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.