Improving Pennsylvania’s Workforce through Industry Involvement

Creating Skilled Labor to fill Jobs of the Future, Sustainable Economic Competitiveness

 Creating the Industry Partnership Initiative was a five (5) step process!

Step 1:  Realizing the Problem

Traditionally, the workforce system in PA focused on dislocated workers, those without jobs, which comprise only 5% of the population.  The majority of state and federal funds were used to support the unemployed population with employment services.  The incumbent workforce, which makes up 95% of the population, was largely neglected because they already had jobs. 

Recognizing the inefficiency of this approach, workforce development professionals spent two years working with employers and legislative members to create a new workforce development strategy that was employer-driven and focused on the incumbent workforce.  This work revealed a significant gap between the training educational institutions offered and the actual needs of industry.  The education community was not meeting employers specific training needs, because employers were not communicating those needs adequately. In was clear that a partnership between educational institutions, workforce development agencies and businesses was necessary in order to keep workers employed and mobile, while keeping businesses competitive.  The approach to workforce development shifted from a more welfare-driven strategy, focusing on services to the unemployed, to an economic-development strategy, listening to business needs.

The new workforce strategy was built on the assumption that companies with similar products and markets become more globally competitive when they share a regional concentration of skilled labor, innovative technology and complementary supply chains. As workforce agencies and unions recognized the application of this insight to economic development, they recognized its relevance to developing human capital and, therefore, organized consortia of related employers to identify skill gaps and invest resources to strengthen the industries in regions with a competitive advantage. They began to share intelligence on industry trends, barriers to employment expansion and the evolving competencies required of workers. 

Step 2:  Building the Structure - Identifying High-Priority Occupations within Target Industry Clusters

In order to determine on which businesses to focus resources, it was necessary to first identify PA industries with competitive potential. Local Workforce Investment Board (LWIB) directors and the Pennsylvania Department of Labor & Industry’s (DLI) Center for Workforce Information & Analysis (CWIA) determined which employers belonged in which industry clusters.  Criteria were developed for selecting “targeted” industries:  those that create jobs paying family sustaining wages, opportunity for employment expansion, career ladders, openings created by significant retirements. The resulting list of “targeted” industry clusters and sub-clusters became the foundation upon which the new workforce development strategy was built.

PA had to invest its resources in occupations that would increase the competitiveness of these key industries.  CWIA developed a list of high priority occupations that were critical to the clusters and established criteria the jobs were required to meet:  family sustaining wages, importance to the cluster and inadequate supply in the pipeline.  This list of high priority occupations became the future framework for guiding career awareness as well as investments to community colleges and career and technical schools.

Step 3:  Creating the Capacity for Partnerships

At the core of the new workforce development strategy was the recognition that Pennsylvanians needed a better understanding of the key industries that supported their economy. Once identified, the workforce system needed a more thorough understanding of the human capital challenges, technological trends and global competition facing the Commonwealth’s employers. Developing this industry-focused approach required that new resources be devoted to organizing employers in critical industries and providing the skills training necessary to bring their workforce up to competitive standards. These partnerships would become the cornerstone of a new demand-driven system that would provide information and intelligence to workforce, education and economic development strategies. 

Bringing together employers within similar industries to create a joint plan of action proved quite challenging.  Good data, access to the right staff and knowledgeable salesmanship were required, as well as outreach to both labor and management to gain a thorough understanding of the industry and a clear identification of the skills gaps. PA’s workforce team recognized the need for funding to facilitate both the organizing phase as well as for the training delivery component.

A number of key assumptions drove this strategy: 

• With a little guidance, employers would identify common needs and work together to address those needs;
• Employers would support a strategy to address the needs of the industry, rather than just the needs of one company;
• Prior to requesting training dollars, employers would need to complete a careful assessment of what skill areas were critical to their success;
• Workers would support this initiative if the training provided them with skills and credentials that were transferable to other employers in the sector.

Based on these assumptions, in 2005 the PA General Assembly allocated $5 million to organize partnerships and $15 million to address the training needs of current employees. Guidelines for obtaining these funds required the involvement of LWIBs and emphasized the importance of employers’ ability to choose their own training providers.  Many LWIBs responded enthusiastically, contacting thousands of employers in multiple sectors. 

Step 4:  Developing Industry Partnerships

Industry Partnerships (IP) begin with state funds, allocated by the GA, which combined with federal funds to support the system. Once funds are allocated, DLI-drafted guidelines for applying for Industry Partnership and Worker Training grants. Any group is eligible to apply, but all groups must partner with at least one LWIB. Applicants draft proposals, which are submitted to DLI and are reviewed as part of a competitive bidding process. Funding is awarded based on specific criteria and availability of funds.

Industry Partnership member companies provide in-kind and matching contributions, which are then leveraged from the state contribution and invested back into the partnership and training programs. As the partnership shows success, more businesses become members, building the IP and eventually making it self-sustaining.

The service model for IPs, as well as the entire PA workforce development system, provides one source for the delivery of all workforce programs. LWIBs, PA CareerLinks (one-stops), and IPs collaborate to meet the various needs of PA residents and businesses.

Beneficiaries of IPs include job seekers, employers, incumbent workers, labor unions and management, education and training providers, students and youth, among others. The Industry Partnership concept created a much more targeted approach to worker education and training than the previous system because the focus shifted to advanced and innovative training for both the employer and the employee simultaneously; previous programs focused on one or the other.

Step 5:  Gauging Success

Central to Pennsylvania's new workforce system is industry leadership, with recognition that businesses can best identify and address the needs and gaps in the workforce community. The key is that all parties – education, economic development, business, labor, state and local workforce agents – come to the table to discuss these issues together, but the discussion is driven by industry needs. As a result, all entities benefit – businesses now play an active role in shaping workforce policy and improving the local economy; labor can help determine how workers move up ranks to management positions; and education and economic development groups have more clearly defined roles and are better in-tune with the actual needs of the community and industry. 

Industry Partnerships are designed not just to identify human resource needs and skill gaps, but also to address those needs by implementing strategies and training to improve and enhance the skills of incumbent workers and to provide career ladders that spur innovation and increased efficiency and productivity. In addition, IPs and LWIBs work closely with schools, youth councils, community colleges and technical schools, to help students focus on the in-demand, high-skill jobs of today's global economy.

The collaboration between workforce development and economic development agents at both the state and local levels create a skill-ready environment in Pennsylvania that is becoming a significant attraction for employers and businesses looking for a competitive workforce.

Through IPs, businesses now fully understand that a better-educated workforce means a more competitive company, and more competitive companies create a stronger economy. An IP is a shared venture between government and industry, and all participants are equal investors with a shared goal. The IP concept is not just about worker training; it is about constantly looking at available labor information to stay competitive on the local, state, national and global levels.

Forty-five percent of companies involved in IPs in Pennsylvania did not have organized training programs prior to joining the program. Today, those same companies now participate in training programs that helped to improve the efficiency and skill levels – and boost the productivity – of their employees. Because of these dynamic results, labor and management continue to work together in the shared interest of moving the company, the industry and the region forward competitively.