Division of Legislative Services > Legislative Record > 2005

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.


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.


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.


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.


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.


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.


The final meeting of the joint subcommittee, which is expected to be a work session, is scheduled for November 14, 2005.

The Hon. Kathy J. Byron

For information, contact:
Frank Munyan, DLS Staff



Division of Legislative Services > Legislative Record > 2005 

Privacy Statement | Legislative Services | General Assembly