Buffalo, N.Y. (WBEN) - For some employees, receiving a promotion could result in a lost of certain benefits. This means that some are not considering accepting their promotions as a result and employers are trying to find ways to keep consistent employee retention.
Business owners gathered inside the Burchfield Penney Art Center in Buffalo Thursday morning to hear a presentation called "Hidden Barrier," which addresses how the benefits cliff is making it harder for businesses to hire and retain employees in the today's climate.
What is the benefits cliff? President and CEO of Buffalo Niagara Partnership Dottie Gallagher breaks it down, "The benefits cliff is the point at which someone receiving public assistance loses that assistance when their income increases to a certain point. That certain point might be as little as $1 more, The catches that that income increase, at least in the short term, does not make up for the loss of benefits, which is sudden and dramatic. As a result, the person who's gotten a raise or a bonus or a promotion is actually worse off financially after their income increase than they were before. So if someone falls over the benefits cliff, their life is literally turned upside down."
Benefits such as housing subsidies, childcare subsidies and other government programs, "Instead of falling over the cliff, they make a very rational decision about their family and decline the hours and turn down the promotion or other advancement opportunities and remain underemployed," says Gallagher.
The Florida Chamber of Commerce reports that at least one third of the 1000 businesses they surveyed found some employees or candidates in their companies are unwilling to accept new jobs, increase hours, or other opportunities out of fear of losing government benefits. One in five people in Erie County receive some form of public benefit.
The Buffalo Niagara Partnership and the Federal Reserve Bank of Atlanta have partnered together to develop an employer specific Benefit Cliff calculator. This tool can provide your organization with a full view of the impact your compensation and promotion practices.
This is not the only effort that the Buffalo Niagara Partnership is a part of, they have partnered with Erie County to launch the Live Well Erie Workforce Development Pilot Project, a comprehensive approach designed to help individuals receiving social service benefits overcome workforce barriers and transition into higher-paying job opportunities. Supplemental supports will be provided to help employees enrolled in the Project meet family needs for food, housing, childcare, healthcare and more to help these individuals overcome the benefit cliff workforce barriers and reach higher-paying job opportunities.
"It's a two year pilot, and that's how long it will take to upskill somebody and get them into that new role that might help them cross over the bridge to to a new life. In effect, it smooths the loss of benefits and makes this much less scary for the individual," Gallagher explains.
In addition, "This year we prioritize legislation in Albany that would provide a grace period for the continuation of income based benefits to better support workers looking to advance into higher paying positions. We took our support for this legislation directly to the State Capitol, encouraging legislative leaders to vote on the measure. While the legislation passed, the Senate did not yet pass the assembly. It's stalled there, but we'll pick up the fight again when the new legislative season kicks off," Gallagher says.
The Buffalo Niagara Partnership also has a Career Pathways Program. The Career Pathways is a 2-3 month intensive program that develops a custom career progression for a company, making it easier for you to attract and retain talent, and for the BNP to work with education or training providers to properly build a company's talent pipeline. After this program, companies will have tangible resources that easily explain each role, the career progression at your company, and the qualifications needed for advancement. Made possible by a generous grant from the Ralph C. Wilson Foundation, the BNP’s Career Pathways initiative is currently working with a select group of employers to develop and perfect the upcoming program, such as the West Herr Automotive Group, who helped organize the presentation.