By Robert Camoin, President & CEO of Camoin Associates
Economic developers from across the country hear the same chorus again and again from their major employers: “We are hiring and we can’t find the people we need!” Indeed, the lack of sufficient quantities of skilled workers is a real brake on economic growth that appears likely to worsen as skilled baby-boomers begin to retire in greater numbers. This workforce gap is particularly puzzling when juxtaposed with the number of unemployed and under-employed people seeking better wages.
In part, to deal with this human and economic problem, President Barack Obama signed the Workforce Innovation and Opportunity Act (WIOA) into law in 2014. WIOA is the replacement to the Workforce Investment Act of 1998 and is meant to better “match employers with the skilled workers they need to compete in the global economy.” We believe that WIOA offers a real platform to allow economic developers to engage with their local Workforce Investment Boards in a new and more comprehensive way. Below we describe two case studies where just such a collaboration has yielded fruit in the form of a more integrated economic developer-workforce development system. We also provide recommendations for others wishing to build this economic-workforce bridge in their own communities.
But first, how does WIOA offer a new platform for economic developers? WIOA has a strong emphasis on training and an increased level of flexibility for local groups to tailor programs to suit local employer’s needs. In fact, in his State of the Union address that launched this effort, President Obama specifically stated that, “[WIOA] means more on-the-job training, and more apprenticeships that set a young worker on an upward trajectory for life. It means connecting companies to community colleges that can help design training to fill their specific needs.” This moves the arc of workforce development somewhat away from its “social services for the poor” history that is focused on the individual and into a newer, employer or demand-focused mission of educating people for specific jobs as shown in the graphic below.
Vice President Biden was named as the point person to spearhead the effort and he established a “Job-Driven Checklist” that embodies this shift, summarized as: (1) engaging employers, (2) offering work-based apprenticeships, (3) using data to inform program composition, (4) measuring outcomes, (5) identifying educational and career based pathways, and (6) coordinating various agencies that are involved in workforce development. In this way, WIOA ties more closely to economic development than its predecessor, the WIA.
In practice, everyone is still attempting to figure out how to implement this transition. We have assisted two such communities in this transition planning effort, namely Saratoga County, NY and the Southeast PA Partnership for Regional Economic Performance (PREP), a six county alliance of economic and workforce leaders in the Philadelphia Metro Area.
Saratoga County, NY Case Study
In Saratoga County, NY, many of the workforce needs identified through the study are being addressed by one or more programs or organizations in the region. However, the impact of these programs can be limited by their funding, capacity, and marketing capabilities. Instead of developing a plan that created new initiatives or programs, the Saratoga County economic and workforce development partners (Saratoga Economic Development Corporation-SEDC and Saratoga-Warren-Washington Counties Workforce Investment Board – SWW WIB) decided to limit the number of new initiatives and focus instead on developing a plan that would support existing programs that are already addressing the region’s challenges. To do so, SEDC and the SWW WIB (“partners”) decided to choose a limited number of specific, high-value industry sectors to focus on.
Saratoga County was lucky to have just wrapped up a county-wide economic development strategy that named five industry sectors of interest in the County. However, the partners were most interested in concentrating on the highest-impact avenues for workforce development, which was defined as: (1) high growth/high replacement need, (2) relatively high wages, and (3) realistic education requirements. On this last point, the partners realized it was unlikely to influence the number of students graduating with advanced degrees (i.e. Master Degree and above) but could have a significant impact in the “middle skill” jobs requiring at least a high school diploma but less than a Bachelor’s Degree (see graphic below). Based on those criteria, the partners chose the following three major sectors to be the focus of the effort: advanced manufacturing, tourism & hospitality, and health & wellness.
True to the WIOA mandate, the next step was a series of 40 in-depth interviews. This included many employers, both private for-profit businesses as well as major institutions such as the regional hospital. We asked them what skills they needed, what their occupational-related demands were and what skill sets were specifically lacking (i.e. pipeline of labor). Also interviewed were “training providers” defined in the broadest possible way to include K-12 educators, colleges, community colleges and the regional BOCES (Board of Cooperative Educational Services) as well as other traditional workforce development providers. We asked them to explain their process for how they figured out the skill demands for regional employers, what they viewed as the opportunities to improve Saratoga’s workforce system, and the greatest obstacles to more effectively addressing Saratoga’s workforce challenges.
Almost across the board, the #1 concern everyone is worried about is replacement jobs more so than filling new positions. In part, this is because sectors such as advanced manufacturing are quite unlikely to be opening up significant numbers of new jobs as they move further and further into capital-intensive production. But a much bigger contributor to this concern is the mere fact that troves of highly-skilled baby-boomers are set to retire in short order with little in the way of young skilled workers to backfill those positions. In one instance, an advanced manufacturer was expecting to lose 20 percent of their skilled labor over the next five years. Countywide, as shown in the bar chart below, around two-thirds of all employment opportunities in the coming years will come from replacement of workers and only about one-third from new jobs being created. This is even more pronounced when we focus on the three targeted sectors for the workforce development plan.
The second big take-away is that in Saratoga, like many communities across the country, the capacity of workforce personnel and economic developers to implement new initiatives is limited. So, to address the area’s workforce challenges without creating new burdens on partners, the workforce development system as a whole needed to better “connect-the-dots” between existing resources, job seekers, and employers. Specifically, there is little need for new programs because the programs in place can be refined and adapted to better effect. Interviewees pointed to the need to better promote programs and then, secondly, streamline the programs in place to get more potential workers through them.
Based on discussions with employers in the region, building awareness of the resources available to employers through the economic development and workforce systems was also identified as a priority. Recognizing the limited capacity of the partners to conduct more business outreach, the partners instead focused on developing mechanisms to better coordinate business outreach. SEDC and the SWW WIB agreed to cross-train their business outreach representatives on all relevant employer programs so that everyone engaged in outreach can “sell” programs to employers that best match their exact needs, regardless of whether they are housed at the agency represented. This training would also incorporate other business outreach partners, such as community colleges, chambers of commerce, and the state department of labor.
Philadelphia Metro Case Study
In response to a grant opportunity from the Pennsylvania Department of Labor and Industry, a broad coalition of economic and workforce development organizations in the Philadelphia Metro area created a partnership to tackle issues of career awareness and employer-driven training, specifically for the manufacturing industry. Recognizing the value of this regional and cross-sector collaboration, the group elected to develop a framework and strategic plan for continued collaboration after the grant expired. The workforce and economic development system in the region was much more dispersed than Saratoga’s, given the much larger geography and population being served. The first step was to review the myriad workforce and economic development plans, determine how to tie them together and identify the commonalities of mission from across the spectrum of the agencies. Subsequently, the group engaged in two collaborative “partner forums,” focused on prioritizing the top challenges and opportunities in the region and on developing a vision for the partnership.
Instead of developing new systems and programs, the planning effort was focused on connecting the diverse group of partners more closely and developing strategies to address regional priorities while limiting the development of new capacity-intensive initiatives. In recognition of the importance of collaboration between economic development and workforce development, the planning effort included a total over 20 agencies, including workforce investment boards, economic development agencies, Small Business Development Centers, and the region’s manufacturing extension partnerships (MEPs).
All four major take-aways from Philadelphia revolved around cooperation between agencies. Identical to the Saratoga County findings, the agencies felt that cross-promotion marketing was an area of obvious improvement for the system. This again meant each organization educating their outreach staff in all the various programs available to assist employers so that they would be empowered to make appropriate referrals.
Likewise, all the parties agreed that economic development agencies had a key component to share with their workforce counterparts – namely, the deep network of business community leadership contacts that would allow for feedback about their needs into the workforce development system.
Another area of widespread agreement was the need to regularly share “best practices” across agencies. The group agreed to hold a mini-workgroup session several times per year to have face-to-face communication of these best practices.
Finally, similar to the Saratoga County plan, there appears to be general consensus on the need to coordinate on the marketing of existing programs. The participants noted that there are already many programs, some of which are operating below capacity coupled with a general lack of awareness in local population. Perhaps more importantly, there appeared to be a lack of awareness of even the existence of jobs “sitting behind” the programs – the kinds of well-paying jobs that would accrue to successful program participants. Therefore, the marketing had to not only focus on the workforce development programs but to raise awareness in the general population of the host of job opportunities that exist in middle-skill jobs with good wages.
Recommendations for Future Collaborations
For those who are considering undertaking a WIOA-inspired planning effort of the same type as above, the following are the “lessons learned” from our case studies on how to best move forward:
- Begin by developing closer working relationships between economic development and workforce officials. Many organizations start by cross-pollenating their boards and becoming educated on the various programs each has to offer.
- Work with both economic and workforce partners to identify the highest priority workforce challenges. Develop consensus among a range of partners to address those challenges as well as a workforce vision for the region.
- Focus on only one to three relatively narrowly-defined sectors to start. More than this can dilute your effort and spread already burdened organizations to thin.
- Support existing programs in region: chances are, someone is already addressing the need identified. Look first to scale up existing initiatives and only develop new initiatives when needed and financially feasible.
- Develop the plan with an eye on implementation: what actions are reasonable for the partners to accomplish, given their existing capacity?
- Include capacity building as part of the strategy to cover leadership, personnel and funding sustainability.
- Finally, refer to the job driven checklist to make sure your plan is addressing one or more of its priorities.
Rob Camoin: Rob is a Certified Economic Developer through the International Economic Development Council (IEDC) and currently serves on the IEDC Board of Directors and in other leadership positions including as a member of the IEDC’s Economic Development Research Partners. He currently represents New York State on the Northeast Economic Developers’ Association (NEDA) Board of Directors and is a past Board member for the NYS Statewide Zone Capital Corporation. He has a Bachelor of Business Administration degree in finance and economics from St. Bonaventure University and a Master of Urban Planning degree from the State University of New York at Buffalo.