The Next Step: Jobs Initiative Initial Findings from ... - Abt Associates

The Next Step: Jobs
Initiative
Initial Findings from the
Cost-Effectiveness
Analysis
Cambridge, MA
Lexington, MA
Hadley, MA
Bethesda, MD
Washington, DC
Chicago, IL
Cairo, Egypt
Johannesburg, South Africa
February 1998
Prepared for
Corporation for Supportive Housing
342 Madison Avenue
Suite 505
New York, NY 10173
Abt Associates Inc.
55 Wheeler Street
Cambridge, MA 02138
Prepared by
David A. Long
Heather Doyle
Jean Amendolia

TABLE OF CONTENT
Initial Findings from the Cost-Effectiveness Analysis of the Next Step: Jobs Initiative ...........1
1. Employment Services at Three Sites ............................................2
1.1 Thresholds .........................................................3
1.2 Lakefront ..........................................................4
1.3 Jericho ............................................................5
2. Approach to the Cost-Effectiveness Analysis .....................................6
2.1 Estimating the Cost of Next Step: Jobs ...................................7
2.2 Assessing the Determinants of Costs ......................................9
2.3 Weighing Costs and Benefits ...........................................11
3. Preliminary Results ........................................................15
3.1 Program Function Costs ..............................................15
3.2 Participation Rates ..................................................17
3.3 Total Costs per Sample Member ........................................19
Appendix A .................................................................22
Appendix B .................................................................24

Initial Findings from the Cost-Effectiveness
Analysis of the Next Step: Jobs Initiative
The Next Step: Jobs initiative is intended to increase employment and earnings among
residents of supportive housing, who have been homeless or at risk of homelessness and often have
been chronically unemployed. The initiative, which is operated by the Corporation for Supportive
Housing (CSH) and supported by The Rockefeller Foundation, began operations in July 1995.
Employment services are provided at 17 supportive housing sites in Chicago, New York, and the San
Francisco Bay Area. The evaluation of Next Step: Jobs involves three efforts: a Tenant Management
Information System (MIS) developed by the Vanderbilt Institute for Public Policy Studies (VIPPS),
an ethnographic study carried out by the Nathan Kline Institute, and a cost-effectiveness analysis
conducted by Abt Associates.
This is the first of two reports on the cost-effectiveness analysis. It presents our initial
findings on the cost of providing employment services and summarizes our plan for assessing the
services’ cost-effectiveness. The results identify the costs of including employment services in the
supported housing programs at three of the nine sites where the cost-effectiveness analysis is being
conducted. Two of these three sites are in Chicago and one is in New York City. The analysis
completed to date has yielded these results:
• The cost of employment services during the first nine months that were provided to
residents at the three supportive housing sites ranges from $806 to $3,958 per
resident. These estimates include the cost of services provided by outside agencies,
to which residents have been referred by program staff, as well as the cost of services
provided by the sites themselves.
• Half of the cost of the employment services is attributable to two important program
functions at the Next Step: Jobs sites. One is job development and placement, which
includes activities such as job search assistance, on-site job creation, job coaching,
development of employment and training relationships with employers, and referrals
to positions in the regular labor market. The other is in-house employment, which
includes on-site internships and sheltered workshops as well as employment with the
sponsoring agency and any businesses it operates.
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• Differences in cost estimates across the three sites reflect noteworthy differences in
the program approaches and participation rates across the three sites. These
differences in approach and participation are themselves partly due to differences in
the populations served by these sites.
It is important to recognize that these are preliminary results, covering only the first nine months that
residents received employment services at only three sites.
The final report, which is scheduled to be completed later this year, will present final estimates
of the costs at these three sites—covering 21 months from the time residents first received
employment services—as well as cost estimates for the other six sites. It will also provide a more
thorough analysis of the costs of employment services in supportive housing settings, covering all nine
sites and systematically identifying the most important determinants of these costs. Finally, the costs
of the employment services will be compared to the value of their effects on supportive housing
residents’ employment, receipt of public assistance and services, and other outcomes.
The results of the cost-effectiveness analysis are intended to provide practical feedback to the
community agencies that are implementing the Next Step: Jobs initiative; help potential government
and philanthropic funders make more informed choices in considering similar policy initiatives; and
furnish useful findings to other decision makers, practitioners, and analysts who are interested in
policy approaches like this one. This information should be particularly valuable given the very
limited prior experience implementing and evaluating housing-based employment services for
supportive housing residents.
1. Employment Services at Three Sites
All nine sites to be covered by the cost-effectiveness analysis, which are listed in Table 1,
share important characteristics. Each of these sites has integrated a range of employment services
into its supportive housing program. All serve homeless or recently homeless populations facing
multiple barriers to personal development and financial self-sufficiency. In addition, all are established
urban community-based organizations with strong linkages to other agencies in their communities.
2

Table 1
Sites Involved in the Cost Analysis
Supportive Housing Program
Lakefront SRO, Inc.: Delmar Building
Thresholds: Austin Apartments
Jericho Project: Harlem Program
Community Access, Inc.: Avenue D
Project Renewal: Holland Hotel
Center for Urban Community Services: BHDF
Common Ground: Times Square Hotel
Episcopal Community Services: Canon Kip
Rubicon Program
Location
Chicago
Chicago
New York City
New York City
New York City
New York City
New York City
San Francisco
Richmond
However, the sites are far from being homogeneous. They serve different populations, use
different program models, and have different scales of operation. They also rely to different degrees
on in-house services as opposed to referring residents to services from other agencies. The three sites
covered in this initial assessment, which are highlighted in the table and discussed below, illustrate
these differences.
1.1 Thresholds
The employment services program for Austin Apartments, operated in Chicago by Thresholds,
is directed to individuals with serious mental health problems. Thresholds is a large
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organization—with more than 700 employees and dozens of program locations throughout the
Chicago metropolitan area—and has been in operation for more than 40 years. Since its inception the
organization has provided employment services to the people it serves. It has more recently become
a supportive housing provider as well. This experience differs from the other two sites, both of which
added employment services to their core supportive housing programs.
Over the years, Thresholds has developed an elaborate and integrated service delivery
structure. Employment services are one element in a multi-faceted package that also includes
extensive mental health services (including diagnosis, treatment, and rehabilitation), life skills training,
counseling and support groups, and a wide range of support services. The primary sources of funding
for the employment services are the grant from the Corporation for Supportive Housing for the
NextStep: Jobs initiative, and funding from two public agencies in Illinois, the Office of Rehabilitation
Services and the Office of Mental Health.
There are four specific employment staff members at Thresholds who work with Austin
Apartments residents: a Vocational Coordinator, who focuses on job development issues; a Pre-
Vocational Coordinator; a job coach who visits work sites and conducts support activities; and a
staffmember with varying responsibilities who has recently focused on on-site employment activities.
In addition, case managers talk with residents about employment issues, though most residents are
referred to members of the employment staff.
A distinctive feature of this program is a group of small businesses operated as a separate
entity called Thresholds Rehabilitation Industries (TRI). These businesses include Lincoln Laser,
wich reconditions cartridges for laser printers; TRI Construction; Turtzel, which makes chocolatecovered
pretzels; and a cleaning service. The businesses produce revenues that, overall, fully cover
the costs of their operation.
1.2 Lakefront
The Delmar building, one of a number of supportive housing programs operated by Lakefront
SRO in Chicago, has the most residents of the three sites. The resident population is more diverse
than the other two sites, including people with mental illness, substance abuse histories, and other
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problems. Lakefront offers a narrower range of in-house services than Thresholds, but refers
residents to outside agencies as needed.
Employment services are handled through a seven-person employment department at
Lakefront. The department’s director oversees an employment manager (who supervises two job
coaches), an employment coordinator (who develops job training partnerships with area employers),
and a construction manager (who runs a construction workshop offering training and hands-on work
experience in the construction trades). In addition to its grant from the Corporation for Supportive
Housing, Lakefront funds the employment services provided by this department with financial support
from the Illinois Department of Housing, the United Way, and the Illinois Department of Human
Services.
Residents of all Lakefront buildings (who currently number 685) have access to this
department and the services it offers. However, Delmar residents have a stronger incentive to utilize
the services, because they are required to pay a market rate rent for their rooms. Recruitment and
intake of Delmar residents into Lakefront’s employment program is partly handled by the case
managers at the Delmar building. For all employment services, however, Delmar residents visit the
employment office.
1.3 Jericho
The Jericho Work Program in Harlem, the smallest program of the three sites covered in this
report, operates in one of three supportive housing buildings run by the Jericho Project in New York
City. Jericho’s services, including employment activities, are generally the same at all three buildings,
but the demographics of the residents are quite different. Residents of the Harlem building, twothirds
of whom were referred by the New York City Department of Homeless Services, all have had
substance abuse problems. The number of residents with severe mental illness is low, but about a
quarter of residents receive state Vocational Rehabilitation (VR) services for physical difficulties.
Jericho provides a range of services and the utilization rate for these services is strikingly high.
All residents receive extensive substance abuse counseling, because they are required both to be sober
and to go to relapse prevention meetings and men’s/women’s groups. All residents use employment
5

services as well. Regardless of their work experience, interests, or skills, all individuals are referred
to the Vocational Education unit, assessed, and expected to participate in work activities. Jericho
also offers education services (including classes and individual instruction in job readiness, job finding,
and resume writing as well as life skills classes and referrals to basic skills training, GED programs,
and area colleges), help with personal finances (there is a savings account system for residents) and
transportation (staff give out tokens as needed), and after-care (when residents leave the Jericho
program, they are provided help with their move and family reunification).
Most employment services are provided by the Vocational Education unit, which has a
director and three staff. The staff who provide residential services in the Harlem building counsel
residents on employment issues and sometimes provide other employment services, as does the
director of the After Care unit. The employment services are supported primarily by the grant from
the Corporation for Supportive Housing and funding from New York City agencies.
2. Approach to the Cost-Effectiveness Analysis
There are three reasons for conducting this analysis. The first is to determine the full cost of
the employment services by estimating the dollar value of all resources used in providing the services
to residents of supportive housing in the programs that make up the Next Step: Jobs initiative. The
cost estimation methods to be used will put a price tag on the Next Step: Jobs model that is now in
place at each site. This includes the full set of employment services these organizations now offer,
including services funded by both CSH and other sources. The cost estimates will also include the
cost of all relevant employment services provided by other organizations, but arranged by site
program staff, in addition to the cost of the services that are actually delivered by the sites themselves.
The second goal of the analysis is to assess the determinants of the employment service’s
costs. The Next Step: Jobs initiative has several different components—such as recruitment and job
development—and the costs of these components are likely to vary considerably across sites. Such
cost variation probably has a number of causes, including differences in program scale, different
locations and organizational settings, differences in the characteristics of supportive housing residents
across sites, different ways of delivering services, and different staffing configurations. If cost
6

variation is found to be strongly related to one or more of these factors, we could gain valuable
information about the key determinants of the costs of employment services for supportive housing
residents.
The third reason for the analysis is to determine whether the benefits of the employment
services outweigh their costs. Such an appraisal is always difficult to make for social programs, but
it is particularly difficult in this case. This is partly due to the fact that many of the benefits and costs
of the employment services to supportive housing residents cannot be measured. It also results from
the fact that, while many benefits and costs can be measured, the research on the Next Step: Jobs
initiative was not specifically designed to measure the employment services’ net effects. As discussed
below, however, we have developed a credible plan for estimating these effects.
2.1 Estimating the Cost of Next Step: Jobs
To estimate the full costs of the Next Step: Jobs initiative, we must first take into account all
pertinent expenditures made by the sites, using funds from both CSH and other sources. We must
also take into consideration expenditures made by outside organizations in providing employment
services to Next Step: Jobs participants as a result of referrals and other arrangements made by site
staff. For example, a site may provide no occupational skills training itself, even though such training
is an essential part of its program model. Instead it may refer residents to outside agencies for
training, and consequently incur no expenses itself. Another site may provide in-house training, but
charge the costs of the training to a special grant it received rather than to its employment and
training services budget. Both types of expenditures are nonetheless part of the total cost of
implementing the Next Step: Jobs model, and clearly must be taken into account in the costeffectiveness
analysis.
Thus, this component of the cost-effectiveness the analysis will place a dollar value on the
investment that sponsor agencies and other organizations make in delivering the employment services
that are promoted in the Next Step: Jobs initiative. This investment excludes the cost of supportive
housing itself, as well as the cost of all non-employment services. It is noteworthy, too, that this
constitutes the gross rather than net investment in employment services made by the agencies. Many
supportive housing residents would receive employment services, although probably not as many, in
7

the absence of the Next Step: Jobs initiative. As a result, the net investment is the cost of Next Step:
Jobs employment services over and above the cost of services that would be obtained by supportive
housing residents had the initiative never operated. This net cost of the employment services will be
addressed when the costs of Next Step: Jobs are compared to its benefits, as discussed below.
The full costs of the Next Step: Jobs initiative will eventually be measured, on a per
1
participant basis, across all nine sites listed in Table 1. The cost estimates presented in the next
section of this report, however, cover a limited time period at only three of these sites. Nevertheless,
the approach used to develop these preliminary estimates is exactly the same as the approach that will
be used to produce the final estimates. This approach—which is described briefly here and in more
detail in Appendix A—involves three steps. The first is to determine the employment services that
members of our sample have received. Data from the VIPPS management information system will
2
be used to do this for seven of the nine sites, including all three covered in this report. Information
on the vast number of services covered by the MIS will, for the purposes of the cost-effectiveness
analysis, be classified into eight program functions, as discussed below.
Recruitment and intake cover the up-front activities that enable tenants to receive
services—that is, the recruitment efforts, initial intake session, orientation, vocational assessments,
and other contact between tenants and staff before services are actually provided. Pre-vocational
activities refer to activities—such as basic skills and GED classes, life skills training, job readiness
activities, English-as-a-second-language classes, and pre-employment support groups—that are
intended to prepare tenants for employment or training. Job development, referral, and placement
include other activities ! namely job development efforts, job referrals and placements, assistance
with job search and interviews, job coaching, day job referral, group training placements, internal
placements, and job creation ! that occur before tenants start employment or training.
The remaining program functions occur after employment or training has started. On-site
employment refers to all in-house employment, including internships and sheltered workshops, as well
1 “Next Step: Jobs” refers to all employment services provided or arranged by the sites, whether or not they are
funded by CSH. “Participant” refers to a supportive housing resident who receives at least one employment
service; it does not refer to residents who receive other services or participate in other housing-based activities.
2 At the other two sites, Times Square and Rubicon, Abt Associates is collecting comparable information especially
for the cost-effectiveness analysis.
8

as to all related activities (such as paying stipends or wages). On-site training refers to all in-house
training, including both classroom and on-the-job training. Off-site employment and training includes
all involvement with outside employment and training, including temporary and part-time jobs and
all types of employment and training programs. Finally, job and training retention activities refer to
all support activities for participants in employment and training, as well as to services specifically
intended to help them perform well in on-site and off-site positions. It also includes arranging support
services, such as transportation to suburban jobs, specifically needed by participants who are
employed or in training.
The second step is to determine the cost of each function per participant—that is, the cost of
serving one person in the activities included in the function for the nine months covered by this
preliminary analysis. For each function, the numerator of the estimated cost is a share of the sites
total expenditures over the nine months, based on an analysis of labor and other costs during that
period. The denominator is the number of people, including individuals in our sample as well as
others who are not, who participated in pertinent activities during the period.
The third step is to calculate the total cost of the services per participant. For each function,
this cost is the product of two figures: the participation rate (determined in step 1) and the unit cost
estimate (determined in step 2). For each site, the costs per participant of seven functional
components of the employment services will be calculated. The sum of these seven component costs
represents the total cost of employment services per participant.
2.2 Assessing the Determinants of Costs
It is expected that the cost estimation effort will produce a wide range of cost estimates across
the nine sites, indicating that the cost of providing employment services to supportive housing
residents can vary considerably. The second objective of the cost analysis is to explain this variation
in site costs.
The aggregate costs of Next Step: Jobs are, in large part, a function of the number of
participants who receive employment services. By focusing on the cost per participant, an assessment
can be made of the determinants of costs other than the volume of participant enrollment. In trying
to identify the determinants of cost per participant, attention will be focused on cost variation across
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sites. When cost information is available on all nine sites, the principal mode of inquiry will be
regression analysis, which will determine which of many factors are primarily responsible for the
variation. Other types of analysis, making use of several types of tabulations of expenditures, will
also be used. However, the preliminary assessment of cost variation provided later in this report is
based on less systematic comparisons of the data obtained thus far from only three sites.
The regression analysis that will eventually be undertaken is expected to be straightforward.
The dependent variable in the analysis will be a measure of cost per participant—either the overall
cost per participant or the cost of a specific program component per participant. A variety of
independent variables will be used. Potential explanatory variables will be identified during the cost
data collection effort as well as from the findings of other aspects of the Next Step: Jobs evaluation,
notably the implementation analysis. For example, these variables might include program scale (total
enrollment across all employment activities), housing scale (total number of supportive housing
residents served by the sponsor agency), program implementation stage (whether the site’s
accounting period includes early start-up months of operations), organizational setting (mental health
organization, housing developer, etc.), location (Chicago, New York, San Francisco), population
served (mentally ill, homeless women, HIV patients, substance abusers, etc.), and sources of funding
other than CSH grants.
Some relationships are to be expected. For example, most administrative overhead costs per
participant should be reduced by large program scale. Others, such as whether costs are higher in
certain types of organizations, are less certain. However, it should be emphasized that this analysis
will be exploratory in nature, both because of the limited number of sites being studied and because
the initiative is one of the first of its kind.
2.3 Weighing Costs and Benefits
The cost analysis addresses the question: What is the cost of including employment services
in supportive housing prpograms The cost-effectiveness analysis will address a related and critically
important question: Do the effects of the employment services justify its cost In other words, what
are the benefits of the services, and how does the value of these benefits compare to the cost of the
services
10

Rigorous analytical methods for assessing a social program’s benefits and costs are well
established. However, these methods presume that the net impacts of the program can be measured
using a formal experimental or quasi-experimental research design. The evaluation of Next Step: Jobs
does not include such an effort. Thus, the primary issue for the cost-effectiveness analysis is how to
estimate the effects of the initiative so they can be compared to its costs. We have consequently
sought to identify a sample of eligible individuals who are not participating in a Next Step: Jobs
program, but whose behavior is the same as what participants’ behavior would have been in the
absence of the initiative. For this sample we would need to obtain a set of longitudinal data on
earnings, public assistance receipt, and other pertinent outcomes that is comparable to the information
that VIPPS is assembling on participants in the eight Next Step: Jobs sites where MIS data are being
collected.
The search for a comparison group “most like” actual Next Step: Jobs participants, and for
a specific sample for which data comparable to the MIS are available, has been difficult. We have
settled on comparison group data to be obtained from the Center for Urban Community Services
(CUCS) for New York City and from Thresholds for Chicago; these data will hopefully be
supplemented with data from a second source in New York and from the Department of Social
Services in San Francisco.
The CUCS and Thresholds data will come from applications to the employment services
programs operated by these two organizations. The specific sample we will use is applicants who live
in supportive housing that is not operated by CUCS, Thresholds, or any other program in the Next
Step: Jobs initiative. All have lived, during the same period in which data on participants have been
collected, in established supportive housing buildings in New York City and Chicago, but did
not have access to the employment services of programs in Next Step: Jobs. The pertinent
information collected by CUCS and Thresholds at application is described in Appendix B.
The characteristics of individuals in these samples are similar to those of Next Step: Jobs
participants. However, we expect to use a sequential matching procedure to identify the most
appropriate individuals within the samples, first eliminating cases who live in what is regarded to be
a weak supportive housing program, and then identifying the individuals those with the most similar
11

characteristics and backgrounds to Next Step: Jobs participants. Remaining differences will be
controlled for, using statistical techniques.
The benefits and costs of the employment services will be estimated using a quasiexperimental
design. By comparing various outcomes, such as earnings and public assistance
payments, for the sample from the Next Step: Jobs sites with the same measures for the comparison
group sample, we can determine the net impact of the services on various outcomes. For example,
the net impact of the employment services on earnings will be computed as the average amount of
earnings obtained by the Next Step: Jobs sample from July 1996 through March 1998 less the average
amount of earnings obtained by the comparison group sample during the same time period. Formally,
the impact will be measured using regression models of the general form:
Y = b + b X + b T + u ,
i 0 1 i 2 i i
where Y i is one of the outcomes for individual i (such as earnings); X i is a vector of control variables
(such as age, education, and gender); T is a binary variable given the value 1 if the individual is in the
i
Next Step: Jobs sample (and 0 if the individual is in the comparison sample); and u is an error term.
i
Once this comparison is made, the analysis will be conducted using the benefit-cost
framework summarized in Table 2. Dollar values will be placed on both the program’s effects and
its use of resources. The framework indicates the components to be considered in the analysis, the
perspectives from which they will be valued, and how each component will be estimated. Whether
a given component is a benefit or a cost depends on what is actually measured and on the perspective
taken. The pluses and minuses shown in the table each reflect the expected benefit or cost status of
an item, but the actual results of the impact assessment may be different from these expectations.
Once measured, particular impacts or expenditures will constitute benefits, costs, or neither
depending on which analytical perspective is considered.
For example, Next Step: Jobs is expected to have a positive impact on earnings (that is,
participants’ earnings are expected to be higher than those of the comparison group), which would
be a benefit to supportive housing residents. Similarly, the initiative is expected to increase the net
cost of skills training (that is, participants will use training more than the comparison group) which
would be a cost to government. The analysis will determine whether these expectations are correct
or not.
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This framework will allow us to assess the cost-effectiveness from several different and
important viewpoints. The perspective of supportive housing participants identifies benefits and costs
to participants in the MIS sample, indicating how these individuals fare as a result of Next Step: Jobs.
The budget perspective, on the other hand, identifies gains and losses to government budgets. The
funders’ perspective counts the costs incurred by non-governmental organizations in funding the
initiative. These three perspectives on benefits and costs together make up the social perspective,
which includes all individuals in society. Thus, benefit and cost results for each of the three are added
together to obtain results for society, providing an overall look at the cost-effectiveness of the
initiative.
Given the constraints we are working with, a critical task of the analysis will be to assess how
these results change when assumptions and estimates used to obtain them are altered. Such
sensitivity tests provide a systematic way to assess the confidence that can be placed in the results
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Table 2
Expected Effects and Estimation Strategies
For Components of the Cost-Effectiveness Analysis
By Accounting Perspective
Private
SH
Component of Analysis Funders Government Residents Society Estimation Strategy
Earnings and Fringe Benefits
Earnings 0 0 + + Estimated using MIS and
comparison data
Fringe Benefits 0 0 + + Estimated based on earnings
Tax Payments
Federal Income Tax 0 + - 0 Estimated based on earnings
State Income Tax 0 + - 0 Estimated based on earnings
Social Security Tax 0 + - 0 Estimated based on earnings
Sales and Excise Taxes 0 + - 0 Estimated based on earnings and
transfer payments
Transfer Payments
SSI 0 + - 0 Estimated using MIS and
comparison data
SSDI 0 + - 0 Estimated using MIS and
comparison data
Social Security 0 + - 0 Estimated using MIS and
comparison data
Food Stamps 0 + - 0 Estimated using MIS and
comparison data
Unemployment Insurance 0 + - 0 Estimated using MIS and
comparison data
General Assistance/AFDC 0 + - 0 Estimated using MIS and
comparison data
Use of Other Programs
Training 0 - 0 - Estimated using MIS and
comparison data
Education 0 + 0 + Estimated using MIS and
comparison data
Vocational Rehabilitation 0 + 0 + Estimated using MIS and
comparison data
Work Related Expenses
Transportation 0 0 - - Unmeasured
Other Expenses 0 0 - - Unmeasured
Employment Service Costs
CSH Funding - 0 0 - Cost Analysis
Government Funding 0 - 0 - Cost Analysis
Other Funding - 0 0 - Cost Analysis
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and indicate the specific elements of the analysis that are most important in determining the overall
cost-effectiveness conclusions.
The main assumptions that will be tested are (1) the assumption that there are no unobserved
differences between participants and the comparison group, and (2) assumptions used in calculating
benefits and costs, such as the assumptions about how long the impacts will last and that no
displacement is associated with employment impacts.
3. Preliminary Results
The cost of serving people in the sample, over their first nine months of program eligibility,
was estimated using the analytical steps described above. The cost of employment services across
the three sites was found to average $2,638 per participant over this nine-month period. It was as
high as $3,958 at Thresholds and as low as $806 at Lakefront. At $3,150, Jericho’s cost was closer
to the high end of the range than the low end. These etimates, although preliminary, show striking
variation in the costs of employment services. This appears to reflect many factors, several of which
are discussed below.
3.1 Program Function Costs
The costs of program functions per participant, as indicated earlier, reflect the magnitude of
total site expenditures, how those expenditures are divided between functions, and the volume of
participants in each function. Aggregate expenditures on employment services during the first nine
months were highest at Thresholds and lowest at Lakefront. The relatively low expenditures at
Lakefront are noteworthy, especially given that it is easily the largest scale program of the three
included in the preliminary analysis. Lakefront, which was the only site to spend less than $100,000
during the period, provided services to 142 participants, compared to 67 at Thresholds and 54 at
Jericho. As noted earlier, Lakefront’s employment department has seven staff and works with almost
700 residents in several buidings. This is nearly 100 residents per staffmember, substantially
15

Table 3
Allocation of Labor Expenses across Program Function
by Site
Program Function Thresholds Lakefront Jericho Average
Recruitment and Intake 6.3 15.1 5.1 8.8
Pre-Vocational Activities 2.0 2.9 27.3 10.7
Job Development, Referral, and Placement 18.8 23.1 23.3 21.7
On-Site Employment 33.4 3.0 0.7 12.4
On-Site Training 16.3 13.4 0.2 10.0
Off-Site Employment 6.0 0.4 0.0 2.1
Off-Site Training 6.0 2.5 0.0 2.8
Job and Training Retention Activities 7.4 1.5 11.9 6.9
Administrative and Other Employment Activities 3.8 38.2 31.5 24.5
Total 100.0 100.0 100.0 100.0
more than at the other two sites. In contrast, Jericho’s four-person Vocational Education unit works
with 150 residents, which is fewer than 40 residents per staffmember.
There are also noteworthy differences in the allocation of total expenditures across functions. As
indicated in Table 3, the allocation of labor expenses across functions, based on the time studies
conducted at these sites (see Appendix A), reveals pronounced differences across the three sites. The
most important of these differences is in on-site employment. Thresholds devoted fully a third of its
staff resources to this activity, whereas the other two sites contributed a fraction of their staff’s time.
This primarily reflects the importance of Thresholds Rehabilitation Industries, to which staff devoted
considerable time. The one-third allocation understates Thresholds’ full investment in TRI
businesses, however, because the nonpersonnel expenses for the businesses is even greater due to the
need for equipment and materials. Indeed, about 40 percent of total expenditures associated with our
sample went to TRI. It is very important to note, in this regard, that these businesses produced
revenue that offset these expenses. As a consequence, about 40 percent of Thresholds’ cost per
16

participant will be offset by tangible benefits of the businesses when the cost-effectiveness analysis
is completed.
Other important differences in pre-vocational activities, training, job and training retention
activities, and administration are also noteworthy. Jericho devoted substantially more resources to
pre-vocational activities, and less to both on- and off-site training, than the other two sites. Jericho
and Thresholds also put more emphasis on retention activities. Threshold also spent much less money
on administration, although that is partly due to the fact that administration on TRI is classified as onsite
employment.
The cost of program functions per participant in function activities was comparable across
sites for some, but not all functions. The unit cost of recruitment and intake, for example, was $115
per person at Jericho, $83 at Lakefront, and $212 at Thresholds, which is relatively close (the most
expensive program cost 2.6 times the cost at Lakefront). Similarly, the unit cost of pre-vocational
activities—that is, the cost per person who ever participated in such activities—was $785 at Jericho,
$268 at Lakefront, and $386 at Thresholds (the most expensive site was 2.9 times as costly as
Lakefront). In other words, the cost of services like these was somewhat lower at Lakefront than
the other sites, but still relatively similar.
In other cases, however, the units costs were very different, suggesting that the kind and/or
intensity of service was probably quite different as well. The cost per person in on-site employment
was estimated at $13,000 per person in such employment at Thresholds, compared to only $2,133
at Lakefront and $2,725 at Jericho (the most expensive site was 6.1 times the cost at Lakefront).
Similarly, the unit cost of job and training retention was $333 at Jericho and $395 at Thresholds, but
only $57 at Lakefront (Thresholds’ cost was 6.9 times that of Lakefront).
3.2 Participation Rates
Striking differences in participation rates also constitute one of the reasons for the differences in
costs. As shown in Table 4, participation rates were much higher at Jericho than at the other two
17

Table 4
Participation Rates in Major Activities
By Program Function and Site
Thresholds Lakefront Jericho Average
Recruitment and Intake 100% 100% 100% 100%
Outreach 3% 16% 58% 26%
Intake 100% 100% 100% 100%
Assessment 10% 30% 98% 46%
Pre-Vocational Activities 22% 28% 100% 50%
Basic Skills 7% 3% 29% 13%
GED 7% 2% 37% 15%
ESOL 3% 2% 0% 2%
Job Readiness 7% 17% 100% 41%
Job Development, Referral, and Placement 22% 37% 100% 53%
Job Club 2% 10% 98% 37%
Resume Development 5% 16% 98% 40%
Counseling 5% 27% 100% 44%
Individual Job Placement 5% 8% 40% 18%
Group Job Placement 11% 2% 2% 5%
Supported Job Placement 10% 2% 23% 12%
Job Coaching 7% 14% 100% 40%
Job Search Assistance 8% 13% 100% 40%
Job Referral 7% 14% 96% 39%
On-Site Employment 13% 3% 16% 11%
Transitional Job 5% 1% 10% 5%
Permanent Job 8% 2% 6% 5%
On-Site Training 13% 4% 14% 10%
Classroom Training 0% 2% 4% 2%
OJT 13% 2% 10% 8%
Off-Site Employment 35% 49% 69% 51%
In Supportive Housing 14% 8% 25% 16%
Other Business 21% 41% 44% 35%
Off-Site Training 2% 7% 30% 13%
Classroom Training 2% 4% 15% 7%
OJT 0% 3% 15% 6%
Job and Training Retention 63% 60% 100% 74%
Job Follow-Up 5% 8% 94% 36%
Support Groups 11% 10% 98% 40%
Counseling 63% 60% 100% 74%
SOURCE: MIS data collected by the Vanderbilt Institute of Public Policy Studies at the three sites.
18

sites. Fully 100 percent of Jericho residents received pre-vocational services, job development,
referral, and/or placement services, and job and training retention services. More than two-thirds held
off-site employment positions and nearly one-third received off-site training, with additional residents
getting on-site employment and training.
The participation rates were considerably lower at the other two sites. It is especially
noteworthy that Lakefront’s participation rates in on-site employment and on-site training, by far the
most expensive components of Next Step: Jobs, were only 3 and 4 percent respectively. The lower
participation rates at Thresholds and Lakefront are probably attributable, at least in part, to the
populations they serve. At intake into the MIS sample, 77 percent of Thresholds residents were
reported to have a severe mental illness, which is undboubtely a serious obstacle to program
participation. A third of Lakefront residents had a severe mental illness. However, noe of Jericho’s
residents were reported to have such a condition.
3.3 Total Costs per Sample Member
Table 5 presents the total costs of employment services per sample member at each of the
three sites. These costs include direct costs, which are the costs borne directly by the sites; and
indirect costs, which are the estimated expenses incurred by other agencies for off-site services. The
costs are highest at Thresholds, in large part because of its expensive on-site employment in the TRI
businesses. Close to half of the site’s total cost is attributable to on-site employment, and most of
this expense is for TRI. As noted before, the TRI cost is totally offset by business revenue. If this
were netted out, the Thresholds cost would be considerably lower. 3
The second highest costs were incurred at Jericho. In this case, the high cost primarily reflects
a high rate of participation in employment activities. Unlike the other sites, all residents are expected
to participate in activities of some kind—an expectation that may be more realistic for the population
served by Jericho (people with substance abuse histories) than the one served by Thresholds
(individual with serious mental health problems). It is also important that there is
3 In effect, these revenues will be netted out when the full cost-effectiveness analysis is conducted.
19

substantial contact between Jericho staff and residents, which takes many forms under the banner of
“job and training retention services,” during the time tenants participate in the activities.
The lowest costs were at Lakefront. This appears to mainly reflect lower participation rates
and lower unit expenditures on several categories of activities, which results from the fact that
Lakefront staff worked with a very large number of residents. Lakefront’s low costs undoubtedly
are due to other factors as well. It is also worth noting that participation rates at Lakefront may rise
over time, which would increase its overall costs per resident.
20

Table 5
Direct, Indirect, and Total Costs per Sample Member
By Site and Program Function
Program Function Thresholds Lakefront Jericho Average
Recruitment and Intake
Direct 211 83 112 135
Indirect 1 0 3 1
Total 212 83 115 136
Pre-Vocational Activities
Direct 67 21 599 229
Indirect 18 54 186 86
Total 85 75 785 315
Job Development, Referral, and Placement
Direct 627 221 584 477
Indirect 3 11 16 10
Total 630 232 600 487
On-Site Employment
Direct 1690 64 436 730
Indirect 0 0 0 0
Total 1690 64 436 730
On-Site Training
Direct 545 74 5 208
Indirect 0 0 0 0
Total 545 74 5 208
Off-Site Employment
Direct 200 10 75 95
Indirect 0 0 0 0
Total 200 10 75 95
Off-Site Training
Direct 200 14 72 95
Indirect 3 9 39 17
Total 203 23 111 112
Job and Training Retention
Direct 249 34 333 122
Indirect 0 0 0 0
Total 249 34 333 122
Administration
Direct 122 211 690 341
Indirect 0 0 0 0
Total 122 211 690 341
TOTAL
Direct 3933 732 2906 2524
Indirect 25 74 244 114
Total 3958 806 3150 2638
21

Appendix A
The costs of the Next Step: Jobs initiative will be measured, on a per particpant basis, across
the nine sites covered in the cost-effectiveness analysis. In each site, the costs per particpant of the
seven functional components of employment services, which were discussed in the text and are listed
in Table A.1, will be calculated. The sum of these seven component costs, as shown in Table A.1,
are each the product of two figures: a unit cost estimate and a participation rate.
Unit Costs. This is the average cost of serving one person in a given component. For each
component, the numerator of the unit cost estimate will incorporate a share of the site’s total
expenditures for staff, rent, utilities, equipment, supplies, fringe benefits, and administration during
a one-year accounting period. As discussed below, total expenditures will be determined based on
a resource inventory and a review of expenditure data to be completed at each site. The allocation
of these costs across components will be based primarily on a time study that will be conducted at
each of the ten sites.
In some sites Next Step: Jobs participants are enrolled in employment activities along with
non-participants, who may well be participants in a different program run either by the sponsoring
agency or by another agency. In these cases, a portion of the cost of these activities (equal to the
percentage of all enrollees in the activities who are Next Step: Jobs participants) will be allocated to
the initiative. Similarly, if a staff member spends only a portion of his or her time working on the
component, then only that share of that staff member’s salary (plus associated fringe benefits,
overhead, etc.) will be allocated to Next Step: Jobs.
The denominator of the unit cost estimate for a given component will be the number of Next
Step: Jobs participants who ever participated in that component during the same one-year accounting
period. This will be based on data from the Next Step: Jobs MIS maintained by VIPPS, as well as
other program data obtained from individual sites.
Participation Rates. The unit cost estimate will be multiplied by a corresponding participation
rate to determine the cost per participant for each component at each site. The
22

Table A.1
Cost Estimation Components
UNIT COST X PARTICIPATION = COST OF THE
RATE
COMPONENT
Recruitment and Cost of recruitment, Percentage of participants Cost of recruitment,
intake, and assessment who received recruitment, intake, orientation, and
Intake
per person recruited intake, and assessment assessment per
services (assumed to be participant
100 percent of
participants)
Pre-Vocational Cost of providing pre- Percentage of participants Cost of pre-vocational
Activities vocational activities to who participate in at least activities per
one person who one activity participant
participates in at least
one activity
Job Development Cost of providing job Percentage of participants Cost of job
and Placement development and who receive at least some development and
placement services to services placement services per
one person who receives
participant
at least some services
On-Site Cost of maintaining on- Percentage of participants Cost of on-site
Employment site employment for one who are ever employed on employment per
person site participant
On-Site Training Cost of in-house voca- Percentage of participants Cost of on-site
tional training activities who participate in at least training services per
per person participating one in-house training participant
in a least one activity activity
Off-Site Cost to employers and Percentage of participants Cost of employment
Employment and other agencies of off-site who receive employment and training services
Training employment and training or training from to employers and other
employers or outside agencies per
agencies
participant
Job Retention Cost of providing job Percentage of participants Cost of job retention
retention services to one who receive job retention services per
person receiving at least services participant
some services
23

numerator of the participation rate is the number of supportive housing residents in the sample who
spend any time in the activity or activities in the component; the denominator will be all residents in
the sample. For example, the participation rate for the in-house employment and training component
will be the percentage of residents in the sample who ever participate in an in-house employment or
training activity at a given site.
The data source for the participation rates will be the initiative’s MIS. Unlike the unit cost
estimate, the participation rates will cover all participation by individuals in the MIS sample—not just
participation among those active during the one-year period covered by the unit cost estimate. For
example, if half of participants in a given site’s MIS sample participate in its in-house employment
and training component at some point during the entire period covered by the MIS, the estimate will
be .50. Then, if the unit cost of training were found to be $1,000, the estimated cost of in-house
employment and training per participant would be $1,000 multiplied by .50, equaling $500.
Collecting Data to Make the Cost Estimates. Data for the cost analysis will be gathered
in three steps. First, the resources used to deliver the employment services—and the financial
accounts to which these costs are assigned—will be identified. This will be done based on a resource
inventory that will be carried out at each of the nine sites. The resource inventory is an on-site review
of program operations that will identify the personnel and nonpersonnel resource use, either in the
sponsoring agency or in other agencies, associated with delivering employment services to Next Step:
Jobs participants. For example, in reviewing the use of on-site staff resources to deliver employment
services, we will determine (1) which staff are fully dedicated to providing these services, and (2)
which staff spend some of their time doing this, and how their specific work activities are affected by
their role in the Next Step: Jobs initiative.
Second, expenditure data for these accounts will be collected for a one-year period between
July 1996 and September 1997. The actual calendar months of this accounting period will vary
according to (1) each site’s annual fiscal reporting period, and (2) the point at which each site began
keeping MIS data. For example, for a site with a July 1 through June 30 fiscal year, that began MIS
reporting in July 1996, the accounting period would be July 1, 1996 through June 30, 1997.
However, if MIS reporting began later, the accounting period would probably be October 1, 1996
24

through September 30, 1997.
Accounting data will be needed not only for the sponsor agencies, but also for other
organizations involved in delivering a significant amount of employment services to sample members
under financial or nonfinancial agreements or simply through referral. These data will be obtained
from relevant agencies for the same accounting period. Obtaining cost data from other agencies may
often be difficult, because they may not have or be willing to share pertinent records. Also, some
agencies may supply limited services to Next Step: Jobs participants, so collecting extensive cost data
may be inappropriate. In these cases, less precise estimates will be made. For example, the cost of
skills training in outside agencies may be estimated by multiplying the number of participants in
outside agency training times the average cost per trainee estimated based on published training cost
data.
The resulting expenditure data almost certainly will not be consistent across sites or across
agencies within sites. It will consequently be necessary, at least in some cases, to make adjustments
in these data in order to meet basic comparability standards for the analysis. We will use standard
guidelines in assessing accounting data for comparability and reasonable procedures for making
needed adjustments. It should be emphasized that these expenditure data will not be audited. The
objective is solely to assemble comparable cost data across sites that will permit meaningful analysis.
Third, the total expenditures identified at each site during the one-year accounting period will
be allocated among program components listed in Table A.1. This allocation will be based mainly
on the time studies that will be conducted at each site. For this purpose a timesheet will completed
by site staff over a two-week period. An example of the timesheet is provided as Figure A.1. (The
form used by individual sites will be identical except for the dates of the two-week period.) The form
requires staff to allocate their time across the seven service components, as well administrative and
other activities that do not fit well into one of the components, projects that are separate from Next
Step: Jobs, and vacation and sick leave.
The timesheet will be supplemented by a brief questionnaire (the five questions shown in
Figure 1)—to be completed by staff—and by discussions with selected staff. One of the issues of
interest is whether the two-week period during which staff track their time is representative of the
25

full one-year accounting period. We want to be sure that the allocation of staff time across program
components, and between Next Step and non-Next Step functions, reflects staff members’ normal
workload over the course of the full year. This allocation of staff time will be critical for calculating
the cost of each component because it is likely that many site staff play several roles, and the
aggregate costs of the initiative will be distributed among the various components based on the
allocation that is determined.
Another issue is identifying activities that are research related, so that adjustments will be
made to exclude research-related costs. A fraction of site expenditures are associated with research
requirements, such as completing research forms (including the timesheet) and discussing program
issues with researchers from VIPPS, the Nathan Kline Institute, and Abt Associates.
26

Figure A.1
Next Step: Jobs
Activities Timesheet
Activities Monday Tuesday Wednesday Thursday Friday Saturday/ Monday Tuesday Wednesday Thursday Friday Saturday/
Sunday
Sunday
10/27 10/28 10/29 10/30 10/31 11/03 11/04 11/05 11/06 11/07
Recruitment and Intake
Pre-Vocational Activities
Job Development,
Referral, and Placement
On-Site Employment
On-Site Training
Off-Site Employment
and Training
Job Retention Activities
Administrative/Other
Employment Activities
Non-Employment
Activities
Vacation and Sick Leave
Total
Please include all work hours, including overtime and time in the evenings or on weekends, and round to the nearest quarter hour (for example, if someone worked for an hour and twenty-five minutes, he or she would enter 1.5 hours to represent
an hour and a half). Total hours worked on a given day should be allocated among the activities listed. In doing this, you may find it useful to keep a running tally during the day and to sum the time spent on various activities at the end of each
day; a description of each activity is on the next page.
The attached questionnaire is designed to supplement the timesheet. If necessary, use additional pages to respond to the questions. However, this is not intended to be a time-consuming activity for you, so brief answers are fine.

Figure 1 - Continued
Next Step: Jobs
Timesheet Directions
This timesheet will furnish information on how staff allocate their time across several key activities, which is critical to assessing the costs of employment services to supportive
housing tenants. It should be completed during the first two full weeks after you receive it. The timesheet asks you to allocate your work hours between the following activities:
1. Recruitment and Intake. This category includes all activities related to contacting and talking to tenants prior to their participation in an initial intake session, as well
as all intake, orientation, and assessment activities.
2. Pre-Vocational Activities. This refers to activities for participants—such as pre-vocational classes, job clubs, ESOL, and pre-employment support groups—that occur
between individuals’ intake and the time they begin an active job search, training, or employment.
3. Job Development, Referral, and Placement. This category includes all activities related to job search, ob development, and job referral and placement. It also includes
assistance with job search and interviews, job coaching, day job referral, group placement, internal placement, job creation, and other activities before a participant
gets a job or begins training.
4. On-Site Employment. This refers to all in-house employment, including internships and sheltered workshops, as well as to all activities, (such as paying stipends that
are directly related to them.
5. On-Site Training. This refers to all in-house training, including both occupational skills training and on-the-job training.
6. Off-Site Employment and Training. All involvement with outside employment and training, including temporary and part-time jobs and all types of employment and
training programs, is included in this category. However, referrals and placement efforts belong to category 3 and support activities related to employment and training
belong to category 7.
7. Job Support and Retention Activities. This refers to all support for participants in employment, as well as to help them perform well in on-site and off-site jobs. It
also includes arranging support services, such as transportation to suburban jobs, specifically needed by participants who are employed.
8. Administrative/Other Employment Activities. This refers to management and supervisory functions, record keeping, and other activities involved in providing
employment services that do not fall into one of the other categories.
9. Non-Employment Activities. This includes all activities that are unrelated to employment services—that is, other projects and programs you work on.
10. Vacation/Sick Leave.

Figure 1 - Continued
Next Step: Jobs
Time Study Questions
Name:
Title:
Organization:
__________________________________
__________________________________
__________________________________
1. What are the major tasks you have undertaken as part of Administrative/Other Employment Activities
2. Is the way you spent your time during the period covered by the timesheet different from the way you have typically spent your time in recent
months Were any of the tasks you performed unusual
3. Are there entries on your timesheet you wish to explain Are there activities you had difficulty allocating across the functions listed
4. Are there problems or types of client contact that were particularly time consuming during this time period
5. Which activities during this time period were related to the research on Next Step: Jobs