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Posted at 03:35 PM ET, 05/13/2012

Firms that hire undocumented workers pose unfair competitive advantage

These days, small businesses face challenges unparalleled in the memories of most owners.

Current staffing levels are at a record low, and recent employment forecasts reveal that staffing levels will remain low for the foreseeable future. Nonetheless, customers continue to demand exceptional service and products at a competitive price. To remain profitable, businesses need employees to have sharp skills to help them deliver the levels of excellence required by their customers at the lowest cost. 

 In a service business, the biggest cost to an employer is labor. Companies that hire undocumented workers are clearly in an unfair advantage because their labor cost potentially is lower than a company that is following the rules. Although fines and penalties currently exist to deter unfair hiring practices, rarely are they ever enforced.

Our company, Benjamin Enterprises, provides workforce solutions to help businesses to hire, train and manage employees in the industrial, commercial and federal government markets.

We regularly bid on contracts that require unskilled and semi-skilled workers to provide facilities maintenance and security guard services across the country. On several occasions, potential contracts have been lost to the lowest bidder contractor, who, when you do the math, could not be paying the statutory state prevailing or minimum wages. As a result, we see good contract opportunities awarded to companies with questionable hiring practices.

 Companies that utilize unscrupulous vendors who knowingly violate immigration laws can find themselves exposed to significant risks. The reality is that many entry level jobs are labor intensive, and are filled by hard-working immigrants. Workplace accidents and incidents can expose well-meaning companies to expensive lawsuits and employment-related litigation.

To be compliant with our current immigration laws, our human resources department conducts an extensive background inspection of all potential hires. We begin our application process by requiring at least two forms of identification. We have found it beneficial to look at the individual’s original Social Security cards to confirm that it is not a copy.

Copies of identification are not acceptable. The federal government’s E-Verify system, along with similar electronic databases are used to check the accuracy of Social Security numbers, driver’s licenses and criminal background information. We have found the E-Verify system to be precise, easy-to-use and efficient.

With staffing levels pared down, small businesses have to make do with smaller teams — which mean that there is little or no experience inside the company to cover the skill deficit. Too often, the dislocated worker lacks the relevance of similar work skills to match customer expected results. Successful hiring will require an on-boarding program that includes on-demand skills training.

Yet hiring and training an employee costs more than 40 percent of the employees’ wages, experts say. That’s expensive, and many small businesses are challenged to constantly find growth opportunities. Workers employed by small businesses make up 52 percent of the national workforce — that’s 47.7 million Americans who work for companies that employ less than 500 persons, according to the federal government. In light of these facts, the government should recognize that small businesses are more likely than large corporations to hire from within their communities. Unlike large, conglomerate corporations that have mega headquarters and stockholders to answer to, small businesses are more likely to reinvest in their communities through purchases of local products and services. Government programs that encourage and enhance the growth of small businesses ensure a strong future for the American economy.

Too often, small businesses struggle to sustain employment for their workers within the constraints of very small profit margins. Too often, employee hiring and training suffer. Yet commitment to hiring and ongoing training is essential in America’s future. Government spending geared toward boosting employment and job skills for our workers would be money well invested in America's future.

Michelle Benjamin is founder and CEO of Benjamin Enterprises, a New York based firm that manages facilities and maintenance for companies.

 

By Michelle Benjamin  |  03:35 PM ET, 05/13/2012

 
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