Connecting People to Work: Lessons Learned in Sectoral Approaches

November 2014

Bill Sproull: Welcome to the Federal Reserve's Economic Development podcast series. I'm Bill Sproull, president and CEO of the Richardson, Texas Economic Development Partnership, located in the Dallas area, and the 2014 chairman of the board of the International Economic Development Council.

Sector-based workforce development is a concept that encourages workforce training policies and programs that target groupings of similar industry firms to benefit both employers and workers. This approach relies on workforce intermediaries to help link both parties. A recent book, Connecting People to Work: Workforce Intermediaries and Sector Strategies, describes the challenges, opportunities, and future directions of sector-based workforce development and the critical role played by these intermediaries.

Maureen Conway

Fred Dedrick

We're speaking today with Maureen Conway, vice president of the Aspen Institute and executive director of the Economic Opportunities Program at Aspen, and Fred Dedrick, executive director of the National Fund for Workforce Solutions. Maureen coedited this book with Bob Giloth of the Annie E. Casey Foundation, and Fred authored a chapter in the book. The book was released in print in June under the American Assembly. Welcome, Maureen and Fred.

The book is focused on workforce intermediaries. Maureen, can you describe for us the types of organizations that are workforce intermediaries, and what is the critical role they play in the workforce development system that led you to focus on them? And perhaps importantly, how have workforce intermediaries changed their approaches to connecting people with jobs in the last decade, and how do you expect that will evolve in the future?

Maureen Conway: A workforce intermediary is a broker of resources and relationships that aims to meet the employment needs of job seekers and the workforce needs of employers. A lot of different types of organizations can play this role in a regional economy, ranging from public agencies to local nonprofits, labor management partnerships, community colleges, and temporary staffing agencies. However, in this book we were primarily interested in organizations that aim to help people facing particular challenges in today's labor market and to address those challenges so that workers get to better employment opportunities than they otherwise might and can ultimately find work that supports them and their families.

Over the past decade, workforce intermediaries have been focused on their employer customers, and they've really made a lot of progress in terms of learning more about the needs of their employer customers and how better to prepare workers to meet those needs. And this, in particular, is where the advantage of a sector strategy really comes in, as it allows a workforce intermediary to develop specialized knowledge about the industry sector, to understand the culture, customs, and trends within the particular industry, and to develop a deeper set of relationships that are really critical to them being effective in matching workers and employers within that industry. One of the troubling things that we've seen emerging is that, really, this has been coming over a long period of time but particularly since the recession, local workforce intermediaries are struggling to connect the number of workers that are coming to them with jobs that can provide a true livelihood.

I think the next frontier is to really think about different kinds of relationships with employers and how to think about supporting these employers in ways that they can think about reorganizing work and building workplaces that are supportive of workers' success while still maintaining successful businesses.

Sproull: Fred, tell us briefly about the findings from your chapter on industry partnerships. What is an industry partnership, and how do these partnerships interface with existing workforce efforts?

Fred Dedrick: The National Fund defines an industry partnership as a dynamic collaboration of a regional group of employers—typically from an industry sector, but sometimes from multiple sectors—who convene regularly with the assistance of a workforce intermediary. Employer members discuss their shared human resource issues and challenges, exchange information about industry practices, and take specific actions to address these workforce challenges. Many partnerships also include representatives from organized labor, trade associations, workforce investment boards, CBOs—that's community-based organizations—and educational institutions. A labor management committee may also serve as an industry partnership.

What I tried to do in my chapter was to really talk about the theory and the practice of industry partnerships. And the theory of it is that it's pretty difficult, if not impossible, to make smart investments in workforce development and skills development without having a deep understanding of industry. And it's very important that this not be a secondary focus of a workforce development organization. Because the complexity of modern industry is such that we really have to work very hard to understand what is going on internally in a sector and obviously within individual companies.

We have seen in our work lots of examples of where, if you can get into a partnership, if you can organize a good partnership with employers, they reveal information that is really not available anywhere else. We call that industry intelligence. And this is extremely important to training providers, educational institutions, and economic developers, because they need to understand what is happening right now and what is likely to happen in the near future. The reason we use the term partnership is because that's exactly what we want it to be. The industry has to offer something to the intermediary, and that's information, ideas, opportunities, and the intermediary has to offer something to industry, and that is resources to train, ideas about how to train better, ideas about how to improve their jobs.

Sproull: So Fred, you've given us an idea of what key aspects enabled success in the partnerships, but can you give us an example of a specific partnership that has worked out well and what were some of the outcomes?

Dedrick: We probably have 90 active partnerships in the National Fund for Workforce Solutions. I'll give you a couple of examples: we have a wonderful partnership in Cincinnati called the Health Careers Collaborative of Greater Cincinnati. They've now interacted with almost 5,000 people over five years and they've placed a lot of these folks in jobs, but also have been able to place a lot of the folks that are already working into higher-wage jobs, many of them making over $15 an hour.

We have another example with Maritime Workforce Partnership in Mobile, Alabama. They've served over 500 people and placed about 400 people in jobs, again, about 125 of those making more than $15 an hour.

We have others in Seattle, the Port Jobs Initiative, which is a great and interesting and innovative initiative that engages all the employers at Seattle-Tacoma Airport and helps anyone who comes into the port jobs system to get a feel for what those jobs are. And they've worked with over 2,500 participants.

And then we have the little smaller ones like the BioTech Institute of Maryland, which is focused mostly on people who are on welfare, mostly women who are with children who are on welfare. They place folks after they graduate from their training partnership into jobs with institutions and a whole variety of health science companies and research organizations in the Baltimore, Maryland, area.

Sproull: Maureen, the book also addresses systems change. How is this systems change conceptualized in the workforce development context, and why is it important?

Conway: The systems change concept is about trying to solve a problem rather than continuing to work around it. I'm going to build on a couple of things Fred mentioned. One of the things people working with companies found that particularly for entry-level employees, they weren't taking advantage of tuition reimbursement and companies were wondering why. It was fairly simple that they just didn't have the cash flow to front the cost. And so a simple change could be made to have the company pay the tuition up-front and as long as the worker maintains the appropriate academic standing they can continue on.

So that's a simple example of a systems change, and it's just addressing that piece of an employment system in a way that creates a change so that it creates an opportunity for a whole set of workers without you having to touch each one of them individually. These changes are about instead of working around a problem, trying to address a problem.

Sproull: Speaking of public policy, what are some of the common evaluation metrics in the field that would benefit policymakers and funders?

Conway: When we think about the outcomes of this work, we talk about them benefiting workers and benefiting employers, and then we also just talked about systems change. So those are three areas of outcome. I think we have a pretty robust set of outcomes for measuring wages, hours worked, etc. We sometimes miss some elements that are important to workers' economic stability, such as reliable schedules. Sometimes we measure or don't measure employment benefits such as paid leave, health, and retirement. But I think in general, we have a reasonably good set of measures for thinking about how do we look at benefits for workers. I think the bigger myth is looking at the outcomes for employers. And how do we see the cross of things like turnover being reduced or the benefits of people being more productive, how do we capture those and show how those benefit the business in ways that the work is better supported and can continue?

The third area I've mentioned in terms of evaluating systems changes is a much more complicated thing to think about evaluating in the way we typically think about it, but I do think documenting and sharing more practices around them and how they are important and contribute to the work is also a key thing that should be done and that evaluators should be paying more attention to as they do their implementation and documentation for this kind of work.

Sproull: Based on what you've learned, Maureen, from your research on this book, what other types of regional policies or approaches are needed to better support a strong workforce ecosystem?

Conway: It's hard to support a strong workforce ecosystem if you don't support strong workforce organizations. To think about how do we provide some consistent and not episodic funding to key organizations that are providing value in this work is a key piece of this, that organizations can build the skills of their own workforce and really be more effective in doing this work. And also in line with that, within funding streams, building incentives to work across institutional lines.

I mentioned earlier the array of types of organizations, and different types of organizations bring different skills and capacities to this work. There are community colleges, there are community-based nonprofit organizations and social service providers that provide important elements of economic stability to workers so that they have the time and space in their lives to actually learn something and build their skills. There's a whole range of organizations that can play a role in sector strategies, and I think providing some incentives to work across institutional lines is important. And there's a whole range of organizations that can play a strong leadership role in this work, and I think having some flexibility so that those organizations can emerge and really work to their highest capacity is also really important.

Sproull: Thanks to both of you for speaking with us today. This concludes our podcast with Maureen Conway and Fred Dedrick.

The Federal Reserve's ninth biennial community development research conference will be held in Washington, D.C., in April 2015. The conference will address a diverse set of issues shaping community development policy and practice. More information on the agenda and registration details will be available at the St. Louis Fed's website.

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