Critical Skill Shortages Initiative Governors Workforce Development Conference October 23, 2003

2 Linking workforce programs and economic development The transfer of workforce programs to DCEO was done to help build a globally competitive workforce. It creates the opportunity to better link workforce programs with economic development. DCEO's mandate is to align workforce programs to meet the needs of employers for skilled workers, while ensuring that populations (including "at-risk" individuals--disabled, welfare recipients, ex-offenders, etc.) served by various workforce programs gain access to good jobs. The challenge is to link economic development initiatives and workforce programs to achieve both goals.

3 Economic Development Regions Ten geographic areas, to be known as Economic Development Regions (EDRs), were designated by the Governor, in consultation with local areas, DCEO and IDES. The regions were designated based on economic and labor market factors that make them logical areas for economic development and workforce planning. The regions are aggregations of counties. DCEO will use the EDRs as the geographic basis for planning many of the department's economic development programs, including this initiative.

4 Goal: Align regional workforce programs to provide a reliable supply of qualified job seekers for critical skill shortage occupations that pay a good wage and provide benefits

5 What is the basic idea? Identify skill shortage occupations that pay a good wage and provide benefits in key sectors of the regional economy. Rigorously examine the "root causes" that led to shortages. Then influence state and local education and training agencies to voluntarily redirect existing programs and services (as well as private resources) to address the root causes and create a reliable "supply chain" of qualified job seekers. Also examine on-the-job factors that contribute to shortages (e.g., high turnover or inadequate recruitment) and work with employers to address those issues.

6 What is the DCEO plan? Draw on the Workforce Investment Boards (LWIBs) to provide leadership to create consortia and influence the regional workforce system. Consortia will initially be composed of local Workforce Investment Boards (LWIBs) within an EDR. The consortia will expand over time to bring together (at a minimum) education and training agencies, economic development organizations, organized labor, and private businesses and industry to work on a consensus basis to voluntarily redirect public and private resources to address critical skill shortages in a region.

7 What is the basic plan? (con't) DCEO will provide financial incentives to regional consortia to voluntarily redirect local resources to create and redesign education and training programs to address critical skill shortages. Specifically, DCEO will provide WIA 15 percent funds to underwrite planning costs and provide incentives (i.e., training funds) to regional consortia to participate in the initiative. WIA Adult Program WIA Youth Program WIA Dislocated Worker Program WIA Incumbent Worker Program

8 Major Steps - Identify sectors, industries, & shortage occupations. Consortia select sectors critical to the regional economy and/or targeted by economic development organizations. Then select specific industries or other groupings of employers (e.g., small-medium-sized employers within more than one industry) within those sectors. Next, consortia identify critical skill shortage occupations in those industries. Targeted occupations must: represent strong employment demand; be critical to industry competitiveness; provide good earnings and benefits; and be appropriate for targeting by the system.

9 Major Steps - Identify sectors, industries, & shortage occupations. (con't) Build on prior research such as community audits; but, reevaluate on a regional basis. Identification of critical occupations is a joint effort with targeted industry. Local industry representatives must participate in the analyses and validate the selection of jobs as shortage occupations and areas where help from the public sector will be welcome.

10 Major Steps - Complete analyses of root causes Consortia, including local employers, business and industry associations, educators, one-stop partners, organized labor, and training providers, will determine the "root causes" of the shortages. Again, determination of root causes is a joint effort with the targeted industry. Industry partners must verify that the root cause analyses were undertaken jointly and that the industry partners agree with the findings.

11 Develop regional solutions Consortia will include a broad network of public and private organizations and training providers to develop solutions including: business & industry associations, labor unions, professional associations, universities and community colleges, community-based organizations, economic development organizations, one-stop centers, one-stop partner agencies, and business development/assistance organizations.

12 Major Steps - Develop regional solutions Consortia should avoid focusing on causes that are "constraints" and are beyond the ability of the local system to change. Rather, the focus will be on the causes that can be practically addressed by the workforce development system in concert with the business community.

13 Major Steps - Develop regional solutions Once the root causes are understood, consortia members will be asked to voluntarily redirect both public and private resources to address the causes. Solutions must: Meet the short-term and long-term needs; Realign existing public and private resources to address the root causes; and, Expand opportunities for workforce program clients (including "at-risk" individuals--disabled, welfare recipients, ex-offenders, etc.).

14 Major Steps - Training Grants After a consortium exhausts local remedies there may be "gaps" in the regional strategy. To fill some of the unmet needs and provide an incentive to regional consortia to participate in this initiative, DCEO will make WIA 15 percent funds available on a competitive basis to fund training activities. Funds will be awarded in two "rounds" on a competitive basis to consortia that produce the best regionally funded plans and have the best- developed requests for supplemental funding.

15 Noncompetitive Grants - Planning Phase Request for applications released.09/24/2003 Applications are due to DCEO.11/14/2003 Grants are reviewed and executed.12/31/2003 Sectors, industries, & shortages identified.03/01/2004 Root cause analyses completed.05/31/2004 Local solutions developed.09/30/2004

16 Competitive Training Grant Phase Round 1 - "Early Bird" / Program Year basis: Submit reports on occupations, causes, & solutions.05/02/2004 Consortia submit requests for 15% funds to fill gaps. 05/02/2004 Competitively award funds ($5.0m - 12 months 100%) 07/01/2004 Renew successful projects ($2.5m -12 months 50%)07/01/2005 Round 2 - Calendar Year Basis: Submit reports on occupations, causes, & solutions.09/30/2004 Consortia submit requests for 15% funds to fill gaps. 10/29/2004 Competitively award funds ($5.0m - 12 months 100%) 01/01/2005 Renew successful projects ($2.5m -12 months 50%)01/01/2006 Consortia may participate in both rounds (e.g., submit for one sector- industry in Round 1 and submit more applications in Round 2).

17 "Discussion Starters" Examples of: Resources Information and data sources Labor supply "root causes Working conditions "root causes Regional solutions

18 Examples of resources: Locally Delivered Programs WIA Title IB Community Services Block Grant Older Americans Act Migrant & Seasonal Farm Workers Displaced Homemaker Program Vocational rehabilitation programs Vocational education K-12 system Postsecondary education Tuition grants & loans Illinois Skills Match Funding from employers Foundation funding State & Federal Grants H-1B Technical Skills Grants WIA incumbent worker program WIA technical assistance program Industrial Training Program (ITP) Job Training and Economic Development Grant Program High Technology School-to-Work Program Eliminate the Digital Divide Grant Program Trade Adjustment Assistance Act Food Stamp Employment and Training Program TANF Employment and Training Program Secretary of State Literacy Program

19 Information and Data Sources: Industry projections Occupational projections New hires data Vacancy surveys Industry reports & analyses ES 202 data Dunn & Bradstreet data Economic development plans Community audits Other local economic research Input from business & industry groups Input from organized labor Input from training providers Input from placement personnel Input from Labor Market Economists

20 Information and Data Sources: Business summits: CEOs HR professionals Economic development professionals Organized labor Input collected from: Educators Training providers Job placement staff Research & Data: individual employers business & industry groups surveys: industry representatives labor leaders training providers workers in targeted jobs recent exiters from jobs Training Provider data: successful completers wage data

21 Examples of supply related causes: Lack of: career awareness a career path a formal education and training strategy Inadequate recruitment Failure to recruit nontraditional populations Inadequate job matching Lack of: training capacity accelerated training alternative training options High dropout rate from training Out-migration of training completers

22 Examples of on-the job causes: High stress conditions of employment Noncompetitive wages and benefits Lack of support for "nontraditional" workers Aging workforce Retirement incentives

23 Example supply solutions: Design formal training programs Increase training capacity Accelerate pace of training Improved screening of trainees Create bridge programs Create alternative training models Develop mentoring programs Develop career paths Increase marketing & recruitment efforts Use referral & signing bonuses Tap "nontraditional" groups Increase support services Make reasonable accommodations Develop upgrading programs (including on- the-job)

24 Example working conditions solutions: Develop incentives to retain older workers: Adjust retirement formulae Restructure jobs Allow semi-retirement Address stress on the job: Shift rotation Mandatory overtime Physical demands Psychological demands Adopt family friendly policies: Telecommuting Job Sharing Family leave On-site childcare Improve wages & benefits