Workforce Development Guide for Donors

Workforce development is evolving. Historically, programs that provided job skills to low-income adults were limited in scope and length. Now, collaborative efforts toward systems change are happening via “cradle-to-career” programs.

This shift relies on sharing best practices, communicating needs and working together to address gaps in labor. Philanthropy can play a pivotal role in supporting organizations that are driving employment outcomes in local communities.

What is Workforce Development?

Workforce development provides skills training and opportunities for job placement within industries that may have vacancies or labor shortages. The programs typically address two needs: location-based employment or sector-based employment.

In 2014, the Workforce Innovation and Opportunity Act (WIOA)  was signed into law and provides federal grants to U.S. states. It aims to give job seekers the necessary education and support to access employment while creating a talent pool that allows employers to stay competitive in the global economy.

Some of the key pieces of the legislation include enhancing services to unemployed people, improving services for individuals with disabilities and investing in vulnerable populations and disconnected youth.

Federal, state and local government funding is a core piece of workforce development in the U.S.

For instance, American Job Centers, which provide employment services in locations around the country, receive federal dollars. Job Corps, which provides job training to young adults ages 16 to 24, is also funded by the federal government.

But, government-funded programs aren’t the only workforce development option (and local funding can be inconsistent). Nonprofit organizations have stepped into the ring to provide a variety of skills training in communities around the country.

While workforce development programs exist throughout the U.S., it’s primarily driven by local workforce needs. This requires strong partnerships between local government entities, employers, advocacy organizations, philanthropists, and educational institutions.

Workforce Development: Meeting the Needs of the Future

As society navigates the Fourth Industrial Revolution, we can’t overlook how this digital age will affect the workforce.

According to Ball State University’s Center for Business and Economic Research, roughly one in four American jobs are at risk of foreign competition in the coming years and approxi­mately half of the jobs are at risk of becoming eliminated and substituted with faster automation.

But Brookings Institute paints a rosier picture. Admittedly, the technology boom may lessen the need for low-to-middle skilled jobs, but it could also elevate the workforce. Newly created jobs are more likely to be high-skilled, managerial roles that will require ongoing learning throughout a person’s career. Workforce development programs may need to pivot to a new model in which they are promoting strategic skills, ongoing learning and emphasizing digital literacy.

Types of Workforce Development Programs

Workforce development programs come in different formats and are supported by various stakeholders, from government entities to nonprofits. Below you'll find a brief overview on three different types of programs.

Education-Labor Pipeline

Workforce development programs are now becoming part of higher education curriculums in order to fill the needs of the future workforce. Policymakers want more development programs in educational institutions to push career outcomes in certain industries.  Robert Behning, who chairs the Indiana House Education Committee says, “There is a movement in this country to see how we can better align our post-secondary education to the jobs that are available.”

Another strategy to fill these vacancies is through vocational and technical schools that provide intensive course work on specific subjects while also preparing for students for their desired career paths. Vocational schools have gone through a re-birth, now more commonly known as career and technical schools, and are transitioning toward STEM-related subjects such as film production and engineering. Educators are using dual teaching methods in which half of class time includes teacher instruction and the other half is dedicated to a hands-on learning approach where students utilize direct skills that are related to employable fields.

Cradle-to-Career Development

There is also a movement to drive workforce development early on. A 2016 survey said that 60 percent of parents put responsibility on K-12 education systems to prepare their children with skills and requirements for the future workforce.

Cradle-to-career programs, which ensure children receive the support they need from infancy to adulthood, have proven to be successful in cities across the U.S. StriveTogether: Cradle to Career program uses a collective impact approach that includes parents, teachers, nonprofits and civic leaders to ensure children are prepared for their future. For instance, one StriveTogether partner, Higher Expectations in Racine County, WI, helps employers engage with schools to bolster future job opportunities that create pathways for students to reach their employment goals. More than 91 employers became involved with Academies of Racine which helps students prepare for the workforce.

Pay-For-Performance Programs

Pay-for-performance workforce development programs combine government funders, employers and others. It is an outcome-based model and has been used as a mechanism to support opportunity youth. One example includes pilot programs that were successful in utilizing pay-for-performance strategies in Austin, Boston, Denver, San Diego, and Northern Virginia. Because there is more flexibility for pay-for-performance programs under WIOA, some organizations believe this opportunity will create innovative partnerships and a focus on evidence-based funding.

Workforce Development Organizations

The America Forward Coalition is a robust network of more than 70 social innovation organizations focused on solving America’s social problems in not only workforce development, but early learning, poverty, national service, criminal justice reform, and Pay-For-Success.

Below are examples of workforce development organizations within the coalition.

Compass Working Capital: Listed on Social Impact Exchange as a recognized organization working on enhancing job and career development opportunities, Compass Working Capital aims to help low-income families rise out of poverty by catering financial and capacity building services to each family’s needs and offers workforce development programs as a means to gain self-sufficiency.

YouthBuild U.S.A targets vulnerable youth populations and focuses on giving them a pathway toward employment and education. The organization’s programs encourage young people to build affordable housing sites in their own neighborhoods and other communities for low-income and homeless populations. Social Impact Exchange also evaluated YouthBuild as a successful job development organization.

Year Up: Provides low-income, young adults (ages 14 to 25) a year of intensive skills development training and support services to prepare them for the professional workplace and successfully transition into jobs that are suited to their interests and skills set. Year Up serves more than 3,000 students year round. The Center for High Impact Philanthropy reports that the investment is clear, when the average salary for Year Up alumni increased by 32 percent in comparison to young adults not in the program.

The Early Childhood Workforce Initiative is a global effort specifically focused on the development of men and women who are interested in pursuing careers in early childhood care. This initiative will conduct research that informs the public about the nuances of this workforce, create helpful tools for practical development skill building, and share findings for stakeholders about what they have learned and the best practices to grow this workforce.

The National League of Cities initiative was created in partnership with the Foundation for Child Development and the NLC Institute for Youth, Education, and Families (YEF Institute) which encourages city innovation around early childhood development programs and helps local city leaders strengthen the early childhood workforce.

Workforce Development Program Success

Innovative programs for successful workforce development need to be strategic and targeted toward the right populations. The projects and organizations below offer high-impact solutions to workforce development issues and are helping advance the landscape of job training in the field.

Andrew Cuomo’s workforce development program is a $175 million investment in job training for industries such as tech and healthcare in New York, where 2 million adults lack a high school diploma. This is where the bridge model comes in. It’s a training program that helps bridge the gap for adult learners who need basic skills training to pursue job development or higher education degrees.

MDRC published a study which examined the success of bridge programs in LaGuardia Community College’s health and business programs. It offered expanded training for students to help prepare for the GED and other development training programs. Overall, students who participated in bridge programs were more likely to pass the GED exam and enroll in college at higher rates than non-bridge program students.

Project Quest is a workforce development program in San Antonio that uses a collaborative approach to engage businesses that have identified vacancies in their respective industries. Then, they create partnerships between those businesses and training/community service organizations who have qualified workers. A report funded by the Annie E. Casey Foundation found that Project Quest was able to increase the mobility of participants in San Antonio through targeted skill-building work. About 74 percent of these participants were Latina women with children who did not hold a college degree, but were able to increase their earnings as well as reach the middle class.

The Center for Employment Opportunities (CEO) which is dedicated to providing support for young adults (ages 18 to 25) who have criminal records but need to integrate back into the workforce. CEO offers a structured program that includes life skills education, temporary paid employment opportunities, and full-time employment opportunities. The organization has made over 20,000 full time job placements in over 100 businesses and an MDRC study found that CEO services significantly limited recidivism rates among individuals that participated in the program right after being released from prison.

Roca identifies at-risk populations, such as young men and young mothers, in the Boston area and guides them on a path towards sustainable employment opportunities through intensive outreach and follow-up services that ensure program participants are on track to reach employment goals. In 2017, ROCA helped 854 high risk young men, and enrolled 274 of those in transitional employment, in which 84 percent of those employed had no new arrests.  Additionally, in the last two years, 98 percent of men enrolled in the ROCA Intervention model had no new arrests.

Workforce Development Program Challenges

In the United States, there is a plethora of untapped but talented workers that are in need of direction and guidance. The disconnect between the amount of workers that are ready to join (or rejoin) the workforce, but do not have the resources or the specific skills/certifications to do so, represent a gap in workforce development.

For entry-level jobs, 40 percent of employers say they can not fill them due to this skills gap, and almost 60 percent of employers cite lack of preparation as primary reasoning of job vacancies.

Workforce development programs need to address this disconnect, but do so for all types of workers in order to fulfill needs of current employers. Mckinsey Insights identified strategies that could improve programs:

• Map out and recognize geographic assets and identify target professions.
• Make sure to deliver return on investment for workforce development programs.
• Support comprehensive, effective and demand-driven training resources and techniques.
• Prepare these individuals even before training programs begin
• Coordinate and communicate with other companies doing workforce-development programs to streamline services and enhance processes.

Lastly, workforce development organizations can have effective programs, but might face challenges with engaging employers to actually implement these projects. Some of these barriers include:

• Workforce development organizations are in competition for funding and employer engagement prompting them to focus less on job placement
• Workforce development organizations may not understand exactly how to engage and involve employers so that they feel valued.
• Organizations are not always able to be flexible and meet employer expectations

Then, there are roadblocks toward collaboration on the employers’ side:

• If organizations are disorganized and sloppy, then employers do not always see the value in partnership
• Employers do not always want to bear the costs of partnership if they can utilize other resources instead
• Employers do not always want to partner with government or nonprofit entities

State and Government Investments in Workforce Development Programs

While the nonprofit sector is an important part of the country’s workforce development, state and government officials are also an integral part. Here’s a look at the role they play:

• State and local governments can help build the labor force through occupational and job training
• Customized training programs can happen most successfully in their employers’ own spaces, otherwise states can offer incentive programs for employers to train new hires in order to ensure job training on site
• Apprenticeships can be cost-effective and can enhance skill productivity and are usually run by government or state agencies. The Department of Labor is the main federal agency that sponsors funding for registered apprenticeships.

How Donors Can Support Workforce Development

Interested in giving time or money to support workforce development in the U.S. Keep reading to learn about the various ways you can make an impact.

• Become a member of the America Forward coalition, and be part of the 70 innovative partners driving workforce development programs forward.
• Learn about the challenges of workforce development and strategies for innovative workforce development funding.
• Invest in organizations that connect youth with education and employment. The Center for High Impact Philanthropy highlights several opportunities to make an impact. Social Impact Exchange highlights the positive results -- 75 percent of young adults are placed in jobs or enroll in college or advanced training -- of workforce training program Opportunities for a Better Tomorrow.

Workforce Development Related Reading

Below you'll find information on research, media and related reading in the workforce development space.

America Forward is a non-partisan policy initiative of New Profit that aims to bring together social entrepreneurs and policymakers in order to create more opportunities for Americans and advance social progress.

The Hechinger Report is an independent education media company that reports on inequality and innovation within classrooms around the U.S.

Urban Institute is a research firm that offers solutions and insight for challenges surrounding public policy and practice in hopes of creating change.

Aspen Institute provides spaces for thought leaders and scholars to convene and discuss innovation and address the world’s most pressing problems.

Related reading on Giving Compass:

Lifting People Out Of Poverty Requires Better Workforce Development Efforts
Renewable Learning Funds: Transforming Workforce Development
Boston Builds Partnerships for the Workforce Future
Why Opportunity Youth Are the Best Option for the Workforce