Business vs. State Employment Training Programs

Business-backed job training yields higher return on investment

By Bill Leonard Sep 29, 2014
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A new study shows that unemployed workers who participate in programs supported by the National Fund for Workforce Solutions (NFWS) are more likely to find employment and earn better wages, when compared to participants in other workforce development programs.

The study tracked unemployed individuals in Cincinnati who participated in three workforce development programs supported by the NFWS and compared them to unemployed workers who sought employment services through state-based workforce development systems.

Individuals in a NFWS health-care-jobs program had a 40 percent higher employment rate and earned 58 percent more after one year than workers who participated in similar state-funded workforce programs. In an advanced manufacturing program supported by the NFWS, participants had a 40 percent higher employment rate and were paid 42 percent more after 12 months.

“This study provides evidence that the National Fund’s model of supporting local employer-led workforce training efforts is conducive to helping achieve better outcomes when it comes to re-employing unemployed workers,” Marios Michaelides, lead researcher and a co-author of the study, said in a written statement.

“This study clearly demonstrates the success of employer-led industry partnerships that are the cornerstone of the National Fund model,” said Fred Dedrick, executive director of the NFWS. “Our investments in local training programs are guided by employers, which gives them the confidence to hire qualified workers who have been trained through these programs and develop the talent supply chain they need to compete.”

The National Fund for Workforce Solutions is a Boston, Mass.-based partnership of employers, communities, workers and philanthropic organizations that helps to support 35 regional workforce development groups. Some of the NFWS funding for the programs evaluated by the study came directly from grants provided by the Social Innovation Fund (SIF), a White House initiative. SIF is a program of the Corporation for National and Community Service.

DOL Funding More Industry-Specific Training

The federal government plans to back more industry-specific training. The U.S. Department of Labor announced on Sept. 24 that it will award more than $50 million in Workforce Innovation Fund grants to improve federal job training programs. The grants will be used to deliver services more efficiently, facilitate cooperation across federal and state workforce programs and funding streams, and expand partnerships with specific employers or industry sectors to develop programs that reflect current and future skill needs.

“We’re pursuing job-driven training by aligning our programs with the needs of employers and making sure that everything we’re doing is preparing ready-to-work Americans [for] ready-to-be-filled jobs,” said U.S. Secretary of Labor Thomas E. Perez. “The Workforce Innovation Fund will improve our job training programs by encouraging innovation, identifying what works, and sharing the results and best practices with others.”

Eleven grants, ranging from $2.9 million to nearly $12 million, have been awarded to a combination of state workforce agencies and local workforce investment boards in the second round of competition under the Workforce Innovation Fund.

Grantees will work with local and regional employers, industry groups, and their state commerce and development agencies to strengthen public-private partnerships. All grants require an evaluation to gather the most effective strategies in workforce development.

Approximately $171 million in grants were awarded in the first round, which included $147 million for 26 grants in July 2012 and $24 million for two Pay for Success grants in October 2013.

To read more about the Workforce Innovation Fund and other federally-funded job training programs, visit

Bill Leonard is a senior writer for SHRM.

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