Employer Participation in Workforce Development ... - SAGE Journals

ECONOMIC 10.1177/0891242405276125 Green, GalettoDEVELOPMENT / EMPLOYER PARTICIPATION QUARTERLY / August 2005

Employer Participation in Workforce Development Networks Gary Paul Green Valeria Galetto University of Wisconsin–Madison Rural America faces numerous challenges in building a high-wage, high-skilled workforce. Many rural communities are establishing workforce development networks that promote linkages across organizations and communities to more efficiently integrate and deliver a variety of services. Drawing on case studies from rural areas of the United States, the authors identify three different patterns of organizing workforce development networks: the sole provider, the hub-spoke, and the cluster oriented. In comparing the case studies, they find that place matters as much as form of organization in the ability to promote employer participation. Keywords: workforce development networks; rural development; economic development Rural America faces numerous challenges in building a high-wage, high-skilled workforce. Workers in rural areas have less formal schooling and training and receive lower returns on their human capital investments than do workers in urban areas (Beaulieu & Mulkey, 1995; Swaim, 1995). Employers in rural areas have less demand for skilled workers and tend to be located in competitive markets that pressure them to cut costs, especially for job training (Gibbs, Swaim, & Teixeira, 1998). Rural communities, therefore, face a basic dilemma. If they are successful in attracting employers demanding high-skilled workers, the workforce may not be available. Conversely, if workers are trained for positions unavailable in the region, they may move to where the jobs are or where they can obtain a higher wage. Many communities are attempting to overcome these obstacles by establishing workforce development networks. In this article, we present three organizational patterns of workforce development networks in nonmetropolitan areas and discuss their roles in improving the functioning of local labor markets. We pay special attention to employer involvement in these efforts.

Gary Paul Green is a professor and the chair of the Department of Rural Sociology at the University of Wisconsin–Madison. His research, teaching, and outreach activities focus on community, economic, and workforce development. He recently published Asset Building and Community Development (Sage, 2002) and is completing an edited volume, Amenities and Rural Development (Edward Elgar, 2005). Valeria Galetto is a graduate student in development studies at the University of Wisconsin–Madison. Her dissertation focuses on the effects of migradollars on local economic development in Mexico.

NETWORKS AND LOCAL LABOR MARKETS Two major factors have contributed to the rise of workforce development networks over the past few decades (Giloth, 2000). First, federal employment training programs have had a negligible effect on family income and poverty. Practitioners and policy makers believed that these programs AUTHORS’NOTE: Direct all correspondence to Gary Green ([email protected]). This material is based on work supported by the Cooperative State Research, Education and Extension Service, U.S. Department of Agriculture, National Research Initiative, under agreement 00-35401-9319. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the authors and do not necessarily reflect the views of the U.S. Department of Agriculture. ECONOMIC DEVELOPMENT QUARTERLY, Vol. 19 No. 3, August 2005 225-231 DOI: 10.1177/0891242405276125 © 2005 Sage Publications 225

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were not very well linked to local needs and employers had little involvement in their design. Second, the restructuring of local labor markets, especially the loss of manufacturing jobs and the decline of internal labor markets, generated more demand for training programs. Training programs were typically disconnected from one another and frequently were not available for workers who were not considered poor or disadvantaged. Although workforce development networks address weaknesses in the functioning of local labor markets, they also face numerous obstacles, especially in rural areas. Employer participation is frequently a major problem. There may be many reasons for the lack of employer participation, such as time, cost, and perception of few benefits. Small businesses, in particular, have fewer resources to devote to and obtain fewer benefits from these collaborative efforts because they have fewer workers and tend to have higher turnover rates. Workforce development networks also face some unique obstacles in rural areas. The number of workers with common training needs is smaller in rural than urban areas, which makes it difficult for educational and training institutions to develop appropriate programs. For example, school-to-work and apprenticeship programs in rural areas are so small that it is very costly for educational institutions to develop these programs. In an urban area, the demand for welders, for example, is so high that educational institutions can justify the start-up expense and employers will hire workers with these skills. In rural areas, the demand is much thinner. Also, the low density level in rural areas makes communication across communities and organizations very difficult. In most urban areas, employers, training institutions, and community-based organizations (CBOs) are close to one another, which facilitates communication and coordination. Previous studies identifying the organizational structure of workforce development networks have focused on urban settings and have not examined carefully the issues surrounding employer participation (Harrison & Weiss, 1998). In the following sections, we examine how employer participation is organized in workforce development networks across rural America. METHOD The case studies were selected through information obtained in a national survey of rural employers we conducted in 2001 (for details, see Green, Galetto, and Haines, 2003). In each case study, we conducted intensive interviews with various network actors, including businesses, workers, training institutions, CBOs, public agencies, and other partners. The purpose of these interviews was to understand how these networks were established, how they were maintained, and whether they provided advantages that were not available to individual employers, organizations, and training institutions. The workforce development networks examined in this article were not actually “community-based”; all had a regional focus. Thus, these networks were not only collaborating across different sectors of the labor market (employers, trainers, CBOs) but also across multiple communities. How they addressed these challenges was also explored. HOW ARE WORKFORCE DEVELOPMENT NETWORKS ORGANIZED? Three different organizational structures for workforce development networks in rural areas were identified. In what follows, we briefly describe the basic structure and operation of each (see Table 1). Sole-Provider Network The sole-provider system has a single organization that occupies the central position in the network. This organization initiates, develops, and maintains relationships with different members of the network. It is usually a direct provider of services but also contracts with other organizations in the network to provide auxiliary services. An example of a sole-provider network is Rural Opportunities Inc. (ROI), a multistate, multiprogram community development corporation. ROI was

Green, Galetto / EMPLOYER PARTICIPATION TABLE 1

Workforce Development Case Studies Compared Rural Opportunities Inc.

Mid-Delta Workforce Alliance

Wisconsin’s Plastics Valley Association

Function

Loosely connected network Community-based organization Community development that provides educational focusing on promoting systemcorporation offering a and training programs to atic information sharing and netwide range of programs plastics employers in and services to farm work- working across local Wisconsin organizations rather than providers, low-income families, ing direct services. It serves a and economically three-county area in Mississippi depressed communities and Arkansas. throughout New York, Pennsylvania, New Jersey, Ohio, Indiana, and Puerto Rico

Types of training

Madison Area Technical Three areas of focus: current A direct provider of the College (MATC) Training National Farmworker Jobs employees; out-of-school and Program in Plastics; 2+2+2 out-of-work; and future employProgram in Plastics ees: school-to-work transition; Groundhog Job Shadow Day

Number of workers trained

More than 300 people have A program was offered twice, in In fiscal year 2001-2002, participated in the MATC 1996 and 1998. The first time 253 people were trained: Training Program in Plas92 received and completed about 200 people went through tics since 2001. For the the training, but far fewer people “soft training” and 161 2+2+2 program, 11 workparticipated in the second. The “hard training.” ers participated in the first alliance implemented the 2 years, 4 in the second 2 Groundhog Job Shadow Day for years, and none in the third the first time in 2002, in which 2 years. 226 students in Arkansas and 573 in Mississippi shadowed more than 420 workplace hosts. A 2-week program, the Sunflower Employability Skills Project, trained 25 people in 2002.

established in 1969 by the State University of New York’s Center of Migrant Studies (CMS). It started as an umbrella organization for a decentralized set of offices providing services to migrant and seasonal farm workers throughout New York. In 1971, it became an independent entity from the CMS and moved its central offices from Genesee to Rochester. Today, ROI offers a wide range of programs and services not only to farm workers in New York but to low-income families and economically depressed communities throughout New York, Pennsylvania, New Jersey, Ohio, Indiana, and Puerto Rico. ROI has become the biggest nongovernmental organization in the United States serving migrants and seasonal farm workers. The main areas of service are education, training and employment, child development, health and safety, economic development, housing, property management, and real estate development. A unique feature of this organization is that it provides a holistic approach to workforce development by offering a wide variety of services, most of which it provides internally. Currently, ROI’s most important training effort is the National Farmworker Jobs Program (NFJP), a federally funded initiative regulated by the Workforce Investment Act and administered by the Department of Labor. Under the NFJP, ROI offers four types of services: (a) job-related assistance services, which are short-term forms of direct assistance that address an urgent need, such as food, shelter, and medical care; (b) core services, which include initial skill assessment, job search, placement assistance, and counseling; (c) intensive services, which cover skills objective assessment and adult education such as English as a Second Language (ESL); and (d) training, which includes on-the-job training, occupational skills training, and work experience acquisition.

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To deliver these services, ROI works closely with local businesses, training institutions, public agencies, and other CBOs. Specifically with respect to businesses, the organization builds on existing relationships with area employers but constantly seeks to develop new relationships as well. It allocates staff to building personal relationships with employers through routine visits to firms, phone calls, and mail correspondence. ROI has been fairly successful in obtaining employers’ collaboration. In part, this has to do with the fact that employers are offered strong financial incentives to participate, including subsidized training and an array of free services. In spite of these benefits, not all employers are willing to participate because the people served by ROI have, in general, poor command of English, little education, and practically no job experience outside agriculture. In 2001, for instance, about 88% of ROI clients were Hispanic, and 61% had never completed elementary school. In addition to area businesses, ROI maintains relationships with local community colleges and private training and education providers. The people ROI serves attend these institutions to learn a trade (welding, carpentry, electrical), earn a degree (certified nurse assistant, commercial driver), or take classes (adult basic education, ESL). Also, the organization closely works with public agencies and other CBOs. This model has several advantages, such as providing services on a holistic basis and securing grants and funding for programs. It is, however, not as responsive to employer needs as other network models and may have difficulty coordinating programs with other CBOs that may be seen as competitors (Green & Haines, 2002). Hub-Spoke Network Another model for workforce development networks is the hub-spoke structure with a CBO at the center. In these networks, the CBO is in charge of building capacity to work collaboratively among partners rather than providing direct services to them. An example of a hub-spoke network is the Mid-Delta Workforce Alliance. The alliance serves a three-county area in Mississippi and Arkansas. Its main office is in Greenville, Mississippi. It began in 1995, when a group of community leaders submitted a workforce development proposal to the Foundation for the Mid-South, a regional development organization serving Arkansas, Louisiana, and Mississippi. The foundation was created at the end of the 1980s to address common issues that transcended state borders. Poverty, was, and still is, the region’s most enduring and pressing problem. The alliance facilitates communication among employers, educational and training institutions, human services providers, and CBOs and helps them come together to assess local workforce development needs and to take advantage of existing but untapped resources. It aims at promoting systematic information sharing and networking across organizations, with the ultimate goal of building the capacity of local organizations to work collaboratively around workforce development issues. It focuses on current employees, out-of-school and out-of-work people, and future employees. Current employees often need additional skills to remain in their jobs or obtain better ones. The alliance serves this population by identifying available training programs, but also by developing programs that respond to new or specific local needs. The organization has carried out two programs in this area. First, in 1996 and 1998, it offered a 6-week program in math, English, computer use, and soft skills. About 200 workers went through the training in 1996; fewer people participated in the second offering. The programs linked the alliance, local businesses and industries, and the Mid-Delta Community College. Second, the organization put together the Sunflower County Employability Skills Project, which assessed skill levels and provided 2 weeks of intensive training in basic math, reading, computer use, and soft skills. This program was run by the county’s economic development organization, the local educational center, and a large wholesale grocery chain. The out-of-school and out-of-work population is made up of adults who are unemployed or marginally employed. The alliance is an advocate for this population in the public policy arena, and it recently joined two national networking groups that deal with workforce development policy issues.

Green, Galetto / EMPLOYER PARTICIPATION

In its focus on future employees, the alliance links local businesses and industries with schools by developing programs that increase the interaction between employers and students. In particular, it seeks to provide students with comprehensive information about employment options in the delta and to encourage schools to develop flexible and up-to-date curricula that are responsive to local employment opportunities. The most important project in this area is the Groundhog Job Shadow Day, an initiative in which students “shadow” workplace mentors as they go through a normal day on the job. In 2002, the 1st year for the project, almost 800 students shadowed more than 420 workplace hosts. The alliance operates through a decentralized, county-based administrative structure. Each county has a task force that includes representatives from businesses, education and training institutions, government agencies, human service providers, and community leaders. Task forces have different dynamics and priorities, which result in different strategies and capacities for addressing workforce development needs. At the same time, they function within a larger organizational structure and can tap into services and programs available throughout the region. Task forces receive vision, direction, and institutional support from the alliance’s board of directors. The hub-spoke model has been relatively successful in building community capacity and linking with regional employers. This is particularly important given that one of the main challenges of collaborative efforts is to build trust and cooperation among various actors who usually interact little. For many regional employers, the alliance provides a system that improves access to qualified workers who have received both soft- and hard-skill training. Compared with the sole-provider model, employers participating in a hub-spoke system take a much more active role in identifying training and other service needs. Cluster Network A cluster network is organized across a single, geographically concentrated industry. Firms located in relatively close proximity to one another tend to benefit from economies of agglomeration. One of these benefits is a specialized labor force from which employers can draw. Cluster networks thus tend to focus on education and training efforts, which are seen as magnets to attract further firms to the region. An example of an industry-oriented network is Wisconsin’s Plastics Valley Association (WPVA). This initiative is a partnership of industry employers, local economic development corporations, University of Wisconsin–Platteville, University of Wisconsin–Stout, University of Wisconsin–Extension, Madison Area Technical College, high schools, and other local organizations. The WPVA was launched in 1998 with a focus on workforce training and education. The tight labor market of the 1990s created a severe labor shortage in the region. In addition, the association wanted to improve state government officials’ and other decision makers’ understanding of the plastics industry. The association developed a strategic plan and appointed three committees to carry out the actions identified in it. The WPVA was created to serve plastics employers in Juneau, Sauk, and Columbia counties. It expanded, however, to cover the entire state of Wisconsin, except the north. The WPVA developed two training programs: 1. The Madison Area Technical College Training Program in Plastics was designed for people working in several types of positions within the plastics industry. It is a 20-hour introductory program in soft skills, and about 300 people have participated over a period of 2 years. 2. The 2+2+2 in Plastics program consists of three levels of skills acquisition articulated through the educational system. Each component builds on the previous one, allowing participants to move from a high school apprenticeship to a bachelor’s degree in or related to plastics. Thus, students in high school take a curriculum in their last 2 years focusing on general skills in the plastics industry. After students graduate, they can move into the second 2 years of the program at one of several 2-year colleges. These institutions train students to work as technicians in the plastics industry. In the final 2 years of the program, students can obtain bachelor’s degrees in several fields related to plastics, such as engineering.

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University of Wisconsin–Stout and University of Wisconsin–Platteville have developed degree programs in response to this initiative. Very few students have participated in the 2+2+2 program. One of the problems is that small firms generally lack the resources to invest in long-term training. Also, many small businesses in the region think the program has been customized to large manufacturers in the region. The other major problem is that local high schools do not have the resources to devote to a curriculum for just a few students. The plastics industry is not sufficiently concentrated in the area to generate enough demand for high school programs. This case study reveals some of the contradictions of employer participation in workforce development networks. Employers did not initiate the network; several public sector organizations took the lead. They struggled in finding ways to hand off responsibilities for the organizations to regional employers. Unfortunately, it was the large manufacturers who took the lead, which created obstacles to widespread participation in the partnership. DISCUSSION OF CASE STUDIES

Workforce development networks usually are made up of public sector organizations, employers, and training institutions, but there are significant differences in how these elements work together.

Workforce development networks take a variety of forms, and no single structure will work in all settings (Harrison & Weiss, 1998). Workforce development networks usually are made up of public sector organizations, employers, and training institutions, but there are significant differences in how these elements work together. Each model appears to have its own set of advantages and disadvantages. Some models are much more employer-centered than others; some tend to focus on broad sets of skills but others on more narrow skills. Interviews with employers, organizations, and institutions involved in workforce development networks suggest that these efforts must be employer-led to be effective. Employers are skeptical of public sector initiatives, but they are unlikely to start such efforts. In most cases, government agencies, community colleges and state universities, or economic development organizations have been involved in establishing these networks. The trick is to build the capacity of the network to the point that employers will be responsible for developing and implementing training programs. Many of the networks struggle with employer participation. Employers participating in the networks were not necessarily motivated by training programs. For example, in the case of the WPVA, a tight labor market and difficulty in hiring were major considerations. Improved training was of secondary importance. Cluster networks may be especially difficult to implement in rural areas because of the density and scale required to make them effective. Distance also makes it more difficult to communicate and develop a sense of trust among participants. That does not mean there are no success stories of cluster development in rural areas. There are, however, distinct obstacles in building training programs through these networks in these settings. The key to promoting employer participation in workforce development networks is identifying the proper set of incentives. Employers participating in these networks appear to be motivated by self-interest. Appealing to social concerns or community well-being is not likely to have much of an impact. Public organizations, such as training institutions and economic development groups, need to be involved in helping facilitate the efforts, but employers need to take the lead in identifying and implementing training programs if such efforts are to succeed. REFERENCES Beaulieu, L. J., & Mulkey, D. (1995). Investing in people: The human capital needs of rural America. Boulder, CO: Westview. Gibbs, R. M., Swaim, P. L., & Teixeira, R. (1998). Rural education and training in the new economy: The myth of the rural skills gap. Ames: Iowa State University Press. Giloth, R. (2000). Learning from the field: Economic growth and workforce development in the 1990s. Economic Development Quarterly, 14(4), 340-359.

Green, Galetto / EMPLOYER PARTICIPATION Green, G. P., Galetto, V., & Haines, A. L. (2003). Collaborative job training in rural America. Journal of Research in Rural Education, 18(2), 1-8. Green, G. P., & Haines, A. L. (2002). Asset building and community development. Thousand Oaks, CA: Sage. Harrison, B., & Weiss, M. (1998). Workforce development networks: Community-based organizations and regional alliances. Thousand Oaks, CA: Sage. Swaim, P. L. (1995). Job training lags for rural workers. Rural Development Perspectives, 10(1), 53-60.

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