Published on 2016/07/19

Sector Partnerships and Microcredentials Critical to Reducing Unemployment

The EvoLLLution | Sector Partnerships and Microcredentials Critical to Reducing Unemployment
Incentivising and improving access to skills training and workforce development programming is critical to creating more pathways to high-paying jobs and careers, especially in areas with high unemployment rates.

Since the recession officially ended and the economy moved headlong into its recovery phase, retraining and upskilling have been top-of-mind priorities for both employers and education providers. However, a massive skills gap still exists between the jobs available and the underemployed and unemployed still looking for work. In this interview, Kermit Kaleba shares his thoughts on the importance of skill development and training programs in areas with high unemployment and reflects on the importance of sector partnerships in moving the needle on reducing the unemployment rate.

The EvoLLLution (Evo): Why are skill development and training programs so important in areas with high unemployment rates?

Kermit Kaleba (KK): Workforce development and training are important regardless of whether you have a high unemployment rate or not. For areas that have high unemployment rates, there are a couple of reasons why skills training can be particularly helpful.

One reason is, even in the areas where you have a relatively high employment rate, there are likely still specific industries that have a need for skilled workers. Even in the height of the recession, when the national unemployment rate was around 10 percent, we were hearing employers say they were having difficulty finding workers with specific skill sets to help them compete and stay afloat. In the areas where there is high unemployment, there can be job opportunities that are going unfilled. Skill development programs and workforce development programs can help with that.

There are also a lot of different reasons why we have high unemployment rates, but talking about communities that may be going through transitions—where you’re transitioning from a declining industry into other industries with emerging economic opportunities—skill development programs and job training can help develop those new businesses and help workers transition into the job opportunities that are being created. That’s an important part of keeping communities strong and making sure the people are able to successfully transition.

Job training can also be part of making sure that you don’t get to a point where your community is suffering from high unemployment rates. The Department of Labour invests millions of dollars a year in layoff aversion programs, which are particularly helpful for industries that need to retool or adopt new technologies and techniques in order to remain competitive in the global market. Job training programs that help workers get the skills they need to take advantage of these new technologies can be effective in ensuring that people never become unemployed, that they’re able to keep their jobs and take advantage of these new skills.

From a job seeker’s perspective, in areas of high unemployment there’s a traditional solution:  When you have high unemployment, or when the economy is in a bad way, it reduces the opportunity cost of education for individuals who might otherwise not be able to find high-paying work. No matter the state of the economy, going back to school and getting job training is always a good idea, as it helps individuals continue to upgrade their skills. But if you’re unemployed and unable to find work, going back to school, getting job training and updating your skills can be a way to be ready for the next economic opportunity when it emerges and when the economy picks back up.

Evo: Is a degree as a credential particularly important when it come to ensuring that underemployed or unemployed workers have the capacity to enter the workforce and succeed?

KK: Two- and four-year degrees are absolutely very important for a lot of jobs. However, we encourage folks not just to look at degrees but also to look at short-term occupational credentials.

In 2012, which is the most recent year we have data from, 25 percent of all postsecondary credentials that were issued were short-term certificates and other programs like that. Not all jobs require a degree. We still think two- and four-degrees are important, but it’s critical for people to keep in mind that there’s a broad spectrum of postsecondary credentials, certificates and diplomas that matter in the labor market. The key is to identify what the industry is looking for, what the skills are, and then the most effective way to get that training.

It should also be said that there are, in addition to traditional postsecondary institutions, plenty of organizations like professional associations and community-based organizations that do a terrific job running training programs that don’t necessarily lead to degrees but do lead to high-paying jobs.

Evo: What role do colleges and universities play in the development and delivery of these programs?

KK: There are a number of different ways that institutions can be engaged in delivering training programs. One of the ways that National Skills Coalition has been particularly focused on is industry or sector partnerships, which are partnerships between multiple employers—usually small-medium sized employers—within a particular local or regional industry working together to aggregate their skill demand and work with other partners like institutions of higher education, workforce development boards, community-based organizations and others to develop short- and long-term pipelines.

We know that community and technical colleges can play a key role in developing those relationships. The federal government was funding a really important program called the TAACCCT (Trade Adjustment Assistance Community College and Career Training) Grant from 2009 to 2013.  They awarded $2 billion in grants—predominately to community and technical colleges but also to a few four-year universities—to work in partnership with industry and strengthen talent pipelines into those industries. Community colleges have been doing this for many years—even before we had this federal grant program—working in partnership with businesses and industries to develop customized training.

Community colleges can be incredibly powerful partners in developing the curricula, making sure that people have access to financial aid in order to engage in training and working with employers to identify what their skill needs are. What’s more, colleges can deliver stackable, portable credentials that workers can use not only to get into the labor market but also to transition up career ladders. That’s an important piece: Colleges can work with employers not just to get workers into the labor market or into a job, but actually develop sequences of courses or career pathways that help workers transition from entry-level work into higher paying jobs. Community and technical colleges can build a labor force and help a company’s bottom line.

One of the challenges to expanding these industry and sector partnerships is that the TAACCT Grant funding has expired. One of the things that we see as a priority for Congress and the next administration is to find ways to modernize higher education policy in this country. They should be looking at how they can provide dedicated funding to partnerships between businesses, institutions of higher education, workforce development systems, community based organizations and others to develop and sustain these partnerships. We know these partnerships can be incredibly effective in meeting the needs of job seekers—particularly of low-income and low-skill job seekers.  However, they aren’t cheap to develop and, without dedicated funding or capacity development, it can be hard sometimes to scrape together the resources necessary to really take these partnerships to scale.

Evo: What do you find to be the other significant roadblocks standing in the way of job training and skill development programs?

KK: One of the challenges that we have spent a lot of time working on is federal financial aid policy under the Higher Education Act, including Pell Grants and student loans. Right now those financial aid streams are only available to students who are enrolled in a program that meets a minimum time requirement of 600 hours over 15 weeks. If you’re interested in a high-quality,  short-term job training program that does not meet the seat-time minimum, you’re not classified as a student and you’re not able to access Pell Grants. As a result, that student is unable to participate in the training and the business is unable to get the skilled worker it needs. This also means that the institution doesn’t have very strong incentives to build those kinds of training programs. Modernizing our financial aid system so that it may accommodate the shorter term credentials and certificates available would be an important step in the right direction.

One of the other obstacles is the lack of of coordination of student support services. In many cases, these are short-term occupational credentials and work-focused training programs. The students are working adults; the average age of community college students is 28 years old and that tells you something about the life circumstances of today’s working students—they tend to be older, they have life commitments, they’re working and they have family obligations. It’s important to make sure that there are resources available to help them succeed in a training program and to help them balance work and family obligations with their academic pursuits. That could mean working with community-based organizations to help provide support services like childcare and transportation. Working with adult education providers or other institutions to help make sure working adults have access to developmental education to help make sure their literacy and numeracy skills are where they need to be in order to succeed in postsecondary education. We don’t generally make a lot of resources available for student support and I think that’s something that we need to fix from a policy perspective.

Another basic barrier is the lack of data alignment. We don’t do a very good job in this country of tracking the outcomes for postsecondary education—whether graduates are getting jobs, what kind of earnings they’re getting, what kind of industries they’re heading into. When we think about the metrics for a high-quality program, we don’t really measure outcomes for a lot of two- and four-year programs. Making sure that we have good outcomes data on all postsecondary programs—from short-term job training programs all the way up to four-year degrees—would help consumers, because they better understand what to expect from any particular program, as well as policymakers in understanding where to allocate resources. It would also help institutions figure out what programs are working and what programs are not working, and it would help employers figure out which institutions are doing a good job of preparing people to enter into the labor market right away. Strengthening the collection and analysis of data, as well as the quality of the data from postsecondary institutions, and aligning that information with other data systems would be an effective strategy.

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Key Takeaways

  • Degrees are important but not every job needs them; it’s critical to understand the needs of employers before enrolling in a specific program.
  • The federal government needs to revise its financial aid policies to improve the affordability of short-term job training programs.
  • Incentivising industry and sector partnerships to create more programming aimed at closing the skills gap is necessary to reducing unemployment and underemployment.