Foundations Foster Public-Private Effort to Develop Workers

Foundations want to combat poverty. The government wants to increase the use of the public workforce development system. Companies need skilled talent.

Those three forces are converging in a new $50 million, five-year initiative to foster training programs that target low-income people and are designed to meet local and regional labor demands.

The goal of the National Fund for Workforce Solutions is to place 50,000 workers in better jobs, leverage $200 million in local funds and help 1,000 companies recruit and train employees.

The fund already has received $15 million from the Annie E. Casey, Ford and Hitachi Foundations and the Department of Labor.

The fund organizers say that they are motivated by two strong trends—higher levels of poverty and the growing demand for skilled workers.

As Hitachi Foundation president and CEO Barbara Dyer talked with businesses, a plaintive cry echoed.

“They simply cannot fill the jobs they have with quality workers,” she said at the launch of the workforce fund at the National Press Club in Washington on Thursday, September 6. “We hear this frustration everywhere we go.”

In order to increase standards of living and decrease the skills shortage, the fund will target community and regional workforce needs that businesses and government highlight.

So far, the program has been tried in Baltimore, San Francisco, Boston, New York, Pennsylvania and Rhode Island. A total of 16,000 workers have been trained and 5,000 businesses have participated.

The extra skills employees obtain have led to a 12.89 percent average wage increase and an 83 percent retention rate.

Partners Healthcare System Inc. in Boston has been participating for three years in a program sponsored by SkillWorks, a workforce development initiative in the city.

Partners, which comprises seven nonprofit hospitals and several physician group practices, was facing worker shortages. It also sought to help low-income Bostonians and to diversify its workforce.

The company set up a training program to help low-wage incumbent workers move from lower-skill jobs, such as patient intake, into nursing and radiology. It also established a pre-employment program for people from poor neighborhoods.

Over the course of the initiatives, 466 current employees have participated in developmental programs and 156 people have gone through the pre-employment process.

Of the latter group, 93 percent have graduated from training courses and 83 percent have been placed in jobs, while 95 percent have been retained after 90 days and 70 percent after one year. The average starting salary is $13.49.

In addition, 250 supervisors have signed up to coach workers on how to take the next step in their careers.

That investment of management time and support is crucial, according to Toddye Anderson, a patient service coordinator in the vascular surgery department of Massachusetts General Hospital.

Anderson was living in a homeless shelter in December 2004. Her needs went beyond training. She also needed child care and housing.

“It’s important to have the managers and the supervisors on board,” she said. “I was blessed to have managers that understood where I was coming from.”

The program not only has transformed lives, it also has changed HR practices at the health care company, said Matt Fishman, vice president for community health.

“We focus much more consciously in developing the potential our incumbent workers bring,” he said. Now the company invests $1 million annually in the training programs.

Fulfilling the hiring needs of a local industry like health care is the thrust of a national training initiative sponsored by the Labor Department. The Workforce Innovation in Regional Economic Development program, launched in 2005, brings together local business, government and academic institutions to identify new industries and jobs in areas hurt by global competition.

It is one of the models that have shaped the national workforce fund. The Labor Department will be a “catalyst” for engaging the public training system in the effort, according to Emily Stover DeRocco, assistant secretary of employment and training.

Educating workers “is a shared responsibility requiring an investment by all partners,” she said.

Cooperation among business, government and foundations is the characteristic that makes the national fund different from previous workforce development ideas, said Steven Gunderson, president and CEO of the Council on Foundations.

“It’s not a public sector approach,” he said. “It’s not a private sector approach. It’s not a philanthropic approach. It’s all of the above. This is a partnership at all levels in the deepest sense of that word.”

The Annie E. Casey Foundation, one of the groups involved, is best known for helping children. But Ralph Smith, senior vice president for the foundation, said that getting children out of poverty requires helping their parents learn skills and find jobs.

“We’ve got to make work work,” Smith said. “We’ve got to make work pay. It all starts with work.”

—Mark Schoeff Jr.