Sector-based Workforce Intermediaries in the United States

Sector-based Workforce Intermediaries in the United States

Flexwork Research ConferenceOctober 24-25, 2013Amsterdam

Robert GilothTHE ANNIE E. CASEY FOUNDATIONTHE ASPEN INSTITUTEMaureen Conway2This presentation focuses on these Workforce Intermediaries.

U.S. Labor Market Intermediary LandscapeA new class of sector-based intermediaries has emerged that goes beyond job matching and outsourcing functions to focus on career advancement for low-skilled workers in the context of employer demand, skill gaps and improving job quality3Overall U.S. Labor Market TrendsPercent of all Low Wage Adults Found in IndustryLow Wage Adult Rate within IndustryManufacturing8.2%13.4%Retail19.7%38.9%Professional Services9.4%17.5%Educational Services6.8%12.2%Health Care Services (except Hospitals)7.9%21.8%Food and Drinking Places13.8%66.3%Source: Osterman, Paul (Forthcoming in 2014). The Labor Market Context for Employment and Training Policy. In M. Conway and R. Giloth, Workforce Intermediaries and Sector Strategies in an Uncertain Economy: A Decade of Research and Practice. 4Job Opportunities Even Without a Four-Year Degree(Jobs in millions)Source: Anthony Carnevale analysis in Career and Technical Education: Five Ways that Pay Along the Way to the B.A.All JobsThere are 29 million jobs that pay good wages and do not require a four-year degree.Back to the question of whether or not the labor market has opportunities for less prepared workers . . .

There are 29 million jobs that pay pretty good wages; these jobs do not require a college degreeAnd they represent 21% of all jobs in the labor market

Many of these jobs are attainable with as little as 3 months of post-secondary training.

Key Point: These jobs account for almost one fifth of all jobs and are projected to be the growth areas for employment

45Supply and demand in dynamic and flexible economiesOrganizing similar groups of employers and workersGenerating and sharing market informationNavigating fragmented institutional and financing landscapeMultiple definitions of workforce problems, solutions and measures of successProblems with Labor Market Integration6*Clark, Peggy and Steven Dawson. 1995. Sector Strategies for Low-Income Workers: Lessons from the Field. Washington, DC: The Aspen Institute, November.

What is Sector-based Workforce Development?*Creates, Over Time, Systemic Change with that Occupations Labor MarketPeggy Clark and Steven Dawson. 1995. Sector Strategies for Low-Income Workers: Lessons from the Field. Washington, DC: The Aspen Institute, November.67Workforce Intermediaries are . . . the organizational dimension of sector, industry approachesWorkforce Intermediaries are . . . entrepreneurial partnerships of employers, training institutions, unions, community organizations built upon many platformsWorkforce Intermediaries serve . . . groups of employers and workers for the purposes of filling skill gaps and promoting career advancementWhat are Workforce Intermediaries?Question: How did U.S. go about growing Workforce Intermediaries and can it be sustained?

8Traditional Workforce Development vs. Workforce IntermediariesTraditionalFocuses on increasing worker skills and job placementTransactionalWorks within existing funding systems and business practicesSharp boundaries around fixed organizational roles and practicesShort-term focusWorkforce IntermediariesFocuses on solving problems faced by workers and businessesRelationalWorks to change funding systems and business practices to enable full array of solutionsFlexible partnerships to solve problems and enhance valueLong-term orientation9Entrepreneurial dual customer partnershipsInterpreters, bridges and buffers between employers and employeesBrokers, integrators, and learners for information, credentials, career pathways and financingSolve problems and make markets, not just reactorsAdaptive learners/flexible investors

Characteristics of Workforce Intermediaries** Giloth, Robert P (2004). Workforce Intermediaries for the Twenty-first Century. Philadelphia, Pennsylvania: Temple University Press.10Wisconsin Regional Training Partnership: Milwaukee (WRTP/BIG Step)Sector Workforce IntermediariesLaunched in 1992Participants Served: 3,000+Sponsored by 28 public, private and philanthropic investors.

ProgramsPre-employment training certificate programsAcademic tutoring for apprenticeship programs

ResultsAverage starting wage per hour for participants in 2012 = $17.80Racial minorities accounted for 63% of placements, women accounted for 7% of placementsRandomize trail: $6,255 over 24 months11Sector Workforce IntermediariesProject QUEST: San AntonioLaunched 1992Participants Served: 5,000+Sponsored by 29 public, private and philanthropic investors

ProgramsAcademic preparation trainingCollege-based occupational training Case management services

ResultsAverage starting wage per hour for participants in 2012 = $19.6511% of participants are African American; 73% are Hispanic; 80% are WomenRandomized trial study underway

12Workforce Intermediaries evolved more as exceptions or workarounds than from concerted policy or from labor/managementA challenging dimension of workforce intermediaries are the costs of organizing, filling gaps, and career advancementOrganizing employers and partners is not a part of most U.S. public workforce policiesScaling strategies must address these costsScaling Challenges for Workforce Intermediaries

13employers engaged in 10 workforce intermediaries/ partnershipstotal funding partnersparticipants

Bostons SkillWorks: 10 Year Snapshot (2003-2013)

participants gained wagesparticipants attained credentialsparticipants earned promotions

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80 4,500

1,300 800 425 14Pennsylvania Industry Partnership Program (2005-2011)75+6,300+100,000+ 11%workforce partnershipsemployers involvedworkers trainedhigher wages starting out15The National Fund for Workforce Solutions is a Philanthropic Workforce Development Initiative Focused on Expanding the Number of High-Quality Workforce Partnerships

National Fund for Workforce Solutions

16The National Fund Model and GoalsHOW DOES THE NATIONAL FUND WORK?

NATIONAL FUNDERS came together 5 years ago TO SET UP A MODEL BASED ON A FEW PILOT SITES AND STUDIES.

For those who are new to the national fund the high evel view of how the model works:--national fudners fund a national office that is part of JFFPUBLIC/PRIVATE UNDERS COLALBORATIVES AT EACH REGION ENSURE LOCAL SOLUTIONSCOLALBORATIVES SET UP INDUSTRY WORKFORCE PARTNERSHIPS THAT ENGAGE WITH EMPLOYERS TO ADDRESS THEIR NEEDS

FOR MORE DETAILS ATTEND THE BREAKOUT SESSIONS ON THE NATIONAL MODEL.

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17100 Workforce Intermediaries/ Partnerships: Now in 32 sites with 383 funders /nonprofits and 4,064 employers participatingSignificant co-investment: Leveraged $41 million from national funders with $192 million in matching funds from local fundersBuilding evidence: Early data on efficacy of the model indicates people are getting hired, earning credentials and advancing

National Fund for Workforce Solutions42,299 unemployed/underemployed received skill training28,614 degrees, certificates and credentials awardedTwo-thirds of 11,694 job seekers placed in jobsOf those placed in jobs, one out of four earned more than $15/hour

The Fund is Paying Off for Participants18The Sector Employment Impact StudySource: Maguire, Sheila, Joshua Freely, Carol Clymer, and Maureen Conway (2009). Job Training That Works; Findings from the Sectoral Employment Impact Study. Philadelphia, PA: P/PV. Began in 2003: Three skills training programs were selected to participate:JVS BostonPer Scholas New YorkWRTP MilwaukeeRandom assignment occurred after intake and baseline information collectedBoth treatments and controls were interviewed at baseline and after 24 month follow-up period1285 were enrolled in the study19Sector Employment Impact StudyEarnings Controlling for EmploymentEntire SampleTreatmentsControlsDifference Due to TreatmentEarnings from month 1 to month 24 due to employment$32,850$29,620$3,583***Earnings from month 13 to month 24 due to employment$21,012$17,399$3,417***Per Scholas, New YorkEnding earnings from month 1 to month 24 due to employment$36,139$35,595$2,373Ending earnings from month 13 to month 24 due to employment$23,956$21,278$3,624**Source: Maguire, Sheila, Joshua Freely, Carol Clymer, and Maureen Conway (2009). Job Training That Works; Findings from the Sectoral Employment Impact Study. Philadelphia, PA: P/PV. How Does Sectoral Employment Development

Improve, Retain and Expand A Qualified Workforce?Improve The Quality Of The Companys Product Or Service?...Affect Productivity? Over What Time Period?Improve The Soft Skills Of The Work-force?What Are Direct Costs To Employers Participating In The Programs? Turnover, retention, yield, diversityEmployee satisfaction; Scrap, rework and on-time delivery rateAbsenteeism; efficiencyTardiness, discipline, grievances, initiative, flexibility, problem-solving, teamwork, communication, confidence, loyaltyAttempt to capture all reasonable training costsEmployer WorkbookEmployer Surveys20Several of the indicators to measure the question improve the quality of the product or service were the same for healthcare, such as retention and diversity. We also considered employee satisfaction. For manufacturing, quality indicators were scrap, rework and on-time delivery rates.21Sector Workforce: Lessons from Implementation StudiesLeadership and CommitmentTarget PopulationsPartners and ResourcesServicesIdentify a strong leader or champion for the approachCreate good governance structures among partnersincluding shared leadership and joint decision makingPartner with colleges with experience in developing innovative practices Seek community support from strong local foundationsFollow through on commitment to serving low-skilled adult populations, including English-language learners, TANF recipients , the unemployed, youth and recent immigrantsBuild on local strengthsEngage community colleges as linchpin partnersTarget labor markets with high-wages and career advancement opportunitiesEngage employers earlyHire industry instructorsLeverage non-governmental supportEngage non-traditional partnersProvide comprehensive support services to students (e.g. financial aid, child care, mental health services, coaching)Coordinate and integrate institutional structuresUtilize career coaches and peer support approachesCreate shorter, streamlined programs of studySource: King, Christopher (Forthcoming in 2014). Sectoral Workfroce and Related Strategies: What We Knowand What We Need to Know. In M. Conway and R. Giloth, Workforce Intermediaries and Sector Strategies in an Uncertain Economy: A Decade of Research and Practice. 22Various pieces of federal workforce legislation and funding have promoted the sector approach and provided some money for intermediariesFive to seven states have passed modest to ambitious policies to support workforce and industry partnershipsAt the same time, federal workforce resources are declining and several states have dismantled sector programs and policiesWorkforce Intermediary Policies23The National Fund started with the assumption that showing compelling evidence and the ability to replicate would unlock business and public sector funding.Neither has proven the case, especially in light of recent recession.Financing Challenges for Workforce Intermediaries

Now there is more attention to community and technical education without an employment focus.The question is whether philanthropy and its partners can stay the course in supporting sector-based workforce intermediaries.24Challenges and Opportunities Ahead for Workforce IntermediariesSustainable funding model; fidelity of partnerships; effective policy agendaTapping the interests of a larger group of businesses, unions, and educational institutionsConvening a field-wide conversation about the future of sector strategies and workforce intermediaries 25Support ongoing engagement of philanthropy in building the sector-partnership fieldAssess the relevance of workforce intermediaries for growing low-wage sectors like retail, hospitality, and healthSpread a different form of sector intermediary that addresses job quality and policy advocacy as well as skills trainingContinue to build the evidence base for workforce intermediaries and the sector approachChallenges Ahead for Workforce Intermediaries

Maureen Conway, DirectorAspen Institute, Washington, D.C.www.aspeninstitute.org

Robert Giloth, Vice PresidentAnnie E. Casey Foundation, Baltimore, MDwww.aecf.org

Forthcoming Publication: Sector Strategies and Workforce Intermediaries in an Uncertain Economy. New York: American Assembly, 2014