Bringing Together Business and Social Change: Not for the Faint of Heart

“It’s not like opening a shoe factory.” That’s how Cameron Voyame—our first employee and someone who is experiencing homelessness—described the challenges we’ve had building HireUp, a job portal that connects vulnerable youth to meaningful and stable employment.

Last November, our B Corp, Impakt, launched HireUp with the support of the Home Depot Canada Foundation and Workopolis. Our objective was to give youth the economic stability necessary to lift them out of homelessness, and help businesses improve recruitment by tapping into a pool of talented and motivated young people. Since then, we’ve built the foundation for a new, national social change system that uses technology to connect employers to more than 36 organizations across Canada. These organizations prepare youth to enter the workforce. 

This effort comes at a time when the relationship between business and social change is undergoing an existential crisis. On the one hand, awareness of social inequities has arguably never been greater, and social change is a high priority, particularly among millennials. On the other hand, despite the evolution of business approaches such as corporate citizenship, community investment, shared value, corporate social responsibility, and sustainability, many would argue that real progress in terms of improved business and social outcomes remains elusive.

Is it appropriate for businesses to benefit from social change? Is simply being in business the best driver for social change? Which comes first? Despite the remarkable vision of corporations such as Unilever, which had the courage to declare, “There is no enduring business case for poverty,” and the fact that that almost all social entrepreneurs use the majority of their organizations’ profits to further social or environmental goals, most businesses favor an incremental, low-risk approach that is lacklustre in terms of real results.

In this context, HireUp has illuminated the possibilities and challenges that go along with combining private and public approaches to create innovative solutions to social problems. Perhaps what’s most interesting is that most of the assumptions we made a year ago about the capacity of community partners, priorities of youth, legal structure, and ability to engage the private sector have proven incorrect. We’ve also had the benefit of seeing what it takes to establish a social enterprise with a national footprint and what we need to do to succeed. Here’s a closer look at what we’ve learned:

Social organizations lack capacity. At the outset, we believed our nonprofit partner organizations had enough resources to ensure that vulnerable youth got the training and support they needed to secure and maintain employment. But in fact most couldn’t afford to go beyond the fundamentals—providing resumé writing programs or ensuring that youth attend job fairs. We are beginning to address this need by establishing regional managers who can help these nonprofits provide better, more-personalized services—assessing local, regional, and national employer needs, and encouraging youth to apply for jobs that interest them.

Youth want meaningful jobs. We assumed that youth who had experienced homelessness would be happy to secure a job of any kind. Instead, we learned they often have very specific interests—such as creative arts or social work—but lack access to adequate training programs in those areas. Our plan is to continue to identify what matters most to youth and employers, and to develop new learning programs and credentials customized for different business sectors (such as financial services, mass retail, or creative industries). We will work with our partners to deploy these programs and offer them on HireUp’s online platform.

Some social enterprises require complex structures. We wanted HireUp to operate as a social enterprise, because it provided a valuable service to employers. We also believed this model would demonstrate that vulnerable youth inherently have value. However, because HireUp isn’t a charity, it doesn’t qualify for funding from private foundations or many government programs. It’s also too early to be sustainable from employers who pay a fee to use the platform, and Impakt itself has had to provide financing. We now recognize that we need to use a hybrid approach. Our plan is to operate a for-profit structure that can generate a return for investors, alongside a new nonprofit organization (HireUp Learning) that can meet the requirements of private foundations and government programs.

On a larger level, new financial regulations and programs to are needed to help get social enterprises off the ground—for example, allowing private foundations to allocate a portion of their funding to social enterprises, introducing government-backed “sovereign guarantees” that reduce risk for people who invest in social enterprises by providing a backstop when social enterprises aren’t viable, or establishing a new national fund that could help capitalize social purpose businesses.

The private sector is embracing social innovation. We expected that the biggest challenge would be convincing employers that they should consider employing youth who’ve experienced homelessness, just like anyone else. But we’ve found that businesses—including Home Depot Canada, Scotiabank, Starbucks, TD Bank, Nordstrom, NEI Investments, Walmart Canada, Peak Products, First Service Residential, and Maple Leaf Foods—are eager to hire vulnerable youth. HireUp employers are committed to diverse and inclusive hiring, and recognize that these young people can be capable and loyal employees. We will continue to work closely with these employers to better understand their hiring needs and ensure that new up-skilling programs provided by HireUp Learning result in more youth hires.

The idea behind HireUp was compelling enough from the start to quickly secure two strong partners, gain lots of media coverage, and make it through the first year. But we didn’t have a clear enough plan for how HireUp would evolve. One could argue that the complexity of the issue made some of the most important business questions impossible to answer. What would be the optimal legal structure? What capital would be required? What was the best pricing structure? How will we measure success?

My advice for other social entrepreneurs is based on what I learned over the past year—the most exciting and difficult I’ve ever had. If I could start again, I would:

• Ensure that I had a clearer idea of how creating employment for vulnerable youth would also generate a profit
• Not rush to create a national footprint. If we had started in one or two pilot markets, we would have learned what do differently faster and saved money.
• Not put own money into the social change aspects of HireUp. It’s one thing to invest in something where there is the possibility of a return, but funding pure social change could have bankrupt Impakt. Instead, I would have tried to get governments and foundations that prioritize this issue to support the project.   
• Have a clear exit strategy. It was never the intention to keep HireUp under the umbrella of Impakt, but we weren’t clear about what this would look like or when it would happen. 

Despite many missteps, we remain confident that we can deliver meaningful social change and turn a profit in doing so. That being said, Cameron is right, this is definitely much harder than opening shoe factory—but that’s no reason to lose hope.

Read more stories by Paul Klein.