Sector Based Training that Works: A Conversation with James A Riccio

ETHOS Digital Issue 02, Apr 2018

1. What does research say about the effectiveness of sector-based training, compared to traditional employment assistance and job placement? 

It depends on what is meant by “effective”. Sector-based training programmes are typically defined as having a “dual customer” focus: they serve employers who need trained workers to fill open positions, and workers who are seeking “middle skill” jobs that pay good wages. From the perspective of workers, sector programmes are seen as a way to provide a path of upward mobility for disadvantaged groups that are otherwise likely to end up in, or stuck in, low-wage jobs.

Although these goals are aligned, it is possible to achieve the first (supplying employers with qualified workers) without producing upward mobility. For example, suppose a programme successfully trained and placed workers in entry-level IT jobs. But also suppose that those positions paid no more than jobs the participants may have gotten had they not joined the training programme—say, certain jobs in construction. The programme would not have succeeded in helping its participants advance economically (i.e., attain higher wages), although it would have served employers’ needs for trained IT workers.

It is hard to know when a sector-based training programme is or is not producing upward mobility for workers. This is because it is difficult to know what kinds of alternative jobs a programme’s participants would have obtained, and how much participants would have earned, without the training programme. To answer that question with confidence, you need a control group. Careful evaluations of sector-based training programmes that use control groups are rare.

However, such studies are beginning to accumulate in the United States and are showing positive results. To take just one example, a recent MDRC study (using a randomised controlled trial) of a programme called WorkAdvance¹ found that one non-profit training agency (Per Scholas²), which focused on the IT sector in New York City, increased its enrollees’ earnings substantially. By the third year after entering the study, those enrolled in the programme were earning, on average, 27% more than similar individuals in the control group who were not in the programme.³ This is a good illustration of programme success in supplying qualified workers to employers in the sector and helping low-income adults achieve some economic mobility.

These and other findings from evaluations of strong sector models contrast with the results from studies of more traditional employment programmes that typically focus on job placement and, for some participants, referrals to a range of education or skills training providers in the community. For example, a number of careful studies in the United States have found that such programmes can also increase employment rates and average earnings of disadvantaged groups. However, the effects of such programmes have generally been modest or small, and they are less able to help participants get and keep jobs that are higher quality or better paying than what they would have gotten without the programme’s help. In the realm of economic mobility, sector-programmes appear to perform better—although many sector programmes do not serve as diverse a range of individuals (in terms of prior skills and interests) as many traditional job placement and training programmes.

A given sector programme will focus on a narrow range of occupations and must be selective about whom it enrols. For example, adults with poor reading and math skills and no high school diploma may not qualify for IT training, such as that offered by Per Scholas, or perhaps they will not be interested in jobs in the IT sector. The same would apply to programmes that offer training in other occupations. Many adults who need skills training may not be interested in, or may not qualify for, what a particular training provider has to offer. Thus, it is important to recognise that a sector-based training programme that focuses on just one or two sectors cannot easily substitute for job placement or other programmes that offer personalised workforce coaching services to a target group of disadvantaged individuals—who may vary widely in their interests, skills, and personal circumstances. At the same time, a more diverse target population could be more fully accommodated by a network of strong sector-based programmes that together cover a broad range of sectors, occupations, and entry requirements.

2. Skillsets demanded by the economy are always changing. How does this affect the implementation of sectoral-based training programmes?  

Sector-based programmes must be nimble. The types of skills needed by employers can change quickly because of changes in market conditions, technology, and even the prevalence of training programmes for specific occupations, which affects the supply of skilled workers. To remain effective, sector programmes must have a capacity to recognise when those changes are occurring or are on the horizon: they must be willing to drop, add, or modify their training courses and curricula, sometimes rather quickly. In the WorkAdvance programme,⁴ for example, one training provider shifted its focus from aviation-related manufacturing—when jobs in that field began to dry up—to advanced training in operating computer-assisted machining equipment. Another agency switched (although not quickly enough) from a focus on environmental remediation (such as lead abatement) to pest control and commercial driver’s licence training for transporting hazardous materials.

One way for programmes to learn which skillsets are in decline and which are in ascendency is to study trends in official labour market data and in online advertising. But also important is gleaning “early warning signs” from employers and industry representatives directly, by talking with them about the ways in which their businesses are changing and where they are beginning to struggle to find enough workers with the “right” skills: what those new “right” skills are, and how they differ from those previously needed.⁵ This means, of course, that staff members of sector programmes must maintain regular communication with employers in the sectors they are serving and inquire not just about current job openings but seek to understand how their businesses are evolving or changing, and how their skillset requirements may be changing in turn.

3. What are the most important factors for a successful sector-based training programme?

First and foremost, it is important to consider what makes a sector-based programme truly “sector-based”. Some experts consider deep ties with employers to be a defining characteristic. In contrast with many occupational training programmes, sector programmes work with employers not just when it comes time to placing programme graduates into jobs, but at every stage of programming, including curriculum design and consultation. In well-run sector programmes, staff members are specialists within a sector rather than workforce generalists. They have ties with and a nuanced understanding of the needs of specific employers, understand the content and structure of the positions those employers need to fill, and understand the career trajectories and advancement opportunities of their workers.

A well-run programme must also “pick the right sector”. That means, identifying a sector that pays wages that are higher than what programme participants might typically be able to earn without the programme, and that offers opportunities for career advancement. It means identifying occupations within those sectors for which enough job openings exist to accommodate all of the programme’s graduates and that do not already face an oversupply of qualified workers. And it means modifying, dropping, or adding course offerings and changing curricula as skillset needs shifts.

Well-run sector programmes carefully screen and select applicants to try to ensure that they will be able to complete the training offered. They provide pre-employment and career readiness services that are not generic but are tailored to the needs of the targeted occupations. They also provide occupational skills training that is crafted with employers’ input and tailored to the types of jobs available in a region, leading to credentials recognised by employers. They develop relationships with employers and industry groups to identify job openings suitable for the programme’s graduates.

Ideally, they also continue to offer participants assistance after they are placed in a sector job. Although not common and less fully studied, post-placement assistance through which staff maintain close contact with graduates and the employers they work for may contribute to a programme’s success: by allowing staff to assess the graduates’ performance, help them address complicating life situations that might interfere with their job performance, help them identify next-step job opportunities and skills training to enable movement up career ladders over time, and assist them with rapid re-employment if they lose their jobs.

Operating all these elements of a sector-based programme well is challenging. Not surprisingly, programme maturity matters. It can take a substantial period of time for a workforce provider to build deep relationships with employers in a given sector, and to acquire the pertinent specialised knowledge. More remains to be learned about “best practices” and conditions that can strengthen sector-based programmes and increase their long-term effectiveness. However, the accumulating evidence suggests that, when operated well, they can be a route to greater economic mobility for low-income adults, while helping employers meet their needs for qualified workers for middle-skill jobs.

Introduced since 2015, Singapore's SkillsFuture Earn and Learn Programme now covers 25 sectors.