Employment Programs Work — Why Aren’t They Getting to More People?
This commentary originally appeared in Spotlight on Poverty & Opportunity.
Project QUEST, a San Antonio nonprofit organization that connects adults to education and training for in-demand careers, has a problem. QUEST and other programs like it — sectoral programs, which work with employers to train people for specific, in-demand jobs, in QUEST’s case in health care, information technology, and manufacturing — have had notable success raising employment and wages for adults living in low-income communities. One study found that compared with similar people, Project QUEST participants earned more than $5,000 annually nine years after the training. That success has led funders to suggest QUEST grow beyond its geographic region and help more people. But QUEST’s purpose and mission were a result of a specific coalition of community, business, and government leaders that arose in a community-centered response to the closure of a major employer.
It is understandable that funders and policymakers want as many people as possible to benefit from programs like Project QUEST. Many high-performing sectoral training programs describe this external pressure and also a sense of responsibility to get their services to everyone who might benefit. But bringing these successful programs to more people is not so simple. Without additional support, the field might end up serving more people, but serving them poorly.
The Pressure to Expand
The federal law that funds workforce development strongly encourages state and local workforce boards to fund sector-based programs. Public and private workforce and economic development agencies court high-performing sectoral providers and try to recruit them to new regions. And philanthropies push providers to find ways to serve more people. For programs whose primary attraction to participants, employers, and funders is their track record of success, growth is reputationally risky and operationally daunting. Still, many feel pressure (and some have substantial funding incentives) to try to achieve a larger scale.
Some have tried to grow by increasing the number of sectors where they offer training or expanding the range of people to whom they offer services. Project QUEST has been offered resources to launch in more cities over the years, but has chosen to expand its offerings in its hometown while offering advice and guidance to people elsewhere who want to start a similar program.
Some do replicate their training in new locations. Per Scholas, which began offering its information technology-focused training in the Bronx, has since grown to operate training programs in 23 locations. Year Up — a training program for younger workers — operates in more than 30 locations and relies on partnerships with other training providers (for example, community colleges) to increase reach and manage costs.
Currently, there is no systematic evidence on what approaches to growth are better for participant outcomes or program operations. Nor is there guidance for the thousands of logistical and programmatic decisions an organization’s leaders and staff members must make in order to expand. In the field, there is not even an agreed-upon target for what “scale” should look like in terms of numbers served, geographic coverage, or any other measure. The advice available on how to grow is often anecdotal and untested. The dominant mental image for many is a start-up in the private sector with a growing user base and multiplying revenue — but that imaginary start-up has few practical analogues to nonprofit funding and operations. Growing programs also face challenges rooted in the sectoral model itself: building relationships with new employers, recruiting more qualified participants, and understanding demand in new local labor markets.
Recently MDRC convened leading sectoral programs to identify research needs in the field. At that meeting, the discussion of growth was all about these challenges. Serving more participants led programs down unexpected paths, most unrelated to training. Several providers discovered that their facilities did not have the infrastructure to add more phone lines and that they had too many users for their software licenses. Universally, providers faced difficulty recruiting new staff members, training them, and integrating them into their organizations’ cultures. More people and locations also led to increased complexity in management and difficulty in supervising staff work to ensure that the quality of services did not slip. Navigating these challenges imposed financial costs and distracted program staff members and leaders from the core functions where they excel: providing effective training and connecting people to jobs.
Many funders of sector programs adopt a linear model where growth is expected to offer consistent results at a consistent cost. Harder still, some funders expect “economies of scale” to develop, where the per-student cost of training declines as numbers increase. Tamara Johnson of Per Scholas describes the organization’s expenses as it grew as anything but consistent and linear. Planning for and launching new locations and adding the infrastructure and staff to serve larger numbers required the organization to spend in preparation for growth. Doing so leaves spikes of expenditures on the books that do not line up with increased numbers of people served — and that can look bad for an organization without additional context. Both Year Up and Per Scholas credit some exceptional funders who recognize this tension and have supported growth with capital investment, but this support is not the norm. Moreover, unlike for-profit start-ups whose investors expect to lose money for years as they build their product and market it, a sectoral program that shows expenditures much greater than revenue would raise red flags for many potential funders.
How to Support Organizations as They Grow
The pressure to expand comes from a good place: more people should benefit from effective programs. But achieving that outcome will force all the players involved to adopt new mindsets, new forms of support, and new priorities.
Provide patient resources
Funders who want to help programs expand should embrace the up-front costs programs experience as they build up their infrastructure and staff. For example, Year Up credits funders that gave it support to upgrade its data infrastructure, develop new processes to handle larger volumes of participants, and integrate with new partners.
Expect growing pains
For many years, MDRC has advised funders and policymakers to tailor their expectations for evidence to a program’s level of development. That is, for a variety of reasons, less mature programs may benefit more from research aimed at improving program delivery than at searching for evidence of their effectiveness. When it grows to a larger scale, an organization with a mature and proven model will, at least in some operational aspects, look like a young and developing organization.
As Per Scholas built infrastructure to serve many more learners, it partnered with MDRC to broaden its assessment of who is a good fit for the program, potentially identifying new groups of participants. Together MDRC and Per Scholas identified barriers users faced, and redesigned and automated processes to accommodate larger numbers. Even in an established and proven program, increasing scale introduced new hurdles that were solvable through research and design.
Collect and analyze data
As they grow, providers need evidence both to help them make decisions and to monitor the consequences of decisions they make. Organizations like MDRC can apply rigorous techniques to help them do so. The work starts with putting in place data-collection systems and analysis processes that can meet the new needs of a growing provider. The organization must be able to track what about its model persists at its new scale and what has drifted away from the features responsible for its impact.
Sector-based workforce programs have shown that they can help people land good, high-quality jobs. With smart, patient resources and support backed by evidence, more providers can help more people from low-income communities achieve that dream.
Clinton Key is a research associate for MDRC’s Economic Mobility Lab where he works with high-performing workforce training programs around the country to unlock solutions that help them serve more people effectively.