State Sector Strategies : Get the Most from Your Workforce Development Investment

State Sector Strategies: Get the Most from Your Workforce Development Investment CEWD Summit October 9, 2009 Indianapolis, IN Erin Andrew, National Governors Association Scott Cheney, PAROS Group

The most efficient way to produce anything is to bring together under one management as many as possible of the activities needed to turn out the product. – Peter Drucker

Agenda • What are Sector Strategies? • Why Sector Strategies? • Project Overview • Evaluation Examples

Characteristics of Sector Strategies • Address the needs of employers -- by focusing intensively on the workforce needs of a specific industry sector within a region over a sustained period of time, often concentrating on a specific occupation or set of occupations within that industry • Address the needs of workers -- by creating formal career paths to good jobs, reducing barriers to employment, and sustaining or increasing middle class jobs • Bolster regional economic competitiveness -- by engaging economic development experts in workforce issues and aligning education, economic, and workforce development planning • Engage a broader array of key stakeholders -- through partnerships organized by workforce intermediaries

Sector Initiative Model Recruitment Services Workforce Intermediary Business Services Support Services Job Seekers and Workers Employers in an Industry Sector Training Services

State Sector Strategies: Common Elements Across States • Engaging leadership • Co-creating core principles • Promoting regionalism • Strategic use of funding • Data-driven decision making • Alignment of public resources and strategies • Capacity building • Promotion and positioning • Evaluation • Legislation

Results for Workers Random assignment evaluation of 1,014 individuals showed that sector initiative participants earned 18.3 percent—about $4,500—more than members of the control group over the 24-month study period. Public/Private Ventures: Job Training that Works: Findings from the Sectoral Impact Study, 2009

Results for Employers A third-party evaluation of sector initiatives in Massachusetts showed: • Turnover: 41% reduction • Re-work: 19% reduction • Customer complaints: 23% reduction • Companies who said partnerships with other companies were valuable: 100%

Systems Change Impact Sector initiatives address key problems for: • An industry’s businesses • The industry’s workforce and/or potential workforce By doing so, they gain leverage to make systems change in the areas of: • Workforce and economic development (including education/training, support services, and business services) • Public policy • Industry practice

Benefits to Regions • Decreased skill and labor gaps • Retention, expansion, and attraction of higher wage employers • Reduction of poverty and unemployment • Increased regional cooperation and collaboration • More efficient and effective use of public resources

Accelerating State Adoption of Sector Strategies Project • Purpose: Advance regionally targeted industry strategies as a state strategic framework around human talent development • Includes increasing state policy support for sector initiatives that focus on low-income and at-risk workers • Four-year project in two phases • Partners: • National Governors Association (NGA) Center for Best Practices • National Network of Sector Partners (NNSP) • Corporation for a Skilled Workforce (CSW) • Funders: • Charles Stewart Mott Foundation • Ford Foundation • Joyce Foundation

Project Tracks • Policy Academy • MD, MS, NH, NV, NY, WI • Learning Network • AR, CO, GA, IL, MA, MI, MN, NC, OK, OR, PA, WA • Knowledge Exchange • Website: www.sectorstrategies.org • Virtual Policy Academy • Toolkit

Policy Academy • States in the Policy Academy have generally: • Secured participation of leadership in the Governor’s office and in key state agencies • Formed multi-agency teams, often including regional sector initiatives • Developed principles or a policy framework for a state sector strategy • Created and started on an action plan • Example: Wisconsin

Learning Network: Quick Facts • Over $150 million dollars have been invested in sector strategies across the 12 states, ranging from $500,000 in North Carolina to $65 million in Arkansas (primarily Career Pathways) for an average investment of just over $13 million per state. • The majority of states in the Learning Network have been funding sector strategies for the past three to four years, with Massachusetts particularly active since 2000 • All 12 states have had or plan to have competitive RFP’s to promote sector strategies in their state.

Learning Network: Quick Facts There are over 400 “local sector partnership projects” spanning 15 industries funded and supported by the 12 states in the Learning Network, an average of just over 36 per state. Most common industries are: • Manufacturing • Health Care • Biotechnology / Bioscience • Logistics • Agriculture and Food Production • Energy – Traditional and Renewable

Evaluation of Sector Strategies: What We Know Matters to States Two Notes: 1) NGA White Paper and Evaluation Framework offers full detailed discussion on these categories; 2) a 5th category of growing interest is “impact on community” (such as reduced poverty/unemployment)

Is There One Formula for Evaluation? First, can we fairly compare outcomes? Consider . . . Second, do we assume training outcomes? Consider . . . A small manufacturing sector partnership that focuses on career awareness Or an energy partnership that develops skills standards (that can be used to develop training) but that primarily is valuable to align titles and HR selection criteria across employers • Over 1,000 healthcare service workers trained every year by a metropolitan sector partnership • About 130 students per year trained and placed in employment by a solar installation sector partnership • 3 Journeyman apprentices supplied to Grand Coulee Dam as a result of a Power Generation partnership No single formula, but there are templates to capture some consistent data across partnerships.

From Washington State

From Massachusetts Annual Report August 2009* Purpose: To provide an opportunity for each project to reflect on its progress toward meeting its goals and share what is learned with Commonwealth Corporation. These reports offer a means to learn more about how projects are unfolding - both at the level of individual projects and across the WCTF initiative. *Note: Adapted and condensed from 10-page WCTF – Annual Report, Round Two, Year 1, August 2009

Some Evaluation Resources* Evaluations of Sector Initiatives Targeting Industries, Training Workers, and Improving Opportunities: Final Report of the Sectoral Employment Initiative, Public-Private Ventures, 2008: http://www.ppv.org/ppv/publications/assets/263_publication.pdf BEST (Building Essential Skills through Training) Benefits: Employer Perspectives, Volume 2, Issue 4, Research and Evaluation Brief, Commonwealth Corporation, 2004: http://www.commcorp.org/researchandevaluation/pdf/ResearchBrief2-04.pdf Benefits of a Sector-Based Approach, Volume 2, Issue 3, Research and Evaluation Brief, Commonwealth Corporation, 2004: http://www.commcorp.org/researchandevaluation/pdf/ResearchBrief2-03.pdf Performance and Evaluation Models for Sector Initiatives An Evaluation Framework for State Sector Strategies, product of 11-state project of the National Governors Association, The Corporation for a Skilled Workforce and the National Network of Sector Partnerships, 2008: http://www.sectorstrategies.org/system/files/EvaluationFrameworkWhitePaper.pdf Evaluating Industry Skill Panels: A Model Framework, Commissioned by the Washington State Workforce Education and Training Coordinating Board, Corporation for a Skilled Workforce with the Paros Group, June 2008: http://www.wtb.wa.gov/Documents/2008SkillPanelEvaluationReport.pdf Business Value Assessment for Workforce Development Organizations: Handbook. The Aspen Institute – Workforce Strategies Initiative, 2005: http://www.aspenwsi.org/BVA/BVA_HAND11-22FINAL.pdf *All available at www.sectorstrategies.org

Field of Evaluation is Ever- Evolving • Since March ‘09, six states in the project (MI, MA, PA, WA, IL, WI) convened four times via conference call to discuss key issues in sector strategy evaluation • Short (but rich) summaries of each call are on the blog at www.sectorstrategies.org • Topics for discussion have included: • “Systems Change” can be a nebulous, confusing term; there’s a need to de-mystify; concrete indicators of systems change already exist within our repertoire of sector evaluation, including career ladder development, changed HR protocols, new certificate/degree programs, others. • A “lessons learned” discussion about measuring impact on employers from MA’s experience in the healthcare/long-term care industry; Common data points: turnover, vacancy rates, reductions in agency fees – i.e. for firm to contract out for skilled work –, and overtime costs. Lesson learned: must collect qualitative testimony in addition to quantitative because latter not always available, and certainly not quickly. • Measurement Consistency across sector partnerships: WA takes the “choose 3” approach; not perfect. Also need common definitions for indicators (such as reduced cost of turnover). PA drew heavily from the NGA projects framework to develop the 2008-2009 annual report. Two other issues: how do we get honest results? How do we account for differences across industries? • PA put a healthcare impact report together summarizing efforts and outcomes of 13 healthcare partnerships – this is potentially a powerful way to capture impact more specifically.

State Sector Strategies : Get the Most from Your Workforce Development Investment