This research examined participant experiences in and operations of nine social enterprises. These organizations are financially viable businesses that intentionally employ four distinct populations of individuals who would otherwise face bleak prospects in the labor market: (1) those with mental health disabilities, (2) formerly homeless individuals, (3) parolees and ex-offenders, and (4) young adults who are neither enrolled in school nor participating in the labor market. Programs are designed to develop workers’ skills in a supportive environment, helping participants to secure unsubsidized jobs and increase their earnings. To maximize their impact, they use a transitional model of employment.

Our research collected both participant and organization-level data to assess social enterprise operations and participant characteristics, work experience, and outcomes shortly after workers left social enterprise employment. It collected quantitative data on 527 participants hired for work between April 1, 2012, and March 30, 2013 (88 percent of such individuals) at three different points in time and on 503 people who requested employment services from the organizations housing social enterprises but were not referred for employment. All analyses were weighted to correct for differences in sampling probabilities and response rates across social enterprises. We also collected data at the organizational level from staff interviews, employee focus groups, site visits, service support checklists, and secondary documents and developed a structured coding scheme for a systematic cross-site analysis of operations and supports.

Our findings suggest that the social enterprises served the hardest-to-employ and seemed to improve the lives of participants. Employees and staff praised the opportunities provided to learn technical skills, improve soft skills, and raise confidence. They noted that employees received work readiness, vocational, and on-the-job training designed to impart communication and conflict resolution skills, improve general work readiness, and, in many cases, provide specific technical skills valuable in the labor market. Employees expressed high levels of satisfaction in working at the social enterprise. Additionally, their average income rose, housing stability increased, and substance abuse fell during social enterprise employment. More than 50 percent of employees left the social enterprise for outside employment or training or were still working there about six months after being hired. Still, some workers might not have realized such benefits. About 14 percent worked only 32 or fewer hours and about one-third left for negative or problematic reasons, including 23 percent who were terminated.

Social enterprises struggled with the transitional nature of the social employment model. All provided degrees of preemployment and on-the-job training and the need for such training created a tension between the transitional employment model and the need to run a viable business. Staff at organizations providing more advanced-skills jobs reported higher costs associated with the transitional employment model, where workers often leave after mastering a trade.  They also reported difficulty in timing the entry and exit of workers so as to not impede workflow and worried about how transitional employment affects employees who need continuing support or may not be ready for permanent employment.