Ask a BAM Mentor poverty

Ask a BAM Mentor: Hiring Dilemmas

Once a month, our panel of mentors answer your practical business questions. Send us your questions!

 

Dear BAM Mentor,

One of the purposes of my business is to create jobs in an area where there is a lot of need. I am feeling the tension between hiring more people who are particularly vulnerable and desperately in need of a job versus hiring people with more skills. Have you got any advice as I try balance making good business decisions alongside fulfilling this core mission of the company?

Hopeful Hirer

Dear Hopeful,

This is a very common concern in our community, so thanks for asking! BAM has great potential in poverty relief, but most of us don’t get there, largely because we fail to ask this sort of question at the beginning.

I would start by changing the challenge from finding the right balance to managing the tension. That’s a healthier way to look at this and a lot of issues. On one side of the tension is the pressure to hire lots of people who are unemployed, many of whom likely lack skills and have a less than optimal work ethic. On the other side of the tension is the need to keep the business alive. If the business fails you won’t be able to hire or help anyone. Look at profitability as a necessary precondition for fulfilling your objective and hiring and training the vulnerable and desperately in need. Profit is like oxygen. No one worries about breathing unless it’s a problem, and then it becomes their entire focus. So make sure you structure and grow your staff so that the business has enough profit so that you are able to give to and equip the vulnerable and needy.

You’ll need to work out how, in your industry and business, you can provide the training and coaching needed to develop people. Make sure you address the deep cultural and worldview issues that are often at the root of poverty – assumptions about fate and the worth of people in God’s eyes. This training will take an investment and will require a structure to implement.  If it can be done on the job, so much the better. But it may be worth partnering with an NGO that can focus on basic training independent of your operation with the understanding that people can transfer to employee status at some point in the future.

This will drive the company for growth and growth will require more and more skilled people to manage and to ensure the product or service is done well. If your training and equipping is also high quality then over time you should develop a stream of growing talent from those who are now the vulnerable and needy, lowering the need to hire skilled people from outside. That needs to be a strategic goal – to ensure that you have a process that does turn these people into productive and value-adding workers. Otherwise you are simply providing charitable services to the poor. That’s a good thing to do, but it’s not as good as helping the poor get out of poverty.

The tension should be most challenging in the early years, when you are trying to work with unskilled people. Likely you can only handle a few. But if you have worked out the training and equipping program properly you should be able to increase the ratio of formerly poor employees in the company.  As a side note, that would be a good metric to watch over time.  You should eventually have only a very few people in the organization who were hired as skilled people; most of them should have come in through your training program and grown with the company.

~ Robert

Dear Hopeful,

Just as BAM is a fusion of business and mission, so also is doing a BAM business a hybrid between the business aims and the social aims. As you note, this can pose a challenge in trying to run a business that is market-sustainable while hiring people who are less than market-ideal.

BAM has multiple bottom lines, and we must meet all of them to succeed. The primary requisite is the business bottom line. If the business cannot succeed as a business it will not be around to even attempt to accomplish any of the other bottom lines.

If a business is already established and flourishing it may be easier to integrate employees who add more to the social objectives than they do to the business ones. However, if the business is a startup, the challenge becomes more difficult. While all of the bottom lines are essential, it may not be possible to pursue all of the bottom lines equally, at least to begin.

In starting up our freedom business, our business objective was to create a one-of-a-kind gourmet café. Our mission objective was to hire prostituted women, who were not the most reliable employees and who did not yet have the skills to staff a successful business. An additional objective was to have an off-site training center where they could learn the hard- and soft- skills for success before being hired at the café. An ideal business plan would have spent years developing the training center first, but God had other ideas. This meant that we were faced squarely with the question you pose: how to balance hiring people who are sorely in need of a job with hiring people who have solid job skills.

To be able to achieve all our objectives, we needed to hire people who could be successful from the start. It would be guaranteed failure for both the café and the employees themselves to staff with people from our social objective who weren’t yet business-objective ready. And yet, our DNA was calling us to hire outside the norm. We satisfied both aims by partnering with an established ministry that had been working with at-risk women for years. We asked them for stars who had proven maturity and were ready for a new challenge. None of them had ever heard of a latte and weren’t the kind of first hires a new establishment would ordinarily make, but neither were they fresh out of trauma and untested.

Later, once we got the café running, we were able to open the off-site training center (again, a step I recommend doing first, unless God directs otherwise). The center allowed us to train people to work at cafés like ours, but more importantly it gave them a place where they could learn skills without being at risk of losing a job (or ruining the business) if – and when – they blew it. The center hosted baking training parties where they could try out their hands in flour, for fun and risk-free. This helped them discover interests and skills they had never known. And selling their products off-site also allowed them to make a little money from their work – not enough to live on, but something to show for their new-found talents. We also held occasional catering events where advanced trainees could serve a beautiful meal to real customers and gain needed confidence from the experience and complements, even if they weren’t quite ready for full time.

Balancing multiple bottom lines is not a simple formula, but hopefully experimenting with these principles can help you discover a recipe for success.

~ Christa

Dear Hopeful,

The non-negotiable in this scenario appears to be a motivation to provide employment for vulnerable and desperate people who need a job through this particular business. However, it stands to reason that a prerequisite to providing employment opportunities must be that the business is established and successful, at least to the point of being self-sustaining. If this is not the case, there can be no employment opportunities and the whole business has failed. It may be that the aim is to provide an increasing number of employment opportunities over time, in which case, the business needs to be more than self sustaining – it needs to be actively growing and expanding. In other words, there may be a number of valid definitions of what is meant by success.

However we define success, it requires business expertise or skills. We may be looking to God to prosper the business and so we should, but God also expects us to play our part.  Moses listened to his father-in-law for a practical way of handling the issues that were being brought to him on a daily basis. Moses wasn’t running a business as such, but he had a much bigger leadership job than most business people. God expected him to use common sense, along with the advice and expertise of others.

It follows that the first priority must be to employ the best business expertise we can to establish our business. Of course this does not necessarily mean that we have to actually recruit the skills. In some cases, it may be more cost effective to use a mentor, an agency or a consultancy. Many small businesses, for example, don’t have their own accountancy expertise but are willing to use an independent consultancy advice for a few days every month. In other cases, the expertise may only be needed for a short period of time, for example to develop a web presence.

However, there is a big danger that pursuing “business success” as a priority could knock the whole business off track. Unless care is taken up-front to define what we mean by “success”, it may be easy to get into the mindset of wanting that little bit more of business success before turning our attention to the real purpose, which is to provide employment opportunities. It seems to be a characteristic of the entrepreneur that they never feel totally satisfied with what has already been achieved but must press on and on.

Perhaps the best way to combat this tendency is to agree from the start with a few trusted advisers precisely what level of success is needed before we can afford to transition the emphasis of the company. The definition needs to be “SMART” (specific, measurable, achievable, realistic, and time-bound), with particular emphasis on being measurable so that there need be no dispute about whether or not it has been achieved. The idea of having a few trusted advisers is that the business owner is accountable to the advisers and accepts their judgement about when to shift the emphasis to employing unskilled labour. Although this response appears to promote a binary switch from employing skilled people to employing unskilled labour, in practice there would probably be a more gradual change of emphasis.  The point here, though, is to get the priority right, or else the business will struggle to provide those employment opportunities.

~ David

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