Eddie Rapp operates two social enterprises owned by Lutheran Social Services. The businesses are dedicated to moving men out of homeless shelters by providing supportive employment to residents in the Lancaster shelter system. Fairhaven Lawn Care and Patriot Pride Painting have a customer mix that is 60% commercial and 40% residential, dispersed over a broad geographical area, with Franklin County accounting for half of their sales.
These businesses demonstrate that putting employees first can be profitable. The combined businesses produce a return on investment of 22%, in addition to indirect savings to the shelter system of $50,000 per year for every employee they can house. SocialVentures talked to Eddie Rapp about what putting employees first means and how that impacts his business decisions.
Give us an example of what putting employees first means to your businesses.
ER: Obviously with any business you look at the financial side of things, but at the end of the day it’s about how many employees we help toward the goal of self-sufficiency. I believe conventional businesses would look strictly at the finances, and that would influence decision-making. For us, we adjust based on the needs of employees. For example, we may send four guys to mow because we want them to get more hours so the income they earn can help them become self-sufficient. Most other companies would send only two guys to mow because it’s better for the bottom line. By conducting business this way, it allows us to meet our financial goals and help more people in our programs.
How has this approach evolved since you started operations?
ER: We find that the rising cost of rental housing requires us to be more nimble in setting wages and providing enough work hours so that each employee can afford current apartment rents and related expenses. We also find that independence requires us to continue to provide some employees with transportation to work.
What have you learned about your customers since launch?
ER: For Patriot Pride, we have found that veteran families see hiring us as an attractive way to give back. They truly understand the magic of social enterprise making a difference through their everyday purchases. For Fairhaven Lawn Care, our continually growing volume tells us that more members of the community are realizing that the labels “homeless” and “addict” can encompass some fundamentally good people like our employees.
What is the typical experience for an individual who works for you as a stepping stone to outside employment?
ER: Generally we use the first 60 days of working for us to use supportive services to address typical barriers to an individual’s becoming ready to move out of the shelter system. That usually means getting a driver’s license and building their working hours so that they can afford an apartment. Once they are out of the shelter, supportive services focus on budgeting, paying bills, and apartment life skills. The next six months are devoted to building the confidence to look for an outside job and move away from the comfort of working for us in our supportive environment.
This focus is challenging for a business. It forces tough calls on service quality. Since our goal is for our employees to work elsewhere, our mission tells us to push out our experienced workers and constantly train new employees.
Most economic development programs measure success as rates of growth in jobs or sales or payroll. Should policymakers use a metric different than “bigger is better”?
ER: A social business and a conscious business both know their success requires them to take care of their employees. Important measures of success could include employee turnover rates and minimum or average salary or wage. Metrics of employee support could include percent of employees in training programs or employee assistance-program participation.
What is the greatest lesson you’ve learned over the years?
ER: We’ve discovered that it’s vital to provide transitional support beyond just providing housing and getting individuals out of the shelter system. The drug crisis is extending the time needed for individuals to achieve true stability and independence. Most treatment programs are too short: 30 days and out. Our approach to using employment as a foundation is effective because it keeps them busy with work and treatment time. Idleness and boredom are often gateways to addiction. The employment provided by social enterprises is key to successfully addressing the opioid crisis. And employers in general must become key players in addressing the crisis. In today’s world, 90% of potential employees will fail a drug test. How do employers adapt to that reality?
Founded in 2014, SocialVentures is a non-profit organization that advances remarkably good businesses—businesses that intentionally integrate social impact as a non-negotiable component of their business model. To contact SocialVentures, send an email to [email protected].