1. Institute for Policy Studies Johns Hopkins University
Best Practices in Promoting Public Sector-Employer Training Partnerships
Burt S. Barnow
Institute for Policy Studies
Johns Hopkins University
Prepared for the conference Enhancing the Role of Employer-Led Training In the United States, co-sponsored by the U.S. Department of Labor and the Urban Institute, and held on June 25, 2003 in Washington, DC.

2. Topics Covered Introduction On-the-job training Customized training
Sectoral approach to training
H-1B training programs
Conclusions and lessons learned

3. Introduction
Government training programs have been used since the 1960s
Programs originally relied on a “Field of Dreams” approach: if you train them, employers will come
Over time, the system has come to recognize the importance of training workers to meet employer needs
For both JTPA and WIA states and local programs have boards with private sector majorities
This presentation focuses only on programs for adults and excludes a discussion of the local workforce investment boards

4. On-the-Job Training
OJT is used to provide informal training to qualified newly hired workers
Employers receive subsidy for fixed period of time to pay for extra costs of training
OJT is attractive because it reduces costs and risk to employer
Studies consistently find high outcomes and impacts

5. On-the-Job Training (continued)
Caveats:
No experimental evidence on impact of OJT
Establishing OJT slots can be expensive
OJT can be abused: wage subsidy and/or overcompensation
Bottom line: Good strategy, that should be encouraged but monitored

6. Customized Training Customized training includes
Employer input and approval authority for the curriculum
Employer authority to establish eligibility criteria for participants and to select participants if they desire
A commitment by the employer to hire successful program completers

7. Features of Customized Training
Companies heavily involved in curriculum development
Recruiting, screening, and assessing potential trainees was a shared responsibility between the firm and the vendor
Sometimes firm set the standards and in other cases the firm was actively involved in selecting each participant
Training was tailored to jobs and customized for the employer
The programs used a combination of classroom training and laboratory, hands-on training

8. Features of Customized Training (continued)
Participants were assessed for adequate reading and math skills
When needed, basic skills training was provided for participants slightly below the required reading or math level for the job
Most programs included pre-employment and workplace skills
Most companies provided written or oral commitment to hire successful program completers

9. Results from Case Studies
No formal impact evaluations
Over 80% completed training in all programs and over 90% in most programs
Virtually all completers were hired by firm
Costs ranged from $900-$2,700, with average of $2,000
Characterized as “win-win-win” for participants, employers, and programs
Why not used more:
High start-up costs to recruit employers
Hard to finance curriculum development
Numbers needed often small
Wary of working with government

10. Results from Survey of State Programs
45 states had programs as of 1999
Duscha and Graves estimate 60% of funds for incumbent workers
In 33 states firms select vendors
In 12 states firms must use community colleges
Biggest problem identified: Windfalls for firms
Programs of limited scale and difficult to expand

11. Sectoral Training Programs
Strategy of using intermediaries to focus on one or two industrial sectors of local economy
Dresser and Rogers say 3 benefits:
Economies of scale
Economies of scope
Network externalities
Find promising developments in Milwaukee

12. Elliott and King Case Studies of 13 Sectoral Programs
Strategies used:
Restructuring jobs for higher pay for more skilled work
Making participating employers into “yardstick” companies that are recognized for their leadership
Rewarding exemplary employers through recognition
Removing artificial barriers to employment, such as irrelevant qualifications
Improving curricula in community colleges

13. Elliott and King Case Studies of 13 Sectoral Programs (continued)
Specific interventions:
Vocational training
Business development activities
Organizing workers and/or community residents
Research and policy analysis

14. Promising Practices from H-1B Training Programs
Requiring employers to contribute to the match requirement
Use of employer association to screen applicants
Requirement that employers submit written application for trainees
Streamlined contracts and paperwork for employer-based training
Requiring participants to remain on the job for two years
Tailored training for incumbent workers

15. Conclusions OJT is a proven strategy that should be continued
Customized training appears beneficial to all
Sectoral approach is promising
These strategies all have pitfalls, so care must be taken to overcome high costs and avoid corporate welfare and other abuses

16. Other Strategies to Consider
Ensure that One-Stop Career Centers provide more than a common address for workforce development programs: coordinate employer contacts among One-Stop partners
Treat employers more like a business would treat its customers
Do not let the use of Individual Training Accounts undermine the importance of linkages to employers
Develop linkages to registered apprenticeship programs and help promote the use of apprenticeship in the local area.

17. Other Strategies to Consider (continued)
Link workforce development programs with economic development programs and have the programs jointly work with employers
Make appropriate use of employer organizations, such as the Chamber of Commerce and trade associations
Promote active involvement by employers on local boards