New GAO report supports sector strategies.

February 20, 2012

The Government Accountability Office (GAO) has just released a report that identifies sector-based partnerships as a vital workforce strategy for addressing the skill needs of workers and employers within local or regional economies. The report evaluates fourteen sector partnerships from across the country and pinpoints the common factors that contributed to their success, while also identifying challenges to collaboration under current law and making recommendations to the Department of Labor to better support the development and implementation of such strategies.

The report was produced at the request of the Senate Health, Education, Labor, and Pensions (HELP) committee, which is responsible for oversight and reauthorization of the Workforce Investment Act (WIA) and other key federal workforce and education programs. During a HELP subcommittee hearing, Andrew Sherill, GAO’s Director for Education, Workforce, and Income Security, noted that in times of reduced federal resources and high unemployment it is important to focus on ways to better connect the workforce system with the needs of local employers. Sherrill concluded that in the communities where sector strategies were implemented, “critical skill needs were met, individuals obtained or upgraded their skills, and the local system of workforce programs was reinvigorated by increased employer participation.”

Although the fourteen sector partnerships highlighted in the report covered a broad range of sectors—including manufacturing, health care, agriculture, and transportation, logistics, and distribution—GAO identified six common factors that contributed to their success:

  • A focus on the skill needs of multiple employers within a specific sector, rather than just focusing on the needs of a single employer. GAO notes that this approach led to innovative labor force solutions that would otherwise not be possible for individual businesses—significantly reducing recruitment and retention costs for employers—while also facilitating greater collaboration between education and training providers, including through shared curricula and credit transferability.
  • Strong leadership from partners with the authority and ability to convince others to collaborate on the initiative. While this leadership often came from local workforce boards, the report stresses that community colleges, state workforce agencies, and employers themselves served as leaders in many of the sector initiatives.
  • The ability to successfully leverage additional public and private resources, including contributions from employers. The report notes that WIA formula funding alone was not sufficient to meet training needs.
  • The provision of employer-responsive services, often through staff with expertise in serving the target industry. These services included engaging employers directly in curriculum development, providing training that resulted in industry-recognized credentials, and developing career pathways strategies that allowed employers to reduce turnover costs and address long-term training needs while providing career advancement opportunities for workers.
  • Minimizing administrative burdens on employers and partners, including through shared data collection and the designation of a single point of contact to facilitate communications between partners.
  • Demonstrating results that helped sustain collaboration over time. For employers, positive results from sector-based strategies included an increased supply of skilled workers, lower costs, and enhanced competitiveness. For workers – including workers with barriers to employment – sector-based strategies led to placement and career advancement. For the workforce system, these strategies led to increased employer participation, greater efficiencies, and stronger collaboration among partners.

The report indicates that WIA performance measures—which focus primarily on individual outcomes—do not adequately reflect the success of sector strategies in engaging employers, although many local areas have developed their own measures. GAO notes that the Department of Labor has taken some important steps to help support the development of sector strategies, including through guidance and competitive grant funding, but encourages the agency to provide more assistance and guidance on leveraging resources.

National Skills Coalition strongly supports efforts to expand federal support for sector partnerships. In particular, we urge Congress to ensure that any effort to reform and modernize the nation’s workforce system incorporates the principles of the SECTORS Act (HR 1240, S. 665), which would provide dedicated capacity to support the implementation and expansion of state and local sector partnerships.

Senators Sherrod Brown (D-OH) and Olympia Snowe (R-ME), who introduced the SECTORS Act in the Senate, are currently circulating a Dear Colleague letter seeking additional co-sponsors for the bill; workforce advocates should make sure that their Senators are aware of the letter, and ask them to sign on as co-sponsors if they have not done so already.