Baltimores Workforce System at Work:

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• Baltimores Workforce System at Work
• First Years Highlights
• by
• Chris Thompson, Ph.D.
• Institute for Policy Studies, Johns Hopkins
  Univ.,
• BWIB Workforce System Effectiveness Committee
• (410/516-8740, chris.thompson_at_jhu.edu)
• Presentation to the Forum of the
• Baltimore Job Opportunities Task Force
• (http//www.jotf.org)
• (June 15, 2004)

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Objectives of todays presentation

• Provide an overview of the work of the Baltimore
  Workforce Investment Boards Workforce System
  Effectiveness Committee (WSEC)
• Present highlights and main findings of WSECs
  first Baltimores Workforce System at Work
  report.
• Highlight two useful approaches to the question
  how are we doing? Benchmarking and ROI
• Have other speakers and audience react to
  recommendations in the Report and suggest where
  do we go from here?

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Workforce Investment Act (WIA) of 1998

• Replaced previous JTPA/PIC system with
• Demand-driven approach
• PICs/SDAs replaced with SWIBs/LWIBs
• Private employer majority boards
• Seamless integrated services accessed through
  comprehensive one-stop centers
• 3 tier model coreintensivetraining
• free universal access to core services
• eligible training provider lists and ITAs
• performance-based, outcome-focused

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The Baltimore performance space
(Advocacy)

BWIB
(Operations)
OSI-B
BMOED
Abell
WSEC
CAREER CENTER NETWORK
1-stop
1-stop
UB-JFI
1-stop
1-stop
(Research)
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WIA 3 step service delivery model
Self-/Staff-assisted CORE
INTENSIVE
TRAINING
Job Search Labor Market Information Information
Sessions Computer Services
Comp. Assess. Employ. Plan Counseling Case
Mgmt. Job Readiness Adult Ed. Literacy

• Occup. Skills
• Customized
• ITAs

Placement Assist. Career Counsel. Assessment Reten
tion Referral
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WIA Service Providers
CORE
INTENSIVE
TRAINING
MOED One-Stop Centers BCPSS Goodwill AFL-CIO BCCC
DORS DLLR DSS Baltimore Reads
Catholic Charities GI Tech MOED One-Stop
Centers The Genesis Group
BCCC All-State Career Goodwill Indust. MD Beauty
School Medix Broadcast. Institute American Red
Cross CCBC TESST MCAT
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Two-year WSEC workplan of performance support
projects

• Customer flow/process mapping study
• Client cohort outcomes and employer
  characteristics
• Return on training investment pilot
• Performance support plans for intensive services
  contractees
• Private sector performance practices

• 6. Comparable cities benchmarking
• 7. Responses to extreme fiscal stress
• 8. Role of temporary help supply/staffing
  industry
• 9. Identification of employer needs
• 10.State of the Workforce System Report

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Sponsors and authors

• Sponsors
• The Abell Foundation
• The Open Society Institute-Baltimore
• The Mayors Office of Employment Development
• Contributing authors
• Burt Barnow (JHU), David Bosser (JOTF), Pat
  Jackson (MOED), Pamela Paulk (JHU Hosp), Deborah
  Povich and Chauna Brocht (JOTF), Donna Safely and
  Diana Spencer (MOED), David Stevens (UB), WSEC
  members

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• Baltimores Workforce System at Work

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Objectives of the Report

• Provide an overview of One-Stop Career Center
  Network structure, services, customers,
  performance (not including other parts of the
  workforce system).
• Be a primer for new/prospective Board members.
• Report progress with multiple WSEC studies.
• Make findings-based recommendations for Board
  consideration.

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Report structure

• 1. The workforce landscape
• unemployment, projections, review of existing
  work
• 2. Local One-Stop Career Network at work
• role of the Board system and services client
  flow and demographics employer analysis
  comparable city benchmarking training investment
  analysis (cost-effectiveness and ROI)
• 3. Future opportunities and recommendations
• - strategies, sector/cluster-based approaches,
  develop more training funds, modern performance
  measurement /management system.

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(1) The Workforce Landscape
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The Workforce Landscape

• Citys total labor force (Apr 04) 288,400
  Employed 266,962, Unemployed 21,438 (monthly
  average rate for 04 8.0)
• Citys unemployment rate has fluctuated between
  7.2 and 9 in last 3 years Dec 03 was 7.8,
  compared to 4.7 for Gtr. Balto. metro area
• manufacturing provided 20 of all jobs in the
  City in 1970, but only 8 today

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The Workforce Landscape

• health, education, social services are now over
  one quarter of all jobs (second only to Boston)
• these new opportunities require higher
  training/educational preparation to participate
• c.132,000 adults over age 25 lack post-secondary
  qualification (2000 Census)

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• (2) Local One-Stop Career Center Network at Work
  general findings

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General findings

• One-Stop Career Center Network served 21,361
  adult job-seekers (100 received self-service
  core services) and 1,260 youth in first 18
  months
• snapshot tally of over 4,000 formally registered
  adults 35 in staff-assisted core, 51 in
  intensive, 14 in training
• 2,231 employers served in the first year, hiring
  6,055 job-seekers at average adult hourly wage of
  9.02 (78 w/ benefits)
• we do not know as much about outside this part of
  the system (only 9.1m of 90.3m total in 15
  federal funding streams).

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• (2) Local One-Stop Career Center Network at Work
  comparable cities benchmarking

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The Benchmarking concept

• Theory
• even if no single agreed definitive best way,
  then best practice may emerge from observing
  across a group of like individuals facing same
  problem
• best in class performance reveals best practice
  location
• Practice
• organizations contribute own data as price of
  admission to club where see everyone elses data
• need neutral party and ground rules on sharing

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Comparable cities project

• selected 16 comparable LWIBs and compiled data
  from FutureWorksTM system
• put individual results in perspective
• compare to peers, not national average
• identify different service models
• allows reverse search for best practices,
  starting with outcomes

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Findings from benchmarking

• Overall, Baltimore is a high performer on nearly
  all federal performance measures, esp customers
  served per 100k of pop, credential rate, entered
  employment rate, earnings change
• Measures limited for present management purposes,
  as based on two-year old untidy data
• See hint of different service models possible
  within WIA 3-tier structure some other areas
  appear to do more training
• Need to follow up with individual cases

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• (2) Local One-Stop Career Center Network at Work
  Training Investment

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The training investment question

• Information on 216 WIA clients who were sent to
  either customized training or ITA-funded
  training, and who exited May 2000-June 2002.
• Is all this money we are putting into training
  paying off from the taxpayers point of view, and
  of the different training types, which is giving
  us the better returns?

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Cost-effectiveness

• Comparative analysis on two samples of 216
  trainees showed 4-quarter before/after wage gain
  of 2.20 for every 1 invested in their training
  (3.55 for customized training, 1.49 for
  ITA-funded) (see chart)

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Return on investment why do ROI?

• as a management tool to guide future resource
  allocation between alternative investments
• do on pilot basis to ascertain whether ROI can be
  done (politically and data-availability)
• articulate evaluation in private sector terms
• demonstrate value of workforce system activities
  and counter negative perception about government
  training
• uncover what ROI results are most sensitive to

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What data are included in our ROI?

• Actuals, at the individual SSN level
• Wages quarterly pre- and post-intervention,
  (incl. only as starting point for taxes paid)
• Public assistance TANF/TCA, Food Stamps, CCA
  vouchers
• Training cost course tuition/trainer fee
• Calculated from demographic, income info
• Tax revenues federal, state, local income tax
• Tax credits fed/state/city EITC,REITC,PLC

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ROI findings

• Return on taxpayers investment in their training
  is positive by end of year 2 after customized
  training, and by end of year 3 after ITA-funded
  training hence retention over time is key (see
  chart)

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What else we learned

• Cost-effectiveness analysis is easier to do than
  full-blown ROI, and may suffice for audience
• Training is both cost-effective and equitable
• Training outcome differences by client group are
  generally larger than by training type (social
  engineering vs. consumer choice?)
• 1 in 4 clients shows wage decline after training
• Level of wage gain not correlated with cost of
  training for similar types of training
• Public assistance receipt poorly aligned to
  training
• Public costs can be perverse

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Critical success factors for doing ROI

• willingness to take transparent analytic approach
• open cooperation of agency data owners
• enough actual data to make results more than
  just product of assumptions
• individual-level wage gain and service cost data
• multiple administrative data-set warehouse
• independent staff, and time to analyze
  (SPSS/Excel)
• start small and branch out, have humility about
  results, and dont focus on just the number

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What are the remaining gaps in knowledge?

• client spousal income, ch.dep.care expenses,
  homeownership, debt/arrearages, all impact
  taxes/benefits
• wage record data thinning increases towards
  present, so retention/longevity only estimated
• self-employment income omitted
• self-reported income info is highly suspect
• sunk costs in previous service tiers, one-stop
  personnel/admin, employer costs, medicaid, other
  community costs/benefits, discount rate, all
  omitted

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What are the remaining gaps in knowledge?

• no obvious control group
• no random selection of individuals for training
  type
• results apply to these samples only
• no consideration of other training under the
  present incremental service
• extending ROI to other service tiers would
  require significantly more data-gathering at
  individual level

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What impacts do we hope our ROI results might
have?

• more emphasis in future on cultivating customized
  training opportunities
• raised issue of client allocation to training
  types
• raised issue of getting a retention-over-time
  commitment from employers, to make sure positive
  returns zone is reached
• greater respect from private sector
• receiving enquiries on how to do it/build it
  in, suggesting possible system change in thinking

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For further info on ROI

• Thompson C, et al (2004) Baltimores Workforce
  System at Work, draft final report by the BWIB
  Workforce System Effectiveness Committee (avail.
  July 04)
• Phillips J (1997) Return on Investment,
  Butterworth-Heinemann/Gulf, Houston, TX.
• Benson D and Tran V (2002) Workforce Development
  ROI, pp173-197 in Phillips J and Phillips P
  (2002) Measuring ROI in the Public Sector, ASTD
  Books, Alexandria, VA.
• King C, et al (2003) Estimating ROI for Texas
  Workforce Development Boards and ROI Estimates
  for Workforce Services in Texas, State FY
  2000/01.

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• Recommendations
• in the Report

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3 main recommendations of Report

• 1. Expand opportunities within high-growth
  target industries out to a larger sector/cluster,
  creating entry/attachment points for low-skilled.
• 2. Greatly increase skills training through
  significant additional sources of funds.
• 3. Institute a modern local performance
  measurement system.

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Research questions for the future

• 1. What goes on outside the One-Stop Career
  Center Network?
• 2. How much workforce training is actually being
  done in the City? What are the workforce training
  needs?
• 3. How do we fund workforce training at a larger
  scale and more creatively, especially for the
  lowest-skilled?

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