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February 15, 2018

Establishing Workforce Development as an Investment in Our Economy

Following the Investing in America’s Workforce (IAW) capstone conference in Austin, Texas, we wanted to provide an update on our efforts. As mentioned in our post in September, IAW is a Federal Reserve System-led initiative that seeks to underscore the importance of workforce development as an investment in our national economy.

Fed Presidents and Investing in Post-Secondary Education Discussion

The IAW conference brought together all 12 regional Reserve Banks, senior representatives from the Board of Governors of the Federal Reserve, and more than 350 participants to discuss the importance of workforce development efforts and their impact on the economy. The Presidents of the Atlanta, Kansas City, Philadelphia, and Dallas Feds delivered remarks at the conference, and their speeches and corresponding plenary sessions are available online. New York Fed President Dudley has also previously underscored the importance of workforce development and addressing the skills gap. In a speech last fall leading up to the conference, he explained, “the good jobs being created in today’s economy require more education, training, and, ultimately, skill than ever before… The challenge facing all of us is how to best help workers develop the skills necessary to land a good job, and how to enhance those skills over time as work requirements evolve.”

At the conference, we moderated a panel discussion about how the changing world of work is placing greater demands on higher education to prepare students with the skills employers need. While a college degree remains a worthwhile investment, employers often cite concerns about the disconnect between the skillsets they need from employees and the education provided in post-secondary settings. Along with four panelists, including Richard Rhodes, President and CEO of Austin Community College, and Drew Scheberle, Senior Vice President at the Austin Chamber of Commerce, we discussed how partnerships and collaboration between industry and educational institutions are important for providing relevant, engaging, and effective educational experiences.

The New York Fed supports such collaborative efforts. For example, we recently completed the second year of an annual video campaign, called Leading the Way, which challenged students in the Greater Rochester Area to create public service announcements about skills needed for local career opportunities.

Introducing a New Federal Reserve System Resource

While the IAW is a unique Federal Reserve System approach, our colleagues from other Reserve Banks continue to make strides in the workforce development sector with new resources for the field. At the conference, Atlanta Fed President Raphael Bostic announced the launch of the Center for Workforce and Economic Opportunity, an initiative that connects research and practice by making work by the Federal Reserve System related to the labor market and workforce development easily available to researchers and policymakers.

Investing in America’s Workforce: Report on Workforce Development Needs and Opportunities

As part of the broader IAW initiative, every regional Reserve Bank organized meetings over the past year with local community stakeholders to gather anecdotal information about the state of workforce development. The regional meetings revealed new approaches, opportunities, and challenges to investing in workforce development strategies. In our earlier post, we highlighted key takeaways from the New York Fed’s regional meetings in BuffaloNew York CityNewark, and San Juan.

The meetings by regional banks ultimately resulted in a report that was presented at the conference, titled “Investing in America’s Workforce: Report on Workforce Development Needs and Opportunities.” The report analyzes information gathered from about 1,000 leaders who work at the intersection of workforce training, recruitment, and finance. It provides a current snapshot of the workforce development sector and its key challenges, and it offers strategies for improving the human capital of America’s labor force, expanding access to jobs, and innovating workforce development funding.

Below are several strategies discussed in the broader report for expanding and diversifying the pipeline of a skilled workforce:

  • Better Alignment of Workforce and Economic Development Efforts Using Sector Strategies: Sector partnerships involve stakeholders from local and regional employers, academic institutions, and training providers coming together to analyze an industry’s current and future skill requirements.
  • Supporting Apprenticeships and Other Work-Based Training Models: These workforce models allow trainees to support themselves and their families while simultaneously learning and earning a license or industry-recognized credential through on-the-job training. While apprenticeships are not new, they are often cited as an effective strategy for developing a skilled workforce. As IAW regional meeting attendees in Buffalo noted, expansion of apprenticeships requires active employer participation.
  • Increased Employer Training for Incumbent Workers to Foster Career Pathways and Create Access to Entry-Level Jobs: Aside from the services and programs offered by training providers and educational institutions, employers have a role to play by encouraging and supporting incumbent workers to advance along a clearly defined career pathway. Employers would thereby improve access for local job seekers by creating vacancies in entry-level positions and investing in their current workforce.
  • Increased Coordination Among Service Providers and With Funders: Funding and resources are often limited, which is why it is imperative that workforce providers coordinate strategies and work closely with funders to develop and communicate shared, measurable goals.
  • Changes in Employer Behavior That Improve Job Access and Quality: Job postings often list the minimum required education attainment, but employers should consider adopting a skills-based hiring plan to remove what, in some cases, may be an artificial barrier to livable wage employment.

Coming Soon: The Investing in America’s Workforce Publication and a Job Quality Webinar Series

A separate component of the IAW initiative is the expected publication this spring of Investing in America’s Workforce: Improving Outcomes for Workers and Employers, a collection of more than 60 essays from national and regional workforce experts about systemic barriers to employment and how further workforce investments can overcome those barriers. The New York Fed contributed a piece on partnership development as a key workforce strategy, which includes a look into how three employers in New York and Puerto Rico developed strategies with post-secondary institutions to make progress in overcoming the skills gap issue.

Also of note, the Kansas City Fed is co-hosting a three-part webinar series on strategies to promote and improve quality jobs for lower-wage workers. Registration is open now for these webinars on how employers create good jobson engaging workers in creating good jobs, and about research on the topic.

With these upcoming publications and events, the New York Fed and Federal Reserve System will build on the foundation established during the IAW capstone conference, ensuring that workforce development remains a priority in the year ahead.

This article was originally published by the New York Fed on Medium.

The views expressed in this article are those of the contributing authors and do not necessarily reflect the position of the New York Fed or the Federal Reserve System.


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