HJR 713: Joint Subcommittee Studying the Need for Greater Consolidation
or Coordination of Virginia Workforce Development and Training Resources
October 18,
2005
The third meeting
of the HJR 713 joint subcommittee featured several critiques of the current
system for delivery of workforce development programs. While no specific
proposals for consolidating or coordinating workforce resources were advanced,
several speakers identified the need to streamline the existing system.
ECONOMIC DEVELOPMENT
PERSPECTIVE
Will Davis, State
Manager of Economic Development at Appalachian Power and President of
the Virginia Economic Developers Association (VEDA) offered two public
policy recommendations. VEDA supports performance-based incentives that
help the Commonwealth attract specific growth and emerging industries.
It also supports increased funding for such programs as the Workforce
Services program administered by the Virginia Department of Business Assistance.
Mr. Davis announced
that VEDA is considering a public policy recommendation to more closely
align several of Virginia's employer-focused and business development
programs with state economic development efforts. Streamlining these efforts
will enhance efforts to create job opportunities and investments. Mr.
Davis noted that the Commonwealth has at least 100 state programs assisting
small businesses, and at least 22 state programs focusing on workforce
development. He cited one instance of Virginia losing a prospective business
to a neighboring state that offered a more streamlined workforce development
system. Specific concerns with Virginia's current workforce development
efforts include too much duplication and turf battles.
In response to a
question posed by Senator Miller, Mr. Davis declined to offer specific
suggestions for consolidation of workforce programs. He suggested that
programs directed at benefiting new and existing businesses could be pulled
together. Two areas to examine in a discussion of program consolidation
include incentives and leveraging the efforts of institutions such as
the Community College System in assisting the unemployed and under-employed.
Mr. Davis agreed with a suggestion by Mr. C. Michael Ferraro that a stronger
governance structure that puts one body in charge of the programs would
be a possible solution.
VIRGINIA'S MANUFACTURING
SECTOR
Brett Vassey, President
of the Virginia Manufacturers Association (VMA), testified that Virginia
may lose 100,000 existing manufacturing employees to retirement between
2007 and 2010. Given the difficulty in locating qualified technicians
in skilled trades, the VMA has adopted a workforce development policy
that calls for special emphasis on worker and skill enhancement efforts.
Mr. Vassey described
the six essential characteristics of a workforce development system. They
include responsiveness, flexibility, preparation of both new workforce
entrants and incumbent and displaced workers, responsiveness to the nontechnical
and technical talent requirements of the workplace, promotion of a "systems
approach" with a single point of service delivery, and performance
measurement and assessment.
With respect to the
need for a systems management approach, Mr. Vassey suggested that the
joint subcommittee examine the stakeholder "Ecosystem" adopted
by Alcoa. An organizational solution should include Secretariat-level
authority for an office in the Executive Branch that would be responsible
for measuring performance and ensuring accountability. Funds should be
prioritized for existing businesses, and budget resources for programs
should be connected by performance metrics.
Mr. Vassey suggested
that the current programs be divided among those that are primarily employer-focused
(such as the Workforce Services program), employment-focused (such as
unemployment programs), and employee-focused (such as programs administered
by DSS).
Alcoa's systems management
approach was offered as a model for organizing Virginia's workforce programs.
The accountability provided by such an approach could improve the current
system while avoiding the turf battles that would ensue from attempts
to rearrange program silos.
Bryce Jewett, owner
of a Richmond-based manufacturing business, summarized the Manufacturing
Council's report on skilled trades. Research has revealed a looming crisis
in the skilled trades required to respond to the needs of an increasingly
complex environment. More than 81% of manufacturers polled stated that
they cannot find the necessary number of skilled workers.
Mr. Jewett recommended
that the Commonwealth develop a statewide process for anticipating the
specific needs for skilled labor and balancing its training resources
to meet those needs. In addition, Virginia should promote manufacturing
and skilled trades as an attractive career option to middle and high school
students. He voiced support for efforts to continue to streamline and
consolidate state workforce development programs. More than $250 million
of federal and state funds is spent on workforce development in Virginia.
While manufacturers contribute to this sum, the value returned on their
investment is not clear.
WORKFORCE PROGRAMS
ADMINISTERED BY THE COMMUNITY COLLEGE SYSTEM
Dr. Rose Harrell
Johnson, Vice Chancellor for Workforce Development Services (WDS) at the
Virginia Community College System (VCCS), provided the joint subcommittee
with an overview of VCCS's workforce training responsibilities. These
include maximizing continuing education offerings for businesses and dealing
with employers to design and offer courses that meet workforce needs.
WDS' Employer Services
encompasses preparing incumbent employees with industry certifications,
licenses, and other work-related skills. In fiscal year 2005, 17,130 incumbent
employees completed at least one course provided through WDS, and 3,389
employers received WDS-provided services such as screening and testing,
needs assessment, and contracted instruction. WDS also provides occupation-specific
instruction, academic instruction, transitional programs and services,
and community and economic development services.
For fiscal year 2006,
WDS will receive over $7 million in federal funds and $6.3 million in
state funds. Dr. Johnson noted that the Middle College concept has been
a success, but limited resources have prevented it from meeting the demand.
Several of the Middle College programs have been funded through local
Workforce Investment Boards.
Dr. Johnson announced
that WDS is meeting with the Department of Business Assistance (DBA),
the Virginia Economic Development Partnership, and others to identify
ways to integrate resources into a fluid system. She agreed with the VMA's
observation that the best way to improve the system is through a strategic
plan with well-defined outcomes, criteria for measuring productivity,
and a method to tie program funding to outcomes. The Virginia Workforce
Council has commenced the process with the announcement of eight core
systems measures. The current challenge is to find the resources to have
these measures implemented by the local Workforce Investment Boards.
OVERVIEW OF MODELS
HJR 713 specifically
directs the joint subcommittee to develop models for consolidation or
other coordination of workforce training resources and to identify needed
changes to the administrative structure that governs workforce development
and training policy. Two models were presented for discussion.
JLARC Recommendation
The first was the recommendation made by JLARC staff in its 2003 report
on Virginia's implementation of the federal Workforce Investment Act (WIA).
JLARC staff recommended that the General Assembly may wish to consider
consolidating workforce training programs under a new state agency that
would assume the functions of the Virginia Employment Commission (VEC)
and lead the implementation of the one-stop service delivery system and
the programs consolidated within the agency. The recommendation called
on the Secretary of Commerce and Trade to develop a plan for consolidating
workforce training programs and other functions currently performed by
the VEC into a single agency.
ANS to House Bill
2626
The second model was based on the Amendment in the Nature of a Substitute
to House Bill 2626 (2005), which would transfer responsibility for programs
authorized under Title I of the WIA from the VEC to the renamed Department
of Business Assistance and Workforce Services.
DISCUSSION OF
MODELS
VEC Commissioner
Dee Esser noted that legislative attempts to implement the JLARC model
by consolidating programs have not been successful. She attributed their
lack of success in part on the variety of state and federal funding streams,
and observed that consolidating federally funded programs raises definitional
and other issues. While she conceded that some consolidation could occur,
she noted that many of the concerns identified in JLARC's report have
been addressed. Commissioner Esser observed that the VEC, with over 1,000
employees, has an adequate infrastructure to support administration of
WIA programs, while the DBA lacks a similar infrastructure and experience
in administering federal programs. Moreover, there is a high correlation
between unemployment insurance and workforce services. If VEC were to
lose administration of workforce services programs, the effectiveness
of the unemployment insurance program could be impaired.
DBA Director Michael
Eisenman responded by citing the experience of personnel in the Department
with workforce issues. He applauded the VMA's suggestion of a client-driven
approach; the DBA's clients are Virginia's businesses. He contended that
there must be a way to organize the delivery of services in a manner that
results in more funds being available to the program's customers.
In the ensuing discussion,
Mr. Ferraro noted the need for clear responsibility for policy development,
administration, and service delivery. He identified the need to establish
a governing body, analogous to the VCCS State Board. Options for accomplishing
this goal include having the Special Advisor for Workforce Services report
to the VCCS State Board or having workforce programs report to a Deputy
Secretary of Education.
Hugh Keogh of the
Virginia Chamber of Commerce observed that the issue is fundamentally
one of leadership, and the next Governor should be persuaded to make workforce
development a top priority. While structure is important, the manipulation
of resources is not as essential as leadership. The next Governor should
contemplate either creating a Deputy Chief of Staff or Secretary of Workforce
Development. Alternatively, management of workforce programs should be
in one secretariat - either Education or Commerce and Trade. With respect
to implementation of programs,
Mr. Keogh praised the VCCS and suggested that its resources should be
utilized. He also noted that the Special Advisor on Workforce Services
was intended to be a "Workforce Czar," but as implemented, the
position never transcended secretariat boundaries.
Dr. John J. Cavan
suggested that the members consider contracting responsibility for WIA
Youth Services programs to the VCCS. Senator Ruff suggested that any recommendations
be directed to providing a system that is responsive, flexible, and transparent.
The current system is not easy to navigate, and should be led by a person
with access to the Governor. The designation in the Governor's Office
of a Deputy Chief of Staff for Workforce Development could advance the
process without the need for legislative action. Mr. Bruce Phipps reiterated
that the current system is broken and that a streamlined, consolidated
system focusing on the needs of employers is needed.
Additional discussion
focused on other states that have establish secretary-level positions
responsible for workforce development programs and on the VMA's proposal
to allocate programs among the three "buckets" for employer-focused,
employment-focused, and employee-focused programs.
NEXT MEETING
The final meeting
of the joint subcommittee, which is expected to be a work session, is
scheduled for November 14, 2005.
Chairman:
The Hon. Kathy
J. Byron
For information,
contact:
Frank Munyan, DLS
Staff
Website:
http://dls.state.va.us/WDTR.htm
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