Workforce Investment Act: Innovative Collaborations between Workforce Boards and Employers Helped Meet Urgent Local Workforce Needs

Published by the Government Accountability Office on 2012-02-16.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                              United States Government Accountability Office

GAO                           Testimony
                              Before the Subcommittee on Employment
                              and Workplace Safety, Committee on
                              Health, Education, Labor and Pensions,
                              U.S. Senate
For Release on Delivery
Expected at 10:00 a.m. EDT
Thursday, February 16, 2012

                              INVESTMENT ACT
                              Innovative Collaborations
                              between Workforce Boards
                              and Employers Helped Meet
                              Urgent Local Workforce
                              Statement of Andrew Sherrill, Director
                              Education, Workforce, and Income Security

Chairwoman Murray, Ranking Member Isakson, and Members of the

I am pleased to be here today to discuss collaboration between workforce
boards, employers, and others. As the United States continues to face
high unemployment in the wake of the recent recession, federally funded
workforce programs can play an important role in bridging gaps between
the skills present in the workforce and the skills needed for available jobs.
However, there is growing recognition that these programs need to better
collaborate with employers to align services and training with employers’
needs. As you know, the Workforce Investment Act of 1998 (WIA) 1
envisioned such collaboration by focusing on employers as well as
jobseekers, establishing a “dual customer” approach. To create a single,
comprehensive workforce investment system, WIA required that 16
programs administered by four federal agencies—the Departments of
Labor (Labor), Education, Health and Human Services, and Housing and
Urban Development—provide access to their services through local one-
stop centers, where jobseekers, workers, and employers can find
assistance at a single location. 2 In addition, WIA sought to align federally
funded workforce programs more closely with local labor market needs by
establishing local workforce investment boards to develop policy and
oversee service delivery for local areas within a state and required that
local business representatives constitute the majority membership on
these boards. 3 Today, about 600 local workforce boards oversee the
service delivery efforts of about 1,800 one-stop centers that provide
access to all required programs. 4

Despite the vision of collaboration between local employers and the
workforce investment system, we and others have found that
collaboration can be challenging. For example, in previous reports, we
found that some employers have limited interaction with or knowledge of

Pub. L. No. 105-220, 112 Stat. 936 (codified at 29 U.S.C. § 2801 et seq.).
 29 U.S.C. § 2841(b). Although WIA required 17 programs to participate in the one-stop
system, the Welfare-to-Work program no longer exists, reducing the total to 16 mandatory
29 U.S.C. § 2832(a) and (b)(4).
 In addition to the one-stop centers that provide access to all programs, over 1,000 other
one-stop centers, known as affiliate centers, provide limited employment and training-
related services to job seekers and employers.

Page 1                                                                        GAO-12-419T
this system and that employers who do use the one-stop centers mainly
do so to fill their needs for low-skilled workers. 5 My remarks today are
based on our report, which was released yesterday, entitled Workforce
Investment Act: Innovative Collaborations between Workforce Boards and
Employers Helped Meet Local Needs. 6 We examined promising practices
for collaboration between workforce investment boards, employers,
education providers, and others that have demonstrated positive results.
Specifically, we examined (1) the factors that facilitated innovative
collaborations among workforce boards, employers, and others; (2) the
major challenges to collaboration; and (3) what actions the Department of
Labor has taken to support local workforce boards in their collaborative

To answer these questions, we asked officials from five federal agencies 7
and national workforce and economic development experts from 20
organizations to nominate what they viewed as the most promising or
innovative initiatives in which local workforce boards collaborated
effectively with employers and other partners to achieve positive results.
From over 89 nominations, covering 28 states, we selected 14 initiatives
in 13 local areas for in-depth review. The criteria for our selection
included the number of nominations for each initiative, diversity of federal
funding sources, variety of local unemployment rates, evidence of
replicability, and geographical diversity, among others. We interviewed
state and local workforce officials, representatives of educational
institutions, training providers, economic development officials,
employers, and others. We also interviewed officials from the
Departments of Labor and Commerce, as well as representatives of
workforce associations. We also reviewed relevant federal laws,

 See GAO, Workforce Investment Act: Employers Are Aware of, Using, and Satisfied with
One-Stop Services, but More Data Could Help Labor Better Address Employers’ Needs,
GAO-05-529R (Washington, D.C.: Feb. 18, 2005). This report found that about half of
employers were not aware of their local one-stops, and that this was more common
among smaller companies. Also, see GAO, Workforce Investment Act: Employers Found
One-Stop Centers Useful in Hiring Low-Skilled Workers; Performance Information Could
Help Gauge Employer Involvement, GAO-07-167 (Washington, D.C.: Dec. 22, 2006).
 GAO, Workforce Investment Act: Innovative Collaborations between Workforce Boards
and Employers Helped Meet Local Needs, GAO-12-97 (Washington, D.C.: Jan. 19, 2012).
 In addition to the Departments of Labor, Education, Health and Human Services, and
Housing and Urban Development, which administer one-stop programs, we also
requested nominations from the Department of Commerce, which administers key
economic development programs.

Page 2                                                                     GAO-12-419T
regulations, and other documents pertaining to the key federal programs.
We conducted our work between November 2010 and January 2012 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.

In summary, workforce board officials and their partners in the 14
initiatives cited a range of factors that facilitated building innovative
collaborations. Almost all of the collaborations grew out of efforts to
address urgent workforce needs of multiple employers in a specific
sector, rather than focusing on individual employers. The partners in
these initiatives made extra effort to engage employers so they could
tailor services such as jobseeker assessment, screening, and training to
address specific employer needs. In all the initiatives, partners remained
engaged in these collaborations because they continued to produce a
wide range of reported results, such as an increased supply of skilled
labor, job placements, reduced employer recruitment and turnover costs,
and averted layoffs. While these boards were successful in their efforts,
they cited some challenges to collaboration that they needed to
overcome. Some boards were challenged to develop comprehensive
strategies to address diverse employer needs with WIA funds. For
example, some boards’ staff said that while their initiatives sought to meet
employer needs for higher-skilled workers through skill upgrades, WIA
funds can be used to train current workers only in limited circumstances,
and the boards used other funding sources to do so. Staff from most, but
not all, boards also said that WIA performance measures do not reflect
their efforts to engage employers, and many boards used their own
measures to assess their services to employers. Labor has taken various
steps to support local collaborations, such as conducting webinars and
issuing guidance on pertinent topics, and contributing to a new federal
grant program to facilitate innovative regional collaborations. Yet, while
many boards cited leveraging resources as a key to facilitating
collaboration, Labor has not compiled pertinent information on effective
practices for leveraging resources and made it easy to access.

Page 3                                                           GAO-12-419T
                                         While the 14 selected initiatives varied in terms of their purpose, sector,
Several Key Factors                      and partners involved, the boards and their partners cited common
Supported Initial                        factors that facilitated and sustained collaboration. These were (1) a focus
                                         on urgent, common needs; (2) leadership; (3) the use of leveraged
Collaboration and                        resources; (4) employer-responsive services; (5) minimizing
Sustained It over Time                   administrative burden; and (6) results that motivated the partners to
                                         continue their collaboration.

                                         With regards to focusing on urgent, common needs, almost all of the
                                         collaborations grew out of efforts to address urgent workforce needs of
                                         multiple employers in a specific sector, such as health care,
                                         manufacturing, or agriculture, rather than focusing on individual
                                         employers (see table 1). The urgent needs ranged from a shortage of
                                         critical skills in health care and manufacturing to the threat of layoffs and
                                         business closures. In San Bernardino, California, for example, some
                                         companies were at risk of layoffs and closures because of declining sales
                                         and other conditions, unless they received services that included
                                         retraining for their workers. 8 In one case, employers in Gainesville,
                                         Florida, joined with the board and others to tackle the need to create
                                         additional jobs by embarking on an initiative to develop entrepreneurial

Table 1: Fourteen Initiatives Addressed a Range of Urgent Employer Needs
                                                         a                                                               b
Initiative name                      Workforce board              Sector focus                    Needs addressed
1. ManufacturingWorks                Chicago, Illinois            Manufacturing                   Critical skill needs
2. Health Careers Collaborative of   Cincinnati, Ohio             Health care                     Critical skill needs, turnover
   Greater Cincinnati
3. Entrepreneurship Quests           Gainesville, Florida         No single sector                Need for additional jobs
4. Advanced Manufacturing Training   Golden, Colorado             Manufacturing                   Soft skills
5. Piedmont Triad Global Logistics   Greensboro,                  Transportation, distribution,   Critical skill needs
Workforce Initiative                 North Carolina               and logistics

                                          According to Labor, averting layoffs is one of the functions of the workforce investment
                                         system, and worker training, such as training for workers in new processes or
                                         technologies, is one of several services that can help employers avoid layoffs. Labor has
                                         encouraged states to establish criteria to identify the employers and workers for whom
                                         layoff aversion services may be appropriate. States that seek to use WIA funds to avert
                                         layoffs must obtain waivers from Labor. See Department of Labor, Training and
                                         Employment Guidance Letter No. 30-09.

                                         Page 4                                                                              GAO-12-419T
                                                          a                                                                      b
Initiative name                    Workforce board                     Sector focus                       Needs addressed
6. Center of Excellence in         Lancaster, Pennsylvania             Agriculture                        Critical skill needs
   Production Agriculture
7. Career Pathways                 Madison, Wisconsin                  Multiple                           Critical skill needs
8. Pre-employment Healthcare       Rochester, Minnesota                Health care (long-term care) Turnover, soft skills
9. Technical Employment Training   San Bernardino,                     Manufacturing                      Critical skill needs
10. Manufacturing Sector Layoff    San Bernardino,                     Manufacturing                      Imminent threat of layoffs
    Aversion and Business          California
    Assistance Initiative
11. Health Care Sector Panel       Seattle, Washington                 Health care                        Critical skill needs
12. Michigan Academy for Green     Taylor, Michigan (southeast Manufacturing                              Need for upgraded skills to keep
    Mobility Alliance              Michigan)                                                              pace with technological change
13. NoVaHealthForce                Vienna, Virginia (Northern          Health care                        Critical skill needs
14. Composites Kansas WIRED        Wichita, Kansas                     Manufacturing (aviation)           Need for upgraded skills to keep
    Initiative                                                                                            pace with technological change
                                       Source: GAO.
                                        The boards are identified by the city in which they are located. For the initiatives that involved
                                       multiple workforce boards, the city shown is the location of the lead workforce board. For the boards’
                                       complete names, see our report.
                                        A single initiative could address more than one common need. The needs shown represent the main
                                       needs identified by the partners.
                                        This initiative addressed the area’s need for new employment opportunities through a strategy of
                                       promoting self-employment.
                                        Soft skills are the nontechnical skills that workers need to function in a job, and include
                                       competencies related to problem-solving, oral communication, personal qualities, work ethic, and
                                       teamwork skills.
                                           Two initiatives of this board, both in manufacturing, were selected.

                                       According to those we interviewed, by focusing on common employer
                                       needs across a sector, the boards and their partners produced innovative
                                       labor force solutions that, in several cases, had evaded employers who
                                       were trying to address their needs individually. In several cases,
                                       employers cited the recruitment costs they incurred by competing against
                                       each other for the same workers. By working together to develop the local
                                       labor pool they needed, the employers were able to reduce recruitment
                                       costs in some cases.

                                       Boards also facilitated collaboration by securing leaders who had the
                                       authority or the ability, or both, to persuade others of the merits of a
                                       particular initiative, as well as leaders whose perceived neutrality could
                                       help build trust. Officials from many initiatives emphasized the importance
                                       of having the right leadership to launch and sustain the initiative. For

                                       Page 5                                                                                        GAO-12-419T
example, in Northern Virginia, a community college president personally
marshaled support from area hospital chief executive officers and local
leaders to address common needs for health care workers.

Another factor that facilitated collaboration was the use of leveraged
resources. All of the boards and their partners we spoke with launched or
sustained their initiatives by leveraging resources in addition to or in lieu
of WIA funds. In some cases, partners were able to use initial support,
such as discretionary grants, to attract additional resources. For example,
in Golden, Colorado, the board leveraged a Labor discretionary grant of
slightly more than $285,000 to generate an additional $441,000 from
other partners. In addition to public funds, in all cases that we reviewed,
employers demonstrated their support by contributing cash or in-kind

In all cases, boards and their partners provided employer-responsive
services to actively involve employers and keep them engaged in the
collaborative process. Some boards and their partners employed staff
with industry-specific knowledge to better understand and communicate
with employers. In other initiatives, boards and partners gained
employers’ confidence in the collaboration by tailoring services such as
jobseeker assessment and screening services to address specific
employers’ needs. For example, a sector-based center in Chicago,
Illinois, worked closely with employers to review and validate employers’
own assessment tools, or develop new ones, and administer them on
behalf of the employers, which saved employers time in the hiring
process. Boards and their partners also strengthened collaborative ties
with employers by making training services more relevant and useful to
them. In some cases, employers provided direct input into training
curricula. For example, in Wichita, Kansas, employers from the aviation
industry worked closely with education partners to develop a training
curriculum that met industry needs and integrated new research findings
on composite materials. Another way that some initiatives met employers’
training needs was to provide instruction that led to industry-recognized
credentials. For example, in San Bernardino, a training provider
integrated an industry-recognized credential in metalworking into its
training program to make it more relevant for employers.

Boards also made efforts to minimize administrative burden for employers
and other partners. In some cases, boards and their partners streamlined
data collection or developed shared data systems to enhance efficiency.
For example, in Cincinnati, Ohio, the partners developed a shared data

Page 6                                                            GAO-12-419T
                        system to more efficiently track participants, services received, and
                        outcomes achieved across multiple workforce providers in the region.

                        Finally, partners remained engaged in these collaborative efforts because
                        they continued to produce a range of results for employers, jobseekers
                        and workers, and the workforce system and other partners, such as
                        education and training providers. For employers, the partnerships
                        produced diverse results that generally addressed their need for critical
                        skills in various ways. In some cases, employers said the initiatives
                        helped reduce their recruitment and retention costs. For example, in
                        Cincinnati, according to an independent study, employers who
                        participated in the health care initiative realized about $4,900 in cost
                        savings per worker hired. For jobseekers and workers, the partnerships
                        produced results that mainly reflected job placement and skill attainment.
                        For example, in Wichita, of the 1,195 workers who were trained in the use
                        of composite materials in aircraft manufacturing, 1,008 had found jobs in
                        this field. For the workforce system, the partnerships led to various
                        results, such as increased participation by employers in the workforce
                        system, greater efficiencies, and models of collaboration that could be
                        replicated. Specifically, officials with several initiatives said they had
                        generated repeat employer business or that the number and quality of
                        employers’ job listings had increased, allowing the workforce system to
                        better serve jobseekers.

                        While these boards were successful in their efforts, they cited some
Workforce Boards        challenges to collaboration that they needed to overcome. Some boards
Overcame Some           were challenged to develop comprehensive strategies to address diverse
                        employer needs with WIA funds. WIA prioritizes funding for intensive
Challenges to Address   services and training for low-income individuals when funding for adult
Diverse Employer        employment and training activities is limited. 9 The director of one board
Needs and Developed     said that pursuing comprehensive strategies for an entire economic
                        sector can be challenging, because WIA funds are typically used for
Their Own Measures      lower-skilled workers, and employers in the region wanted to attract a mix
to Track Employer       of lower- and higher-skilled workers. To address this challenge, the
                        director noted that the board used a combination of WIA and other funds
Engagement              to address employers’ needs for a range of workers. Additionally, some
                        boards’ staff said that while their initiatives sought to meet employer

                        29 U.S.C. § 2864(d)(4)(E).

                        Page 7                                                          GAO-12-419T
needs for skill upgrades among their existing workers, WIA funds can be
used to train current workers only in limited circumstances, and the
boards used other funding sources to do so. Among the initiatives that
served such workers, the most common funding sources were employer
contributions and state funds.

In addition, staff from most, but not all, boards also said that WIA
performance measures do not directly reflect their efforts to engage
employers. Many of these boards used their own measures to assess
their services to employers, such as the number of new employers served
each year, the hiring rate for jobseekers they refer to employers, the
interview-to-hire ratio from initiative jobseeker referrals, the retention rate
of initiative-referred hires, the number of businesses returning for
services, and employer satisfaction. 10

  These examples are consistent with prior GAO work. In a 2004 report, we found that
about 70 percent of local areas nationwide reported that they required one-stop centers to
track some type of employer measure, such as the number of employers that use one-stop
services, how many hire one-stop customers, and the type of services that employers use.
See GAO, Workforce Investment Act: States and Local Areas Have Developed Strategies
to Assess Performance, but Labor Could Do More to Help, GAO-04-657 (Washington,
D.C.: June 1, 2004).

Page 8                                                                        GAO-12-419T
                       In order to support local collaborations like these, Labor has conducted
Labor Has Taken        webinars and issued guidance on pertinent topics, and has also
Steps to Support       collaborated with other federal agencies in efforts that could help support
                       local collaboration. For example, Labor is working with the Department of
Local Collaborative    Education and other federal agencies to identify existing industry-
Efforts and Address    recognized credentials and relevant research projects, 11 and has issued
Some Challenges but    guidance to help boards increase credential attainment among workforce
                       program participants. 12 In addition, Labor has recently worked with
Has Not Made           Commerce and the Small Business Administration to fund a new
Information on         discretionary $37 million grant program called the Jobs and Innovation
                       Accelerator Challenge to encourage collaboration and leveraging funds.
Leveraging Resources   Specifically, this program encourages the development of industry
Readily Available      clusters, which are networks of interconnected firms and supporting
                       institutions that can help a region create jobs. A total of 16 federal
                       agencies will provide technical resources to help leverage existing agency
                       funding, including the 3 funding agencies listed above. 13

                       While Labor has taken some steps to support local collaborations, it has
                       not made information it has collected on effective practices for leveraging
                       resources easily accessible, even though many of the boards we
                       reviewed cited leveraging resources as a key to facilitating collaboration.
                       For example, Labor maintains a website for sharing innovative state and
                       local workforce practices called Workforce3One, which has some
                       examples of leveraging funding at the local level. 14 However, the website
                       does not group these examples together in an easy to find location, as it
                       does for other categories such as examples of innovative employer
                       services or sector-based strategies. 15 Moreover, although certain
                       evaluations and other research reports have included information on

                         According to the Department of Education, The National Center for Education Statistics
                       has convened a federal interagency working group to develop better survey measures of
                       the prevalence of industry-recognized certifications and licenses and educational
                       certificates in the United States adult population.
                         See Department of Labor, Training and Employment Guidance Letter No 15-10
                       (Washington, D.C.: 2010).
                         In September 2011, Labor announced the 20 regions that will receive grant funds. Labor
                       estimates the grants will result in the creation of 4,800 jobs.
                        See www.workforce3one.org.
                         There are 14 “super categories,” on the site, such as apprenticeship, clusters,
                       community colleges, entrepreneurship, disability, nonprofit, and youth services.

                       Page 9                                                                         GAO-12-419T
leveraging resources, 16 this information has not been compiled and
disseminated in one location.

In conclusion, at a time when the nation continues to face high
unemployment, it is particularly important to consider ways to better
connect the workforce investment system with employers to meet local
labor market needs. The 14 local initiatives that we reviewed illustrate
how workforce boards collaborated with partners to help employers meet
their needs and yielded results: critical skill needs were met, individuals
obtained or upgraded their skills, and the local system of workforce
programs was reinvigorated by increased employer participation. Labor
has taken several important steps that support local initiatives like the
ones we reviewed through guidance and technical assistance, and
through collaborative efforts with other federal agencies. However, while
Labor has also collected relevant information on effective strategies that
local boards and partners have used to leverage resources, it has not
compiled this information or made it readily accessible. As the workforce
system and its partners face increasingly constrained resources, it will be
important for local boards to have at their disposal information on how
boards have effectively leveraged funding sources. In our report, we
recommended that Labor compile information on workforce boards that
effectively leverage WIA funds with other funding sources and
disseminate this information in a readily accessible manner. In its
comments on our draft report, Labor agreed with our recommendation
and noted its plans to implement it.

This concludes my prepared statement. I would be happy to answer any
questions that you or others members of the subcommittee may have.

  For example, see The Urban Institute, Characteristics of the Community-Based Job
Training Grant Program, prepared for the Department of Labor (Washington, D.C.: 2009).
Also see Public Policy Associates Incorporated, Nurturing America’s Growth in the Global
Marketplace through Talent Development: An Interim Report on the Evaluation of
Generations II and III of WIRED, prepared for the Department of Labor (Lansing, Mich.:
2009), and Social Policy Research Associates, Literature Review: Business/Faith-Based
and Community Organization Partnerships, prepared for the Department of Labor
(Washington, D.C.: 2006).

Page 10                                                                     GAO-12-419T
                  For further information regarding this testimony, please contact Andrew
GAO Contact and   Sherrill (202-512-7215 or sherrilla@gao.gov. Contact points for our
Acknowledgments   Offices of Congressional Relations and Public Affairs may be found on
                  the last page of this statement. Individuals who made key contributions to
                  this testimony include Laura Heald (Assistant Director), Chris Morehouse,
                  Jessica Botsford, Jean McSween, and David Chrisinger.

                  Page 11                                                         GAO-12-419T
This is a work of the U.S. government and is not subject to copyright protection in the
United States. The published product may be reproduced and distributed in its entirety
without further permission from GAO. However, because this work may contain
copyrighted images or other material, permission from the copyright holder may be
necessary if you wish to reproduce this material separately.
GAO’s Mission         The Government Accountability Office, the audit, evaluation, and
                      investigative arm of Congress, exists to support Congress in meeting its
                      constitutional responsibilities and to help improve the performance and
                      accountability of the federal government for the American people. GAO
                      examines the use of public funds; evaluates federal programs and
                      policies; and provides analyses, recommendations, and other assistance
                      to help Congress make informed oversight, policy, and funding decisions.
                      GAO’s commitment to good government is reflected in its core values of
                      accountability, integrity, and reliability.

                      The fastest and easiest way to obtain copies of GAO documents at no
Obtaining Copies of   cost is through GAO’s website (www.gao.gov). Each weekday afternoon,
GAO Reports and       GAO posts on its website newly released reports, testimony, and
                      correspondence. To have GAO e-mail you a list of newly posted products,
Testimony             go to www.gao.gov and select “E-mail Updates.”

Order by Phone        The price of each GAO publication reflects GAO’s actual cost of
                      production and distribution and depends on the number of pages in the
                      publication and whether the publication is printed in color or black and
                      white. Pricing and ordering information is posted on GAO’s website,
                      Place orders by calling (202) 512-6000, toll free (866) 801-7077, or
                      TDD (202) 512-2537.
                      Orders may be paid for using American Express, Discover Card,
                      MasterCard, Visa, check, or money order. Call for additional information.
                      Connect with GAO on Facebook, Flickr, Twitter, and YouTube.
Connect with GAO      Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts.
                      Visit GAO on the web at www.gao.gov.
To Report Fraud,
Waste, and Abuse in   Website: www.gao.gov/fraudnet/fraudnet.htm
                      E-mail: fraudnet@gao.gov
Federal Programs      Automated answering system: (800) 424-5454 or (202) 512-7470

                      Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-
Congressional         4400, U.S. Government Accountability Office, 441 G Street NW, Room
Relations             7125, Washington, DC 20548

                      Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800
Public Affairs        U.S. Government Accountability Office, 441 G Street NW, Room 7149
                      Washington, DC 20548

                        Please Print on Recycled Paper.