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Sectoral employment: Meeting the needs of workers and industries
By DUANE M. ELLING
Nineteen-year-old T.J. Velez believes in divine intervention.
In early 2006 he was surviving financially by selling illegal drugs near downtown Cleveland. Not a career that he was proud of, T.J. says, but at the time he believed “it was the only thing I was any good at.”
Later that summer, however, staff at the Cleveland-based Westside Industrial Retention and Expansion Network (WIRE-Net) called to say he had been accepted into a local job training program focused on precision machining.
WIRE-Net is an employer-based membership organization and Mott Foundation grantee that sponsors job preparation programs at various training institutions in Ohio.
“I couldn’t remember filling out an application or even hearing about the program,” T.J. said. “I believe that God was looking out for me and made it happen. And it completely changed things for me.”
Today, as a result of his job training and new outlook on life, he is working full-time, making diamond-tipped cutting tools at E.C. Kitzel & Sons, a local manufacturer.
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Sectoral employment programs help low-skilled workers prepare for careers in targeted industries.
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T.J. is one of many people who have transformed their futures with the help of sectoral employment programs around the U.S.
Sectoral programs prepare workers for careers within a particular industry or “sector” via job-specific education and training, as well as access to living-wage employment. Many also connect workers with support services -- including life-skills development, specialized counseling and case management -- designed to help them overcome barriers in their career path.
The field is helping shape the nation’s labor market by involving employers from specific industries in the design and implementation of regional sectoral training programs, thus ensuring that participants gain the skills needed to succeed in the workplace. Businesses also are engaged in restructuring employment practices -- recruitment, hiring, training, promotion and compensation -- in order to grow the quantity, quality and accessibility of living-wage jobs for low-income, low-skilled workers.
By creating pools of skilled and prepared workers, sectoral programs also help employers minimize the costs associated with staff training and turnover. As a result, businesses are better positioned to be competitive and expand into new markets, which can generate additional job opportunities -- as well as economic strength and stability -- for local communities.
And the emerging impacts of sectoral strategies are fueling many state and federal policy debates about workforce and economic development, thereby helping to reshape the future of job training in the U.S.
These combined impacts, says Maureen Conway, reflect a “genuine system approach” to workforce development.
Conway is deputy director of the Aspen Institute’s Economic Opportunities Program. The institute first defined sectoral employment in a 1995 report, Jobs and the Urban Poor: Privately Initiated Sectoral Strategies, published by the Mott Foundation.
Mott has provided more than $75 million in grants since 1986 in support of what are now called sectoral programs as well as field studies and evaluations designed to test the approach and its outcomes. That grantmaking includes $5.3 million to Aspen for sectoral-related activities.
A 2007 report by Aspen, Sectoral Strategies for Low-Income Workers: Lessons from the Field, provides an update on the earlier report. It highlights the idea that by shaping workforce development systems, sectoral programs are creating lasting change in the labor market system to the benefit of both workers and employers.
The broad scope of that approach makes sectoral program stand out.
Conway says job training programs traditionally have focused on preparing workers for entry into the labor market, but with little input from the industries that hire them.
As a result, participants may spend weeks, or even months, developing skills that fail to meet the needs of local businesses. And employers discover that their newly hired employees cannot produce or perform at the expected level. As a result, both become frustrated and disappointed, putting what already might be fragile relationships at significant risk.
Conway says sectoral programs, on the other hand, “reflect an understanding of the educational challenges and life situations of workers, as well as the competitive dynamics and workplace environments associated with specific industries. When done well, they provide businesses with valuable employees, and workers with meaningful ways to start and advance in their careers.”
Over the years, the strategy has demonstrated its value.
For example, Aspen’s Sectoral Employment Development Learning Project (SEDLP) – which ran from 1996 to 2002 with the help of $1.4 million in Mott support-- found that two years after receiving industry-focused training, participants’ median annual income rose from $8,580 to $17,732.
And under a four-year Sectoral Employment Initiative (SEI) -- launched in 1998 by the Washington D.C.-based Public/Private Ventures and recipient of $3.9 million in Mott support -- sector-trained workers increased their median yearly earnings from $10,486 to $18,875.
Both initiatives found that graduates of sectoral programs developed more consistent employment patterns. The SEDLP reported that two years after completing training, the proportion of participants who maintained year-round employment rose from 23 percent to 66 percent. The SEI has reported a similar increase -- from 22 percent to 61 percent.
Finally, many sectoral program participants report improved overall job quality and career prospects. For example, 78 percent of SEDLP graduates obtained positions that offered employer-supported health insurance, compared with 50 percent prior to training. And 82 percent believed that their industry-focused experience would open doors to advanced work opportunities in the future.
Such outcomes factor heavily in public policy debates over sectoral employment as a workforce development strategy.
Jack Mills, director of the National Network of Sector Partners (NNSP), said, “The extent to which states are creating components of sector strategies and, in some cases, establishing full policy frameworks to support sector initiatives has grown markedly in the past few years.”
To date, 17 states have begun efforts to adopt the approach at some level.
NNSP is a membership-based organization that provides information, resources and technical assistance to the field of sectoral employment and works to increase policy support for sector initiatives. It is a program of the Insight Center for Community Economic Development - formerly the National Economic Development and Law Center - which launched the NNSP in 1999 with $1.8 million in Mott support.
Mills says developing state level policies around sectoral employment requires a focus on regional economies and a comprehensive understanding of regional labor markets, including the accurate identification of promising industries and relevant occupations.
Next, he says, states must align resources, organizations and programs around the sector strategy. This may include nurturing collaborations among state agencies engaged in workforce and economic development, as well as institutions in post-secondary education.
The growing integration of such partnerships with community and technical colleges reflects an emerging trend in the field of sectoral employment.
The rationale for this is clear, says James McKenny, vice president for economic development at the American Association of Community Colleges (AACC).
“These schools provide more than high quality training and education. Many also have a strong, visible history of working collaboratively with local agencies and audiences. They’re recognized throughout their communities as being accessible and responsive. And because they’re accountable to the public, there’s a sense of local trust and ownership of the institution.
“Those are all huge advantages to a resource- and action-intensive strategy like sectoral employment.”
Helping other communities capitalize on those relationships is the focus of the Center for Workforce and Economic Development. The center, created in 2006 by the AACC with $200,000 in Mott support, seeks to highlight and share models for linking community colleges with the fields of workforce and economic development, as well as labor market leaders and community organizations. It presently focuses on practices found in 11 community colleges in Illinois, Indiana, Michigan and Ohio.
Among those schools is Macomb Community College (MCC), located in Michigan.
Jim Jacobs is director of the college’s Center for Workforce Development and Policy.
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Precision machining is one of many industries targeted by sectoral programs.
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He says community colleges can play an important role in advancing sectoral strategies in states such as Michigan where low-skilled, high-paying manufacturing jobs, once plentiful, have largely disappeared. As a result, displaced workers increasingly find themselves on unfamiliar territory -- the college campus.
“For many of these families, secondary education may have always seemed out of reach, perhaps even scary,” Jacobs said. “The community college can appear more accessible and less intimidating. As a result, it provides many people with a critical bridge to job training and an entry point to other educational opportunities.”
At the same time, he says, community colleges are uniquely suited to creating educational curriculums tailored to the needs of local industries.
“The schools can play a significant role in figuring out what skill sets are needed and creating the relationships with employers. As a result, workers have a stronger chance of being connected to -- and succeeding in -- a living-wage job.”
The launch in recent years of two Mott-funded, multi-year initiatives reflects this growing recognition of community colleges as vital partners in workforce development strategies, including sectoral employment.
The first is the Opening Doors demonstration, started in 2003 by the New York City-based MDRC, a nonprofit, social policy research organization. The demonstration’s focus is on the role of community colleges in helping low-income students continue with their education, obtain certificates or degrees, and succeed in the labor market. Mott support for Opening Doors has totaled $801,000 since 2003.
The second demonstration, entitled Breaking Through, was launched in 2005 by the Boston-based Jobs For the Future. Its goal is to expand the capacity of community colleges to help adults with low literacy and math skills succeed in professional and technical certification programs. Mott has made $4 million in grants for the demonstration, including planning activities, since 2004.
While both initiatives are relatively new, they are yielding some encouraging results.
For example, one of the sites participating in the Opening Doors demonstration provides opportunities for small groups of low-skilled community college students to take two or three classes together during their first semester. They also receive specialized counseling and tutoring services.
Early findings suggest that the students participating in these “learning communities” may perform better academically than underserved students who start college without such a support system. As a result, they may be more likely to stay with their studies, earn their certificates or diplomas, and enter the workforce with a ready set of needed skills.
As the importance of such community-based partnerships to the sectoral approach grows, challenges -- including funding issues -- remain. This is especially true, says Mills, in regions with struggling economies.
But as the benefits of sectoral programs become increasingly apparent, many states are finding creative ways to make such programs a reality.
For example, Michigan -- with support from both the public and private sectors, including Mott -- linked resources for economic and workforce development in 2004 to create the Michigan Regional Skills Alliances (MiRSA). Each MiRSA is designed to addressworkforce issues in a specific region and industry sector, ultimately connecting residents with living-wage jobs and providing local employers with a skilled workforce.
Driving each MiRSA is a group of employers that share similar labor market issues within the target industry and that can help leverage available resources. Also key to the model is the development of coalitions and partnerships in core areas, such as education and job training providers, and faith-based and community service organizations.
Michigan to date has funded 34 MiRSAs in manufacturing, biotechnology, health care, construction, hospitality and information security industries. The state’s Department of Labor & Economic Growth reports that more than 6,400 individuals have received sector-focused training via the program, with more than 1,000 finding new careers in their target industry.
Helping other states explore the benefits of sectoral programs and build the support necessary for their successful launch are among the goals of the Accelerating State Adoption of Sector Strategies project. It was launched in 2006 -- with $450,000 in Mott funding -- by the National Governors Association in partnership with NNSP and the Corporation for a Skilled Workforce (CSW), a national nonprofit that focuses on policy research and practices in the areas of economic, workforce and community development.
Specifically, the project works with states to consider issues of financing and policy related to the sectoral model, and to develop regional approaches to industry-specific workforce and economic development. It also helps states create and strengthen partnerships that reach across workforce, education, social services and economic development.
The project has produced an evaluation framework to help states measure the impact of their sector strategies on workers and employers, the quality and effectiveness of participating collaborations, and the extent to which local workforce and economic systems are changed.
More than 30 states are participating in the project.
Larry Good, chairman of CSW, says this growing attention to sectoral employment reflects an increased understanding at various levels -- including federal -- that “it makes sense to focus our limited public resources on strategies that promise the ‘biggest bang for the buck.’”
“At its best, workforce development connects families with good jobs, helps employers grow their businesses, and builds the economic muscle of communities,” he said. “We’re seeing all of those outcomes with sectoral employment.”
Sectoral advocates are exploring ways to strengthen the field. Among the activities currently under way are Sector Skills Academy, an annual series of workshops that help program providers acquire new skills, engage in peer exchange and learn from field mentors. Those lessons are then applied in ways that enhance the providers’ work in their specific sectors.
More effectively documenting the impacts of sector strategies on businesses is also an important goal, Conway says. Those impacts can be as unique and varied as the employers themselves. In addition, each can be affected by various market and economic forces outside the control of the worker, the industry or the sectoral program.
While the field works to address these challenges, Tom Schumann is already convinced of sectoral employment’s inherent value.
Schumann is general manager of E.C. Kitzel & Sons, the Cleveland-based manufacturer that hired T.J. Velez in the summer of 2006. He is also vice chairman of the WIRE-Net Board of Directors and chairs its Manufacturing Assistance and Employment & Training Committee.
To date, Kitzel & Sons has hired 10 employees via local sectoral training programs.
Schumann says he has been very satisfied with the results.
“These individuals arrive with an understanding and interest in the type of work we do, as well as the technical and life skills they need to succeed in this labor market. As an employer, I couldn’t ask for anything more.”