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

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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.

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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.

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• 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

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• 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?

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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

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• 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.

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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

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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

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• 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

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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

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80

4,500

1,300

800

425

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Pennsylvania Industry Partnership Program (2005-2011)

75+

6,300+

100,000+

11%

workforce partnerships

employers involved

workers trained

higher wages starting out

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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

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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

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• 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

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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

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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

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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.

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• 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

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• 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.

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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

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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

Maureen Conway, DirectorAspen Institute, Washington, D.C.www.aspeninstitute.orgRobert Giloth, Vice PresidentAnnie E. Casey Foundation, Baltimore, MD

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