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Sector-based Workforce Intermediaries in the United States
• Flexwork Research Conference
• October 24-25, 2013
AmsterdamRobert Giloth
THE ANNIE E. CASEY
FOUNDATION
THE ASPEN INSTITUTE
Maureen Conway
2
This presentation
focuses on these
Workforce Intermediaries.
U.S. Labor Market Intermediary Landscape
Labor market intermediaries include
staffing and temp agencies, professional
associations, educational institutions, unions and electronic
job networks
Labor market intermediaries play
important bridging and facilitating roles in U.S.
labor markets
A 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 quality
3
Overall U.S. Labor Market Trends
Percent of all Low Wage Adults Found in Industry
Low Wage Adult Rate within Industry
Manufacturing 8.2% 13.4%
Retail 19.7% 38.9%
Professional Services 9.4% 17.5%
Educational Services 6.8% 12.2%
Health Care Services (except Hospitals) 7.9% 21.8%
Food and Drinking Places 13.8% 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.
4
Job Opportunities Even Without a Four-Year Degree
Sales & Office Support; 6.5
Man-age-rial & Pro-fes-
sional, 7.2
Blue Collar; 9.1
Food &
Per-sonal Ser-vice; 1.5
Healthcare Pro-fes-
sional; 2.7
Arts; 0.2
STEM; 1.8
(Jobs in millions)
Source: Anthony Carnevale analysis in Career and Technical Education: Five Ways that Pay Along the Way to the B.A.
21%
79%
Middle Jobs Other Jobs
All JobsThere are 29 million jobs that pay good wages
and do not require a four-year degree.
5
• Supply and demand in dynamic and flexible economies
• Organizing similar groups of employers and workers
• Generating and sharing market information
• Navigating fragmented institutional and financing landscape
• Multiple definitions of workforce problems, solutions and
measures of success
Problems with Labor Market Integration
6*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?*
Exists for the Primary Purpose of Assisting Low-income People to Obtain Decent Employment
Intervenes By Becoming a Valued Actor in the Industry That Employs That Occupation
Targets a Particular Occupation Within an Industry
Creates, Over Time, Systemic Change with that Occupation’s Labor Market
7
• Workforce Intermediaries are . . .
the organizational dimension of sector, industry approaches
• Workforce Intermediaries are . . .
entrepreneurial partnerships of employers, training institutions,
unions, community organizations – built upon many platforms
• Workforce Intermediaries serve . . .
groups of employers and workers for the purposes of filling skill
gaps and promoting career advancement
What are Workforce Intermediaries?
Question: How did U.S. go about growing Workforce
Intermediaries and can it be sustained?
8
Traditional Workforce Development vs. Workforce Intermediaries
Traditional
Focuses on increasing worker skills and job placement
Transactional
Works within existing funding systems and business practices
Sharp boundaries around fixed organizational roles and
practices
Short-term focus
Workforce Intermediaries
Focuses on solving problems faced by workers and
businesses
Relational
Works to change funding systems and business practices to enable full array of solutions
Flexible partnerships to solve problems and enhance value
Long-term orientation
9
• Entrepreneurial “dual customer” partnerships
• Interpreters, bridges and buffers between employers and employees
• Brokers, integrators, and learners for information, credentials, career pathways and financing
• Solve problems and “make markets,” not just reactors
• Adaptive learners/flexible investors
Characteristics of Workforce Intermediaries*
* Giloth, Robert P (2004). Workforce Intermediaries for the Twenty-first Century. Philadelphia, Pennsylvania: Temple University Press.
10
Wisconsin Regional Training Partnership: Milwaukee (WRTP/BIG Step)
Sector Workforce Intermediaries
• Launched in 1992
• Participants Served: 3,000+
• Sponsored by 28 public, private and philanthropic investors.
Programs
o Pre-employment training certificate
programs
o Academic tutoring for apprenticeship
programs
Results
o Average starting wage per hour for
participants in 2012 = $17.80
o Racial minorities accounted for 63% of
placements, women accounted for 7% of
placements
o Randomize trail: $6,255 over 24 months
11
Sector Workforce Intermediaries
Project QUEST: San Antonio
• Launched 1992
• Participants Served: 5,000+
• Sponsored by 29 public, private and philanthropic investors
Programs
o Academic preparation training
o College-based occupational training
o Case management services
Results
o Average starting wage per hour for
participants in 2012 = $19.65
o 11% of participants are African American;
73% are Hispanic; 80% are Women
o Randomized trial study underway
12
• Workforce Intermediaries
evolved more as exceptions
or workarounds than from
concerted policy or from
labor/management
• A challenging dimension of
workforce intermediaries are
the costs of organizing, filling gaps, and career advancement
• Organizing employers and partners is not a part of most
U.S. public workforce policies
• Scaling strategies must address these costs
Scaling Challenges for Workforce Intermediaries
13
employers engaged in
10 workforce
intermediaries/ partnerships
total funding partners
participants
Boston’s SkillWorks: 10 Year Snapshot (2003-2013)
participants
gained wages
participants
attained credentials
participants
earned promotions
27
80
4,500
1,300
800
425
14
Pennsylvania Industry Partnership Program (2005-2011)
75+
6,300+
100,000+
11%
workforce partnerships
employers involved
workers trained
higher wages starting out
15
The 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
16
The National Fund Model and Goals
National Fund for Workforce Solutions/ Jobs for the Future
Systems Change: National, State and Industry
Regional Collaboratives
Systems Change: State
Policy and Money
Workforce Partnerships
Employers Served, Systems Change
17
• 100 Workforce Intermediaries/
Partnerships: Now in 32 sites with
383 funders /nonprofits and 4,064
employers participating
• Significant co-investment: Leveraged
$41 million from national funders with
$192 million in matching funds from
local funders
• Building evidence: Early data on efficacy
of the model indicates people are getting
hired, earning credentials and advancing
National Fund for Workforce Solutions
• 42,299 unemployed/underemployed
received skill training• 28,614 degrees, certificates and
credentials awarded• Two-thirds of 11,694 job seekers
placed in jobs• Of those placed in jobs, one out of
four earned more than $15/hour
The Fund is Paying Off for Participants
18
The Sector Employment Impact Study
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.
Began in 2003: Three skills training programs were selected to participate:
o JVS – Boston
o Per Scholas – New York
o WRTP – Milwaukee
Random
assignment
occurred after
intake and
baseline
information
collected
Both treatments
and controls were
interviewed at
baseline and
after 24 month
follow-up period
1285 were enrolled in the study
19
Sector Employment Impact StudyEarnings Controlling for Employment
Entire Sample Treatments ControlsDifference
Due to Treatment
Earnings 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 York
Ending earnings from month 1 to month 24 due to employment $36,139 $35,595 $2,373
Ending 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 Company’s 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, diversity
Employee satisfaction; Scrap, rework and on-time
delivery rate
Absenteeism; efficiency
Tardiness, discipline, grievances, initiative, flexibility, problem-solving, teamwork,
communication, confidence, loyalty
Attempt to capture all reasonable training costs
Employer Workbook
Employer Surveys
21
Sector Workforce: Lessons from Implementation Studies
Leadership and Commitment
Target PopulationsPartners and Resources
Services
• Identify a strong leader or “champion” for the approach
• Create good governance structures among partners—including shared leadership and joint decision making
• Partner with colleges with experience in developing innovative practices
• Seek community support from strong local foundations
• Follow through on commitment to serving low-skilled adult populations, including English-language learners, TANF recipients , the unemployed, youth and recent immigrants
• Build on local strengths
• Engage community colleges as “linchpin” partners
• Target labor markets with high-wages and career advancement opportunities
• Engage employers early
• Hire industry instructors
• Leverage non-governmental support
• Engage non-traditional partners
• Provide comprehensive support services to students (e.g. financial aid, child care, mental health services, coaching)
• Coordinate and integrate institutional structures
• Utilize career coaches and peer support approaches
• Create shorter, streamlined programs of study
Source: King, Christopher (Forthcoming in 2014). Sectoral Workfroce and Related Strategies: What We Know…and 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.
22
• Various pieces of federal workforce legislation and funding
have promoted the sector approach and provided some
money for intermediaries
• Five to seven states have passed modest to ambitious
policies to support workforce and industry partnerships
• At the same time, federal workforce resources are declining
and several states have dismantled sector programs and
policies
Workforce Intermediary Policies
23
• The 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.
24
Challenges and Opportunities Ahead for Workforce Intermediaries
Sustainable funding model;
fidelity of partnerships; effective policy
agenda
Tapping the interests of a larger group of
businesses, unions, and educational
institutions
Convening a field-wide
conversation about the future
of sector strategies and workforce intermediaries
25
1) Support ongoing engagement of philanthropy in building the sector-partnership field
2) Assess the relevance of workforce intermediaries for growing low-wage sectors like retail, hospitality, and health
3) Spread a different form of sector intermediary that addresses job quality and policy advocacy as well as skills training
4) Continue to build the evidence base for workforce intermediaries and the sector approach
Challenges Ahead for Workforce Intermediaries