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RBJ 75: Importance of non-profit employers grows

Non-profits continue to cement their status as the area’s leading employers, a trend experts say is likely to diversify and bolster the economy.

From educational institutions to health care providers, 28 non-profit organizations earned a place on the 2014 RBJ 75 list, which is ranked by total local employment. Together, they employ 69,917 people.

“Universities, colleges are the idea factories, and in terms of drawing top talent, they do exceptionally well as magnets,” said Mark Zupan, professor of economics and public policy and director of the Bradley Policy Research Center at the University of Rochester’s Simon Business School.

The growth of jobs in the non-profit sector has coincided with the downsizing of the Rochester region’s biggest manufacturing companies, transforming the employment landscape.

“The not-for-profit sector does a really great job of meeting the needs of our elders, especially in my area. We know the population is growing, we know the needs are tremendous,” said Daniel Katz, president and CEO of Jewish Senior Life. “More and more, the not-for-profit sector is doing that.”

Fernan Cepero, chief human resources officer at the YMCA of Greater Rochester, views non-profits as a bridge to corporate social responsibility.

“I think that’s why non-profits are playing such a prominent role in our community,” he said. “They are the ones that are connecting not only dollars from for-profit organizations but also the talent and helping the community on particular issues that come up.”

As a group, the 75 companies and organizations on the RBJ list employ 132,324 people. Of these, the 27 public companies have 34,158 employees and the 20 private companies employ 31,571 people.

Non-profit growth
The University of Rochester tops the 2014 RBJ 75 list by a wide margin. It reported 25,773 employees in the six-county region, up 399 or 1.6 percent from a year ago. In total, six colleges and universities made the list, each adding jobs with the exception of Roberts Wesleyan College, where employment has held steady.

Other leading non-profit organizations include those that provide health care services. The newly formed Rochester Regional Health System employs 13,986 people, up 380 or 2.8 percent. Non-profits like ESL Federal Credit Union, the Hillside Family of Agencies, St. Ann’s of Greater Rochester Inc. and Mary Cariola Children’s Center also added jobs.

Employment at Jewish Senior Life, which is in the midst of a significant campus transformation, rose 15 percent over the last year. The organization attributes its growth to diversification of services.

“Many years ago it was just our campus-based facilities,” Katz said. “We now have a vast array of other types of services—home- and community-based services and services that are campus-based—aimed at helping people get better and go home and stay home and also provide services directly into their homes. That’s really the reason why we’ve increased our employment.”

JSL’s transitional care unit within the Jewish Home also has grown. When Katz came to the organization, he said, it had 20 beds. The unit now has 68 beds and is expected to increase to 110 as part of the restructuring on JSL’s campus.

“That has to do with health care reform and the need to get elders out of the hospital sooner into a transitional care setting,” Katz said. “I think we’ll continue to see growth in volume.”

The organization now serves a mix of Jewish and non-Jewish clients.

The YMCA of Greater Rochester, with 2,841 employees, ranks ninth on this year’s list.

“We’re a primary employer for individuals, particularly baby boomers in their encore careers, so we’re playing a significant role in that piece,” Cepero said.

Some milestones for the organization over the last year include its partnerships with other agencies and resource centers for seniors in the area.

“It’s reflective of how we’re remaining relevant with shifting times in the community and really reaching a broad spectrum of community members with our programming endeavors,” Cepero said.

Public companies
Among the 27 publicly traded companies on the 2014 RBJ 75, IEC Electronics Corp. posted the largest job increase at nearly 23 percent, to 712 staffers. Employment at Iberdrola USA Inc.’s local operations grew 9 percent to 1,130 staffers.

“We have a number of people that have moved into the Rochester area because we view Rochester as a very vibrant location, one that we like to bring people to and have some of our corporate functions housed here,” said Mary Smith, vice president of general services at Iberdrola USA.

She said the company contributes to the area’s economy with more than just employment. It is Rochester’s largest city taxpayer, making annual payments of more than $26 million. And from 2003 to 2013, the company spent $1.5 billion on infrastructure improvements in the area.

The largest job loss occurred at two of Rochester’s traditional Big Three. Valeant’s Bausch & Lomb Inc. shed nearly half of its local jobs, declining to 900 employees. Eastman Kodak Co., which emerged from bankruptcy last September, cut 1,242 positions or more than 35 percent of its workforce, reducing its total to 2,300.

Kodak spinoffs, however, have managed to make the list on their own. Of the four on the list, Carestream, the former Kodak health group, ranks highest with 1,250 employees.

“When customers think of the world’s first wireless digital X-ray detector, the first digital dental X-ray detector or a unique new platform for mobile digital X-ray imaging, it is important to note that all began here in Rochester,” said Norman Yung, chief marketing officer of digital medical solutions at Carestream. “With established research, manufacturing, sales and marketing functions and a talented employee base in Rochester, we are poised to build on our past success and continue to innovate and grow.”

Summing up Carestream’s economic impact, like Iberdola officials, Yung also point-ed to the goods and services the company purchases from suppliers in this region.

“We purchase more than $500 million in goods and services, and there are 50 suppliers based in New York State that account for almost $200 million in purchases,” he said. “In addition to imaging or specialized suppliers in the Rochester region, Care-stream also purchases supplies and services locally for non-manufacturing areas.”

Another upbeat note: 20 of the 27 publicly traded firms among the RBJ 75 delivered positive returns to shareholders last year.

Constellation Brands Inc. stock brought a 99 percent one-year return. Shareholders of Bausch & Lomb parent Valeant Pharmaceuticals International realized a one-year gain of 96 percent. Xerox Corp., Exelis Inc. and Carestream owner Onex Corp. were among the firms that also posted double-digit one-year returns.

Private firms
Many of the 20 private companies on the 2014 RBJ 75 also were in hiring mode over the last year. Mark IV Enterprises grew by more than 20 percent to 601 employees. Gleason Corp., Vision Automotive and DeCarolis Truck Rental Inc. were among others that added staffers.

Kodak Alaris Inc., which has 700 employees here, expects to be a key regional employer, said Dennis Olbrich, who recently became president of its paper and output systems and film capture businesses. The company is dividing its Personalized Imaging division into two units to accelerate execution and innovation in key markets. Olbrich formerly headed the Personalized Imaging business for Kodak Alaris.

Eye to the future
Zupan, who notes that “the Fortune 500 tend to be net job losers,” thinks the key to more robust employment growth is a better climate to nurture entrepreneurial ventures.

“(The economy is) OK, but it could be stronger and the biggest hindrance is self-imposed,” he said. “We are blessed with many assets, including a highly educated (and) talented workforce, but in terms of the capacity to start, grow businesses relative to other areas in the country or in the world, there are some challenges. I think we’ve made some positive strides in recent years, but those challenges still remain.”

Iberdrola and Carestream hope to do their part. Both employers see Rochester as an energetic community that will play an important role as they grow.

“You can count us among many organizations and business leaders that believe Rochester is a great place to develop and grow a business,” Yung said. “This area also has a lot to offer from a quality-of-life perspective, which can be very helpful in attracting talented professionals to the area.”

Yung said Carestream’s goal is to serve markets that value innovation—markets where customers are underserved, challenges are complex and innovative technology and product designs yield superior results.

Given that 70 percent of Iberdrola’s staff will be eligible to retire within 10 years, Smith expects her company to keep hiring.

“We’ve begun looking at areas where we can hire more, and we’re doing that,” she said. “Some of the jobs that we’re bringing to the Rochester area are really good professional jobs, including engineering.”

Smith also pointed to Rochester’s quality of life and its arts community as significant factors in attracting talent and Iberdrola operations here.

It will take a mix of private and public companies and non-profits to help the economy, however.

“We definitely need innovation and innovative thinkers to think of our area in a new and different light, to bring in new businesses and new ideas and new economic growth,” Cepero said. “Non-profits are going to play a significant role in that. I see them as the agents … being able to address and also be equipped to deal with some of the social challenges that the area might be facing.”

With non-profits as the stewards of social change and with continued economic growth, he added, “Rochester is going to be poised for some significant growth and better times ahead.”

7/25/14 RBJ 75 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email [email protected]

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