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This is a true story...happened just last week...
Jake trods the edge of homelessness. A friend of mine met him at a homeless shelter as a matter of fact.
Jake is twenty-seven years old, but has seen much more life than that. He was an alcoholic once, but beat it. He has various ailments...when he's stressed his skin breaks out in bright red patches. A short while back he beat pneumonia. His girlfriend of many years left him...it coincided with his banishment to the streets. His homelessness was an act of the economy, not irresponsibility on his part.
Jake filled out paperwork at a temporary employment agency and was soon placed at a manufacturing facility in Lake Geneva, Wisconsin.
Volunteering at the shelter was my friend, who happened to be looking for a new place to live. Jake wanted out of the shelter. They decide to share expenses and became roommates. Happy days.
Temp jobs are, of course...temporary. The key number in Wisconsin is 1043...by law one can only work 1043 hours as a temp at a particular job in a twelve month period. As a temp reaches that number, a business has a decision to make-hire the person on full-time or let him go and hire another temp.
Jake was approaching his 1043 hour limit, but was well thought of at the company. He learned two machines and had become quite valuable. In recent weeks, he had seen other temps carted off to jail and cut loose for drunkenness or incompetence. But Jake was not. He was responsible, showed up on time and did his job. His boss and the Human Resources manager encouraged him that permanent employment was a real possibility.
In recent weeks, with his temp commitment about to expire, Jake tried to approach the HR manager about the permanent job. Whereas before she had been quite encouraging, she suddenly gave him the cold shoulder. She put him off and wouldn't discuss it with him. He was getting scared. His hours were fast approaching 1043, and he had no assurances.
One thing he had going for him was that his boss wanted to keep him. Even still, last week, Jake got the bad news. His time was up, and he was sent packing.
He was devastated. He was finally out of the shelter and off the street. He had cleaned up and worked hard. He had taken on the responsibility to share bills with my friend.
In his desperation, Jake tried to get a meeting with the HR manager. She wouldn't take his call. No explanation was ever given him...you don't have to explain anything to a temp.
Jake broke down. After all, he hadn't had time to put away money for such an occasion. He had nothing. He was staring starkly at having to return to the streets. He began heaving devastated tears. He dragged himself to his bedroom and collapsed in weeping despair. His skin broke out in large red patches.
My friend tried to console him, but she had worries of her own. She does not have a high paying job either. They may well lose the little house they rented. What then?
But, you see, the CEO didn't see all that. He wasn't in Jake's room witnessing his despair. He hasn't looked into the worried eyes of my friend.
His eyes are glued to a spreadsheet that shows him how much money he saves by using up these temps (smaller hourly wage, no benefits), cutting them loose and bringing in another hoard.
What he doesn't know is that his spread sheet is lying to him. Pea-sized vision strikes again. He's actually losing money in the deal.
On average, it costs a company about 50% of an hourly employee's annual earnings to replace him. The costs are direct and indirect. Direct costs would include actual time and money spent in searching for, interviewing, replacing and training an employee. Indirect costs would include lost productivity, dissatisfied customers, lower morale, stressed workplace, added overtime and the general disruption of business.
This is a temp so maybe he earned about $12,000 in those 1043 hours. That means every temp replaced costs the company an average of $6000.
But wait, there's more...
Jake's manager is disgusted with the policy in which he has to retrain and retrain temporary employees in the same skills over and over again. By this, he never can cultivate enough experienced, reliable hands. He's ready to quit because of it.
This raises the stakes because it's more expensive to replace managers. The average estimation of the cost of losing a manager is 150% of their earnings. So let's say this manager made $35,000 per year...the company is poised to lose another $52,500.
One thing I've learned from long years as a leader...doing right by human beings is usually the business prudent thing to do also.
Jake got over his despair. He is now hitting the streets daily looking for his next job. Here's hoping he's lucky enough to be hired by a company that gets it...and soon enough that he and my friend don't lose their little house.
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