This blog post is a DRAFT chapter for a book being published by Origami Works Foundation. We will correct inaccuracies in the final book version. If you identify any inaccuracies, please let us know using this Feedback Form.
This chapter lays out some workforce development fundamentals, including how various stakeholders are involved. We’ll answer these questions --
What are the aims of workforce development?
How does it operate?
Who delivers services to employers, job seekers, and wage earners?
How is it funded?
Who benefits?
The main purpose of this book is to inform you, an employer, about why and how to leverage your community’s investments in workforce development to meet your organization’s talent needs. We think it helps to have a basic knowledge of how this enormous ecosystem functions overall. Armed with that awareness, you can gain a fuller understanding of the many ways to access benefits and achieve goals, often at a low cost, or no cost at all.
Workforce development involves many stakeholders who may or may not be labeled “workforce development.” Some entities may never intersect with or even know about one another. So, in this book, we refer to the totality of providers as the workforce development ecosystem, or for short, the workforce ecosystem. We are purposefully avoiding the term “workforce development system,” which implies one integrated system that is coordinated by some single entity. This is seldom the case.
Workforce Development Aims
Workforce development is all about boosting the skills and opportunities of residents in a region to fuel economic growth and prosperity. Think of it as a collaborative effort among the government, schools, businesses, nonprofits, and other entities to close gaps between the businesses that need talent and people who need work.
Workforce development aims to create, sustain, and retain a viable, skilled regional workforce that can support current and future business and industry needs. Organizations engaged in workforce development support local economies by striving to ensure that businesses can fulfill their hiring needs with skilled employees, often by accessing talent pools that are frequently overlooked.
Workforce development involves addressing skills deficits by investing in education and training for employees and potential employees. It also can address other kinds of gaps, such as a lack of public transportation, or issues with the quality of available jobs (e.g., low pay or lack of benefits).
Workforce development also can tackle information gaps. If businesses and potential employees aren’t aware of one another, or if misperceptions and inaccurate assumptions are in play, they are unlikely to connect. Workforce development can educate employers about the capabilities and value of talent pools that are frequently underutilized, such as individuals who don’t have college degrees or are living with disabilities. It also can educate job seekers about career paths they may not have considered.
Workforce development addresses not only gaps and problems, but also opportunities. For example, a region may decide to intentionally invest in building specialized skills among its citizens, for example by providing free or low cost certifications through its community college system. If a region has skilled talent, then high-growth industries are more likely to take root there.
Finally, workforce development programs often support entrepreneurship and small business development, empowering individuals to start their own businesses and create jobs.
By investing in workforce development, governments and other stakeholders aim to provide local industries the skilled workforce they need to stay competitive and keep the economy humming, while also making sure everyone has a shot at success.
Workforce Development Activities
Developing a region’s workforce probably sounds like a good idea. This section describes how it is done - i.e., the major functions of workforce development at a macro or regional level.
Identify Gaps and Opportunities
Workforce development starts with assessment of the current and future needs of industries within a region. Why? To identify areas where there are shortages of skilled workers, where specific skills are in high demand, and ways to strengthen the workforce to meet specific regional employer needs.
Who performs this kind of assessment? Federal legislation requires states and local areas that receive funding to create workforce development boards to serve as strategic leaders of local workforce development efforts.
A workforce development board coordinates with education and economic development stakeholders to deliver regional workforce programs that meet the needs of job seekers, career seekers, businesses, and communities. A region’s workforce board is responsible for distributing federal workforce development funds and implementing federal programs. The board may also administer other funds and resources.
The federal guidance on workforce boards emphasizes the importance of employer representation on the boards.
Developing a strategic plan for workforce development requires careful consideration of employer needs as well as regional demographics. Here are some key questions that might be addressed --
What are the priority industries and sectors driving economic growth in the region?
What are the existing strengths and weaknesses of the local workforce, including skills, educational attainment, employment rates, and demographics?
What are the current and projected labor market trends in the region?
How can workforce development initiatives be tailored to maximize opportunities for underrepresented groups, including minorities, women, individuals with disabilities, and veterans?
A thorough strategy also considers what metrics and indicators will be used to measure the success of workforce development initiatives.
Implement Initiatives and Programs
Workforce development involves seeking to close gaps and leverage opportunities through a variety of programs. Here are some examples of initiatives that fall under the “workforce development” umbrella --
A nonprofit organization offers general skill building and job placement to a low-income community
A community college develops a certificate program in an emerging industry
An employer partners with a local school system to offer paid apprenticeships to students
A community-based nonprofit works with an employer to promote retention of entry level employees, by providing “success coaching” and emergency loans
A “coding boot camp” teaches programming skills to populations under-represented in the tech field, and places newly certified trainees in jobs
With the support of private funders, a vehicle rental business offers inexpensive leases to help employees access jobs on the other side of town
These are just a few of the different ways workforce development appears in our communities.
Successful workforce development not only provides helpful interventions, but also is intentional about maximizing access to programs. Promoting affordability, accessibility, and awareness can help ensure that individuals have the opportunity to participate in workforce development programs regardless of their background or circumstances.
We’ll take a deep dive into services for businesses in Chapter 4. In the meantime, here is a summary of the types of activities embedded in workforce development initiatives and programs.
Category | Frequently Offered Services for Businesses | Frequently Offered Services for Individuals |
Recruiting & Hiring |
|
|
Temporary Hires |
|
|
Training and Development |
|
|
Retention and Inclusion |
|
|
Who Delivers for Employers and Individuals?
Within the workforce ecosystem, we see services delivered to employers, job seekers, and employees by various categories of entities --
Public administration and government agencies
Public and private education
Nonprofit organizations
Industry associations and labor unions
This section provides an overview of each of these categories.
Public Administration and Government Agencies
Government agencies involved in workforce development typically aim to meet the needs of employers, employees, and job seekers. In addition to workforce boards, already described above, here are some of the key agencies and how they engage with employers.
Type of Agency | What They Do | How They Engage With Employers |
State and local departments of Labor (DOL) | Administer workforce development programs and services aimed at connecting job seekers with employment opportunities and assisting employers with their hiring needs. | Provide recruitment assistance, job matching services, and information on available workforce development programs and tax incentives. May also offer customized training programs designed in collaboration with employers to meet specific skill requirements. |
Departments of Economic Development | Work to attract and retain businesses, promote economic growth, and support job creation in their communities. | Offer incentives such as tax credits, grants, and loans to encourage investment and expansion. Provide assistance to employers seeking to access workforce development resources, navigate regulatory requirements, and connect with training providers and other business services. |
"One-Stop" Career Centers | Serve as hubs for employment and training services, providing job seekers and employers with access to a range of resources and support. | Offer recruitment assistance, job posting services, and access to job fairs and hiring events. Facilitate workforce training programs in partnership with employers to meet industry demands and fill skill gaps. |
Overall, regional and local government agencies involved in workforce development engage with employers through collaborative partnerships, targeted outreach efforts, and customized service offerings to address the workforce needs of businesses and drive economic growth in their communities.
Educational Institutions
Educational institutions are the original workforce development entities. K-12 schools and higher education institutions, both public and private, educate a region’s workforce by teaching academic skills. In the past, schools were the primary organizations companies relied on to educate their geography’s workforce. While that responsibility is now more distributed, obviously educational institutions continue to play a vital role, and also work with employers in new collaborative ways.
The educational heavy hitters in workforce development are typically community colleges. But, educational institutions at all levels can and do serve as valuable partners to employers in a regional economy.
For example, K-12 schools provide exposure to career paths in popular or emerging industries. Many also collaborate with workforce development stakeholders and employers to build educational programs that develop in-demand skills.
Fun Fact: Career and Technical Education (CTE) programs offered in many high schools provide students with hands-on training in various industries, such as healthcare, information technology, engineering, and culinary arts, preparing them for careers directly after high school or further education. After falling out of favor and languishing for a few decades, CTE is enjoying a renaissance of interest and funding.
As for adult education, community colleges, trade schools, and four-year colleges and universities collaborate with local employers to create degree and certificate programs that address skill gaps in key industries. And, they offer continuing education and professional development programs designed to meet the evolving needs of both job seekers and employed individuals.
Higher education also collaborates with employers to offer work-based learning opportunities, such as internships, apprenticeships, and cooperative education. These programs allow students to gain hands-on experience in real-world work settings.
Work-based learning allows students or participants to gain hands-on experience, develop relevant skills, and apply theoretical knowledge in real-world work environments. The goal of work-based learning is to bridge the gap between classroom learning and the demands of the workplace.
Nonprofit Organizations
Workforce programs and initiatives often are delivered by nonprofit organizations. These entities provide direct services to both employers and job seekers.
On the job seeker side, these organizations generally seek to support individuals who face barriers to rewarding work.
When we say rewarding work, we mean employment that meets individuals’ employment needs and career goals, and supports them in reaching their potential.
Many nonprofit organizations focus on offering education, training, and support to specific prioritized populations, for example --
Individuals who lack experience or educational credentials
Returning citizens and justice-involved individuals
People who have experienced homelessness
Persons with disabilities or mental health challenges
Single parents and caregivers
Veterans
Youth, especially those who are unemployed and not in school
Students, sometimes focusing on students who are the first in their families to attend college, or members of groups underrepresented in higher education
New members of a community who bring valuable skills but may not be familiar with the local economy–dislocated workers, immigrants, refugees, and English language learners
Justice-impacted or justice-involved populations include individuals who have contact or interaction with courts, jails, prisons, or probation. A returning citizen is an individual who is returning home after being incarcerated.
Focusing on specific populations facilitates a deep understanding of participants' support needs, which leads to better results for employers -- e.g., high performance and retention. Employers who worry about their ability to successfully support employees from these populations can rely on these organizations' expertise to promote success for all. The workforce ecosystem has developed successful approaches to supporting specific populations of unemployed or underemployed individuals.
For example, a program that focuses on individuals with disabilities can help navigate requests for specific work accommodations. A program that serves justice-involved individuals or returning citizens may offer support in getting criminal records expunged.
Nonprofit organizations work with employers to foster successful outcomes with talent pools that they might not otherwise consider.
Industry Associations and Unions
Organizations tied to specific industries, such as industry associations and labor unions, also contribute to workforce development. For example, these organizations may --
Provide skills training and education programs designed to meet the needs of workers and potential workers in specific industries.
Sponsor apprenticeship programs and work-based learning opportunities that provide hands-on experience and training to individuals while they earn a wage.
Administer training grants and funding programs, such as purchasing equipment and materials for training facilities and offering scholarships and tuition assistance to job seekers and employees who want to advance their education and skills.
Organizations that deliver services to employers might be called by different names, including community-based organizations, providers, delegates, delegate agencies, workforce partners, or workforce nonprofits. Throughout the remainder of this book, we’ll mostly refer to them as business services partners.
How Individuals Access Services
The visual below demonstrates the different ways individuals access workforce development programs. Individuals seeking employment or training may go directly to a workforce development program; be referred by a different social service provider; or access a program through their school. Job holders may also utilize any of these routes or work with their employers to find an appropriate program.
Here are some sample scenarios --
Sylvia (job seeker) goes to her local food bank (social services) and picks up a flyer about a job training opportunity (workforce development program). Ultimately, Sylvia is referred to an employer, applies, and secures a job.
Eric (job seeker) is a senior in high school and is interested in apprenticeship programs. His counselor (school) refers him to a program offered at a nearby community college, in partnership with a local business. Eric enrolls and, upon completing the program, is hired by the company sponsoring the apprenticeship.
Manuel (employee) works for Fairmount Manufacturing, and has experienced some recent financial difficulties. His supervisor (employer) connects him with a nonprofit organization, which provides financial coaching.
No matter how individuals access the workforce ecosystem, they can be referred to organizations, programs, and services that address their specific needs.
Who Pays?
Workforce development is supported by an array of funding at the federal, state, and local levels. This section provides an overview of the major sources of funding for workforce development, including --
Workforce Innovation and Opportunity Act (WIOA)
Other government funds
Philanthropy
Of course, employers also allocate resources to recruit and develop employees. Some invest considerable time and money in expansive talent strategies and initiatives. In this section, we'll focus on outside funds that enrich the regional workforce and augment what employers invest for themselves.
Workforce Innovation & Opportunity Act (WIOA)
The primary federal source of workforce funding is the Workforce Innovation and Opportunity Act of 2014 (WIOA, pronounced “we-OH-ah”). Most of these funds are allocated to states using formulas that account for economic factors, including unemployment and poverty rates. States then pass this funding on to local areas.
Learn more about the Workforce Innovation and Opportunity Act (WIOA) on the Department of Labor website.
Federal WIOA dollars ultimately benefit employers by providing them with trained, qualified employees. WIOA funding is a primary source of reimbursements to employers for the cost of wages to hire eligible recipients, the cost of training that builds team members’ skills, and assistance with strategies that enable employers to avoid layoffs. However, the money does not flow directly from the federal government to employers. Instead, funds are distributed to the entities listed earlier–community based organizations, community colleges, social service entities, and intermediaries–who assist employers with strategy development and reimbursement.
Additional Government Funding
Beyond WIOA, workforce development funding is provided by many federal government agencies and programs. The table below provides just a few examples.
Agency | Includes Workforce Development Resources for -- | Through -- |
Department of Labor | Specific populations who face barriers to rewarding work, including senior citizens, migrants, veterans, and others | Legislation and programs including Job Corps, Trade Adjustment Assistance (TAA) program, Senior Community Service Employment Program (SCSEP), National Farmworker Jobs Program (NFJP), and Veterans’ Employment and Training Service (VETS) |
Department of Education | Students enrolled in educational programs that incorporate occupational training | The Pell Grant program and the Carl D. Perkins Career and Technical Education Improvement Act |
Department of Housing and Urban Development | Those living in identified challenged communities | Community Development Block Grants |
Department of Agriculture | Individuals receiving food assistance | Supplemental Nutrition Assistance Program, or SNAP |
State and local governments also are a source of workforce development funding. While state and local governments utilize WIOA and other federal funds, they often maintain their own programs and funding streams for workforce programs. Similar to federal funding, these programs may prioritize specific populations.
Additionally, workforce development initiatives are embedded in other categories of legislation. For example, construction permits may require that developers provide training to and hire local residents. A government agency primarily focused on serving the homeless or immigrants may also offer job training and placement services. So, activities that serve workforce development aims may originate in policies and funds not primarily or obviously labeled “workforce development.”
Philanthropy
Because the benefits of workforce development are wide ranging, foundations contribute substantial sums to promote it. For example, national organizations such as the Bill and Melinda Gates Foundation have made career pathways a focus of their work. Foundations connected to major employers (e.g., JP Morgan Chase) also support workforce development.
National and local collaboratives fund workforce development, often in partnership with local organizations and employers. The National Fund for Workforce Solutions, for example, has pulled together over $315 million since 2007 from over 700 local and national funders.
Workforce funding also comes from foundations that focus primarily on non-workforce areas. For example, the Annie E. Casey Foundation, which prioritizes children’s issues, provides grants for workforce development, citing the importance of living in a family with sufficient income.
Funding Trends & Flows
As is the case with any funding, ideas for workforce investments compete with a wide range of other priorities, and funding may ebb and flow based on the economic environment, unrelated budget considerations, the priorities of officeholders, or the effectiveness of advocates to secure funding.
Federal funding for workforce development has been substantial, but decreasing. According to the Government Accountability Office, funding for 43 federal workforce programs totaled $20 billion in 2009. In 2017, the total investment was only $14 billion. Pandemic-related funding boosted workforce investments beginning in 2020, but those funding streams had limited timeframes.
Regardless of the source of funding, there is growing recognition of the critical role employers play in workforce development—not just as entities seeking talent, but as experts on what skills and career paths workforce development programs should be prioritizing and as the site of on-the-job learning. This has meant that decision makers often have prioritized funding for initiatives that include employer partners.
The visual below summarizes how funding reaches stakeholders in the workforce ecosystem. Funds can go directly to program participants, programs, or employers or be directed through state and local governments.
Who Benefits?
All this investment begs the question, who benefits? We say: Everyone. This section summarizes benefits to employers, individuals, and the community at large.
Employers
Workforce development arguably benefits any employer who hires anyone--since workforce development, broadly defined to include public education, impacts virtually every employee and potential employee.
Employers who take advantage of business services offered directly to them reap additional benefits. These services include free or low cost support for talent management services, such as recruiting and hiring, training and development, and retention and inclusion. Details of these services and how employers benefit are covered in Chapter 4.
Additionally, connecting with the workforce development ecosystem provides access to talent pools that employers frequently overlook. There is often stigma and apprehension associated with hiring from certain groups, such as justice-involved individuals, those experiencing homelessness, and individuals with limited English proficiency. Fears may be rooted in biases and the expectation of negative outcomes. But, business services providers can improve employment outcomes for these populations and transform potential negative experiences into positive ones–for example, higher retention rates and more productive employees. Hiring from these populations, with the support of business services partners, not only contributes to fairness and equity, but also can provide significant business advantages.
Individuals
Workforce development benefits individuals, including students, job seekers, currently employed people, and career changers. Programs benefit participants in many ways --
Enhanced knowledge and skills
Achievement and confidence
Higher income
The benefits that come with employment (assuming a quality job), including structure, accomplishment, growth, community, and benefits
“Being able to see it all come together is what’s most impactful. Seeing someone get employed in a job that they feel is right for them can be transformative. I know firsthand how the right opportunity can affect the trajectory of someone’s life and have a profound effect on an entire family.” Dr. Lisa Bly-Jones, CEO, Chicago Jobs Council
Communities
Overall, the functions of workforce development are geared toward building a skilled, adaptable, and resilient workforce that can drive economic growth, innovation, and prosperity within a region or community. Matching skilled individuals to employers in need of talent, and maximizing each individual’s contribution, are critical to the labor market and the economy as a whole.
Here's a summary of how workforce development benefits communities.
Workforce development … | Which leads to … | .. and produces this outcome |
Provides individuals with the skills and training they need to secure employment and advance in their careers | Productivity, innovation, and competitiveness | Economic growth and prosperity |
Improves the knowledge and skill of a region’s residents | More businesses and industries that require a skilled workforce choosing to locate in the region | Job creation |
Equips individuals with the skills and resources they need to secure stable and well-paying employment | More individuals and families that can achieve financial independence | Reduced unemployment and poverty |
Reduces barriers to employment for historically disadvantaged groups | Greater fairness, more diversity in the workforce, and reduced inequality | Strengthened community bonds |
Promotes access to stable employment with livable wages | More individuals that can participate fully in the social and economic life of the community | Improved quality of life |
“Fueling community development hinges on what I call “starting the engine.” While affordable housing and small businesses are valuable, the real catalyst is workforce development – fostering meaningful careers, not just jobs. Without viable income, even the most affordable houses lose their appeal. Without residents in stable, rewarding careers, small businesses struggle due to a lack of disposable income in the community.” George Wright, CEO, The Chicago Cook Workforce Partnership
Workforce development plays a vital role in building strong, resilient, and vibrant communities by promoting economic growth, creating jobs, reducing unemployment and poverty, fostering social inclusion, and improving the overall quality of life for residents. Ultimately, successful workforce development efforts benefit everyone.
Summing Up …
Effective workforce development requires collaboration and partnership among various stakeholders, including government agencies, educational institutions, employers, industry associations, and community organizations. By working together, these stakeholders can deploy resources and expertise to create comprehensive workforce development strategies that address the needs of both individuals and businesses.
In practice, because workforce development funding has multiple sources and disparate recipients, decision-making about how to deploy resources is decentralized. Funding decisions made by government agencies, or by independent parties such as private foundations, might or might not match federal priorities or a regional workforce board’s strategic plan.
The following graphic summarizes how major categories of stakeholders generally operate in the workforce development ecosystem. The model is not meant to account for every situation–you could find evidence to shade virtually any box in this diagram. Instead, this visual demonstrates which stakeholders hold the most responsibility for the majority of the indicated activity, in many geographies.
Activity > Stakeholder | Identify gaps and opportunities | Deploy funding and resources | Implement initiatives and programs | Accrue benefits |
Employers | ||||
Public Administration and Government Agencies | ||||
Philanthropic Organizations | ||||
Educational Institutions | ||||
Nonprofit Organizations | ||||
Industry Associations and Labor Unions | ||||
Individuals | ||||
Community At Large |