Can Work-Based Learning Ease Talent Issues?

To address the shortage for talent of entry- and mid-level workers, paid work-based learning opportunities can align efforts to recruit workers in high-demand industries, while also providing a way for workers to develop their skills and earn postsecondary credentials and potentially higher wages.

Work-based learning programs (e.g., apprenticeships, internships, fellowships and on-the-job training) often include a classroom/worksite component and mentorship opportunity that allows individuals to learn while they earn and employers to be directly involved in their employees’ skills training.

While work-based learning strategies are a powerful tool for increasing experiential learning for students and current employees, recent surveys suggest partnerships with employers are underutilized.

In The Graduate! Network’s employer survey, employers stated they were less likely to partner with higher education institutions and expressed strong interest in creating partnerships.¹ While 56% of workforce agencies reported working directly with businesses on hiring or improving credentials of current employees in the Federal Reserve Bank of St. Louis’ 2017 Community Development Outlook Survey, 44% of workforce agencies are not working directly with employers.²

During a recent Investing in America’s Workforce summit in Memphis, Tenn., the St. Louis Fed gathered more than 70 stakeholders from across the Eighth District to explore how to advance work-based learning opportunities and increase educational attainment for the unemployed and underemployed. Through facilitated dialogue, summit participants outlined critical strategies and issues to address:

• work-based learning as a key strategy to close the skills gap;
• employment barriers;
• trauma among current and prospective workers;
• the importance of partnership; and,
• the need for additional funding and quality data.

During the event, employers noted a need to scale up paid apprenticeships, internships and on-the-job training. While challenges persist, including a lack of understanding national credentials and an inability to grasp the full scope of their organizational needs, employers have opportunities to engage in sector partnerships with community representatives to expand pre-apprenticeships and skills training. Summit attendees suggested targeting industries such as hospitality and healthcare, working with co-ops, and increasing entrepreneurship opportunities to create better career pathways that build skills and increase wages. Employers and panelists also noted how work-based learning opportunities can circumvent job displacement due to automation by upskilling and providing resources to new and incumbent workers.

Although there is optimism surrounding more employers hiring individuals that were previously incarcerated, a significant group of the reentry population, opportunity youth (those aged 16-24 who are neither in school nor in the workforce) and those 55 years or older, still face major barriers to work.Internal Revenue Code and ETA’s TEGL No. 3-09, Changes 2 and 3: A SWA certifies members of the Disconnected Youth group if they have: (1) attained age 16 but not age 25 on the hiring date; (2) not regularly attended any secondary, technical, or post-secondary school during the six-month period preceding the hiring date; (3) not regularly been employed during such six-month period; and (4) not been readily employable by reason of lacking a sufficient number of basic skills. While workers may participate in work-based learning programs to receive higher wages, some individuals face the “cliff effect”—when a minor increase in an hourly wage causes a sudden loss of benefits, such as childcare subsidies. Participants suggested partnering with organizations to establish and extend career and counseling programs to address any barriers to job retention.

Community partners and educational institution representatives highlighted the negative effects trauma has on their clients and students (i.e., the inability to complete training and maintain a strong work ethic). There is a growing need for better information to support trauma-informed care and employee assistance programs to ensure an individual’s success in the workplace.

Participants stressed the importance of partnerships to both better aligning services and increasing educational attainment among populations that experience barriers to employment. Identifying overlapping priorities and ensuring businesses are at the table bolsters the efficient use of resources and improves economic mobility for workers. Employers recommended more partnerships with two- and four-year colleges, as they have the ability to be nimble and innovative in their development of programs for on-the-job training.

Educational institution representatives, employers and community partners stressed the need for better data and additional funding for books, uniforms and special tools often required when attaining a postsecondary credential.

As the economy evolves, the demand for education, skills and credentials also increases—requiring new ways to build workforce talent and help all Americans secure their careers. While major corporations may have the resources to provide work-based learning training and services to support workers, small and mid-sized businesses continue to have a hard time with developing and implementing these programs. Workforce development boards, chambers of commerce and other community organizations have an opportunity to align benefits and services, as well as provide businesses with available subsidies, tax credits and other incentives to alleviate the financial burden to take work-based learning to scale.

Sam Evans is a community development advisor focusing on workforce development at the Federal Reserve Bank of St. Louis.