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3 from 5: Three Key take-aways from our five-year initiative to build the capacity of sector-focused job training organizations

By March 8, 2018Foundation Blog

by Joel Luedtke, Program Director

From 2011 to 2016, the Phillips Sectoral Employment Initiative (PSEI) provided multifaceted building support to a cohort of organizations that offer industry-focused job training services to low-income adults in the Twin Cities. Grantees each received $60,000-$90,000 per year, consulting support, and access to 1-2 fulltime AmeriCorps*VISTA members. PSEI aimed to help grow and improve these “Sectoral Employment” programs so that this evidence-based approach to workforce development could reach more low-income job-seekers.

The four PSEI grantees included in this report were:

International Institute of Minnesota (IIM): Focused on improving Healthcare Career Pathway, and launching training for the hospitality industry.
Project for Pride in Living (PPL): Launched trainings for Pharmacy Tech and Human Services Representative (with Hennepin County), and improved longstanding healthcare training offerings.
Resource, Inc. (now Avivo): Developed trainings for several positions, including Business Support Specialist, Healthcare Information Technology, and manufacturing.
Summit Academy OIC (SAOIC): Focused on improving and expanding established construction training program

You can find the final report on PSEI here.

When we embarked on PSEI, its purpose seemed clear and urgent. The Great Recession had left tens of thousands of Minnesotans jobless. Communities of color felt this calamity most acutely. But our local job market had begun to grow again, and some industry sectors were already talking about workforce shortages.

By building the capacity of experienced nonprofit job training providers, the Foundation felt it could help expand a model with a proven record of connecting low income adults to good jobs in growing career fields. We also saw an opportunity to deploy philanthropic resources to spark innovation and growth in a field that was heavily reliant on restrictive government funding streams.

We’re pleased that the PSEI Final Report indicates that many of our hopes have been realized: Our grantees grew to serve more people, their participants saw strong growth in their incomes and rates of employment, and employers benefited from a growing pool of high quality job candidates.

At the same time, big questions remain.

Here are three key take aways that lift up the highlights, low-lights, and lingering questions from this initiative.

Capacity built
At its heart, PSEI was a capacity-building effort. Grantees received general operating support to advance specific growth and improvement goals related to their sector-focused job training activities (what Paul Brest termed “negotiated general operating support”). This funding ranged from $60,000-$90,000 per year for five years. The Foundation also provided consulting services to help PSEI grantees strengthen their program services and develop data-driven continuous quality improvement practices. Finally, AmeriCorps*VISTA members provided full-time, year-round support on a range of projects related to organizations’ improvement strategies. VISTAs created training curriculum, recruited participants, researched employers, raised funds, created websites and much more.
The graph below shows how this support aligned with the growing capacity of PSEI grantees.

The increased annual enrollment was not just in longstanding programs. PSEI grantees used capacity-building resources to target new industry sectors and specializations. For example SAOIC added plumbing and sheet metal specializations to its core construction training program, PPL launched a new government careers program in partnerships with Hennepin County, and the International Institute created a bridge option for candidates who were not quite ready for its Nursing Assistance training program.

Most of the new program offerings created during PSEI continue at grantee organizations even though Foundation funding ended in 2016.

Increased earnings – but is it enough?
Program completers saw a big jump in earnings, and their incomes continued to grow over time. In the two years before enrolling, participants earned an average of $3,659 per quarter. In the three years after enrollment, earnings increased to $5,521 per quarter – a boost of 50%. While incomes increased strongly in the first year after enrollment – presumably as participants secured their first jobs after training – earnings continued to grow an average of 3% per quarter during years two and three.

The trend line looks good, but it is driven mainly by increasing hours worked, not by fast-growing wages.
The following graph shows how far PSEI participants were from earning a living wage.

While this finding won’t surprise anyone familiar with adult workforce programs, it does suggest at least one uncomfortable question about how this work is currently framed. We’ve collectively adopted the term “career pathway” to describe any effort that prepares job-seekers for specific careers. In almost all cases, the goal is an entry-level position in that field. Ideally, candidates also earn an industry-recognized credential like certification as a nursing assistant or computer network technician. Scant investment is made in advancing individuals past that initial position and/or credential. The “pathway” presumably becomes real as individuals pursue better jobs and more training, and as employers support these moves.

However, the PSEI data show that entry-level job seekers don’t advance their wages much after their initial post-training bump. It seems like – at least in the first three years after training – their career “pathway” is a one-step journey.

More on this in my next post…

Healthcare FTW!
In many cases it proved hard to assess whether or not program graduates were securing and keeping training related jobs. We attempted to track participants’ area of employment using North American Industry Classification System (NAICS) codes, but found that, while programs targeting the fields of construction, administrative support, hospitality, and manufacturing did boost employment in these sectors, most alums were employed elsewhere. This may be due to the diffusion of training related jobs across multiple NAICS codes. For example, construction trainees might be putting their skills to good use in retail, transportation or temporary labor positions – none of which turned up as a “match” in our study. It may also be that some of these trainings don’t actually connect a majority of participants to the targeted industry. More investigation is needed to understand what is actually happening to these individuals.

The exception to this muddle is healthcare. The chart below shows a large and growing movement of individuals into this sector post-training. This is great news for trainers and employers alike – and should spur serious conversations about how healthcare employers can partner with training providers to address their widespread staffing challenges.

What’s next?
That’s already too much for one blog post, but there’s a lot more notable stuff in the PSEI Final Report. I’ll plan to post at least one more piece on this work and our findings. I’m also interested in your reactions, and any ideas about how we can use this research to improve our region and state’s workforce systems. Please be in touch if you have ideas to share: / 612-623-1651

Joel Luedtke

Author Joel Luedtke

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