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Improving workforce development
By Jessica David / June 7, 2016 /   Loading Disqus...

This is the second in an occasional Economic Security Strategy Series. 

The vision that guides our economic security initiative is a strong economic environment that allows all Rhode Islanders to prosper. We believe that the foundation of a strong Rhode Island economy will be quality jobs that allow our residents to support themselves and their families, and these quality jobs require robust enterprise and a skilled workforce.

We focus our investments in this sector on three strategies:

  1. Helping businesses start and grow by strengthening the business ecosystem.
  2. Meeting the needs of the workforce and industry by pursuing improvements to the workforce development system.
  3. Improving statewide self-esteem by promoting assets and enlisting advocates.            

In an earlier post, I discussed our business ecosystem priority. Here, I’d like to talk about our second strategy: pursuing improvements to the workforce development system.

Why workforce development?

Jobs are the foundation. Good jobs are central to a strong economy, equitable and prosperous communities, and family security. Every Rhode Islander deserves the opportunity for meaningful employment. And employers need a capable workforce to succeed. 

In Rhode Island, there is much work to be done for these needs to be met. Our unemployment rate has dropped to 5.4% as of February 2016, the lowest since August 2007. This is excellent news. But there are still troubling signs in the labor market. For a nuanced understanding, we turn to recent research by Mary Burke, senior economist at the Federal Reserve Bank of Boston. 

Participation in the labor market has declined. According to Burke, “the increase in the number of employed Rhode Island residents fell short of the decline in the number of unemployed persons in the state, suggesting that some (or possibly all) of the formerly unemployed individuals dropped out of the labor force (or moved out of state) rather than finding work.” Unemployed Rhode Islanders are finding work in other New England states, while Rhode Island employers are filling vacancies with out-of-state workers. The highest share of Rhode Island residents who work outside of the state are those with a high school diploma or less. The highest share of jobs filled by nonresidents go to those with a bachelor’s degree or more. This suggests a mismatch between the skills employers need and the skills of Rhode Island workers. 

Burke’s research also notes that the share of the labor force between 25 and 44 years of age declined significantly between 2001 and 2015, while the share of workers between 45 and 64 years of age increased. This is a trend nationwide, but Burke points out that it seems “more pronounced” in Rhode Island than in neighboring Massachusetts or the United States. Our workforce is getting older. What does this mean for the long-term well-being of our residents? 

In addition, vacancy rates are coming down, suggesting that employers are taking down vacancies or moving operations elsewhere. We know that workforce quality affects where firms locate and how they decide to grow. And Rhode Island companies, across industries, regularly report difficulty finding skilled employees. 

Long-term, Rhode Island’s public education system (pre-K through college) must better prepare students for the workforce of today and tomorrow. (We’re working on that, too.) In the meantime, job seekers need access to education and training programs and work experience that will make them employable. That’s where workforce development comes in. 

Why the systems approach?

 

As you’ll see, the vast majority of workforce development dollars come from the public sector. At best, the Foundation’s philanthropic resources can fund programs that serve a few hundred people. Our greatest point of leverage, we feel, is at the systems level – to help create a comprehensive, coordinated network of services and supports that is easy to navigate and highly effective at meeting the needs of employers and job seekers. 

What is the workforce development system, anyway?

 

This question, it turns out, is trickier than you might expect. The reality is that there is not actually an organized system, in the traditional sense of the word, for workforce development. Currently, there is a highly fragmented set of education and job training programs; operated by many actors of different scale and focus in the public, private, and nonprofit sectors; funded by federal funds, state dollars, and philanthropy. Services are provided by state agencies, two local workforce investment boards, numerous community organizations, and private corporations. Some programs are more effective than others in connecting employers and retaining graduates in jobs. Some are more suited to serve job seekers with particular needs. From both the employer and job seeker perspective, it is difficult to know what resources are available, how to access them, and which are most suitable. Depending on the source of funding, the programs face different reporting standards; therefore, it is very difficult to compare results across programs. In our experience, effective workforce development programs are costly and not easily scalable. 

In 2015, we partnered with the Governor’s Workforce Board on a “mapping” of the public workforce system as part of the legislatively-mandated Comprehensive System Improvement Plan (CSIP). We sought to create a guide to the system, including a detailed inventory and analysis of all workforce development programs in the state and their functions, responsibilities, populations served, performance indicators, and outcomes. While we did not get that complete of a picture in our first attempt, the mapping exercise provides valuable information for two reasons: 

First, we got a fuller picture of the system and its actors than we had previously. 

For fiscal year 2014, $58.1 million of public funds is spent on workforce programs in Rhode Island. The federal government provides $38.3 million, the state allocates $9.5 million in general revenue, and the Job Development Fund, generated by employer contributions, provides another $10 million.

In terms of how funds are spent, when you think about workforce development, you might think of the Department of Labor and Training and the Governor’s Workforce Board. Did you know that the Department of Education expends $15.6 million annually for workforce development activities, the Department of Corrections $2 million, and BHDDH $2.3 million? In fact, nine state agencies administer workforce funds. 

Other important players include Rhode Island’s two local workforce investment boards (WIBs), Workforce Solutions of Providence/Cranston and Workforce Partnership of Greater RI. Rhode Island also has four netWORKri career centers, also known as the “One Stops.” 

The types of services provided in the workforce development system include:

  • Adult education, which includes adult basic education, English-as-a-Second Language, and GED services
  • Case management services, which are geared around meeting each individual’s unique needs.
  • Occupational skills training, which helps employees gain hands-on experience.
  • Work readiness, which includes the range of services that help prepare individuals for the workforce and enable them to apply for employment.
  • Youth programs.
  • Incumbent worker programs.

Higher-touch programs tend to reach a smaller number of participants, take more time to provide, and cost more, but they are intensive and hands on. Lower touch programs might include online tools, workshops, and resume writing assistance, which reach more people but may not be as effective. 

The second reason the mapping exercise was useful is that we started to get our arms around many of the barriers to an effective system. While there may not be an official workforce development system, job seekers and employers should expect and would be well served by a seamless network of services. 

For example, we learned that services are not geographically distributed across the state, and some regions are not receiving some types of services. This suggests the need for a comprehensive review of offerings and plan to fill the gaps. We also see that multiple agencies are funding the same types of services, and many vendors receive funding from more than one public agency. There may be ways to streamline or, at the least, coordinate. And the lack of consistent, reliable data is a significant problem. Our system needs a shared language and reporting system, and we need information about outcomes. 

Isn’t there a lot happening in this space right now?

 Yes! The good news is that there are many positive recent developments. The CSIP declares, “By developing an effective network of public and private sector partnerships, Rhode Island will create a workforce system that is truly informed by, and responsive to, the needs of Rhode Island businesses and workers.” It provides many strong recommendations (see a summary table beginning on page 84). The Department of Labor and Training launched last year Real Jobs RI, a demand-driven, intermediary-based initiative. And under the new Workforce Innovation and Opportunity Act, Rhode Island developed a statewide plan that identifies three core strategies: (1) a demand-driven sector-based approach, (2) a career pathway strategy to provide services for individuals, and (3) performance measurement.

We believe these efforts signal substantial and important progress.

So what is the Foundation looking for in its investments?

Our goal is to help support a comprehensive, cohesive network of training and education supports that educates and trains workers for well-paying jobs with local employers.

We will do this by:

  • Continuing to analyze the continuum of education and training opportunities available to job seekers and the array of employer resources. We will support efforts to align coverage and improve effectiveness and catalyze innovative new approaches to bridge the education and workforce development systems.
  • Selectively investing in highly effective workforce development programs for underserved populations. Here we are looking for evidence of outcomes, a strong connection to employers and employment opportunities, service of a population in need, and substantial scale.

We expect grants and activities to demonstrate progress toward one or more of the following outcomes:

  • Systems improvement
    • Reforms to current workforce development system, including new and/or improved structures and changes to what and how services are provided.
    • Increased collaboration and coordination among entities within the workforce development system (employers, providers, funders).
    • Increased collaboration and coordination between the workforce and education (elementary, secondary, adult, higher) systems.
    • Establishment of clear performance metrics to understand outcomes.
    • Increased satisfaction of job seekers and employers.
  • Effective programs
    • Increased outcomes for job seekers (participation, placement, and retention), particularly for hard to serve populations.

Long term, we want to see an increase in the percentage of Rhode Islanders who are employed, a decrease in the number unemployed, and an increase in household income. 

Along the way, as in our business ecosystem strategy, we seek partners who have a “systems” purview. This is a large, complex problem, and none of us can go it alone. We all must understand how we contribute to a broader network. 

Our strategies evolve over time, as we are constantly learning from our community. I hope you’ll be in touch with feedback or ideas. I look forward to sharing with you the thinking behind our third strategy sometime soon.




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