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Wednesday, October 22, 2014

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Cascade: No. 79, Winter 2012

The National Fund for Workforce Solutions: The Impact and Challenges of Its Workforce Partnership Model*

The recent economic recession and equally anemic recovery have dramatically changed the job outlook for low-wage workers and disadvantaged youth in America. In addition, the Great Recession has accelerated the long-term trend toward requiring workers to have a higher skill set to obtain jobs that pay family-supporting wages. The recession also highlighted the fact that workers need both sector- and firm-specific skills as well as connections to employers in order to obtain jobs that pay reasonable wages. However, as middle-skill jobs (e.g., welders, paralegals, radiology technicians, and machine operators) have become more modernized, workers would likely have had to assess and adjust their skills to obtain these types of positions despite the recession.

As labor market demands shift, so too must workforce development systems that are geared to helping low-wage workers acquire higher skills so that they can obtain promising careers. These new approaches must be able to help adults who are looking for work, or who are otherwise disadvantaged, to acquire skills and credentials that are truly valued by the employers in their markets. Employers, policymakers, practitioners, and funders who work and reside in a community are in the best position to develop worker training and career development programs that meet the needs of both workers and employers in that community.1

Creating a Workforce Development Strategy

A trainee learns to operate equipment at a plant owned by PGT Industries, a manufacturer and supplier of residential windows and doors located in southwest Florida. The trainee is part of workforce training coordinated by Careeredge Funders Collaborative, a regional collaborative of the NFWS.A trainee learns to operate equipment at a plant owned by PGT Industries, a manufacturer and supplier of residential windows and doors located in southwest Florida. The trainee is part of workforce training coordinated by Careeredge Funders Collaborative, a regional collaborative of the NFWS.

In late 2007, in response to these economic and labor market challenges, the Annie E. Casey Foundation, the Ford Foundation, the Hitachi Foundation, the Harry and Jeanette Weinberg Foundation, and the U.S. Department of Labor formally launched the National Fund for Workforce Solutions (NFWS). The purpose of this philanthropic initiative was to expand on a promising workforce development strategy that was built on a model that serves both employers and job seekers. What began with investments in four regions has evolved into a national initiative that now serves 32 communities and has attracted additional partners such as the John S. and James L. Knight Foundation, Microsoft Corporation, the Walmart Foundation, the Prudential Foundation, the Joyce Foundation, and JPMorgan Chase.

These national investors selected Jobs for the Future (JFF), a Boston-based national nonprofit organization, as one of two partners to help implement the NFWS. Founded in 1983, JFF operates in more than 200 communities across 43 states. Its goal is to identify, develop, and promote educational and workforce strategies to help expand opportunities for individuals who are struggling to advance. Because JFF is experienced at executing national education and workforce initiatives, the organization was instrumental in helping to launch the NFWS effort. JFF’s history in overseeing major foundation and public grants was critical to the NFWS being selected as one of the first recipients of a Social Innovation Fund grant.2 In addition to JFF, the NFWS investors also brought on another partner, the Council on Foundations (COF), to assist in developing national and local philanthropic support. Based in Washington, D.C., the COF is a nonprofit membership association that includes about 2,100 grant-making foundations and corporations.

Building Effective Funding Collaboratives and Workforce Partnerships

Getting Employers Involved

The NFWS supports regional funding collaboratives that help low-wage workers succeed in good careers; these careers are identified by employers who work together to address the human resource needs of a particular industry. The collaboratives are most often initiated by community and national foundations, United Way organizations, chambers of commerce, or workforce investment boards. They recruit local funders and workforce and economic development stakeholders who pledge to provide additional financial resources to further the goals developed by the collaborative.

The key objective of a collaborative is to bring together a broader array of local stakeholders to address their community’s workforce and economic development challenges rather than using traditional workforce efforts. The collaborative analyzes the needs of the regional labor market, selects key industry sectors that need trained workers, and then organizes employer-led workforce partnerships that can help provide training in the targeted areas.

These partnerships generate unique information about an industry, which helps training and education providers to develop programs that enhance the critical skills needed for that industry. These partnerships go beyond gathering historical data and statistics by eliciting real-time exchanges among a group of employers. The best partnerships provide insight into both the current and future needs of a sector, such as new technologies, major trends, evolving skill sets, emerging occupations, career pathways, and new business practices.

Getting employers involved in a mutually productive partnership, however, can be challenging. The collaborative must research a variety of sectors and select those that have the greatest potential for generating employer interest and at the same time creating employment and/or career opportunities for low-wage workers. Then it must select an individual or organization that understands how to convince the employers that this effort will be of value to them.

This partnership organizer must identify the appropriate leaders within prospective firms and make the business case for participating in the partnership. For the partnership to be successful, there must be a consensus among employers that their workforce needs will be more effectively addressed by working together than by working alone. Employers must welcome the exchange of information and ideas with their peers and be willing to learn from the interactions. Businesses will continue to be involved with the partnership only if they perceive that the relationship is beneficial to both their firm and the community.3

The value of a strong workforce partnership to a worker or job seeker cannot be overstated. Good partnerships create training and education initiatives directly with the employers, and because of these relationships, the curriculum is based on critical industry expertise. Well-implemented training programs provide workers with increased opportunities for employment and career advancement. However, many job seekers are not prepared to succeed at training because of additional educational challenges and/or other barriers; therefore, these challenges must be addressed before these workers can obtain the credentials that are necessary for career advancement. In these cases, the partnership must create “bridge,” “on-ramp,” or “pathways” programs to help ensure that workers are ready to succeed at more highly skilled training.4

Leading Collaboratives

Two innovative funding collaboratives in the National Fund for Workforce Solutions are providing training programs, worker support systems, and other much-needed services in the Greater Cincinnati area and in rural Wisconsin.

The Greater Cincinnati Workforce Network (GCWN) supports business-directed workforce partnerships between businesses, educational institutions, and community organizations in health care, construction, and advanced manufacturing.

The partnerships include over 30 employers who collectively employ more than 50,000 workers. Of the more than 3,000 people who have been trained, 2,750 individuals have received credentials and 1,800 individuals have been placed in jobs.

Over the past three years, GCWN has leveraged $24.8 million from local, state, and national sources, including $11.9 million in training funds from the region’s public workforce system, $8.4 million in state and federal grants, and $3.2 million from 10 philanthropic and corporate funders.

A hospital system employer in GCWN’s health careers collaborative found a 12 percent return on investment for its involvement in the incumbent training program and a net benefit of $2.6 million for its entry-level certificate training program, in light of lower turnover and reduced recruitment costs.*

Meanwhile, in rural Wisconsin, Workforce Central operates workforce partnerships in advanced manufacturing and information technology and a pathway program providing accelerated GED and certified nursing assistant training. Working with 26 employers in 2011 and led by the Community Foundation of Greater South Wood County, Workforce Central has leveraged $1.9 million in funds from public, private, and philanthropic sources over the past three years.

Workforce Central’s manufacturing partnership, in collaboration with Mid-State Technical College in Wisconsin, created a series of supervisory management certificates for incumbent workers who want to improve their supervisory skills in a manufacturing environment. The certifications, which can be taken individually or in sequence, can lead to an associate’s degree. Instructors have a manufacturing background and provide training during different shifts. Late in 2011, 75 workers from six businesses were enrolled in the program.

For information on GCWN, see http://www.cincinnatiworkforce.org/ External Link. For information on Workforce Central, see http://nfwsolutions.org/locations/central-wisconsin/ External Link.

— Emily Wood, National Fund for Workforce Solutions

Partnerships may also play a role in convincing firms to change any internal practices that may prevent frontline workers from pursuing the training needed to advance. They are able to show that the advancement of frontline workers can reduce turnover and generate higher productivity. Employers are more willing to make changes in response to what they learn from their peers or by measuring the return on training or career coaching programs.

In the long term, workforce partnerships can also be the catalyst for reforms to the regional educational system. These reforms include promoting industry-recognized credentials, scheduling classes to accommodate workers, and creating flexibility around semester timetables.

Targeting Specific Industries

The NFWS’s manufacturing partnerships develop improved training initiatives because these programs are based on a deeper understanding of the current responsibilities of a machinist, a welder, or a mechanic, for example. Education and training providers learn how the integration of the multiple disciplines, such as information technology, engineering, and machine maintenance, is critical to the success of advanced manufacturing.

Partnerships with hospitals, long-term care institutions, and community health centers reveal the neverending need for improved skills driven by evolving technologies, evidence-based practices, and new regulations. Most of the NFWS’s health-care partnerships focus on incumbent workers, since retaining good workers saves money and builds loyalty, resulting in better patient outcomes.

Implementing Effective Strategies

The approach to workforce development that is endorsed by the NFWS is based on the following five strategies:

  • Developing and nurturing a national network of regional funding collaboratives that leverages public/private investment to support this strategy;
  • Supporting collaboratives that help create sectoral workforce partnerships that encourage employers to enter into long-term relationships focused on workforce and career development for low-wage workers;
  • Implementing career advancement initiatives and practices that create career pathways for workers to advance into better jobs that provide good wages and benefits;
  • Promoting changes in federal and state public policies and private-sector employment practices that are aimed at improving outcomes for low-wage workers; and
  • Combining national and local evaluations with quality research to provide the evidence needed to support practices that improve outcomes for low-wage workers.

These five strategies, which have emerged from years of research and practice, show that when organizations combine their knowledge of the worker or job seeker with a deep understanding of a particular industry, hiring and advancement opportunities for low-wage workers are improved. In addition, the collective action of employers in workforce partnerships can have a broader impact on the industry.5

Promoting Collaborative Philanthropy

Collaborative philanthropy is at the heart of the NFWS’s strategy. A dozen national foundations pool their resources to further encourage collaborations at the regional level. The NFWS co-invests in regional collaboratives that are able to provide at least 80 percent of their total initiative budget from local sources. Obtaining such a large share of funding from local sources ensures that the collaborative is focused on local priorities; it also promotes long-term sustainability from the start. Investments at the regional level are made by investors in both the philanthropic and public sectors who have a shared vision of how best to address the career advancement challenges facing low-income residents. The NFWS’s unique and successful approach to philanthropy has been recognized by its peers. In 2010, it received the COF’s Distinguished Grantmaking Award for Collaboration.

To date, the NFWS has supported 32 regional funding collaboratives around the U.S. that collectively engage more than 400 public and private-sector funders. These local collaboratives have matched nearly $25 million in NFWS investments with more than $130 million in local funds in support of over 90 sector-based workforce partnerships. In the process, they have become important components of their communities, providing leadership on workforce, education, and economic development issues. They have built relationships and acquired valuable expertise through the implementation of sectoral projects.6

Making an Impact on Job Opportunities and Employer Practices

By the end of 2010, NFWS partnerships had served 18,109 individuals (see Figure 1). Almost one-third of those served (32 percent) were incumbent workers (see Figure 2), almost half (48 percent) had a high school diploma or less, and the largest population served (36 percent) was African American. In addition, over half of the participants (55 percent) had received occupational skills training, and 10,000 degrees and credentials were awarded. Of the credentials that were awarded, 67 percent were associate’s degrees, bachelor’s degrees, occupational certificates, credentials, or licensures. In addition, 344 individuals completed apprenticeship programs.

As of 2010, nonincumbent worker participants had received most of the degrees and credentials (79 percent). In addition, there were differences in the types of credentials received by incumbent versus nonincumbent worker participants (see Figure 3).7

Figure 1

Figure 2

Although the national unemployment rate reached almost 10 percent, NFWS partnerships helped to place 5,069 workers in jobs. The largest share of participants (36 percent) was placed in jobs ranging from $10 an hour to $14.99 an hour. Over one-fifth of the individuals who were placed (22 percent) obtained jobs that paid over $15 an hour. However, 15 percent of the workers were placed in jobs that paid less than $10 an hour. Of the 5,069 individuals who were placed, 46 percent were eligible for benefits at placement.

Equally as important as the results for low-wage workers were the changes in employer practices that were enabled by the NFWS. The partnerships have also played a key role in encouraging employers to change job entry requirements, to adopt internal policies that make it easier for workers to access additional education and training, and to adopt career ladders and other career advancement strategies.

Several partnerships convinced employers to adjust their credential requirements for entry-level positions that had previously required four-year degrees. In other partnerships, employers agreed to waive their absolute ban on hiring individuals with criminal records. Some employers have also adopted tuition support programs that allow low-income workers to pay for courses up-front, rather than waiting for reimbursements, and provide release time to attend training sessions.8

Of the employers served by the workforce partnerships in 2010, the largest numbers were in construction, health care, and manufacturing. Participating employers totaled 666 in construction, 604 in health care, and 120 in manufacturing (see Figure 4).

Figure 3: Degrees/Credentials Receipt by Degree/Credential Type and Program Type
 
Nonincumbent Participants Who Completed Education/Training Services (n=7,537)
Incumbent Participants Who Completed Education/Training Services (n=4,111)
Number of Participants
Percent of Subgroup Total
Number of Participants
Percent of Subgroup Total
AA or AS 23 0.30% 76 2%
BA or BS 99 1% 4 0.10%
GED/High School Equivalency 210 3% 10 0.20%
Occupational Skills Certificate/Credential 4,113 55% 1,735 42%
Occupational Skills Licensure 630 8% 61 1%
Figure 4: Number of Employers Served by Sector — 2008 and 2010
Sector
Number of Employers Receiving Services
2008
2010
418
1,936
Biotechnology 69 65
Construction 117 666
Energy 0 38
Financial Services 2 12
Health Care 176 604
Hospitality 0 107
Information Technology 0 11
Logistics, Transportation, Distribution 13 52
Manufacturing 33 120
Marine Trades 8 8
Other 0 11
Multiple Sector 0 242

Promoting Policy Reform

In addition to making grants, the NFWS promotes state and local policies that help low-wage workers advance in their careers and coordinates with local funding collaboratives to support policy advocacy at the local, state, and national levels. It also supports a small number of innovative policy and financing pilot strategies that support workforce partnerships. These innovations help bring attention to the public policy challenges and the financial and management skills needed to adopt particular strategies. The NFWS also facilitates peer-learning opportunities across regional collaboratives to share expertise on effective strategies for sustaining and expanding workforce partnerships.

Many leading workforce partnerships and local funding collaboratives realize that some public policies and changes to the system are necessary. For example, Pennsylvania recently adopted legislation that promotes public funding of sector-based workforce initiatives. SkillWorks in Boston is promoting legislation that places a higher priority on middle-skill jobs within the state’s workforce system. Several partnerships focus primarily on these long-term goals.9

Conclusion

It takes patience, persistence, and skill to bring the appropriate group of employers into the leadership of the workforce partnership. Some businesses have become discouraged by their experience with the public workforce system, whereas other firms believe that “outsiders” cannot really understand the particular needs of their industry. In some cases, small firms simply lack the personnel to participate regularly in partnership meetings.

Because every labor market is different, each collaborative must develop a unique strategy to engage employers. The leaders of workforce partnerships must be skillful and committed facilitators over many months and years to build relationships that will yield positive results. In addition, they must be flexible, creative, and willing to learn from others.

An additional challenge is the dynamic nature of labor demand that can suddenly shift to requirements not anticipated by the workforce partnership. Emerging markets, rapid technological and management changes, and new regulations require a flexible and responsive approach by the partnerships so that employers can work with educators to shift resources to invest in the new competencies.

There are also multiple challenges for job seekers and those desiring to move up the career ladder. Many training programs will not accept individuals with very low reading and numeracy levels because the fast-paced training schedule and large class size of these programs offer little time for remediation. For those who successfully complete training, there can still be the challenge of finding a job in an economy that is struggling to emerge from a recession. Finally, individuals who must continue to work as they pursue skills development face additional obstacles.

A good workforce partnership addresses these issues by clearly communicating to education and training providers the expectations of employers. It seeks out creative ways to address educational deficiencies with bridge programs, contextualized literacy training, and online intervention tools. The partnership identifies exemplary programs that have responded to similar challenges. In addition, it finds peers in the field who can share important insights and point to research or case studies that can be helpful.

Challenges Faced by Employers and Low-Skill Workers

Workforce development initiatives, such as the National Fund for Workforce Solutions (NFWS), face difficult challenges in trying to serve both employers and low-skill workers.

The NFWS’s third annual national evaluation report details these challenges: “The most fundamental challenge for partnerships was how to interest employers in serving populations that had serious barriers to employment, ranging from few, if any, occupational skills to criminal records and a lack of basic work readiness…

“Even partnerships working with very low-income, low-skill employed workers found that the barriers to helping them keep and advance in jobs were greater and more complex than they had expected. The keys to success for both employed and unemployed low-skill workers were long-term and intensive interventions, including robust remedial and support services.”*

The report concluded that “partnerships often found it difficult to identify the community of interest between employers’ needs and those of low-skill workers” and that few employers participated actively in a collaborative. However, the report added that having a dedicated “organizer” could be important to a partnership’s success and that “employer champions are the spark that fuels a partnership.”

An NFWS survey found that employers had several reasons for participation, such as concern for their community, commitment to worker advancement, and the reduction of both labor and skills shortages. Motivation varied by sector. Firms in construction, biotechnology, and energy wanted to improve the quality of entry-level workers, while health-care and manufacturing employers sought to support employee advancement.

The national evaluation report concluded that the NFWS had made measurable progress toward its goals by the end of 2010 and pointed out that the number of regional investors in the NFWS’s collaboratives grew 74 percent from 183 in 2008 to 318 in 2010. The report noted that the key challenges facing the NFWS include how to engage employers in serving low-skill workers, how to measure success, and how to attain scale and sustainability.

— Keith L. Rolland

For information, contact Fred Dedrick at fdedrick@jff.org E-Mail Address or 617-728-4446; http://nfwsolutions.org/ External Link.