The largest pool of unskilled entry-level labor in the United States consists of the 35 million people who are chronically unemployed or considered working poor because they earn less than 200% of the federal poverty-level income. In light of the significant financial and operational costs of high employee turnover, that’s a risky pool for businesses to tap and manage, but they often have to do so to meet their labor needs, especially in industries such as retail, health care, manufacturing, and leisure. Legal and political pressure to replace the 7.5 million illegal immigrant workers in the United States with domestic employees makes it all the more important that companies get a handle on this part of the workforce.

A version of this article appeared in the December 2006 issue of Harvard Business Review.