by James A. Bacon
Virginia spent $341 million in government funds in fiscal 2013 on workforce development programs. What did taxpayers get for their money?
There is no way to tell, according to a new Joint Legislative Audit and Review Commission (JLARC) report, “Virginia’s Workforce Development Programs.” Some of the main findings:
No consistent accounting. Virginia’s workforce development programs appear to spend a high percentage of funds on training rather than administrative overhead — a good thing — but there’s no way to tell for sure. Different programs have different definitions of what constitutes “programs” and what constitutes “administration.
No consistent performance metrics. Virginia programs do not fully measure participants’ success, employee satisfaction or employer satisfaction. Apprenticeship programs do not capture outcomes, such as whether apprentices remain in the industry after program completion or whether they earn higher wages.
Employers don’t use state programs. According to a JLARC survey, only 16% of employers use workforce programs. Employers find them complex, disjointed and difficult to navigate. They are overwhelmed by the number of partners and programs. Instead, they rely upon internal recruitment and training to meet their workforce needs. In many cases, the programs aren’t training skills in demand by employers. In other cases, programs are under-utilized because they are poorly marketed to students and job seekers.
Marginal return on investment. Contract researchers have conducted ROI analysis for several programs and found marginally positive 5- to 10-year returns for Workforce Investment Act programs and a negative return for the Trade Adjustment Assistance program.
These findings should come as little surprise given the way the state’s 24 programs are structured and administered. Sixty one percent of the funding comes from federal sources, which means they have strings attached on how the money can be spent. Administration is scattered across nine state agencies, innumerable regional workforce centers, community colleges, high schools and the Virginia Employer commission.
The fragmentation and ineffectiveness of state workforce development programs has been well known for years, if not decades. In 2014 the General Assembly replaced the old, ineffective Virginia Workforce Council with a Board of Workforce Development to advise the governor and legislature on workforce development matters. This board, which includes representatives from a wide range of stakeholders, is expected to monitor and oversee state agencies’ development of a common state vision.
However, JLARC says that state agencies continue to operate in silos, committed foremost to their individual agency missions. Moreover, the Workforce Board lacks the legal authority and the dedicated staff to fulfill all of its responsibilities. “The majority of board members are executive-level staff from Virginia businesses who reported that they have limited time to carry out all of the board’s responsibilities, and several board members expressed only vague knowledge of their responsibilities as board members.”
Bacon’s bottom line: The Commonwealth of Virginia probably could save a lot of money with little harm to the workforce simply by shutting these programs down. The state can’t do that — many of the programs are outgrowths of federal initiatives, and someone local has to administer them. But JLARC has the right idea. Let’s at least develop metrics to measure how well they’re working so the state can conduct Return on Investment analysis to prioritize how the $130 million or so in state dollars are spent.
As for reforming giving more power and resources to the Workforce Board, I’m dubious. We’ll return to the same issue four years from now, a new JLARC team will look at the fragmented, ineffective workforce-development system and, seeing how centralized it is, will recommend we decentralize it. The problems are so fundamental, I suspect, they can’t be fixed by redrawing the organization chart.
