A Win-Win Approach to Workforce Development:  Industry-Specific Initiatives & Advice on Working with Employer Partners

by: Ida Rademacher
Senior Research Associate, Economic Opportunities Program 
The Aspen Institute

At the Aspen Institute, we have been researching labor market dynamics and workforce development initiatives at the community level since 1994 in an effort to understand how to improve the economic opportunities available to poor and low-skilled individuals. What we have observed in talking with employers, low-income job seekers, and non-profit leaders is that regardless of which side of the market you are coming from, it is difficult to navigate successfully without developing strong relationships with partners that understand your needs.

Among businesses, managers are perennially in search of skilled, entry-level workers who demonstrate sound judgment and conscientious work habits—characteristics they note are increasingly hard to find in the labor pool. But there is a premium to be paid for attracting and retaining skilled labor, and the same managers who recruit are also tasked with holding down the costs of doing business in order to remain competitive. The two pursuits naturally frustrate one another: Reducing costs by cutting internal training budgets and employee benefits can increase turnover and decrease productivity. The managers we’ve interviewed in our studies are aware of these tradeoffs, but they struggle to find a better way. 

Among job seekers, especially workers from low-income communities, navigating the labor market is equally frustrating. First, there is the seeming disappearance of “good jobs” for workers with limited skills. The opportunities that are available are less apt to provide stable, steady employment, thus diminishing the odds that workers will acquire the experience, training, and personal relationships and networks that have traditionally enabled upward mobility. The general public tends to think that the majority of entry-level, dead-end jobs are staffed by young people, but in the baseline year of a 3-year survey we conducted with over 700 low-income job seekers, we found that the average age of respondents was 34, that they had been participating in the labor market for over 12 years with little success securing living wage jobs or access to career ladders. 

A Solution: Industry-Specific Workforce Development

It is no small challenge to make labor markets responsive to the needs of both employers and individual job seekers, nor is it a challenge that most businesses or training providers are equipped to address. But in a growing number of communities around the country, new initiatives are developing to play the brokering role and improve labor market outcomes. The programs that we are most impressed with have taken an industry-specific approach to workforce development. These industry-specific, or “sector-based” programs, share a core set of characteristics that distinguish them from traditional workforce training programs. These are highlighted in the box below. 

A unique aspect of the industry-based approach to workforce development is that intermediaries achieve sustainable improvements and expansions of employment opportunities for low-income workers through value-added contributions to the industries they target. These industry-specific initiatives demonstrate a thorough understanding of how an industry works, its actors, and its operating context, and are able to identify the types of activity and assistance that will address the key labor problems that challenge the industry.

Evaluating the Industry-Specific Workforce Approach

Over four years the Aspen Institute evaluated six long-established programs in order to understand how their industry-specific strategies and partnerships created positive outcomes for both employers and low-skilled workers. In the next article, we will discuss the survey findings of our research and elaborate on how programs helped individuals improve their employment and income opportunities. Here we provide examples from our case study research that illustrate the ways two programs in our evaluation worked with employers to address their workforce issues. The examples are taken from Chicago’s Jane Addams Resource Corporation and New York City’s Garment Industry Development Corporation.

Quality Candidates: A Win for Employers

The win-win nature of industry-based workforce initiatives is evident in feedback from both workers and employers. During the course of our case study research, we found that the attributes that make an initiative’s training program meaningful and effective for low-income workers also are cited by employers when discussing the value of working with these programs. In the majority of interviews with employers, we heard that the key reason that businesses valued their relationship with industry-based training programs was because their approach to training created better, more productive workers. 

For example, the Jane Addams Resource Corporation of Chicago (JARC) works specifically in the manufacturing industry training entry-level and incumbent workers in basic punch press and production processes. In its effort to stay engaged and responsive to the needs of employers, JARC regularly surveys its business partners. During the year we researched JARC (1999), the organization surveyed the 17 firms that had worked with them about a range of training courses their employees had taken at JARC over the course of the year. The firms reported that 79 percent of the 24 courses JARC had conducted directly helped increase worker productivity, in some cases by as much as 60 percent. Increased productivity stemmed from employee training that resulted in reduced waste; improved worker communication and problem-solving skills; reduced set-up time for punch press, die and other production processes; and improved safety practices in the workplace.

Donald Koop, the Director of Human Resources at Parkview Metal Products in Chicago told Aspen researchers, “In an environment of increasing competition, greater demands for quality but decreasing availability of highly skilled employees, JARC meets multiple needs. They were a major factor in our decision to keep punch press operations in Chicago.”

Adding Value Beyond Training

Employers also benefited from consulting and management services provided through their relationships with industry-based workforce development organizations. Programs tend to develop and offer these additional services to their employer partners as another way to help improve job quality for workers, but do so in a manner that can enable businesses to increase their productivity, lower costs, and improve profits.

Management consulting services assist businesses with productivity and cost containment by helping them learn how to get the most value from their workers and their production processes. For example, the Garment Industry Development Corporation (GIDC), located in Chinatown in Manhattan, worked with Feldman Manufacturing, a Queens-based producer of swimwear and specialty lycra, to advise them on the purchase of a new Gerber cutter and to provide training to workers and supervisors on the correct use of the new equipment. After its adoption, owner and manager Richard Feldman noted the improved quality achieved by the cutting department and the reduced amount of waste. These results had an important impact on the bottom line for Feldman Manufacturing. 

Additionally, GIDC provided Feldman Manufacturing with training for a group of employee volunteers to introduce a modular manufacturing process. Workers had to understand all aspects of production and also needed to understand their new decision-making and quality control roles. In addition, a new pay system had to be devised to provide appropriate incentives for teamwork. The result has been a marked decrease in turn-around time for production, an important competitive advantage. An added benefit is the workers’ pride in their enhanced role in the production process. Richard Feldman states that he never would have instituted modular manufacturing without GIDC’s encouragement and support.

For Organizations Considering Industry-Specific Workforce Initiatives, here are lessons for working with employer partners:

• Be clear what segment of the industry’s employer community your services can best serve. In any industry, employers fall along a spectrum of sophistication. Large/small, sophisticated/back of the envelope, proactive/reactive, etc. Initiatives must understand the range and understand the different challenges that each part of the spectrum face.
• Understand that even within a company, there are many different decision makers. Individuals in the firm’s HR department may not always have full information from colleagues about the specific skills and experience levels their entry-level workers needs to perform jobs successfully.
• Recognize that employers are often challenged by resource constraints that prevent them from changing their behavior.
• Workforce initiatives need to remain focused on the business case to “sell” their services to employers, and avoid playing to an employer’s sense of social conscience when establishing relationships. 

Ida Rademacher is a Senior Research Associate with The Aspen Institute’s Economic Opportunities Program (www.aspenwsi.org). She currently works as a principal research analyst and spokesperson for EOP’s Sectoral Employment Development Learning Project, a 3-year learning evaluation designed to document the operational strategies and participant outcomes of industry-specific workforce development programs. She is the lead author of the Project QUEST case study, and co-author of the sector policy series entitled Measure for Measure: Assessing traditional and sectoral strategies for workforce development. Before joining The Aspen Institute, she worked as a management and research consultant in the U.S. and Australia. Her prior research and writing has documented social, economic and environmental impacts of privatization and market transitions in energy, telecommunications, and financial sectors of the economy. Ms. Rademacher’s undergraduate degrees are in anthropology and economics. She holds a Master’s Degree in Public Policy from the University of Maryland School of Public Affairs.

For more information, please visit the Aspen Institute's website or contact Ida at ida.rademacher@aspeninst.org.