Private Employers and TANF Recipients. 2.1  Overview

05/25/2004

As indicated in Exhibit 2.1, the study team reviewed 110 research documents for this project.(4) More than three-quarters of the reviewed items involve qualitative research. Some of the studies classified as qualitative entail reviews of research literature  most, but not all of which is qualitative. Virtually all of the quantitative studies involve analyses of survey data. The bibliography for this report lists all documents we have reviewed, and detailed information on most of the documents is provided in the appendix.

Our review of the literature indicates that, while a large and varied research literature addresses the labor supply of welfare recipients, much less addresses the employers who make up the demand side of the labor market. Indeed, our present understanding of employer attitudes and practices in relation to TANF recipients depends heavily on research studies that have focused on supply-side topics, notably employment and public assistance outcomes for TANF recipients.

The available research, however, strongly suggests three things about employers' interest in TANF recipients. First, employer demand for labor from TANF recipients has been high. However, while a broad range of employers is willing to hire welfare recipients, those that actually do are concentrated in the service sector, notably in retail, eating and drinking establishments, business services, and health services. The employers of TANF recipients tend to be larger companies and located in cities. They are likely also to be offering jobs with irregular work hours, low pay, and/or alternative job arrangements, such as those of independent contractors and on-call workers.

Exhibit 2.1
Research Documents Reviewed
Qualitative Studies
  • Case Studies (some include other qualitative analysis)...... .......................................................27
  • Other Qualitative Studies (some are reviews of literature, including quantitative studies)............54

Qualitative Studies

  • Analyses of Survey Data (some include analysis of additional, non-survey data) ......................17
  • Analyses of Records Data...................................... .................................................................1

Qualitative and Quantitative Studies

  • All Analyses (some include case studies, all involve survey data)....... ......................................11

Total.......................................................................... ..................................................................110

Second, research studies consistently indicate that employers who hire welfare recipients do so primarily to meet their business objectives, not out of a sense of social responsibility. Firms are especially concerned about the frequency and cost of job turnover, which clearly affects their hiring decisions. Employer demand for welfare recipients is strongly influenced by economic conditions. Consequently, employer interest in hiring recipients roughly corresponds to the changes in the business cycle.

Third, employers are often skeptical of welfare recipients' "soft skills." These skills include such things as positive attitude, conscientiousness, teamwork, and the ability to adapt to workplace norms. Many employers also worry that TANF recipients possess significant barriers that limit their ability to work effectively and increase the likelihood of job turnover. Employers are especially unlikely to hire TANF recipients who have criminal records. Other barriers that lead employers not to hire TANF recipients include poor job skills, limited work experience, poor academic preparation, transportation and child care problems, mental illness, domestic violence, and drug and alcohol abuse. Some of these same issues contribute to the absenteeism and interpersonal difficulties to which many TANF recipients are prone as employees.

In addition, the existing research literature describes the practices of employers in recruiting and hiring TANF recipients as employees. It indicates that, while employers who hire current and former welfare recipients use varied recruitment methods, most rely more on word of mouth and advertising than on referrals from employment agencies. Once individuals have been recruited, employers focus on the screening of potential candidates. A variety of specific tests and background checks are used.

Much less information is available on employer practices once recipients are in jobs. Based on the existing evidence for the supports and services provided by employers, it appears that many employers find it difficult to provide the range of services often needed by welfare recipients. Few employers devote substantial resources to training low-skill workers, and most of the training is concentrated in a few skill areas and provided by large companies. In this training, employers place more emphasis on hard skills than on soft skills. While extensive research has addressed wages and fringe benefits, only a small amount of information has been produced on employer practices in determining this compensation. Very little evidence is to be found regarding mentoring, employee assistance (e.g. job coaching, support services, counseling) and management (e.g. supervision, communication, job performance assessment).

Finally, while many studies have identified and described these practices, none has systematically assessed their effectiveness. Moreover, it is difficult to determine what measures should be taken to improve employer practices. Answers to this question are not based on solid research evidence, because specific practices have not been credibly evaluated. Several studies do provide clues about approaches and procedures that might or might not be helpful, and many people have offered their informed opinions.

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