As published in the July 1, 2015 Toledo Business Journal
Daniel Hardiman
True North Companies, Inc.
Workforce solution and increased profits
Toledo Business Journal attended a workforce development session and met with Daniel Hardiman, CEO of True North Companies, Inc. located in Columbus. Hardiman shared an important experience that his company has had in hiring ex-offenders and the significant impact it has had on his business and the company’s profitability. Insight into this issue may provide benefits and solutions to other area companies.
Owens Community College (Owens) hosted a workforce development event at its Arrowhead Park location. The room was full of representatives from companies who had come to learn about a unique approach to satisfying the need for new employees and at the same time receiving a tax incentive and cost reduction opportunities.
Carl Dettmer, corporate training solutions team member at Owens, organized the event, welcomed guests, and introduced several speakers. Robin Grimes, assistant deputy chief, US Pretrial Services and Probation Office and Marci Rapp of the same office shared information about the federal court system and its efforts to assist ex-offenders (or returning citizens) in obtaining employment and reducing recidivism (return to prison). Most of the session was devoted to letting attendees see the experience that was shared by the keynote speaker, Daniel Hardiman, CEO of True North Companies located in Columbus. The company owns 6 Tim Horton’s restaurants on the west side of Columbus.
Hardiman explained that he has owned the business for close to 6 years and employee turnover, finding new employees, and training had been major difficulties facing the business. He then provided an in-depth discussion of his company’s experience with hiring ex-offenders and the significant improvement that has taken place with the business’ operations, cost reduction, and increase to its bottom line profitability.
“I did not plan to hire ex-offenders or returning citizens which is the term that professionals in this field prefer to use. I started hiring ex-felons by accident. I was in the process of promoting two employees when I learned that they both had been in prison. One asked if we had gotten our tax credit and I didn’t know anything about this.
“I learned that both of these employees were living in a half way house with 40 other residents. We were in need of additional personnel and I asked if they knew of anyone else looking for a job. They advised that there were lots of others at their half way house and in other locations that needed employment,” Hardiman stated.
The True North CEO quickly learned that there was an entire staff of people involved with the federal court system who were responsible to work with employers to assist in matching up ex-offenders for jobs and then overseeing their work to minimize issues.
Hardiman advised the court system personnel about his employment needs and then quickly set up a meeting at their office to conduct interviews. He was surprised to see that they had 30 to 40 individuals who had the capabilities that he needed waiting for an interview when he arrived.
“I pay $8.10 an hour. The job is pouring coffee. It is not a glamorous position,” stated Hardiman. He then explained that his ex-offender employees were anxious to succeed and start a new life. They know that it is very difficult to find employment. They also know that they have to answer to personnel in the court system about their actions and employment.
Hardiman advised that having the oversight and assistance from the court personnel was like having extra management staff for which he did not have to pay. He further explained that many of his best employees were the ex-offenders who were anxious to make a new life. They have a strike against them and they do not want to fail so they work harder than others, according to Hardiman.
The restaurant executive shared that customer service is critical for his business and there are clear performance measurements. “We measure performance based on speed and the average for all Tim Horton’s is to serve a customer in 25 to 30 seconds. Our stores are the fastest in the country with average service at 17 seconds,” stated Hardiman.
In addition to improving the operations of the business, a number of other benefits have contributed to significant cost reduction. “Employee turnover and training were two of our highest costs. Our ex-offender hiring has changed this. We now hire less often and do much less training for new employees. I use to work night shifts to fill in, but have not worked a night since this was set up,” Hardiman stated.
The experience with the ex-offenders was so positive that the company increased its hiring in this area. In 2013, every new employee that was hired was an ex-offender. In some restaurants, 90% of the employees are ex-felons.
The restaurant executive and the professionals from the federal court system also shared information about other benefits that were obtained in this area. The opportunity to obtain tax credits has had a significant impact on True North’s after tax profitability.
The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers who hire individuals from eligible target groups with significant barriers to employment. Each year, employers claim over $1 billion in tax credits under the WOTC program.
Employers can earn a tax credit of between $1,200 and $9,600 per employee, depending on the target group of the new employee and the number of hours worked in the first year. Employees must work at least 120 hours in the first year of employment in order for the company to receive the tax credits.
Hardiman shared that with the number of ex-offenders that his company has hired, the business has obtained over $500,000 in tax credits. With the continuing use of this approach, his company may pay no income taxes for the next 10 years, according to the restaurant executive. The tax credits continue to provide significant financial benefit to True North.
Another benefit that a business can obtain involves the Federal Bonding Program. It is a program designed to assist selected individuals to get and keep a job. Fidelity bonds are issued through this federal program. Ex-felons are classified as “at-risk” employees that enable a prospective employer to receive a fidelity bond. In setting up this program, the US Labor Department put this bonding program in place to provide employers with financial protection when hiring an ex-offender.
The bond is given to an employer free of charge. The fidelity bond guarantees the employer against the loss of money or property that results from employee dishonesty. It provides coverage during the first six months of employment and will pay up to $5,000 if losses are suffered. The fidelity bond functions to guarantee to the employer that the ex-offender that they are hiring will be an honest employee.
Hardiman also shared some of his personal thoughts concerning hiring ex-offenders. “Our numbers for deductions from employee pay checks for child support are high. Every day, these numbers keep growing. I am very glad to be an employer that sends child support payments from our personnel to families. When these individuals are in prison, there is no money going to support their children. When they are unemployed, the family gets no income from the ex-offender. I consider sending these child support payments to families to be a priding moment,” said Hardiman.
Another issue that was discussed was the personal and career development of these ex-offenders and their chance to obtain jobs with higher pay and benefits. There have been quite a few ex-offender employees that were hired by True North and who at some point left for higher paying jobs. Hardiman explained that this was also a priding moment and he felt very good that his company benefited by their employment and at the same time contributed to these individuals getting an opportunity to improve their lives.
The restaurant executive explained to the audience that he is very focused on his business and that he is driven by what improves the company’s bottom line. His hiring of ex-offenders was not done to be a good citizen nor was it done as an act of kindness from his heart, according to Hardiman. He was very clear with attendees that the driving motivation has been the improvement to the business’ operations and to the company’s profitability. “You have a captive employee that no one else will hire. In the time that they need to improve themselves, they are yours and your company will benefit,” explained Hardiman.
“I’m not here to tell you to hire ex-offenders. I am here to tell you to simply give them a chance for an interview and do not automatically exclude someone who has a prison record. Give them a chance to obtain a job during an interview,” stated Hardiman.
“I explained earlier that I started hiring ex-offenders by chance. Now, I hire them by choice,” Hardiman emphasized.