Conversations on COVID-19: Interview with First Step Staffing
Written by Deborah Ryan
We’ve been spending the past few weeks curating resources helpful to startups in light of COVID-19. Now we are exploring how social enterprises and startups are responding to the immediate impacts of COVID-19 and how they are planning for the future.
In the first of our series of real-life profiles, we interviewed Amelia Nickerson, Vice President of Development and Community Relations, of First Step Staffing.
First Step Staffing has been called a “staffing company with a heart.” From the beginning in 2007, First Step has been focused on providing jobs for men and women experiencing homelessness so that they can afford housing. They work with over 100 businesses in their four locations (Atlanta, Philadelphia, Los Angeles, Nashville) to fulfill staffing needs. Most importantly, First Step provides the wrap-around support for their clients to be successful, everything from job coaching to transportation, to partnering with other nonprofit organizations that provide housing and healthcare. As a result, First Step continues to grow and expand across the nation, reducing homelessness and empowering their clients.
StartingUpGood: What have been the immediate impacts of COVID-19 on your organization?
Amelia Nickerson: All of First Step Staffing’s operations have been significantly affected by COVID-19. While we are still open and operational, supporting our homeless clients through employment, we made many changes to protect the health and safety of our staff and clients. This included changes around orientation and transportation to allow for social distancing, providing PPE, temperature and health checks, additional cleaning, etc. Many of our jobs in sectors such as hospitality/events saw early closures with no reopen date in sight. However, First Step continues to staff essential businesses in all of our markets — food production, logistics and cleaning — so in some cases we saw an increased demand for employees. Job coaches worked to offer new assignments to those that lost employment due to temporary closures. Overall, each of our markets has seen a decrease in sales revenue, so budgets and cash flow projections have been adjusted accordingly.
StartingUpGood: How were decisions made about changes — in services, seeking funding, personnel — and which stakeholders were involved in making these decisions?
Nickerson: First Step’s leadership team — CEO, COO, VP of Development, VP of Operations, VP of Sales, and VP and General Managers for Los Angeles and Philadelphia — collectively made decisions on personnel and expense reductions. To ensure First Step remains financially stable through the remainder of the year, we looked at a “worst case scenario” of a 50% reduction in earned revenue and made reductions in SG&A at 25%. This included decisions to temporarily furlough some staff, both 30-day furloughs and hourly reduction furloughs. All Executive Team took a temporary pay reduction. All bonus and commission payments have been deferred for the first (and likely second) quarter. Additional expenses have also been reduced.
First Step was also able to apply for a PPP loan which is currently pending. Finally, given our debt-financed growth, we have lenders in each market that have been updated on our COVID-19 plans. These lenders have been willing to offer deferrals of their monthly interest/principal payments for two or four months. This has provided significant cash flow relief.
First Step has also applied for additional philanthropic support where appropriate in each market. This includes new opportunities like the Philadelphia Relief Fund and discussions with current grantors about additional funding and/or moving multi-year grant payments to earlier in the year. All of our funders have been extremely supportive and are kept updated on our cash flow position and operational impact regularly.
StartingUpGood: What are you doing now to plan for post-COVID-19?
Nickerson: COVID-19 is both a health and economic, often disproportionately affecting those living in poverty. First Step knows that our mission to support men and women experiencing homelessness with employment and income will become even more critical as we move into the recovery phase of this crisis. As unemployment rates soar and thousands more become homeless or unstably housed, access to income will be essential to regaining stability. Our already strapped support systems (housing, healthcare, etc.) will struggle to meet this growing demand. Additionally, for those with higher barriers to employment — the chronically homeless, returning citizens, and those with mental/physical illness — will now face larger challenges when re-entering the workforce as the compete with the newly unemployed who are better trained and have more work experience. This group will need even more support and access to opportunities, which is where First Step shines. Finally, as in previous recessions, contract staffing is often one of the first methods companies use in order to onboard new hires. Experts in the staffing industry are projecting similar reactions to COVID-19 recovery as businesses begin to rehire and open their doors. First Step is ideally positioned to meet this need and gain market share in the industry by providing well-supported and reliable employees to local businesses.
StartingUpGood: Will your plans to “reopen” change the way you do business?
Nickerson: First Step is using this opportunity to adjust some of our program delivery. This includes how we communicate with our clients and how we service our business customers. Ultimately, we are not planning any major changes in the way we do business.
StartingUpGood: What do you see as the biggest challenges and opportunities?
Nickerson: First Step is a social enterprise and depends on earned revenue to support 95% of our business model. Maintaining and growing our customer base will be essential to continued operations. This is both a challenge, as light-industrial staffing is extremely competitive, and a tremendous opportunity to gain market share in our business, thus the ability to provide hundreds more jobs to clients as the nation’s economy begins to recover. As stated before, one challenge will also be supporting those with higher barriers to employment, like those with criminal backgrounds, who face being even further disenfranchised from the workforce as the newly unemployed compete for new job openings. Companies that were reluctantly to hire returning citizens will now be even less inclined to relax their hiring policies to include these men and women (who are being released from prisons today without a support system in place). Ultimately, we believe First Step is well-positioned to weather the current crisis and by doing so, will be prepared to provide a vital service connecting those in need to available jobs during the economic recovery. Working with supportive stakeholders, including our philanthropic partners, lenders and referral partners, has been essential to maintaining a strong program over the last several weeks.
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Deborah Ryan has more than 20 years of experience working in nonprofits and foundations providing management, administrative leadership and strategic direction. She is a Managing Director at Changing Our World and a consultant to StartingUpGood. Contact Deborah at dryan@changingourworld.com.
