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Enterprise Strategy for Workforce Development

Opening Doors for Job Seekers, Delivering Talent to Employers

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What is Alternative Staffing?

In today’s economy, staffing, including temporary, contract and direct hire placement, is a key gateway to stable employment. Alternative staffing enterprises use competitive staffing services to help thousands of marginalized job seekers enter and succeed in the labor market, while connecting employers to talented and motivated individuals. Alternative staffing organizations (ASOs) strive to improve the quality and dignity of temporary work by paying good wages, promoting safety standards, and equipping candidates for long-term success through coaching and skills training, placement in temp-to-hire opportunities, and access to social supports.

Wage Rates

Hourly wages are a key measure of job quality. In ICA’s 2017 survey of the sector, ASOs reported a median “average wage” rate of $11.80 per hour, with half of ASOs paying average wage rates at or above the living wage for a single adult in their local area markets.

Workplace Safety & Health

ASOs communicate with client employers about shared responsibility for workers health and safety, monitor worksite conditions via physical inspections and reviews of prospective clients’ OSHA logs, and include contract language that specifies both the ASO’s and site employer’s obligations related to safety and health-related training and worksite protections.

Post-Exit Retention

Four ASOs that track post-exit retention of their workers document six-month retention rates of 50% to 79%. ICA works with practitioners to pursue a systems approach for tracking post-exit outcomes to better understand the longer-term impact of this transitional employment strategy.

Temp-to-Hire Conversions

ASOs aim to make job placements that lead to stable employment. A median of 38% of ASO workers convert to hire by employer clients or use their temporary work experience to secure new jobs on their own.

Supportive Services

Providing supportive services sets ASOs apart from other staffing firms and is vital to workers’ success on-the-job.

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About the Alternative Staffing Sector

$250 million in fee revenues in 2016, most of which flows to employees in the form of wages and benefits. Median revenue for a single enterprise was $1.7 million.

43,000 job seekers employed by 70 ASOs per year. Job seekers include returning citizens, people with disabilities, people experiencing homelessness, young adults, immigrants, and people recovering from substance abuse.

Industries served include manufacturing, warehouse and logistics, property maintenance, hospitality, government, construction, retail and customer service, IT, and health care.

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Impact Profile

First Step Staffing supports
workforce development growth

Founded in 2007 and headquartered in Atlanta, Georgia, First Step Staffing is a non-profit staffing agency dedicated to helping individuals experiencing barriers to employment re-enter the workforce. In 2011, the organization joined the Alternative Staffing Alliance, a national association founded by the ICA Group to advance the temporary staffing sector. 

In 2015, First Step developed an acquisition strategy to significantly scale its impact. ICA introduced First Step to LEAF, a Community Development Financial Institution that provided gap financing, and helped the agency build relationships with other social impact lenders. The acquisition led to significant revenue and job growth: annual revenue increased from $1.5 million to nearly $20 million and First Step’s daily average of workers on assignment grew from 150 to over 800 workers per day.

As First Step sought to build on this success and expand its work beyond Atlanta, the ICA Group and the Alliance were prepared to help the organization deepen its impact. First Step needed to identify a new market that could support their model, which provides rapid reemployment, comprehensive support services, and development of referral pipelines. The ICA Group conducted market research about industrial staffing in prospective target cities, which helped to confirm that the city of Philadelphia was best prepared for the workforce impact that First Step Staffing hoped to create.

After a second acquisition in early 2018, the organization’s annual revenue doubled to $44 million. In its first year of operation, First Step in Philadelphia employed 1,300 individuals experiencing homelessness and paid over $14.5 million in wages, managing over 600 individuals weekly throughout the region. 

The ICA Group continues to support the agency in its continued efforts to identify new markets for expansion and as a member of the alliance. First Step Staffing CEO Dave Shaffer shared, 

“Our long term relationships with the Alternative Staffing Alliance and the ICA Group have been very valuable from both a learning and teaching perspective with like-minded organizations from all over the country. The Alliance encourages collaborations and information sharing among agencies committed to helping those with barriers reconnect to the workforce. The support, research, and community connections through the Alliance have proven to be invaluable as First Step expands into new markets and forges new partnerships.”

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Join the Alternative Staffing Alliance

The Alternative Staffing Alliance is a dynamic community of nearly 50 employment social enterprises in over 20 states and Vancouver, Canada that combine a staffing service business model with supportive services to help thousands of disadvantaged job seekers enter and succeed in the labor market.

Learn more about the Alternative Staffing Alliance and become a member!

As a national network, the Alternative Staffing Alliance helps practitioners connect for mutual learning and professional support. Together with our members we:

  • Promote peer networking and learning through referrals, webinars, and conferences
  • Develop business resources including regulatory updates, a directory of trusted vendors, staffing service agreements, employee handbooks and checklists
  • Document best practices for staffing operations and supportive services for workers
  • Conduct an annual survey that benchmarks operating performance and social impact

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Best Practices for Alternative Staffing Organizations

Key Elements for High-Performing Alternative Staffing Organizations

Weighing the Options: Legal Structures for ASOs

Engage Employers to Address Tight Labor Markets

Additional Resources

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Consulting & Technical Assistance

The ICA Group offers in-depth technical assistance for alternative staffing organizations, including:

Market research

to assess demand for staffing services, identify sources of candidates, and develop sales estimates

Feasibility analysis

using the business’s operational needs and cost structure to develop detailed financial projections

Business plan development

to guide implementation, attract financing, and cultivate partners

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