They're worth the risk
Questionable hires pay off in the end

By Jeffrey A. Tannenbaum, The Wall Street Journal

June 29, 1997

When Ruth Tinney started looking for a job last December, she didn't have much of a résumé: The 30-year-old mother of two had no recent employment at all and had been on the welfare rolls for about three years.

Nonetheless, Microboard Processing Inc., an electronics assembler in Seymour, Conn., offered Ms. Tinney a two-week employment trial. Now she has a regular assembly-line job at MPI, and she recently got her first raise.

Close to 30 percent of MPI's new hires could be considered high-risk employees, from former welfare recipients with little job experience to felons and former drug addicts, says Marilyn A. Burke, the company's production manager. Chief Executive Craig T. Hoekenga says MPI makes sure that at least 10 percent of its new hires every year are in these categories.

As government relief programs get cut back, businesses are feeling growing pressure from President Clinton and others to hire people like Ms. Tinney. The prospect scares many executives. But a number of entrepreneurs like Mr. Hoekenga have already discovered how to get results with workers most employers shun.

Risky hiring isn't hurting MPI, which has 240 employees. Profits are rising, and sales will reach $30 million this year, up from $17 million last year, Mr. Hoekenga says. While most of his employees have conventional backgrounds, Mr. Hoekenga attributes the growth of his company partly to the loyalty and hard work of his high-risk hires.

Hiring people like Ms. Tinney is also a mission for Mr. Hoekenga. He owned MPI outright before he assigned its shares to a charitable trust six years ago amid a religious rebirth. Once materialistic, the 50-year-old Mr. Hoekenga says he gave up his Mercedes-Benz for a modest minivan and gave away most of his money. Now, he says, one of his responsibilities as a Christian is to help troubled people turn their lives around. "We as businessmen have a unique opportunity to help people who haven't been as fortunate," he says.

Philip Hyman, a 44-year-old employee who now operates a soldering machine, recalls that he had been on welfare for two years when MPI hired him in 1995. Mr. Hyman says he and many others at MPI got breaks that most employers wouldn't give. "There are a lot of grateful people here," he adds.

"The loyalty factor helps produce good work," says Thomas R. Bloom, a purchasing manager for a Connecticut unit of ADC Telecommunications Inc., which buys MPI's circuit boards. Mr. Bloom believes the grateful workers don't want to let their boss down.

Certainly, Mr. Hoekenga's approach has sometimes caused him trouble. Formerly based in Bridgeport, Conn., MPI made plans two years ago to expand into larger quarters in Trumbull, Conn. But some residents complained at a public hearing that some of his employees might commit street crimes. Not wanting to go where his employees weren't welcome, Mr. Hoekenga moved the company to Seymour.

In Seymour, First Selectman (the equivalent of mayor) John A. O'Toole initially had his doubts, too. The company sounded "more like a mission than a business," he recalls. Yet he says the company has given a boost to the community, without bringing along social problems. "Once you realize these people are getting their lives on track, and are productive members of the community, all the fears are laid to rest," he says.

A number of high-risk hires do fail, and MPI can be tough on employees who don't pull their weight. Ms. Burke says she became known as "the hatchet lady" for firing 10 people in short order last year, mostly because they couldn't meet attendance or production guidelines. One fired woman had provoked verbal battles with several co-workers. "We don't have a lot of room for street talk," Ms. Burke says.

One prison parolee whom MPI hired turned out to have a continuing drug problem and lost his job over poor attendance, Mr. Hoekenga recalls. MPI gave him another chance – but he lost the job again and landed back in prison, the executive adds. Still, seven or eight of every 10 high-risk hires become productive workers, normally within six months, he says.

Mr. Hoekenga has a strategy to minimize failures. First, the company – sometimes with state subsidies – puts workers through a variety of educational and training programs, beginning with English-language education. In May, it spent $4,000 on English lessons enabling some employees to work with billing forms and other documents used by the company.

While much of the assembly work is simple, training is crucial for many of the new workers. "Some of them have never worked," says Donald J. Preziosi, MPI's vice president for sales and engineering.

Selection is also critical. Mr. Hoekenga has cultivated trusted sources, such as churches, to refer promising applicants to him. Luis Ortiz, now 39 years old, says his pastor called MPI six years ago to plead his case for a job. Mr. Ortiz, then in prison in Somers, Conn., says he was serving eight years on a manslaughter conviction. Briefly released for a job interview, Mr. Ortiz made his case to Mr. Hoekenga. "I was trying to say that although I had been a loser, now I was really a different man," Mr. Ortiz recalls.

Mr. Hoekenga decided to take a chance with the convict. Mr. Ortiz has been with the company six years and now oversees three other workers.

Although Ms. Burke, the production manager, says Mr. Hoekenga often makes "snap decisions" on hiring, he sometimes awaits more evidence. MPI has four temporary employees landscaping the company's 10-acre site. If any prove to have good work habits, the company will probably offer them factory jobs.

The company cuts employees a lot of slack on attendance during their first several months on the job, because many aren't used to showing up on time. Mr. Hoekenga says that during this period, he doesn't fire people as long as they show improvement. "Normally, it takes us a couple of months to straighten out attendance," he adds.

What makes Mr. Hoekenga unique is that he has patience, says William R. Bellotti, Connecticut's deputy labor commissioner. "Most employers want people with a good work ethic, social skills and an ability to produce the first day they come to work. Craig will take people who can't produce and will wait six or nine months for them to come through."

In addition, Mr. Hoekenga says MPI has a few special cases-employees who constantly fail to meet production guidelines but, because of disabilities such as severe psychological trauma, won't be fired. The company has a debt to society, he declares, and thus must carry a few people.

The company makes other contributions, too. Mr. Hoekenga says he and the company together have given some $2.5 million to charity since 1991, although the company reinvests most of its profits.

Mr. Hoekenga sometimes prays with his workers in a conference room that doubles as a chapel. For some, the prayers are decidedly practical. Says Ms. Tinney: "We pray we can keep our jobs."

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