relies heavily on the team concept, with one person clearly in charge but each worker on the team filling a specific, vital function. "We tend to be project-oriented in the way we approach the business," notes Dennis Beach, the minimill's vice president of administration, "and we try to bring together people of differing skills." Chaparral establishes teams to handle all projects, which may range from identifying ways to cut costs in a particular operation to installing or updating equipment-basically anything that involves a change and that is directed toward an established goal. The makeup of the team varies widely from project to project and may include a diverse mix of people ranging from laborers to engineers to upper-level executives, depending on the task at hand.
One drawback to the personnel organization schemes involving cross-training or a team approach is that employees who are used to working based on rigid rules and hierarchy may feel overwhelmed and confused by rapidly changing responsibilities. So, Chaparral considers this issue when hiring. "We try to select people who don't like to have a lot of structure," explains Beach. "There are people who don't work well in a team atmosphere, but it works well for our company. We basically try to hire good people and get out of their way."
In any case, says Beach, use of a team approach requires that all members of the team, including management, accept that they'll feel uncomfortable at times with the way things are being done. "You have to realize people won't always do something the same way you would," observes Beach. "Employees are going to make mistakes, but we all learn from our mistakes."
Widening Worker Horizons
Strategy number 6: Enhancing employee skills and fostering company loyalty through education and wellness programs.
Continuing education programs offered in the workplace can sharpen employee skills, improve attitudes, and give workers added incentive to come to work, say those who have explored this strategy.
Chaparral Steel has offered educational opportunities to employees for 20 years. Today, the company has a permanent continuing education center that includes eight classrooms and conference rooms staffed by five employees. Classes are taught almost every hour of the day, with nearly 80 percent of the company's work force enrolled in one or more programs. Although the curriculum offered is very diverse--workers can learn anything from how to read a blueprint to Spanish to operating various computer software--"everything we do is needs-related," stresses Beach.
Training programs are available to all employees, not just those willing to commit to remaining with Chaparral for a certain period after completing the company-funded training or degree program. Beach explains that the firm doesn't include this requirement because the company's top managers believe they are better off letting employees leave if they'd rather be somewhere else. "The idea of keeping people against their will isn't a good one," he says. "You'll get people's arms and legs, but you won't get their minds or their interest." In addition, removing any sort of quid pro quo is likely to encourage employees to appreciate the company's willingness to provide educational benefits.
For the company, the payoff of this no-string's-attached benefit is found in an increase in employee knowledge useful on the job as well as greater worker concern about their jobs and the future of the company. "You want people to be ego-involved in the goals of the company, and you want to establish an atmosphere of growth," says Beach. The continuing education program helps link the growth and well-being of the employees with that of the company. Another apparent benefit of the commitment the company and workers share, according to Beach, is a rate of employee retention "considerably higher" than the national average.
Another firm whose workers benefit from continuing education is OmniSource Corp., which brings in local university and high school teachers to lead seminars. Among the results: Academic course work offered recently enabled two hourly employees to earn the equivalent of a high school diploma.
OmniSource also offers wellness courses, including nutritional counseling, taught by nurses from local hospitals. "The more healthy our employees are, the better and more productive they are," explains OmniSource's Eisbart. "We're self-insured, and we try to treat our employees like part of an extended family."
Eisbart suggests making courses offered as convenient as possible for employees. "We're going to experiment with some after-hours and Saturday classes, especially for our wellness program, but most are taught during work hours" to maximize employee access and participation.
Every Friday Off
Strategy number 7: Switching operations to a four-day workweek to improve regular maintenance--and attitudes.
For the past five years, Advance Metals Recycling has used a four-day workweek on its night production shift to give the company's automobile shredder a much-needed extra "day" of maintenance each week. (The company runs the shredder at night when power is less expensive than during peak hours.)
The company has found that the unconventional schedule is not only better for the equipment, but it's become a benefit to workers, who enjoy three-day weekends as a result, says Charlebois. The schedule has proved popular enough, in fact, that senior employees at Advance Metals vie for the night shift.
The Payoffs to Innovation
Whether it's tapping an unconventional and overlooked labor source, such as inmates, temporaries, and disabled people, or finding new ways to spread responsibility among workers and link their growth to the success of the company, innovative personnel strategies like those outlined here can pay dividends in improved morale, enhanced productivity, and more-efficient operations.
Though you may not have a handy source of prison labor, the ability to run a continuing education program on-site, or an operation suitable for some of these other strategies, with a little creativity and a willingness to try the unusual, you could find your own unconventional answers to personnel problems.•
A variety of scrap recycling companies are finding unconventional sources of labor and experimenting with other creative personnel strategies to cut fixed costs, improve performance, and boost morale.