Closing the Skills Gap Using Employer Partnership

“How can we help employers create career on-ramps for talented but underserved communities longing for economic stability?”

—Latasha Harris, director of workforce strategies, Memphis Medical District Collaborative

According to the Bureau of Labor Statistics, the August 2023 national unemployment rate was 3.8%. For Black and Hispanic workers, the unemployment rate was 5.3% and 4.9%, respectively.See the Bureau of Labor Statistics’ Current Population Survey. The Community Development department of the St. Louis Fed has been engaged in discussions across the Eighth Federal Reserve DistrictThe Eighth District includes all of Arkansas, eastern Missouri, southern Illinois, southern Indiana, western Kentucky, western Tennessee and northern Mississippi. to better understand challenges impacting the workforce within our communities and to highlight emerging solutions that respond to the needs of vulnerable workers. One barrier that workforce intermediaries identified in these conversations is the skills gap.

Business Roundtable defines the skills gap as “the difference between the skills that employers are looking for and the training and experience that candidates possess.”See the Business Roundtable article “The Skills Gap, Explained.” As employers seek to attract and retain workers, they acknowledge that persistent gaps in education, training and career pipelines hinder the process. Practitioners frequently point to the structural barriers that exist for many workers and communities; despite the existence of training programs or approaches, some have identified a need for deeper and more-engaged partnerships between all facets of the workforce system, including education, workforce development and employers. Recent analysis points to the need for an “employer-led skills development system,” which would pivot employers to a proactive approach to procuring talent, moving away from previous assumptions that skilled workers will be available when needed.See the 2013 report Bridge the Gap: Rebuilding America’s Middle Skills (PDF), from Harvard Business School, in partnership with Accenture and Burning Glass Technologies. Creating deeper partnerships with workforce intermediaries, community and technical colleges, and skills programs allows systems to more acutely assess and provide the training needed to move workers into jobs, especially ones that can provide mobility up the career ladder.

Eighth District communities are responding to the skills gap through a variety of learn-and-earn models. Registered and unregistered apprenticeships are one tool that communities have used in an effort to create more opportunity and greater diversity in careers such as manufacturing, the skilled trades and health care. For example, Missouri recently passed the Intern and Apprentice Recruitment Act, which offers companies a tax credit of $1,500 for each paid intern or apprentice, up to $9,000 or six positions.See the Aug. 8, 2023, St. Louis Public Radio article “Missouri Hopes Tax Credits for Internships and Apprenticeships Will Grow and Retain Young Talent.”

This article explores how partners in Memphis, Tenn., have created a model to connect workers to jobs within some of the city’s anchor institutions.

The Challenge within the Memphis Medical District

For Memphis, workforce development and unemployment are core economic concerns. As a part of its work, the Memphis Medical District Collaborative (MMDC) examines the “opportunity gap,” what it considers the difference between the availability of and need for programs and supports to help workers acquire skills and on-ramps into careers. Closing this opportunity gap is why this collaborative of medical and education anchor institutions in Memphis’ Medical District created the Hire Local program. Hire Local implements training programs that identify, train and fast-track residents into jobs with career pathways and a livable wage.See the Hire Local website for its goal. Latasha Harris, director of workforce strategies for MMDC, launched this program in 2020 as a career pipeline for residents within the institutions’ geographic footprint. MMDC learned that only 2% of Medical District employees live in the district, while the households there deal with concentrated poverty and can be seen as disconnected from economic opportunity. MMDC launched the Hire Local program to respond directly to this problem.

Connecting Residents and Employers through Hire Local

The Hire Local program begins with MMDC’s employer partners, which are anchor institution members of the collaborative. Harris notes that the first steps in the process are to understand the needs of the employers, to secure a commitment from them to be partners in the process, and to have interview opportunities available for candidates.

“There must be a strong alignment between training and job opportunities” says Harris. “Too often students graduate from programs and struggle to find employment in their career field of interest. Our employer partners push into our classrooms, help design the course content, and interview successful graduates for jobs with living wages and benefits to continue their career growth journey.”

Residents can sign up on the Hire Local website and create a profile for a program of interest. The program uses a predictive assessment to align potential candidates and available job opportunities, says Harris. Employers within the Medical District have their top talent take the assessment to identify critical skills needed for the roles. Once accepted into the pipeline, participants are supported in pursuing the appropriate credentialing programs and guided toward the available roles. Harris notes that the MMDC aims to have residents participate in short-term credential programs that last no longer than two years. At the end of their program, participants are then able to interview for the job opportunity.

Hire Local provides support to participants for two years after placement. For those who aren’t quite job-ready, the program continues offering access to services. Harris observed that there are many nonacademic barriers for program participants.

“Last year, a number of residents were dealing with housing instability; additionally, 45% of students were unemployed,” says Harris. “So we offer stipends and are hoping to offer a living stipend in 2024. That will give them additional financial support while in training and during the hiring process.” The program continues to seek ways to support participants around these barriers, she added.

Outcomes Designed to Enhance Partnerships and Create a Strong Workforce

Since its launch, 180 Medical District residents have participated in the Hire Local program, with a 65% graduation rate and a 60% job placement rate, says Harris. She shared the story of one participant who wanted to enter the health care field. Through Hire Local, the participant was placed in a job-shadow arrangement with an employer that provides tuition reimbursement, which allowed her to begin a college degree and have access to employer-paid health benefits. The program’s success has allowed it to grow, says Harris; it now includes the Career Launch Academy, which is a similar work-based learning program for high school students.

Hire Local acts as a connector between employers and the residents, not to replicate existing programs, but rather to enhance partnerships to create a strong workforce in the city, says Harris. She shared the following for communities looking to replicate the Hire Local model:

“Once you find an evidenced-based or research-informed model with promising practices, be encouraged to adapt it to fit your city and the neighborhoods you serve,” she says. “There is no one-size-fits-all solution. Our approach to the work is based on what we know families need here. We can’t stop at job placement. Our families continue to need support from Hire Local as they navigate the early employment milestones. If you know the major hurdles job seekers face in your area, be sure to build support and partnerships to address those barriers.”

Harris also pointed out that it is important to understand the target geography and populations the program aims to serve. For its programs, Hire Local focuses on residents who live within the eight ZIP codes of the Medical District. Additionally, communities should think about different funding models—such as income share agreements, public/private investment and philanthropy—to bring these types of programs to scale, she noted.

The skills gap is one of many interconnected issues affecting the labor force. MMDC’s Hire Local program and its work in Memphis offers insight into how Eighth District communities are seeking best practices and solutions to support workers.

Notes

1. See the Bureau of Labor Statistics’ Current Population Survey.
2. The Eighth District includes all of Arkansas, eastern Missouri, southern Illinois, southern Indiana, western Kentucky, western Tennessee and northern Mississippi.
3. See the Business Roundtable article “The Skills Gap, Explained.”
4. See the 2013 report Bridge the Gap: Rebuilding America’s Middle Skills (PDF), from Harvard Business School, in partnership with Accenture and Burning Glass Technologies.
5. See the Aug. 8, 2023, St. Louis Public Radio article “Missouri Hopes Tax Credits for Internships and Apprenticeships Will Grow and Retain Young Talent.”
6. See the Hire Local website for its goal.