While ASOs vary in their organizational structures and the populations they seek to serve, they have two common characteristics. First, all are deeply rooted in their respective communities, giving them a keen understanding of the landscape and enabling them to leverage local connections and resources. Second, all share a market-driven approach to delivering staffing services.
Frequently Asked Questions about Alternative Staffing Organizations (ASOs)
How do ASOs differ from conventional staffing companies?
What kinds of job seekers do ASOs serve?
What kinds of support services do ASOs provide their workers?
What advantages do ASOs offer employer customers?
What industries do ASOs serve?
Who operates ASOs?
How do ASOs interact with other local workforce development organizations?
How are ASOs funded?
How big is the alternative staffing sector?
What inspired the alternative staffing approach to workforce development?
ASOs have a dual mission to satisfy their customers and promote workplace success for people with obstacles to employment. ASOs use temporary placements to help job seekers build skills and confidence, adjust to the demands of the workplace, and establish behaviors that will give them an edge in the labor market throughout their working lives. Because they are committed to their workers’ long-term success, ASOs invest in developing a deep understanding of their employees’ challenges in order to provide appropriate supportive services. To facilitate transitions to long-term employment many ASOs have a no-fee policy for temp-to-hire conversions after as few as two weeks.
ASOs serve job-ready individuals who are unemployed or underemployed and may have additional obstacles to employment such as low income, lack of a high school degree, limited skills or experience, physical or mental disability, criminal history, homelessness, age or past substance abuse. The most common barriers are criminal history, disability and lack of stable housing. Many job seekers served by ASOs have multiple barriers to employment.
ASOs help candidates prepare for interviews and job assignments, give them feedback about their work performance, and serve as trusted advisors to address issues that arise on the job. In addition to this critical coaching assistance, ASOs provide an array of other pre- and post-placement supports that may include transportation, case management, economic literacy training, social service referrals (for child care, housing, etc.), and provision of tools and work clothing.
In a national study, employers cite four main reasons they prefer using alternative staffing suppliers over conventional staffing agencies: better understanding of their business needs and priorities, higher quality screening and matching, greater staff responsiveness, and worker supports that enhance performance and reliability.
ASOs serve customers in a wide range of industries including manufacturing, logistics, building services, retail, hospitality and construction. ASO job placements tend to be concentrated in production and materials handling, office/administrative, customer service and cleaning and property maintenance occupations across multiple industries.
ASOs operate as programs or subsidiaries of larger non-profit organizations and as independent, social purpose businesses founded by entrepreneurs. Parent non-profits tend to be engaged in neighborhood development or service delivery to specific populations such as homeless individuals or people with disabilities.
ASOs collaborate with workforce development organizations to recruit newly-trained candidates, and cross-refer job seekers to these agencies for skills training and job search activities. In some cases, ASOs partner with training organizations and community colleges to develop custom training to meet an employer’s needs. In addition, ASOs provide employment services for organizations that operate transitional housing, welfare-to-work and reentry programs.
As social enterprises, ASOs’ main source of revenue is fees earned from employers through providing competitive staffing services. In addition to generating earned revenues, most ASOs raise grant funds from foundation and/or government sources. Grants may be dedicated to specific purposes, e.g., job readiness training or transportation services, or used to provide operating capital. Most ASOs rely on grants to fund their initial feasibility, business planning and start-up. Established ASOs cover an average 94% of program expenses with fee revenues, and about half generate a modest surplus.
The alternative staffing sector numbers over 60 operators in the US and Canada, employs an estimated 30,000 people annually, and generates annual revenues of about $180 million, most of which flows back to workers and the public in the form of wages and payroll taxes.
Temporary staffing is the fastest growing segment of the workforce and a key pathway to employment. In some cases, community-based organizations found that their training program graduates were being steered to staffing firms and opted to form their own staffing business to expand their programming and capture some of the market value created for employers. Other ASOs were created in response to poor working conditions faced by employees of some day labor firms. More generally, workforce developers have found that disadvantaged job seekers constitute an untapped labor pool. Commercial staffing firms’ screening criteria may reject candidates with a long-term gap in their employment history or a criminal record. The greater amount of time needed to coach inexperienced workers also acts as a disincentive for commission-based recruiters to serve this segment of the workforce. ASOs address this market “failure” and enable low-skilled, inexperienced and otherwise challenged workers to turn temporary employment opportunities to their advantage.