SEPTEMBER 26, 2006 VCU WEBCAST Captioning Provided By: Caption First, Inc. >> CATHY HEALY: It's a pleasure to be here this afternoon. The local chambers of commerce represent the interests of the state regional and local business community in government and community affairs, economic development, and work force development. Chambers advocate for pro business policies. They serve as a liaison with government officials, and as a connector to the community at large. As a work force intermediary, chambers play a pivotal role. Not only do they ensure that the work force services that are being developed meet the needs of business, but they also communicate the resources to their business members. Most of the chambers' business members consist of small and mid-size business. In fact, about 80 to 90 percent of business members of local chambers are in the small business range. So, as a potential gateway to small business members, chambers play an important part in ensuring individuals with disabilities are counted in the work force. The institute for competitive work force formerly the center for work force preparation is the result of a merger between CWP, and the business education network. The U.S. Chamber of Commerce going forward will serve as the primary bridge between the business and education communities. Through policy initiatives, business outreach and the grass- roots networks, the chamber will find and help implement solutions, that will preserve the American work force as this country's greatest business asset, and its strongest future resource. There are three major trends that cannot be ignored and are intricately woven together: Globalization, demographic shifts, and skill gaps. Until mid 2001, the U.S. experienced the strongest growth and development in history. Record lows in unemployment and record growth in per capita income. There is a kind of good news/bad news. Because we won the cold war, capitalism has prevailed. In the process, we created three billion new competitors who are all competing for the same markets, the same resources and the same talents. We are also experiencing demographic shifts. And towards the end of this decade, the numbers are that something like 77 million baby-boomers have the potential to retire. Beginning this year, we see that for every two workers who are leaving the work force only one will be entering. This represents a great drain in our skills and our intelligence. We have skills gaps also. To give you an example, 20 percent of jobs in 1950 were classified as skilled. Today, 85 percent of jobs are classified as skilled. So in the '50s, with a high school diploma or even an 8th grade graduation, it would be easy to find a job at family sustaining wages. But today, what we know is that more than 80 percent of high growth occupations will require some form of post-secondary education, or training. 61 percent of these will require more than a high school education, but less than a bachelor degrees. By 2012 it is expected that demand for skilled workers will intensify. 42 percent of U.S. jobs in 2012 will require technical or academic degrees, up from 29 percent in 2000. 30 years ago, Fortune 500 companies made up 26 percent of the nonagricultural work force. Since that time, these firms have lost over 12 million jobs. In the 1990s, medium and small companies accounted for all of the net job growth across the country. According to the small business administration, in 2004, there were approximately 24.7 million businesses in the United States. And of those, 99.7 percent were small. Small firms employ half of all the private sector employees. They pay 45 percent of the total U.S. private payroll, and they have generated 60 to 80 percent of net new jobs annually over the last decade. There is more good news about small business and why we need to pay close attention to them. According to a 2005 study of employers nationally, by the families and work institute, small employers are more likely than large employers to pay all of employees' premiums for their personal healthcare insurance, 25 percent versus 20 percent, and small employers are less likely than large employers to have asked employees to pay a larger proportion of their personal health insurance premiums over the last two years. 37 percent versus 51 percent. Small companies also lead the way in providing one of the most valued benefits, working flexibly. Small employers are significantly more likely to offer flexibility to all or most employees than employers of other sizes, and in no instances are they significantly less likely to offer these options. Well, we don't really know how small employers recruit. But we have some insights. In 2004, CWP conducted an internal survey of members. And we did this to get a baseline understanding of their work force practices and their understanding of work force services. Of the 144 respondents, 87 percent had fewer than 500 employees and 13 percent had 500 or more employees. This demographic sample is consistent with other CWP chamber member surveys where we find that 80 to 90 percent of local chamber members are in small businesses. We asked them to check all that would apply to them. The responses were interesting. 73 percent of employers report that they rely upon word of mouth or employee referral programs to recruit potential employees. 70 percent place ads in newspapers or trade publications. And only 52 percent post job openings and search resumes on the Internet. So we see the importance of personal relationships in recruiting and how important this is particularly for people with barriers who are trying to get into the work force. A service provider needs to form a good relationship with either a local Chamber of Commerce, or a local employer. They need to become a trusted resource for them. Research around job seekers with disabilities is very encouraging to employers. So employers who understand the value add of job seekers with disabilities, we know that recruiting from this labor pool is actually a very good business decision. But small employers particularly small employers tell us that they have extenuating circumstances. It may be very difficult for them to recruit from this talent pool. Small business often does not have a HR staff. They wear many many hats during any given day. So they do not have the luxury of time to figure out how to interview a person, particularly with significant needs. They don't have the time to figure out how to fit the person into their workplace. And they certainly don't have the time to figure out how to accommodate a person with a disability. They also do not have a wide profit margin. It is too risky for small employers to make mistakes. Once again we see why it is so important for a small business owner to have a trusted source who can help them be confident, that they will know that there is someone to help them in the recruitment of a person with a disability. And that once the job is offered, that there will be ongoing support as needed. It gives me great pleasure to be here today, with Steve Korte, of A and F Wood products, who is a 2004 recipient of the secretary of labor's New Freedom Initiative Award. >> Teri: Thank you, Cathy. Before we move on to our second presenter, join us in the chat room following the webcast. Is it my pleasure to introduce Steve Korte. Steve is a co-owner of A&F Wood Products, which is a family owned and operated business in Howell, Michigan. They provide employment opportunities to individuals with disabilities through support, training and user friendly environment. Let's get started with a second half of the webcast, and it is my pleasure to turn that over to Steve Korte. Steve? >> STEVE KORTE: Thanks. A&F Wood Products was opened in 1956, 15 miles east of Detroit. Two people ran the shop for a year and a half without hiring outside help. In the small business world that means the kids were still in diapers and weren't old enough to work. In 1983, the plant burnt down on a night that they call in Detroit devil's night. We were able to save some of the products and some of the machinery. We were producing three days later in a warehouse. In 1986, we moved to a 12,000 square foot building in Green Oaks Township. In 1990, Jason, Pat and myself, my brothers, bought out our dad and uncle in an equal partnership. In 1992, we added on another 12,000 square feet which maxed out the property. We were pretty stuck there. In 1997 we started our disabilities program which we like to call operation opportunity. In 1999, we built a new 36,000 square foot building in Howell, Michigan. Our headquarters in Howell, Michigan is where we do our manufacturing and shipping. In our warehouse in Brighton, that is where we do, have overstock and extra materials and we do a little bit of shipping out of that area also. We manufacture pocket door frames. We stock commercial flush doors. The commercial doors we bring in, we have a C and C router that routes in hinges, door knobs and we have a prefinishing area too. . Our customers, we sell to wholesale distributors, national lumber yards, like Carter Lumber, and we have also yards we distribute to and we sell to home super stores, Home Depot and Lowe's. We have 30 employees currently, nine of which of those have some form of disability. My goal here today is to show you the path that led us to hiring people with disabilities. I want to show you why they are a good source of employees, the partnerships that we have now and how that is a good return on our investment, the tax benefits to our company, how it's a positive impact on the community, and how it makes you feel good and then all this wrapped up, why this makes good business sense. How we got started, as all small businesses know, everyone takes a turn doing a job. In 1992, it was my younger brother Jason's job for hiring employees. He received a call from a social worker that answered our ad in the local newspaper. And said, hey, do you hire people with disabilities? Jason said, come on in. I talked with Denise and Cathy about this on our first initial contact and how this happened. For us, this was fine. We said, hey, we are fortunate and let's go ahead and look on this. It worked on the card of our emotions and stuff like this. Is that the proper way to do it? Knowing up front what we are working with, I think that they mentioned words about using less skill which would still work with us, but knowing a person has a disability is great for a small business employee because that is a term that we know, though I don't think we know exactly what that means, it's such a broad term. After we had that initial interview, we had a few concerns. First question, will the government have to inspect our plant? A small business, I think the people need to understand that it's like part of your family, part of what you are doing. You either adopted this baby, bought this business from somebody else, or it's a newborn baby that was your idea and you started it from scratch, and brought it in. Or it's like taking care of your mother and father or grandmother and grandpa, which we did, it's something that is instilled in you that is really important. When an agency like OSHA stops in and suggests that you make alterations or be fined, it's tough. It's someone telling you how to take care of your family. Granted, we are a safe shop. I think most places are. There is a place for the stuff. But it's hard to take orders from people, especially when it's something of your own. Also, can people with disabilities do our types of jobs? A small business owner has done every job in there and does it way better than anybody else or so they think or so I thought. Growing up in the business, you work this and you have done it and seen every angle. Letting go of that is something that is really tough. Who is there that can help us? We are not professional social workers. We need help dealing with people. Our HR department is growing up in a family of seven kids, brothers and sisters. You learn to get along or else. How much will it cost? At the end of the day, we can only afford so much as a small business. You want to make sure you are paying fair wages to everybody and it's good for everybody. When you start to take stuff out of your pocket to pay for things, you are squeaking. This is when we were introduced to Work Skills. They are out of Brighton, Michigan. They are an employment and training service, a buffer to the employee and buffer to the government, which is something we needed. What they offered was a, what they said they could offer was enhanced community image and public relations, motivated workers, increased longevity. One of the toughest things to do with the company is get that motivated worker. On-the-job training; whenever I can make money while an employee is being trained, that is an awesome thing. And professional worker to job match, very important. Other advantages was money saving through hiring incentives, tax credit and tax benefits. The efficiency increased by job task analysis. Having them come in and look at our jobs. That is tough. That is eggshell walking on. You have done the job for so long. You don't want someone to tell you to do it this way. That will put up a barrier that is no good for anybody. Follow along service, employer assistance. We need to be hand held. It's new to us. We weren't sure what was going on. That was awesome. Decreased personal time and cost. Helping the bottom line and getting me home on time. That is what I was after. This is what I was hoping they were going to bring to us. Some of our answers, will the government have to inspect our plant? No, not any more than we had in the past. With OSHA, we have come through and had our difficulties, but we are a safe place. You are going to take care of people. Who is there that can help us? Work Skills. They are going to be there to walk us through and hold our hand. Can individuals with disabilities do our type of jobs? Let them try and give the opportunity to make-or-break it. There is not much more you can do than that. Also how much will it cost? Time. Like Cathy said, it's a precious commodity for a small business. You don't seem to have enough. You want to get home. If this is going to be something that will take up more of my time and I won't make any money, it won't be worth it. They said they would be there to help. That should dramatically reduce that. We said, let's do it. The first applicant that the social worker brought in didn't work out. They didn't come in and look at our job. They brought this person in for an interview and pull at our heartstrings and we said let's give it a shot. The second applicant that came in, this is where Work Skills came in and looked at what we were doing and did a good job match. They brought in their A person, which is important. Get the ball rolling and get things going. When they first came in, everybody was nervous. What are we going to do? How will this work out with the person? We put them in on a press that put screw holes in an aluminum track. The first day, not a lot of production. Everybody was nervous. Jason, Pat and I took time and watched him. We thought, what if we do this? We made a slight modification. That modification, the next day when he came in, made a huge improvement. We are like, wow, this is great. We are moving forward. We thought why don't we put air actuators on that and make it a semi-automated machine. We did that and increased the production even better. It helped everybody in the shop. That was great. We went through a process that made us money by having him come in and open our eyes a little bit rather than doing things the same old way. After our two-week evaluation, what we found out is that we had a person that was motivated to work. It was wild to have an employee to actually want to come in and work and do their job. That was awesome. He was eager to learn. He would watch and, what can I do, is this right, is this correct? He is conscientious on making sure he had the proper product coming off. He was looking for a place to go every day, a home, that everybody wants. He wanted a real job with real pay, producing a real product. It was, he was proud of his job. That is awesome to see. Also what we found out, the term disability is a broad term. We had no idea what we were going to get, where we were going to go or what was going to happen. Disability is a broad term. Most of us see disabilities either on the movie screen or what you see on TV or going through a mall. But working with a person is a huge difference. You are interacting and talking and stuff like that. That is where we learned that, wow, this is something different. We need to focus on this. Wheels started turning. Okay, Work Skills, what can you do for us? They had brought a job coach in, in the beginning. But we didn't know, are we going to get a different job coach. They said no, we will train this person. If that person leaves, we will train somebody else. They can train the next person that comes in. They set up transportation, which is a huge issue trying to get people there on time. We have what is called a let's bus or a dial a ride. The problem is that we can't get people there early enough in order to move them into full time, but we are working on different situations for that. The two week evaluation, awesome. I can get more time if needed. They are flexible. If I'm not comfortable, they won't push something down my throat. Follow-up is awesome. They are there when I need them. If it doesn't work out, they are with me working on an exit interview, helping me get rid of the employee, not get rid of, but have them move on because they might not work out for us. What can individuals with disabilities do at our plant? That is our big thing, we started walking around and taking a look. The thing is what can't they do? This is a setup, where we spent the most money on probably. This has an automatic screw feed machine which made a lot easier because eye/hand coordination, you didn't need to have so much, by putting the end of a screw onto the tip of a screw gun. This here is probably, cost us about $10,000, but we improved the productivity for the rest of our shop. Huge! It made life easier. We had a better product coming out. This is one of the punch presses. They are stamping print or grooves, words on to a piece of board. You can see the modifications we made. This one probably cost $2500. It improved reliability, safety and letting the small business owners know that, you don't have to have the super high tech, as you can see. We have regular flake board up there guarding the press. We had OSHA come in after this and look at that. I said, we have this board. He says, can anyone touch anything? No. He says, great. It doesn't have to be pretty. You don't have to paint it. Just make it safe. That helped our fears on something like that. We have cutoff machines there. This is a machine that we already had on in there, and this is where I do some of my job testing. I have a couple areas where when I bring people in, I let them try out the jobs a little to see, I can see where their skill level is. Work Skills may come in and say it's at a certain point, but I like to see for myself in my environment how people will work out. Here is the original machine that we started people working on. Back to my current process in how I bring people in. Taking turns, Jason is not doing the job but I am. My current process is I try to make a group interview. It saves me time. That is important with a small business. I let each applicant try the jobs. There is a couple in there I showed you as far as people stacking some wood. We make pallets. I have them use a staple gun under my supervision. It will be me or one of my brothers or one of my top managers that walks people on through. But in general it will be me. I need to make the final decision on this. When you are using staple guns, you go through the spiel on safety. Everybody has eyeglasses, eye protection and everything else on. It's important that I see what is going on. After I do the interview and give them the spiel on what A&F is all about, and it's the same spiel I give to everybody, being there on time, being proud of your work, getting good production, getting along with people in the shop, I meet with each applicant and their caseworker if they wish. We go over individual possible needs for everybody. Some might be, I can only work every other day, because I'm going to school. Some might be, my transportation doesn't work out. This is my point, to talk with that person, and get to know them better which makes things more comfortable for me and them. If it works out, I set up a two-week evaluation. Challenges we had along the way, we didn't wake up in Emerald City. The first person that came through was not capable of doing what we needed him to do. It is because the social worker didn't see what we were doing actually. Struggled, we struggled to help the nondisabled workers find their comfort zone. This is a little more difficult, because Jason, Pat and I talked about it so we had time to get comfortable and see what is going on. But throwing somebody into the break room, and everyone, we have 20 people that hang in there and everyone else scatters throughout the shop, there is a real culture that goes on there. More often than not, we talk with applicants as they come in to help them fit into the culture. That is important. You don't want anybody to be alienated. You don't want anyone to not participate. Maybe it's too much of a control thing, but I think this helps out and gets people comfortable. To throw somebody in the room and walk away is no good for anybody. We work on helping everybody to get their own comfort zone. We shouldn't assume everyone has been exposed to people with disabilities. Like I said earlier, a lot of us see walking through a mall or movies or something like that, but working with somebody is a huge difference. It's more personal. Once people get over the fear of that, they, leading by example is important. When we are comfortable and our top employees are comfortable, new employees that come in whether they have disabilities or not are comfortable. Everybody is in a relaxed situation. Mary Ann is a perfect example of this. She is blind. In the first interview, we are sitting there and chatting. At the end, she said, I'll see ya. And all three of our mouths dropped. And we said, do we say, I see you back? I don't know. It was uncomfortable. But she made life easy for us. That is real important I think. It's a two-way street. If that employee isn't able to go with that and help them, the job coach or their social worker, somebody has to have input to help that along. Take-aways for a service provider. Treat the business as if we are your customer too. That's huge. We work with Work Skills and it's an awesome relationship. What we have there is, after they got used to it and we got used to them, they me call and say, I have this employee, Steve, they are not right for your company but I want to get them out into the work force and do an interview. I say, come on in. Granted, you call it that that's giving community service or what have you. No, it's just helping people out. That's awesome. I'll take that time, bring them in, run them through the spiel and everything. It gives that person a feel. It gives them a chance to see if they like the type of job, so nobody is committed to anything. That is nice. Also, the good customer service, means responsive to our needs. I can call up and get a response back right away. I have cell phone numbers, if we have a problem with somebody, or myself or they have a problem, the response is awesome. Providing creative low-cost solutions and alternatives to our challenges. What is nice is on one of those machines, you saw where we had the plywood up there. That is great. It wasn't, you need to get an engineer. Let's take measurements. We have a six months approval system. No, let's just make it work and make it safe. Sometimes holding our hand along the way, that's been awesome. A small business doesn't want to say we need hand-holding, but we do. We are a jack-of-all-trades and master of none. Having somebody there to work through and be your HR department is awesome. Business, look for partners. To be honest with you, if we hadn't had the social worker answer the ad in the paper, I wouldn't know to go here. I wouldn't know where to look. Work Skills is 15 minutes from our plant. I didn't know they were there. Don't give up on one try. It may take a few attempts. If we had given up on the first person, it would have been a shame, because we are making money off the situation because we have an employee who is producing a great product. Expect good customer service from your partners. How you would expect your customers expect from you and from your vendors and so on, that is important. This is a business. It needs to be treated that way. Have high expectations from your workers. Leading by example. I don't think anybody gets any kind of special treatment. Nobody wants that. Everyone wants to be treated the same, and you do your best to do that, and talking with the person, and being up front, and casual and nice, that happens automatically. In review, why hire people with disabilities? They are a good source of employees. I didn't want to talk about this so much, but we actually have a competitor/vendor, we buy products from him and so on. He took us through a tour of his plant. As we are walking through, my two brothers and I are going through, wow, there is a perfect job, there is a perfect job. But you know what? I feel we got such a great thing, that I don't want to tell everybody. I know I need to and I have to get over there, and we will probably let the cat out of the bag. I guess it's happening now. But it's a good thing. With the way things are and people going overseas trying to find competitive wages and this and that, it's great in your backyard, you know? Why not use that? Partnerships provide a good return on investment. I have an employee who is going to put out their most. They are going to work their hardest and produce a good product. The tax benefits, to my company. Positive impact on the community. Any time someone in your community gets a job is a good thing. It helps everybody out, getting people to work. It feels good. When you see someone with a disability, exceed yours and their expectations, the feeling is hard to describe. We had a gentleman working for us, and he was working on getting his license. He was 28 years old. He had a hard time getting it. And some of the people up front helped him out and got him to his job and that helped him get his license. He was proud and happy about this. This ended up being around wintertime. In Michigan we get the first snowfall, and unless you get a foot, it's not a big deal. We got an inch of snow. This guy calls up and says, sorry, I can't come into work. I can't drive in the snow. I said, don't move. Stay right there. I had somebody drop me off, went over there, says get in the car. I took him, we drove from his house to the work, which is only a ten-minute drive. We went out in the parking lot, did a couple donuts, he got used to snow. I said now you will never be late for work because of snow. It made a huge difference. He felt good about that. He no longer works for us. He moved on into a different position. It didn't work out. But that is okay. Because I think that what we did is, helped him move on to bigger and better things. When you add all these things on up, you can see that it definitely makes good business sense. There is no reason that a small business shouldn't move into this stuff. We talk about, I mentioned about the jobs going overseas, and competitive wage and stuff like that. I get people that come into the shop looking for a high wage, looking for starting at the top. I have people moving into our shop right now, that come in as employees with a disability that are ready to start at the bottom. And not everybody stays there. You do get some employees that this is their limitations, this is where they will be and they are happy and we are happy. It works out both ways. I try not to stick anybody in one particular job forever. I like to have at least one or two that I can move, one or two jobs that people can move into. But there is room for advancement. We have actually a couple employees, one in fact yesterday, day before yesterday I met with and made him a team leader. He has three or four people underneath him. He started out from the get-go like I did, sweeping floors, that is where he started. It moved up from there. I'll tell you, communication is great. The people skills are great. He is just a hard worker. He leads by example. I have a couple other guys that may not have people underneath them but they are running some areas themselves like machines. They will go in there and change the machine from one part to another part, which for me will take a 4-hour deal. Maybe for them it takes six hours. But I didn't have to do it. I think that's key. What it boils down to is that I think you have to open your eyes, and see all the different possibilities that can happen. When you do that, you are going to make money. People are going to make money. And you are going to feel really good about it. Thank you very much. ****** 1