June 29, 2017

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Among policymakers and businesspeople, most recognize that workforce development is a crucial part of individual economic mobility, business dynamism, and, ultimately, U.S. economic growth. But getting results from those efforts can be complicated—the outcomes and effectiveness of workforce development programs vary widely.

The Atlanta Fed recently participated in a Federal Reserve System initiative, Investing in America’s Workforce: Improving Outcomes for Workers and Employers. The Fed started this initiative to investigate regional aspects of improving workforce outcomes and investment for both workers and employers. For its part, the Atlanta Fed reached out to businesses and organizations in the Southeast to identify approaches that are working well as well as opportunities to improve outcomes. The Atlanta Fed also sought to identify challenges to attracting investment and evaluating outcomes for workforce development programs.

What's working?

In a series of meetings across the region, workforce development practitioners, researchers, businesses, and community members shared their stories about what worked. It might seem that cutting-edge technology helps drive successful results. But the Atlanta Fed heard that strong communication and good coordination across communities are most effective. Attendees at these meeting also discussed other effective strategies.

Roundtable Meeting Locations, Topics, and Dates
• Starkville, Miss., Rural workforce development (February 28)
• Nashville, Tenn., Workforce development and postsecondary alignment (March 24)
• Miami, Fla., Workforce access and training—hospitality industry (March 29)
• Atlanta, Ga., State of workforce development in metro Atlanta (April 10)
• Melbourne, Fla., Business investment and engagement in workforce development (April 11)
• New Orleans, La., Small business and workforce development (April 13)
• Valdosta, Ga., Investing in workers of the future and early childhood education (April 27)
• Jacksonville, Fla., Investing in workers of the future and early childhood education (April 28)

Advisory Council Meeting Locations, Topics, and Dates
• Birmingham, Ala., Agriculture (February 22)
• Miami, Fla., Travel and tourism (March 23)
• Atlanta, Ga., Community depository institutions (March 23)
• New Orleans, La., Energy (March 30)
• Jacksonville, Fla., Trade and Transportation (April 5)

In Miami, for example, meeting attendees discussed a program that focused on workforce access and training in the hospitality industry. The program was notable for the strong links it forged among the local hospitality industry, training programs, and philanthropy, along with the matches it achieved for program participants to entry-level jobs and career ladders. This approach, which employed strong coordination, enjoyed considerable success. (For more information, see chapter 7 of the Atlanta Fed's ebook Developing Career-Based Training.)

As one of its founding members noted, this program worked with members of the community stuck in a cycle of poverty, bringing "them up to a place, what I call the bridge or platform, where we can start to connect them with programming [at the Hospitality Institute], to connect [them] with jobs in our industry. That is what this program has achieved."

People present at the Valdosta meeting reviewed a Georgia program that focuses on these underserved children: the E3Z, or Early Education Empowerment Zones, established by the Georgia Department of Community Affairs. E3Z helped bring together civic groups, health care agencies, and chambers of commerce to work on early learning issues (see the sidebar). Describing the south E3Z as "just fabulous," meeting participants were particularly pleased with the involvement of various stakeholders throughout the community and the responsiveness of coordinators in helping to work through problems. Strong communication and coordination in the community kept everyone informed and attracted resources. One attendee observed, "That's why it's empowering. I mean, there is nothing that we have not asked [the program coordinator] for that that we can't get done."

Regional Insights: Investing in Tomorrow's Workers and Early Childhood Education

Valdosta, Georgia, and Jacksonville, Florida, lie only 120 miles apart, but the cities are much farther apart in other respects—comparative size, rural versus urban environments, and different political and educational systems.

The Atlanta Fed traveled to both cities in late April to gather insights from businesses and other organizations on investing in the future workforce and early childhood education.

photo of Rob Grunewald, Federal Reserve Bank of Minneapolis economist
Rob Grunewald

At both meetings, held as part of the Fed's initiative Investing in Investing in America’s Workforce: Improving Outcomes for Workers and Employers, Minneapolis Fed economist Rob Grunewald shared research demonstrating that early childhood intervention results in better educational and health outcomes, higher incomes, and a reduced likelihood of underserved youths entering the criminal justice system. These are all critical components of an individual's career success.

Following Grunewald's presentation, the groups discussed early childhood education efforts in their community. During the meetings, informal polls compiled attendees' perspectives on the issues. Despite some demographic differences in the two groups, their outlook on early childhood education issues had significant overlap.

  • Both groups agreed that good early childhood programs are available in their localities, but the number of slots for participants fails to meet demand (see the chart).

  • The Valdosta group indicated additional revenue or grants would increase investment in programs, and the Jacksonville group felt that better coordination with the business community to pool resources and subsidize programs would increase investment.

  • Both groups agreed it would require multiple initiatives to improve how they demonstrate their programs' value and returns on investment to their communities.

In Melbourne, Florida, home to Florida's Space Coast, industry leaders shared the challenges they faced finding workers with strong technical and engineering skills. They described the importance of coordination between institutions of postsecondary education and local industry. Indeed, many colleges and technical schools have become very responsive to large employers or industry clusters and their training needs. Local business leaders felt it was important to grow these skills locally as well. In response, they have partnered with local high schools and elementary schools, where employees of local organizations sometimes teach students about emerging opportunities. Another local initiative that leaders have found effective is project-based learning for K-12 at the Space Coast Fab Lab, which again exposes local students to opportunities in STEM-related industries along with meaningful learning opportunities. They are looking to expand the outreach of both of these programs in their community.

Challenges attracting investment

Stories about the ability to attract investment in workforce development varied widely, but by most accounts funding falls well short of supporting the demand for these programs. Many meeting participants reported that state and federal government funding was either holding steady or shrinking. Not surprisingly, many rural areas reportedly face challenges attracting investment because they have limited exposure to networks. Most felt that the key to attracting more investment was communicating more effectively at every level of government and community the efficacy of their programs along with a positive return on investment. However, most agreed that ideas on how to accomplish this are not well formed.

Evaluating outcomes

Most meeting attendees agreed that evaluating outcomes of workforce development programs is crucial, but many felt that often collecting the appropriate information and evaluating outcomes were taxing and expensive burdens. In particular, reporting requirements vary considerably among funders, and most programs have multiple funding sources. Some funders require simple reports or even narratives on basic outcomes, yet others want complex data demonstrating progress for each client.

"We learned a lot about the landscape of investment in workforce development through the initiative," said Stuart Andreason, director of the workforce development program at the Center for Human Capital Studies at the Atlanta Fed. "There are great examples of effective investments across the southeast, in big cities and small rural communities. It seemed that many of the programs face is demonstrating their effectiveness in an investment framework—being able to describe the returns on investment and returns to the community, business, or worker. Finding ways to communicate the value of these programs as investments that provide returns will likely help many programs attract new funding and capital and allow them to scale up to reach much broader audiences.

"We think that some of those challenges come from existing reporting burdens, but also the other factors too," Andreason added. "Given this feedback, we are going to continue to work across the system to identify replicable models of communicating returns on investment in workforce development programs".

Opportunities, obvious and otherwise

Participants largely felt that opportunities existed for scaling up programs that were working well but were hampered by resource shortages. Additionally, they said that greater coordination and improved outcomes could come from increasing the programs' visibility and forming stronger relationships with the business community. Most workforce development organizations felt that the business community was not well represented or connected to the workforce development system, particularly small and midsize businesses. Similarly, many business community members said they lacked awareness of the needs or impact of many of their communities' workforce programs.

What's next?

The information the meetings generated will become part of a larger Federal Reserve System report about the needs of effective workforce development investments and the most promising practices across the nation. The report will be issued at a Federal Reserve System conference on workforce development in Austin, Texas, October 4–6, 2017.

photo of Whitney Mancuso
Whitney Mancuso

Senior economic analyst in the Atlanta Fed's research department