Who Gave You Your First Break? WorkReady Philadelphia’s Innovative Approach to Stimulating Corporate Altruism on behalf of Inner-City Youth

Who Gave You Your First Break?

Before the start of an ordinary business day in mid-October, some of Philadelphia’s most powerful political, corporate, and nonprofit leaders sit down with high school students from the city’s public schools. These two groups — ordinarily separated by vast differences in age, experience, status, and influence — gather in Center City to share breakfast and their answers to the question that brought them together: “Who gave you your first break?”

The breakfast is designed to thank the hundreds of employers who have supported interns during the 2009 WorkReady Philadelphia campaign. The event features employer awards and remarks by employer champions, and is managed and led by young people.

Above the din of silverware and refilling water glasses, Khareif Williams, an engaging senior at Simon Gratz High School and the morning’s emcee, invites CEOs, executive directors, and even Mayor Michael Nutter to share with one another stories about the people who first positively influenced their early professional lives. Stories from around the room reflect diverse professional paths. One business leader remembers the teacher who made an extraordinary effort to get him into a good school, while another recalls the manager who encouraged her to present an innovative idea to the board of directors at her summer job. David Cohen, executive vice president of Comcast and chair of the board of directors of the Greater Philadelphia Chamber of Commerce, speaks of the way early work experience enabled and empowered him as a young man. Mayor Nutter mentions the responsibility he learned during his summer jobs and how it helped him break down barriers throughout his career.

When they finish, the attention shifts to the high school students at each table, who have until now been smiling along and nodding politely, even if they can’t quite picture the scenes and hairstyles of 1970s Philadelphia. In sharp contrast to the assortment of times, places, and career stages included in the stories told by the executives, the students’ big breaks all share a common theme: Each was provided by the leaders sitting across from them through internships in the businesses they own and lead. For the students, their big break is having valuable knowledge of the professional world. They use phrases like “proper work attire,” “memo protocol,” and “my expanding professional network.” They know how to speak confidently to the people in charge and how to take pride in a job well done. Though not yet out of high school, these students carry themselves like experienced members of Philadelphia’s workforce.

As the stories end and the formal program gets under way, selected prominent Philadelphians step to the microphone to address their peers and the students. A few executives thank the students and congratulate them for their motivation and work ethic. Mayor Nutter congratulates the corporate executives for providing rich experiences for the students. But underneath the palpably uplifting and optimistic feeling of the morning lies an urgent message in every speech: despite the positive value of internship experiences to the lives of these students, too many of their peers have not been afforded the same opportunities.

Identifying the Problem: Inadequate Career Training

As millions of baby boomers retire over the next five to ten years, the next generation of workers will struggle to fill the jobs retiring workers leave behind. Labor statistics indicate that in the short term, there will not be enough younger workers with the appropriate talent to fill these vacancies. Of the 153 million working Americans, nearly half, or 76 million, are likely to retire within the next decade (Gallagher 2005). Of greater consequence, many boomers will leave behind jobs that are not easily filled. The retiring generation is the first generation of executives and professionals to have expansive knowledge in computer technology, advanced scientific methods, and global business development (Akl 2005). In fact, the jobs that require these intellectual services and high-level analytics and decision-making have above-average levels of retirement risk (Seubert 2008). Stated simply, the boomer generation possesses the institutional knowledge of thousands of corporations, and currently holds many of the most skilled and senior positions (Gallagher 2005).

After baby boomers, Generation X comprises the portion of the workforce with the most experience. While Gen Xers will move into many of the jobs vacated by their predecessors, they are a significantly smaller cohort, totaling only 46 million members of the workforce (Gallagher 2005). Generation Y, the most recent addition to the workforce, will play a crucial role in filling the workforce gap between the two preceding generations. Born between 1982 and 1995, Generation Y will have nearly 80 million eligible workers by the beginning of 2010 (Leung 2005). More importantly, perhaps, nearly all of them will have lived much of their lives using the core technologies that will drive business in the 21st century. But despite the significant opportunities Generation Y represents for the future of America’s workplaces, current trends suggest the need for more focused efforts to maximize this potential.

It appears that the gap between the skills young people are developing and the skills they will need in the future is widening at an alarming rate. New technologies increase the volume of available information and advance the speed at which it can be shared and consumed, and while members of Generation Y adapt to technology quite well, they will require the professional skills to utilize that information. To be most effective, this largest segment of America’s future workforce will need early and frequent experiences that build the initiative, problem-solving, and conflict resolution they will require in rapidly changing workplaces. Increased availability of real-world internships during teenage and young adult years can help reconcile this problem.

During the first decade of this century, new occupations have been created each year to meet the demands of the rapid acceleration of the medical, computer technology, and environmental sectors. Yet the vast majority of the jobs students will take during the summer of 2010 will be in the same occupational fields as those taken by students in 1960. Jobs in hospitality, retail, and manufacturing still draw a high percentage of high school students. In fact, the traditional summer jobs — building and grounds maintenance, fast food service, inventory and sales, and factory labor — make up nearly two-thirds of student summer employment. Although these jobs develop important employment soft skills they often do not provide career awareness, technical skills, or develop the social and professional connections and access within growing industries. While these jobs certainly expose students to the working world, they do not help develop the skills that will be most useful in future careers (U.S. Bureau of Labor Statistics 2009b).

A summer jobs program focused on health care, technology, and education would help prepare current students to fill tomorrow’s critical employment gaps in critical industries. Registered nurses, for example, are on average slightly over 45 years old. When they retire, they will not only vacate thousands of skilled positions, but will also represent the growth of an aging population that will need those positions to be filled (Gallagher 2005). Moreover, each year the information and software systems, medical assistance, and personal finance professions are creating jobs that have never existed before. Employment in these sectors requires job-specific skills that are difficult to learn without experience and without the interpersonal and communication skills that make navigating the workplace easier. In these occupations, knowing the specifics of organizational culture and procedures enhances productivity; further, on-the-job experiential training helps interns become more flexible, innovative, and knowledgeable. Employers value workers who can communicate ideas in writing and are able to respond appropriately to unexpected setbacks. And as technological and medical fields become more advanced, an additional premium will be put on familiarity with industry jargon. Unfortunately, internships in these fields make up only a tiny portion of youth employment. Current statistics place internship participation in the most rapidly expanding fields at just over 20 percent (U.S. Bureau of Labor Statistics 2009b).

In the near future, the most successful members of the workforce will be those who gained the appropriate workplace technical skills and intellectual capital to be successful in expanding and emerging occupations. But an additional — and perhaps more ominous — concern is whether the skills young workers learn at summer jobs will be useful at all in the future. The explosive growth of technology that will make 21st-century workforces ever more efficient and resourceful may also make many jobs obsolete. Some estimates speculate that by 2050, computers may have the capability to perform the majority of low-skilled labor. Nearly 80 percent of jobs in maintenance, close to 90 percent of jobs in food preparation, and over 90 percent of jobs in retail sales could be performed mechanically by the middle of this century (Cech 2007). If current occupational statistics remain steady, more than 27 million jobs will be lost to technology in just 40 years. Compare that to just over 20 percent displacement of computer science jobs, and the need to place young workers into more strategic work experiences is imperative.

Without measures that bridge the gap between current high school summer jobs and growing industries, we will most likely experience shortages of skilled workers. An unsuitably and under-skilled workforce will inevitably create a high rate of unemployment. In Philadelphia, unemployment directly correlates with crime rates. Even in 2005, before the economic slowdown, fewer than half of Philadelphians between the ages of 20 and 24 were gainfully employed (Towarnicky 2007). One unfortunate social consequence of unemployment is that it can lead individuals to make money outside of the law. Accordingly, neighborhoods reporting the highest levels of unemployment also report the highest levels of crime. If the projections for job obsolescence are correct, more people with few skills will find themselves out of work, and unemployment and crime will rise in these neighborhoods. Philadelphia spends more than one third of its annual budget — or nearly $1.5 billion — responding to crime (Towarnicky 2007). Career preparation will indirectly affect crime rates and thereby cut into this spending, and at the same time increase the city’s revenue-creating tax base.

Highly skilled and experienced workers are less likely to be unemployed, and student internships are an effective way for young people to build skills and gain experience. Internship experiences build valuable skills for future employment and establish critical networks for young workers, but many employers shy away from internship programs. Though internships allow employers to groom potential full-time staff from a vibrant and energetic demographic, training short-term workers is not cost-effective. Federal subsidies are awarded only after hours of paperwork have been logged. Liability insurance for student workers is costly, and even after its purchase the organization still is not completely immune to litigation. Because establishing internship programs is a strain on their bottom lines, many businesses — especially those that are small and locally owned — are unable to offer job training experiences. Small businesses employ a large portion of Philadelphia’s workforce, and increasing their ability to host interns helps solve a piece of the career preparation puzzle.

A rapidly changing global job market requires that all of Philadelphia’s young people be exposed to academic and extracurricular experiences that prepare them for success in college and in the workplace. Unfortunately, opportunities to gain valuable work experience are more widely available to students in affluent suburbs than to those in low-income urban areas. Students in city neighborhoods often have limited access to quality employment opportunities; such work opportunities that can both build valuable skills and are close to home are even more difficult to secure. Many of these students must choose between focusing on school and devoting time to work. Because work experience and schooling are both necessary to career success, sacrificing one for the other makes little sense. If the future workforce of the Philadelphia region is to be competitive in the 21st century and beyond, all students must have practical opportunities to make strong career connections that enhance academic experiences.

The Solution: WorkReady Philadelphia

WorkReady programs, by assuming the hiring and operations infrastructure costs of private companies to hire student interns, gives thousands of young people internships that increase their chances of graduating from high school, entering and graduating from college, and being qualified to enter the workforce. WorkReady is a set of programs, managed by the Philadelphia Youth Network, that bridge the gap between the need for student exposure to practical workforce training and the employer’s bottom line. Each year, WorkReady programs offer nearly 10,000 young Philadelphians opportunities to gain valuable work experiences in youth development and workforce organizations around the city, while ensuring that employers are not deterred by the hefty costs attached to hiring temporary workers. By incentivizing internship placements, WorkReady not only provides a valuable return on investment for participating firms even amidst an economically downtrodden labor environment, but it also enables thousands of inner-city youth to effectively alter their trajectory toward a more promising future.

The WorkReady model is a system of summer and year-round programs that provide work experience, college awareness, career exposure, and service learning opportunities for low-income students and out-of-school youth ages 14 to 21. Many public and private sector firms wish to bring student workers on board, but cannot afford the direct and indirect costs that are tied to new hire procedures. Through the efforts of PYN and its key partners in these efforts — including the Greater Philadelphia Chamber of Commerce, the City of Philadelphia, the United Way of Southeastern Pennsylvania, Philadelphia Academies, and the School District of Philadelphia — these firms are provided with a significant opportunity to actively engage in corporate citizenship by investing in a WorkReady program.

It is no surprise that businesses are reluctant to establish internship programs on their own. Each time an organization takes on a new employee, the firm must comply with a number of legal requirements: new hires must be reported in accounting and human resource paperwork within 20 days (Hadzima n.d.). There are also significant numbers of federally required expenses that must be paid for every hire — whether temporary or not. The federal FICA tax, federal and state unemployment insurance, and workers’ compensation all apply to short-term employees. These legally required employee benefits can cost corporations up to $2.59 per hour worked per employee (U.S. Bureau of Labor Statistics 2009a). Many businesses in the Northeast, where payroll expenses are higher than those of any other region, report that these costs represent 8.1 percent of total compensation expenses. Insurance costs, which include life, health, and short- and long-term disability, average about $2.47 per hour worked and represent 7.7 percent of all compensation costs. Finally, paid leave, including vacation, holiday, sick, and personal leave, is about $2.41 per hour worked and accounts for about 7.5 percent of total compensation costs (U.S. Bureau of Labor Statistics 2009a).

On average, all of the costs included in hiring any new employee amount to an additional 35 percent in extra expenses that need to be paid in addition to salary and wages (Payroll 2003). So an employee who receives a salary of $50,000 actually costs the company about $65,000 per year. For many industries, the cost of payroll can be the single largest line item on a financial statement.

Any prudent organization would be apprehensive about hiring anything less than a well-qualified team member who is committed to remaining for the long term. When a corporation establishes a short-term paid internship program, it is actually committing to spending far more money and time than the student intern will be able to contribute to the organization. Before PYN, hiring untrained student workers simply was not a cost-effective decision.

The WorkReady internship program removes extra financial considerations from the equation altogether. When a corporation signs up to receive interns, the student workers are added to PYN’s payroll, which reroutes all liability, and the costs attached therein, to the nonprofit rather than the company hosting the intern. The only monetary commitment partnering businesses make is a potentially tax-deductible contribution of $1,600 per intern. After factoring in the amount of money that companies would have to spend to create paid internships independently, as well as the myriad benefits student workers bring to an employing organization, this initial investment can yield estimated returns of 68 percent.

Students participating in the WorkReady program earn at least minimum wage ($7.25 per hour), with many employers opting to pay a higher rate, usually $8 per hour or more With extra hiring and benefits costs being approximately 25 percent it is clear that the WorkReady model saves businesses dollars in taxes and benefits alone. These costs do not account for the costs attached to recruitment of interns, interviews, and employee training.

The benefits of partnering with the WorkReady program model go beyond cost efficiency. For instance, students who assume internships within partner corporations receive weekly work-readiness sessions that provide important training and skill-building opportunities. During these meetings, PYN provides its student workers with workshops and the sessions are hosted in an upscale city venue, all at no cost to the employer. The sessions cover topics that include appropriate business attire, effective business practices, and personal finance. The costs of providing such integral training and professional development to student interns are undoubtedly a large savings for employers, and the benefits of having trained “work-ready” students come into the workplace are invaluable.

The degree of professional development that WorkReady provides enables students to have a seamless transition into an often foreign and overwhelming business world. These valuable experiences enable the students to be contributing workers, and cultivate confident, professional young people eager to excel in the sector in which they are placed. The learning sessions, coupled with practical employment placements, produce a multi-faceted summer experience that equips low-income inner-city youth with tools that help them break through the societal barriers that often make upward mobility impossible.

In addition to the benefits they provide to students, internships are advantageous for the companies that provide them. The WorkReady model gives employers the opportunity to develop company loyalty from a demographic that can inject vibrancy, energy, and fresh ideas into a workplace. Having interns in the office can increase productivity and improve office morale, since employees can feel good about knowing that they are helping shape the lives of inner-city youth. Finally, employers can be leaders in the community and receive the recognition that philanthropy and altruism afford — a potential catalyst to an increase in business.

The WorkReady internship program creates a mutually rewarding experience for employer and employee. Creating incentives to hire student workers and streamlining the new employment process for first-time workers allows businesses to push forward with their desires to help Philadelphia youth, without worrying about how it affects the bottom line. By designing an educationally rich work experience with thoughtful regard for life skills and career preparation, the program makes success attainable for inner-city youth who may be otherwise bound to underserved, overlooked, and impoverished communities. The innovative WorkReady model unites the public and private sectors, addresses the unique needs of every party and, as a result, unearths an abundance of opportunity and altruism within the city limits.

WorkReady’s Social Impact

Through its WorkReady program, Philadelphia Youth Network provides a service that creates social value beyond each student’s workplace experience. Long after they end, internship opportunities like the ones facilitated by PYN appear to have positive, measurable consequences in the adult lives of the students who undertake them. Especially for low-income and at-risk teen populations, a growing body of research strongly correlates career readiness programs with positive career and educational outcomes. These data demonstrate that in addition to the many benefits PYN provides, the greatest impact is felt on a social scale.

Statistical studies have for years shed light on the connection between educational attainment and employment, linking higher levels of education to higher working wages. The same connection can be made the other way around, as youth employment also influences educational achievement and attainment. When students work a reasonable number of hours (generally 20 or fewer per week), they increase the likelihood that they will have a college education by the age of 30 (U.S. Bureau of Labor Statistics 2000). Participation in a WorkReady internship provides students with this type of reasonable employment opportunity. And the established relationship between education and wages indicates that those same students are also more likely to be frequently employed, thereby increasing their chances of working upward over time to earn better wages. In fact, over the course of a career, a person with a college degree will make roughly $1 million more in lifetime earnings than someone with only a high school degree (Cheeseman Day and Newburger 2002).

Every high school dropout, over his or her lifetime, costs the nation approximately $260,000 (Bainbridge 2006). The average increase in lifetime earnings for a person with a college degree compared to someone with a high school diploma is $1 million.

Assuming that students who participate in the WorkReady program are more likely to attain a college degree (data are currently being tracked) that is valued at a difference of $1 million in lifetime earnings, and assuming, conservatively, that at least 30 percent of PYN alumni graduate from college, equaling about 2,600 young people, PYN is effectively generating about $780 million in additional income for the city of Philadelphia. This social return on investment is monumental and undoubtedly a catalyst for long-term transformative change in the social arena.

Achievement at school also improves for teens participating in internships. They record fewer absences from school, and fail core classes like math and language arts less frequently than similar classmates (National Employer Leadership Council 1999). A lower attendance rate and higher failure rate are predictive of a student’s probability of dropping out of school; a high attendance rate and low failure rate — reinforced by work experience — therefore predicts a low probability of dropping out.

Youth internships also create strong connections between Philadelphia’s businesses and the communities in which they are located. If an individual intern stands out as exceptional, it is possible that in the future a business will direct its corporate grant money to an organization serving that intern’s community, or establish an ongoing internship program that exclusively selects students from his or her school. Such ties, though difficult to quantify, are perhaps an equally meaningful aspect of WorkReady’s social impact.

The Bigger Picture

As the mid-October breakfast event draws to a close, a similar scene is unfolding at each of the neatly set tables. Amid last bites of pastries and final sips of coffee, business cards are passed across tables, pleasantries are exchanged, and lunches are penciled into planners. What is striking is that high school students are the recipients of the cards, pleasantries, and lunch dates. One cannot help but notice that these young people are part of a network, one that many of their peers won’t be a part of for at least a few years, if ever, and that this network is already opening doors and creating opportunities.

Not all of these students will manage a division of a major corporation. Fewer will be CEOs, and the odds are not in their favor to be elected mayor of Philadelphia. While ideally they will all become prominent Philadelphians in the future, that is not PYN’s mission. PYN aims is to ensure that all of these students — and thousands like them — have gained an experience that makes them better prepared for success in the 21st century.

While they may not be aware of it, the students are also the recipients of an altruistic spirit. In their youth, each of these executives was given a helping hand, and they were now passing the favor on to the next generation. Years from now, if given a chance to sit on the other side of the table, the students might look back on these managers, supervisors, and executives as the helping hands who first helped them build their prominent careers.

The city of Philadelphia is making efforts to increase student internship capacity to invest in its future. A large portion of this capacity is catalyzed by the Philadelphia Youth Network, but wouldn’t be possible without the critical support from the Mayor and city, employer, and philanthropic leadership, and the Chamber of Commerce and Council for College and Career Success. Acting as a partner and facilitator to hundreds of businesses across the city, PYN removes the traditional hindrances associated with student internships, provides valuable experience to young adults, and improves the quality of Philadelphia’s future workforce. In removing these hindrances and aligning altruism with sound business sense, the WorkReady partnership has uncovered a citywide wealth of corporate citizenship, while at the same time facilitating the creation of immense amounts of human and social capital.

Considered narrowly, the WorkReady model revolutionizes the readiness of Philadelphia’s workforce. With wider participation, it is possible that the majority of the city’s young people could leave high school already possessing valuable professional, sector, and organizational knowledge. Such knowledge will certainly inform career choices, and even has potential to inspire further academic studies. Ultimately, this progress results in a workforce that is more creative, innovative, and most importantly, local.

Considered in a broader scope, PYN’s model reveals the potential for a sweeping social movement. In all sectors, there are undoubtedly obstacles that make corporate citizenship impractical. PYN and its partners have found the keys that unlock altruism by making it worthwhile for businesses to mentor young people. There are no doubt opportunities in all sectors for facilitating social change.

Dan Kaufman graduated from the Pennsylvania State University in 2005 with a degree in English and Rhetoric. A Teach for America alumnus, he has taught high school English and chaired the English department at LEAP Academy University Charter School in Camden, New Jersey. He is currently earning his master’s degree in Nonprofit/NGO Leadership from the School of Social Policy and Practice at the University of Pennsylvania. Cecilia Ramirez graduated from the University of Pennsylvania in 2005 with a degree in Sociology, Urban Studies and French. She then joined Teach for America and taught fourth grade in the South Bronx section of New York City. Cecilia shifted to the nonprofit arena in 2006 when she joined the World Affairs Council of Philadelphia as the Director of International Programs at Bodine High School for International Affairs. She will be receiving her master’s degree in Nonprofit/NGO Leadership from the School of Social Policy and Practice at the University of Pennsylvania in May of 2010.

Recipients of Goldring Fellowships and candidates for the degree of Master of Science in Non-profit/NGO Leadership, School of Social Policy and Practice, University of Pennsylvania.

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