Monday, March 4, 2013

The High Cost of Cutting Workforce Training

Darlene Miller and Marlena Sessions

A significant percentage of our work force lacks critical education and skills needed in today’s economy — of that there can be no argument. Even though we have a large pool of unemployed workers, there’s a skills gap: They lack the technical skills and credentials necessary to work in a more technologically advanced economy. In Washington state, despite an unemployment rate of 7.8 percent, employers say every day that they cannot find workers with the “right skills” to grow their businesses.

We know what works to address this problem: investing in skills training and education, partnering with employers and training programs, and mixing public and private support. Public investment in skills training should be considered part of our public education system. The return on investment locally is well over $8 into the economy for every $1 invested in training.

Our economy requires lifelong learning and refresher certifications to keep pace with equipment and technology advances. Workers whose jobs have been eliminated may need more than on-the- job training to repair a hybrid vehicle, install a wind turbine, operate high-tech manufacturing equipment, or administer the newest insulin pump.

But a dark cloud looms over the work-force development system. Unless averted, sequestration, which has been delayed by two months, will cut funding for nondefense discretionary programs — including work-force development and career and technical education — by 20 percent overall compared to fiscal year 2010 levels.

By most conservative estimates, Washington state’s job-training programs will be cut by $12.4 million in 2013, eliminating education and training for more than 36,000 people. The impact of these cuts cannot be overstated. In fact, according to a recent report from the Aerospace Industries Association, 24,000 individuals may lose their jobs if projected funding cuts take place.

Federal funds for job training and workforce education are accountable for results in real time. The funds are invested by public boards led by the private sector. Here in Washington state, we have 12 such boards accountable to their local areas to put local job seekers back to work and make sure local employers can find the skills they need in the local work force.

Our state’s community and technical colleges, too, are on the front lines of getting laid-off workers skilled up and back to work. Thousands are being retrained and returned to the labor market armed with skills that employers desperately need. If we hamstring the very system that delivers the skilled workers employers are begging for, how can we expect their businesses — and the economy — to recover?

Surely there’s a better way to reduce the deficit than cutting work-force training. We urge policymakers to ask themselves this question in the days and weeks ahead: Isn’t it a better return on investment to turn unemployed job seekers into taxpayers and consumers?

DARLENE MILLER is executive director of the National Council for Workforce Education, based in Bellingham ( MARLENA SESSIONS is chief executive officer of the Workforce Development Council of Seattle-King County (

Friday, March 1, 2013

Let’s Push the Reset Button on Pell Grants

By Bruce Ferguson, Candace Moody and Bryan Stone

At a recent workforce conference, a speaker gave his vision for WIA in the next decade: “We should call for the end of the Individual Training Account, and reinvest the funds in the Pell Grant program.”

A bold idea, and dead wrong. Here’s why.

Since Senator Claiborne Pell introduced the federal student financial aid bill in 1965, Pell grants have been awarded to millions of students who couldn’t afford college on their own. Today, about 5.4 million grants are awarded annually, with a maximum award of around $5,000 per recipient, and which are not repaid by the student. We must assume that the Return on Investment for the program comes through the economic gains by students who take advantage of the program. 

According to a 2012 report issued by the John W. Pope Center for Higher Education Policy, The Pell grant program is the federal government’s largest education expenditure and costs taxpayers over $35 billion per year. The report goes on to say, “Although the program started out as a way to provide college access to low-income students, it has grown so vast in recent years that nearly 60 percent of all undergraduates received a Pell grant for the academic year 2009-10. Out of the 16.4 million undergraduate students enrolled in the United States, 9.6 million received Pell grants.”

The program cost has doubled since 2008 (from $15 billion to about $35 billion in 2011), and enrollment has climbed by 50 percent. The United States has held education as a value for generations, and we have many reports touting the increased earnings and employability of those attending college. But the data may be deceptive.

The advantage of college graduates in the workforce makes a compelling case for education. College graduates earn 75 percent more than high school graduates ($80,500 vs. $46,000 annually.) According to the Bureau of Labor Statistics (BLS), workers with a Bachelor’s degree had an unemployment rate of 3.7 percent (seasonally adjusted, January 2014) compared to a rate of 8.1 percent for high school graduates with no college.

But that advantage only holds as long as the student graduates -  and very few students make it to the finish line. According to a January 2013 paper by Richard Vedder, Christopher Denhart, and Jonathan Robe for the Center for College Affordability and Productivity, about 45 percent of students who start college fail to graduate within six years. Having “some college” education but no degree virtually wipes out the earnings gain that graduates experience. On average, non-graduates earn only about $7,500 more a year than high school graduates. But they may leave school with an enormous amount of debt: sunk costs from taxpayer-funded Pell grants, and repayable loans from private and public sector lenders with variable interest rates.

Even those who finish may find that they are not employable in this economy. According to the same report, almost half of all college graduates hold jobs that don’t even require a college degree. Albert Graham, a Jacksonville, Florida native who left to pursue a degree in Information Technology from Bowling Green State University in Ohio, could not find a job when he returned to Northeast Florida after graduation. He discovered, as many IT graduates do, that his four-year degree was not enough to persuade employers to consider him for a job. IT is a complex and essential function in any business, and employers need to be assured that new entrants into the workforce have the necessary applied skills to be successful on day one. It’s not enough to know things; it’s critical to demonstrate that you can do things.

Graham obtained an Individual Training Account (ITA) scholarship from WorkSource, the regional workforce development organization. In Northeast Florida, we fund training for 2,000 – 3,000 individuals each year, at an average cost of $5,000 per grant (our scholarships are capped at $9,000.) After six months of training at a private sector technology school, Graham obtained his Network +, A+, and CDIA (Certification in Document and Imaging Architecture), a COMPTIA certification that leads to careers in enterprise management. He graduated in November, 2012 and was hired in December for a network administrator job paying $40,000 per year plus benefits.

The workforce system’s ITA accounts have a success rate that yield significant returns on taxpayer investment. Here in Northeast Florida, we invested in 797 ITA scholarships in 2012; 94.5 percent of the recipients became certified and found work after graduation. This was down from our 2011 performance, a year in which we graduated 995 trainees with a placement rate of 99 percent. Our regional unemployment rate at the time went from 11 percent to 8.7 percent.

Only thirty percent of Pell grant recipients actually finish their training programs, a rate which means that over 70 percent of the $35.6 billion of taxpayer investment in 2011 did not result in a degree or credential and is not recoverable. There is no data available on how many graduates actually find employment. What accounts for the difference in outcomes?

One difference is the information available to students. Our workforce region will fund scholarships only for occupations and industries that are growing and producing sustainable employment opportunities, and we work carefully with our State labor statistics division to help students make decisions based on current data.  Scholarship applicants must research employment prospects and compare programs, and plan to cover the remaining cost of programs that are more expensive that our spending cap. We carefully screen applicants for academic suitability for their program of choice, and we require them to have a plan for income, transportation and family support during school, all significant factors that contribute to student dropout rates. We also provide staff support and coaching throughout the student’s training to make sure they fulfill their obligations, maintain an acceptable grade point average and help smooth out any issues that may hinder the student’s success.

Rather than pouring more into a failed program with a 30 percent completion rate, why not invest Pell grant funds into the workforce system? We have a system in place to help students make better choices, incur less debt and put out more graduates who can find work. We all know what happens when you try the same thing over and over, expecting different results. Let’s invest Pell grant funds into a system that will get real results.

Bruce Ferguson, Candace Moody and Bryan Stone direct Jacksonville’s Center for Workforce Leadership, an organization dedicated to solutions for America’s talent pipeline. Together, they lead Northeast Florida’s workforce investment board, which served over 170,000 jobseekers in 2012.

Thursday, February 28, 2013

How Improved Cost-Benefit Models And Labor Market Intel Are Changing Workforce Investment

By Rob Sentz

The skills gap and public scrutiny on the true effectiveness of the workforce investment system are two major hurdles confronting WIBs in 2013. In both cases, we would suggest that the right data is the best ally.

We live in a world of Big Data, which means we live in a world of way too much data. Big Data is an ocean with no reference points, or dense fog that induces decision paralysis. Or better yet, it’s a file cabinet we’ve been stuffing for years. We know it’s full of good information, but where should we even start?

The first step is realizing that just having data isn’t the goal. We all have those scary file cabinets sitting around. Those warehouses of information do nothing for us, unless, of course, we know how to get in, find what we need, and get back out – quickly. The point of the file cabinet is to create any easy reference system that we can use to immediately call up the important details essential for answering an important question. Once we can start to do that, data moves from a scary beast to a powerful ally that will vastly improve our decision-making process.

From a workforce development perspective, the file cabinet in question is the massive amount of information that the U.S. collects on employment and human capital, otherwise known as labor market data. And harnessing that data is really all about:
  1. Being smarter and more informed as we address employers’ workforce needs;
  2. Establishing the right vision for the region and getting employers, educational institutions, and economic developers to buy into that vision; and
  3. Helping the broader community understand the role that the workforce system has in driving regional economic prosperity.
There are two critical ways that WIBs can harness Big Data to get more people ready for the right careers, establish focus, and change perception.

Labor Market Intel

If there is one thing that keeps business leaders up at night, it’s apparently their ability (or inability) to find and keep skilled workers.In November 2012, CareerBuilder surveyed over 2,700 hiring managers about their top staffing challenges for 2013. Nearly 30% said that finding skilled applicants was their biggest problem. Another 13% said that they don’t have the budget to effectively recruit, and 33% are afraid that they won’t be able to retain their best workers.

Here at EMSI, we believe strongly that WIBs are in a great position to help with these issues using the right information. The file cabinet is there. WIBs just need to access it to help troubleshoot the key issues that employers face.

The first step workforce boards can take is to realize that many employers simply aren’t familiar with the labor market. Labor market data is extremely useful for expanding one’s perspective on hiring and recruitment because the data can shed light on the fundamental economic realities of the region. Labor market data is just a tad difficult to get at, which is why EMSI exists. As a WIB sits down with an employer and reviews the data, it could actually produce some big “aha” moments that businesses have never considered before. This would include:
  • Stats on their industry’s overall performance in the region,
  • Competitors (other businesses within the same industry),
  • Occupational wages, which will give them a better sense what a typical person earns in the community,
  • Regional growth, which would provide an overall sense of the general direction of the local economy.
  • Local training providers, who might be producing talent they could recruit, and
  • Compatible occupations that might be indicate workers they could hire because of similar knowledge and skills backgrounds.
Second, as WIBs have these sorts of conversations with employers, the next steps might come easier or at least be greeted with greater clarity.
  • Does a company need to pay a bit more to improve its number of qualified applicants? What is that ideal wage?
  • Does a company need to invest more in training and how can the WIB help?
  • Does the business need to think about recruiting a different type of worker, and is there an industry that has a lot of these workers?
  • Is there a program at a local college that would help provide workers with the right skills?
These are all they types of questions that a WIB can help with by tapping into the huge amount of data available.

Finally, many WIBs have been working with this type of strategic data for much longer than the private sector and will have a better grasp of how to use and interpret it. This can ultimately help the workforce system become a trusted adviser and open doors into much more meaningful conversations about what can be done to find, develop, and retain those workers. Furthermore, WIBs that are good at this will put themselves into a key position when other companies come knocking on the region’s door.

To see how this can really work, please read this case study by Scott Sheely, Executive Director of the Lancaster County (Pa.) Workforce Investment Board, and this one on the Pacific Mountain Workforce Development Council in Washington state.

The approach isn’t difficult or overwhelming. It just requires an understanding of the problem that the employer faces, getting the right data to shed light on the issue, and working with them to find the workers that will help them build a better workforce.

Return on Investment

As the workforce board establishes these relationships with the business community, they will be in a position to address other public concerns, like return on investment. For the past 12 years, EMSI has been supplying many of the nation’s community colleges with our Economic Impact Study. To produce the study, EMSI collects lots of internal data from the college and combines it with external labor market information to create an overall statement of performance. The colleges have used the study to make powerful arguments to their regions and states about the impact that they have on the economy and workforce. This is just the sort of statement that is needed in the workforce investment system.

The Workforce Investment Act (WIA) has a stated purpose “to consolidate, coordinate, and improve employment, training, literacy and vocational rehabilitation programs in the United States.” Given this mission, how can boards understand their WIA programs’ effectiveness?

That’s the question that was brought to EMSI and NAWB in 2011. Boards needed a rigorous economic evaluation of their programs – an evaluation that was repeatable, unbiased, and able to withstand scrutiny from different audiences.

The program started with seven WIBs in a pilot effort, and the methodology was reviewed by economists to ensure reliability. After the first iteration, we did a second project with South Central Michigan, which was released in March of 2012.  Since then, we have done similar projects, including a statewide analysis for Oklahoma, and are currently doing a statewide analysis for California.

The study uses a workforce board’s internal data to provide a report that shows the benefits and cost of WIA programs as well as economic impacts generated by the boards themselves and their service providers.

And, here is the tie-in to using data. So far, the WIBs with the best results are the ones that really do their “homework” on their local economies and establish strong business service efforts. They are the ones that use data to understand the industries and occupations that are driving their region.


For the past 10 years, EMSI has been supplying WIBs with the data necessary for understand and communicating with employers about the local economy and workforce. Over the years we have seen many powerful stories of workforce boards positively impacting employers and jobseekers throughout their regions. It is something we take pride in and something we would like to help other regions reproduce. The goal is to help WIBs support the business community and to bring the key players together to help establish the right development mission for the community. In addition to labor market data, EMSI is passionate about training and supporting WIBs. We are fully committed to our partners’ success and take it very seriously. Having EMSI is like having another fun, relatable economist on staff.

If you would like to learn more about what we do and how we help, please contact us or visit

Rob Sentz is VP, Marketing for Economic Modeling Specialists International (EMSI).

Wednesday, February 27, 2013

Compliance Withers WIBs; Only Managing Performance Ensures Sustainable Success

by Bojan Cubela

Lately, I get this question a lot: “How can workforce organizations make better use of data to improve their performance?” This may be the single most important question that workforce leaders must answer in order to stay ahead and stay relevant in the age of shrinking budgets. There has been a growing emphasis on data in workforce development programs and across the public workforce system, due in no small part to the last 20 or 30 years of federal legislation, and more recently, from local emphasis. This seemingly irrevocable shift means a growing focus on accountability, transparency, and on measuring the impact of dollars spent in order to calculate the ROI from workforce development interventions. At next month’s National Association of Workforce Boards (NAWB) Forum, representatives from the U.S. Department of Labor will conduct a session on “Putting Evidence to Work in Workforce Development”. But how can WIBs best respond to this challenge to capture outcomes data and use it to inform program performance in real-time?

From Outputs to Outcomes
It is easy to mislabel the shift toward accountability, transparency and efficiency of operations as an emphasis on reporting alone.  Common measures are not enough to demonstrate true impact of our efforts. While reporting remains as important as ever before, we must recognize that success will not come exclusively from reporting or compliance; success hinges upon the ability to manage toward effectiveness and excellence in your programming, and having the information necessary to do so.  This is the main difference between data management systems that help you manage performance and the mandated systems that ask you to report on performance.

Effective performance management in the workforce sector can be realized  by answering a few key questions:
  1. How well are we serving our program participants? (NOT how many or how frequently)
  2. Are we creating value for our employers?  How do we measure that?
  3. How can we alter service delivery or re-allocate resources to better meet the needs of our program participants and workforce partners? (For instance—are participants “falling off” in the service delivery cycle? Why? How can we redesign service delivery to keep participants engaged and successful?)
  4. How are our service providers performing? How can we better play to their strengths? Are we learning from our data and using the knowledge to continuously improve and realize efficiencies in our delivery model?
  5. How can we generate cost-savings by eliminating duplication of services and time that is wasted on reporting and compliance?
A Common Platform to Secure Diverse and Continued Funding
Approaches to service delivery are changing, and reporting has to evolve with these changes; it must inform continuous quality improvement in real-time. From a process standpoint, each funder has their own requirements for how they want performance data to be communicated. Because of this, WIBs and other providers are often stuck feeding data into disparate reporting systems and managing the reporting for dozens of sub-grantees, taking valuable time away from service delivery. We need all our data in one place so that we can easily report on our outcomes.

There needs to be a way to enable reporting to be a byproduct of service delivery itself. Efforts to Outcomes (ETO™) software from Social Solutions ”sits at the bottom of” state-mandated systems, bringing outcomes-oriented case management data collection and analysis to complement the long-standing systems required for traditional reporting.  ETO software allows WIBs to manage performance for programs across providers and funding streams, as a single platform. For the past several years, Social Solutions has worked with the Milwaukee Area WIB to implement ETO software and has achieved impressive results:

Before Efforts to Outcome (ETO) software

  • Vouchers processed manually;
  • Payments tracked, but not directly tied to training/outcome data.
With Efforts to Outcomes (ETO) software
Condition:  Computerized voucher payment system tied to ETO. The system:
  • Tracks up to date enrollment and expenditure information;
  • Permits analysis of program completion;
  • More clearly identifies quality issues and employment results.
Impact:  Inability to easily make management decisions related to:
  • Program investments;
  • Targeted approaches;
  • Real-time funding status.
Impact:  Better program management resulting in:
  • Timely information on project expenditures;
  • Comprehensive information on program enrollment and training;
  • Ability to review correlation project outcomes to other variables, such as training completions and placements.

“Without a common platform like ETO software, there’s no insight into the overall effectiveness of programming, no ability to assess community-level impact and no way of knowing where to direct restricted or additional funding to ensure maximum value,” said Bruce Wantuch, MAWIB Data Manager.  “This is something that, in a sense, the community adopts. This is something that lots of organizations can participate in and really get a sense of what’s happening almost in total in their community,”  (Listen to the full Workforce Central interview with Ron Painter, Bruce Wantuch and myself here)

Is your WIB interested in gaining expertise in community and multi-agency collaboration, data-driven decision-making and ROI-based advocacy?  At the NAWB Forum in March, I will join Don Sykes, CEO of the Milwaukee Area Workforce Board, for “Funding What Works: A Performance Driven and Evidence-Based Approach to Workforce Development,” a discussion of the explicit link between new funder expectations and the tracking of efforts and outcomes.  Social Solutions, the Milwaukee Area WIB, and Henkels & McCoy will share how such a system can be achieved with real-time outcomes reporting, as well as how WIBs are using such a system to demonstrate significantly better outcomes and become more competitive in securing new funding.

At the Forum, visit us in the exhibitor hall at booths 314 and 316—I’d be especially interested in speaking with you about the specific work you are doing to measure and improve performance in workforce programs across your community!

Bojan Cubela is the Director of Workforce Strategy for Social Solutions, Inc.