CREC Project News and Updates

Talent Development: Federal-State Economic Development Collaborations

December 9, 2015
  • Topic Overview

Workforce development—or Talent Development—encompasses initiatives that educate and train individuals to meet the needs of current and future business and industry in order to maintain a sustainable competitive economic environment.  In a recent survey of corporate executives, two of the top three most important site selection factors relate to workforce development (Citation: “The Role of Workforce Development in Economic Development,” National Association of Workforce Development Professionals, May 2015). The availability of a skilled workforce, and the productivity of that workforce are critical determinants to whether or not a business will locate or expand in a region. It is also critical for existing companies as they compete for new business. Furthermore, workforce development can be leveraged to foster entrepreneurial development. Most job growth comes from firms employing less than 20 people, and the majority of it from firms employing less than 10.

  • Federal Role & Priorities

Federal job training programs help employers to hire the workers they need and help millions of Americans to reach their full potential. Using an expansive definition, federal employment and training programs are funded at just over $17 billion in the FY 2014 federal budget. By way of comparison, in 2013, U.S. employers are estimated to have spent over $450 billion on training. Traditionally, these federal programs (often referred to as the “public workforce system”) were focused on helping individuals find employment or seek out education and training based on their personal goals and interests. In this context, metrics tended to focus on placements and emphasized the hard-to-serve over those already in the workforce whose skills were becoming obsolete or the talent pipeline required to meet industry needs.

However, a successful public workforce system actively engages employers to ensure that training and education investments prepare Americans with the skills needed to be productive and properly rewarded. In rapidly-changing industries and a globalizing economy, this engagement must be dynamic and must be move beyond the human resources function of the company to the “C-suite.”

Both the Bush and Obama Administration worked to implement these strategies within the legacy public workforce system by promoting pilot efforts to promote collaboration between economic and workforce development and to encourage industry engagement through sector strategies. The Obama Administration began using competitive grant programs to make the public workforce system more demand-driven. In July 2014 the Vice President released the Job-Driven Training (Citation: The White House, “Ready to Work: Job-Driven Training and American Opportunity”, July 2014) report, which includes calls to action for helping 24 million low-wage, lower-skill American workers to upskill themselves into better jobs, and expanding the ways that a diverse array of Americans can be trained for a half million jobs currently unfilled in information technology occupations, and hundreds of thousands more that need to be filled soon.

  • Major Federal Programs & Activities

In July 2014, Congress enacted the Workforce Innovation and Opportunity Act (WIOA) on a bipartisan basis as a replacement to the Workforce Investment Act. WIOA seeks to transform the public workforce system by providing states and local areas the flexibility to collaborate across systems in an effort to better address the employment and skills needs of current employees, job seekers, and employers. WIOA accomplishes this by requiring:

  • A stronger alignment of the workforce, education, and economic development systems; and
  • Improving the structure and delivery in the system to assist America’s workers in achieving a family-sustaining wage while providing America’s employers with the skilled workers they need to compete on a global level.

WIOA consists of four core programs: Adult, Dislocated Worker, and Youth; Adult Education and Literacy; Vocational Rehabilitation; and Wagner-Peyser Employment Services. The common performance measures on which WIOA core programs will be assessed include: employment placement; median earnings; credential attainment; skills gain; and effectiveness in serving employers.

WIOA embraces the principles of the Job-Driven Checklist included in the Vice President’s Job-Driven Training report. The checklist serves to guide administrative reforms and to ensure that what’s working best becomes what all Americans can expect from federally funded employment and training programs. Of particular note, the checklist highlights the importance of (1) working with employers up front, (2) utilizing work-based learning opportunities, including on-the-job training, internships, pre-apprenticeships, and registered apprenticeships, and (3) making better use of data to drive accountability, inform what program offered and delivered, and provide user-friendly information to job seekers.

  • State Role

Statewide Workforce Development Boards, appointed by the Governor, provide oversight for their respective workforce systems; and under WIOA are to be increasingly engaged in the business of collaboration, convening, and partnership. Workforce Board composition at both the state and local levels must consist of at least 51 percent Business Representatives, including the Board Chair, and must also contain at least one representative each from Higher Education and Economic Development.

In an effort to create a more comprehensive, strategic and streamlined system, WIOA requires a single, Unified State Plan inclusive of all core programs under the Act. The State Plans seek to improve service delivery and access to the workforce system for job seekers and employers. These strategies provide an opportunity for states to engage in new innovative approaches to employer engagement, using technology, or strengthening core programs; developing career pathways and industry and sector partnerships; and affording the opportunity to use labor market analysis to drive a comprehensive analysis of the state’s talent needs. Local Plans are designed to address the needs of the local labor market and encompass the overall strategy embodied the State Plan.

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About the Client

Appalachian Regional Commission

The Appalachian Regional Commission (ARC) is a regional economic development agency that represents a partnership of federal, state, and local government. Established by an act of Congress in 1965, ARC is composed of the governors of the 13 Appalachian states and a federal co-chair, who is appointed by the president. Local participation is provided through multi-county local development districts.