Briefing BookITA/Eligible Provider Demonstration
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U.S. Department of Labor
Employment and Training Administration
Prepared by Public Policy Associates, Incorporated and
the Corporation for a Skilled Workforce
Section One: Demonstration Project Overview
Disclaimer:
These materials have been prepared by a contractor to the U. S. Department of Labor in an effort to provide
timely and useful information. This material does not necessarily represent official Agency policy or opinion.
Included among these materials is information based on the interim final Workforce Investment Act (WIA)
regulations published in full on April 15, 1999 at 64 Federal Register 18662 et seq. The final WIA regulations
are scheduled to be issued December 1999, and may differ from the interim final regulations.
Section One: Demonstration Project
Overview
Information Session Agenda
8:00 - 9:00 Registration; Continental Breakfast
9:00 - 10:00 Introduction and Overview
10:00 - 10:10 BREAK
10:10 - 12:00 Individual Training Accounts: Participants and Eligible Training Providers
under WIA
Relevance to ITAs and Eligible Training Providers
What would you envision an ITA/Eligible Training Provider system would look like?
How would your organization need to change to implement this new system?
What do you view as the key challenges to successful implementation?
12:00 - 1:00 Lunch
U.S. Department of Labor
Employment and Training Administration
Dallas Region VI
Topic: The Central Role of ITAs in Implementing the WIA Principles
1:00 - 2:10 ITA Implementation Options
2:10 - 2:20 BREAK
2:20 - 2:35 Technical Assistance
Expectations for Participants for System-building and Sharing
2:35 - 3:05 Proposal Development
3:05 - 3:30 Session Evaluation and Wrap-Up
Thanks for attending! We hope that the day was helpful to you.
Please be sure to complete and return the session evaluation form that
is located in the last section of this Briefing Book.
Information Session Goals
The goals of this information session are to:
ITA/Eligible Provider Demonstration and
Experiment Goals
Overview
The ITA/Eligible Provider Demonstration seeks to support the design and implementation of
the Workforce Investment Act by testing approaches that best fuel the creation of a more
market-like environment for adult worker re-training. The demonstration evaluation will
generate valuable information about alternative ITA/Eligible Provider models that are
implemented at various sites. This information will assist the states and localities by providing
guidance for the implementation of more promising models that have the greatest likelihood of
producing positive impacts for participants. This will allow the new Workforce Investment
Areas (WIAs) to tailor their training programs to better serve trainees and to increase the
effectiveness of training programs.
The evaluations of the ITA/Eligible Provider Initiative will include information on key issues
regarding implementation and operational processes (e.g., payment mechanisms necessary to
implement ITAs, eligible training provider lists), the impacts of various ITA models, and
estimates of the return on the public's investments in ITAs.
Two Projects
The ITA/Eligible Provider Initiative includes the ITA/Eligible Provider Demonstration and the
ITA Experiment. This information session is linked to the solicitation for sites interested in
participating in the ITA/Eligible Provider Demonstration. Sites that are selected for the
ITA/Eligible Provider Demonstration are not required to apply for or participate in the ITA
Experiment. There will be a separate SGA issued at a later date for sites interested in
participating in the ITA Experiment.
ITA/Eligible Provider Demonstration
This ITA/Eligible Provider Demonstration is designed to fund a broad array of states and local
areas to pilot test a limited range of approaches to implementing ITAs. This project will
include the provision of extensive technical assistance and training to participating sites in a
short-run effort to provide early operating models. This project serves as the initial step to
immediately begin collecting and processing information for early lessons learned about the
development and implementation of ITAs under the WIA.
The ITA/Eligible Provider Demonstration will support the development and implementation of
ITA/Eligible Provider systems in 10 to 12 pilot sites and will use those experiences to provide
learning opportunities for the broad workforce development system as it continues to
implement the Workforce Investment Act over the coming year. This project will focus on the
development of administrative systems and structures, the engagement of vendors and other
stakeholders in the planning process, and the necessary staff training and development to
support the customer-focused approach inherent in the ITA concept. This project will also
feature extensive information exchange both among the participating sites and between the
sites and other state and local workforce officials. More detailed information regarding
application requirements for the ITA/Eligible Provider Demonstration project can be found in
Section Five of this briefing book.
ITA Experiment: Determining Impacts of Alternative ITA Models
The ITA Experiment is designed to fund a selected group of state and local Workforce
Investment Areas to conduct a rigorous experiment involving carefully selected ITA models.
The ITA Experiment will provide in-depth analysis of the impacts of alternative ITA models
on the labor market outcomes of adults. More detailed information regarding application
requirements for this experimental project will be provided in a separate solicitation for grant
applications (SGA) which is expected to be issued in January 2000.
Additional information about the evaluation of both the ITA/Eligible Provider Demonstration
and Experiment can be found in Section Three of this briefing book.
Section Two: ITAs -- Participants and
Eligible Training Providers Under WIA
Introduction
The Workforce Investment Act of 1998 represents the first major reform of the nation's job
training system in over 15 years. The enactment of the legislation was the culmination of a
four-year bipartisan effort on the part of the Administration and Congress to design, with
states and local communities, a revitalized system that provides workers with the information,
advice, job search assistance, and training they need to get and keep good jobs--and provides
employers with skilled workers.
The enactment of the Workforce Investment Act provides unprecedented opportunity for major
reforms that will result in a reinvigorated, integrated workforce investment system. States and
local communities should seize this historical opportunity by thinking expansively and
designing a customer-focused, comprehensive delivery system. New, strong, business-led
local boards can contribute fresh thinking about the labor market and its needs, as well as
about quality and continuous improvement--in a way that earns sustained support by local
business leaders.
WIA Principles
The Workforce Investment Act gives American workers the chance to equip themselves with
the skills and information needed to compete in the new economy and helps workers take
responsibility for building a better future for themselves and their families.
To accomplish the goals of the new legislation, the new workforce investment system will be
built around several key principles:
Streamlining Services
Empowering Individuals
Universal Access
Increased Accountability
Strong Role for Local Workforce Investment Boards and the Private Sector
State and Local Flexibility
Customer Choice
The underlying principle of the provision of training services under the WIA is customer
choice. One-Stop centers will provide access to consumer information relating to training
providers that can assist individuals in gaining relevant skills--including information about the
performance of such providers in placing graduates in employment. Through local boards,
each state will compile a list of eligible training providers that meet performance levels as set
by the Governor and adjusted upward, as appropriate, by local boards. Individuals may
choose any provider from the list of approved providers, whether or not the provider is located
in the local area where the individual resides. In addition, states may enter into agreements on
a reciprocal basis that allow individuals to access training in another state.
The Act creates a market-based system for training service and will provide a "level playing
field" for a wide array of providers--large and small, public and private. Those who provide
training services under the Act will have to meet the test private businesses face every day.
They will have to deliver value to their customers, or risk losing them. With individuals
making their choices based on past performance, ineffective training providers will not
survive.
WIA ITA/Eligible Training Provider Requirements
There are many issues associated with designing and operating an ITA/Eligible Training
Provider system. This section provides a brief overview of regulations governing system
design and operation.
(Note: For a complete presentation of WIA Regulations, the reader should consult the WIA
Interim Final Regulations and WIA Interim Regulations Q&As, both of which are available
through the usworkforce.org web site. Specific web addresses can be found in the
bibliography of this briefing book. The final WIA regulations are scheduled to be issued
December 1999, and will be made available through the web site at that time.)
A discussion of some of the policy issues that need to be addressed by system planners can be
found in the sub-sections that follow.
Individual Training Accounts
Eligible Training Providers
Issues for Participants
Background on Participant Issues
Finding workers to sustain America's economic growth is becoming one of the most crucial
concerns of business owners and managers across the United States. Changing job
requirements and the resulting demand for new skills, the desire for reliable worker
credentials, and shifting company and industry structures mean continuing intense demand for
high-quality services that enable workers to meet the needs of the labor market. The WIA was
developed with the recognition that, as the 21st century approaches, we have to develop
training opportunities that respond to market needs and provide consumer choices.
In an effort to get a better understanding of how voucher-style training accounts might impact
consumer choice, the U.S. DOL conducted a multi-site demonstration project in which
selected sites were allowed to design and implement innovative voucher style approaches to
providing training to dislocated workers. This demonstration project was conducted prior to
the passage of the WIA and used the term career management account (CMA) rather than ITA.
A systematic evaluation of the CMA Demonstration has provided valuable lessons that help
inform the development and implementation of ITAs. (Note: The briefing materials include a
copy of the CMA final report as a separate document.)
Based on learnings from the Career Management Account (CMA) Demonstration Project,
participants in an ITA/Eligible Training Provider system will be empowered to have control
over career choices, control over training providers, and control over expenditures.
Control Over Career Choices
In a true voucher environment, workforce development agency staff would not make career
decisions. Rather, they would inform or guide those choices, and the ultimate decision would
rest with the participant. The extent to which customers are empowered to make career and
training choices will vary across ITA/Eligible Training Provider systems, however, the system
must accommodate broad choice for customers. Participants must be challenged to examine
their options and decisions in terms of what is appropriate to their educational and professional
background, available in their local economy, and feasible to accomplish with the ITA and
other available resources.
Control Over Training Providers
Traditionally, decisions on training options were often made by agency staff who would buy
training slots in bulk. In order to make the system cost-effective, it was important to make
certain that those slots be filled. This could lead to pressure on staff to direct clients to classes
or individual slots that were already committed but not fully subscribed. By contrast, the
participant-driven decisions about the type of training desired and who the provider should be
puts the individual in a position of having to analyze not just the labor market but the training
market as well. In the ITA/Eligible Training Provider systems, participants must be
challenged to consider all of the relevant information regarding eligible training provider
performance to make appropriate choices when selecting a training vendor. The clear
implication for states, workforce boards, and One-Stops is that they must provide the kind of
information about training choices and providers that is necessary to make an informed
decision and provide in a form that is easily usable by participants. This is one of the
significant system-building challenges under WIA.
Control Over Expenditures
In order for customers to make informed choices, they must be aware of the amount available
at any time and the rules for spending. Based on findings from the CMA Demonstration
project, participants did not necessarily value physical control of the account and payment
mechanism (as might be afforded through a debit card or checkbook) as much as they valued
the freedom to assign resources they controlled to their own choices. As long as their
decisions were implemented on a timely basis, the physical method of payment did not matter
significantly. Control over spending requires separate accounting for each participant. While
this does not differ in principle from the accounting requirements of JTPA, it can be very
different operationally.
Summary of CMA Participant Survey Results
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CMA Demonstration Clients of Re-employment Services Survey Results |
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October 1998 | |||
General Information
Thinking about the re-employment services you received from our agency, please circle the number next to the response which best represents your answer to each question.
RESULTS Total CMA Title III
1. Were you enrolled in a unique re-employment service that somehow differed from traditional job search or training programs? (n=1217)
Yes 50.8% 53.5% 47.8%
No 30.5% 29.0% 32.1%
Don't know 18.7% 17.4% 20.2%
2. When you began using our services, were you interested in making a career change? (n=1245)
Yes 78.6% 80.5% 76.4%
No 21.4% 19.5% 23.6%
*Significant differences at the 0.10 -level. (Chi-square test)
a. Did you successfully make a career change? (n=1145)
Yes 56.6% 58.6% 54.4%
No 43.4% 41.4% 45.6%
Program Enrollment
3. Compared to other government programs, how would you describe the amount of paper work required to obtain re-employment services? (n=1128)
Less than others 35.3% 38.2% 32.1%
About the same 54.0% 50.7% 57.6%
More than others 10.7% 11.1% 10.3%
*Significant differences at the 0.10 -level. (Chi-square test)
4. How easy or difficult was it to understand the rules and regulations involved in your re-employment program? (n=1233)
1 2 3 4 5 6 7
Easy Difficult
Mean 2.30 2.28 2.32
Median 2 2 2
Std. Deviation 1.61 1.59 1.64
5. To what extent did your re-employment program require you to learn about or investigate your career choice in order for you to get a training program approved? (n=1234)
To a great extent 30.3% 35.4% 24.7%
Somewhat 41.7% 40.3% 43.1%
Not very much 18.5% 17.0% 20.1%
Not at all 9.6% 7.3% 12.1%
*Significant differences at the 0.10 -level. (Chi-square test)
Re-employment Services
Please help us understand the nature of your re-employment program by answering each of the following questions.
| Total |
CMA |
Title III |
6. How would you rate the extent to which program staff provided you with assistance to determine and meet your re-employment needs? (n=1237)
| Too little assistance | 17.5% | 16.5% | 18.5% |
| About the right amount | 81.4% | 82.3% | 80.5% |
| Too much assistance | 1.1% | 1.2% | 1.0% |
7. How would you rate the amount of information you received about your program and all the options and services available to you? (n=1241)
| Too little information | 20.7% | 20.2% | 21.2% |
| About the right amount | 77.9% | 79.0% | 76.7% |
| Too much information | 1.4% | 0.8% | 2.0% |
8. How would you rate the quality of information available to you to make decisions about re-employment services or training? (n=1241)
| Excellent information | 40.3% | 42.6% | 37.7% |
| Adequate information | 47.5% | 45.7% | 49.6% |
| Not very good | 9.8% | 9.5% | 10.0% |
| No information at all | 2.4% | 2.1% | 2.7% |
9. How would you rate the amount of information available to you regarding job training services (i.e., schools or other training providers)? (n=1237)
| Too little information | 25.5% | 25.0% | 26.0% |
| About the right amount | 73.7% | 74.5% | 72.8% |
| Too much information | 0.8% | 0.5% | 1.2% |
10. How would you rate the amount of information available to you regarding specific jobs or career fields? (n=1236)
| Too little information | 32.3% | 31.4% | 33.2% |
| About the right amount | 66.1% | 66.9% | 65.2% |
| Too much information | 1.6% | 1.7% | 1.5% |
11. How would you rate the range of service options available to you? (n=1233)
| Many options | 24.5% | 25.5% | 23.4% |
| A fair amount of options | 49.3% | 50.1% | 48.5% |
| Only a few options | 22.2% | 19.9% | 24.7% |
| No options at all | 4.0% | 4.5% | 3.4% |
| Total |
CMA |
Title III |
12. To what extent were you able to make your own decisions about service options? (n=1227)
| To a great extent | 61.9% | 66.1% | 57.4% |
| Somewhat | 26.8% | 24.4% | 29.5% |
| Not very much | 8.0% | 6.8% | 9.2% |
| Not at all | 3.3% | 2.6% | 3.9% |
*Significant differences at the 0.05 -level. (Chi-square test)
13. How were decisions made regarding what services and training you could take? (n=1221)
I made my own decisions, with little or no advice
from a counselor 35.0% 35.7% 34.2%
A counselor helped advise me on choosing
from several options 49.6% 51.9% 47.0%
A counselor suggested the best option
for me 10.9% 8.7% 13.4%
A counselor told me
what to do 4.5% 3.7% 5.4%
*Significant differences at the 0.05 -level. (Chi-square test)
14. Did your re-employment program make a specific amount of money available for your services and training? (n=1221)
| Yes | 60.9% | 74.3% | 46.1% |
| No | 17.9% | 10.7% | 25.7% |
| Don't know | 21.2% | 15.0% | 28.2% |
*Significant differences at the 0.01 -level. (Chi-square test)
15. How much control did you feel you had over how you could spend money available? (n=1102)
| Complete control | 10.5% | 12.0% | 8.6% |
| A lot of control | 25.8% | 30.7% | 19.5% |
| A little control | 25.6% | 30.2% | 23.8% |
| No control at all | 38.1% | 30.2% | 48.0% |
*Significant differences at the 0.01 -level. (Chi-square test)
16. How would you rate the amount of control you would liked to have had over how your financial assistance was spent relative to the amount you did have? (n=1077)
| I preferred less control | 3.1% | 3.0% | 3.2% |
| I had the right amount of control | 63.4% | 66.0% | 60.1% |
| I preferred more control | 33.5% | 31.1% | 36.7% |
Outcomes
The following set of questions is designed to help us evaluate the overall quality of your re-employment program.
| Total |
CMA |
Title III |
17. How did the outcome of your program compare with your initial expectations? (n=1216)
| Exceeded my expectations | 28.9% | 29.2% | 28.7% |
| Met my expectations | 48.9% | 49.6% | 48.2% |
| Did not meet my expectations | 22.1% | 21.2% | 23.1% |
18. How satisfied were you with the degree to which you could make your own decisions? (n=1214)
| Very satisfied | 57.7% | 59.5% | 55.6% |
| Somewhat satisfied | 30.1% | 30.0% | 30.3% |
| Not very satisfied | 7.5% | 7.3% | 7.7% |
| Not satisfied at all | 4.7% | 3.1% | 6.4% |
*Significant differences at the 0.05 -level. (Chi-square test)
19. How much do you feel your re-employment experience helped you? (n=1221)
| Quite a bit/a lot | 60.4% | 62.6% | 57.8% |
| Somewhat | 24.8% | 23.6% | 26.2% |
| Not very much | 9.2% | 8.5% | 9.9% |
| Not at all | 5.7% | 5.3% | 6.1% |
20. How would you describe your overall experience with re-employment program staff? (n=1223)
| Positive | 78.3% | 80.4% | 75.8% |
| Neutral | 15.8% | 14.4% | 17.3% |
| Negative | 6.0% | 5.1% | 6.9% |
21. How would you rate your overall satisfaction with your re-employment program? (n=1224)
| Very satisfied | 57.5% | 60.0% | 54.7% |
| Somewhat satisfied | 28.9% | 27.1% | 30.9% |
| Not very satisfied | 7.8% | 8.1% | 7.4% |
| Not satisfied at all | 5.8% | 4.8% | 6.9% |
| Total |
CMA |
Title III |
22. Other than receiving financial assistance for training, which of the following aspects of the re-employment program was most important and valuable to you? (n=893)
| Good counseling | 27.2% | 25.7% | 28.8% |
| Good information about training programs | 17.7% | 16.0% | 19.5% |
| Good information about jobs | 10.0% | 7.3% | 12.8% |
| Freedom to decide about where to go for training | 29.9% | 35.2% | 24.2% |
| Freedom to decide how to spend financial assistance | 2.8% | 5.0% | 0.5% |
| Space to work and make phone calls | 7.1% | 6.0% | 8.1% |
| Assistance with things like child care or transport | 5.4% | 4.8% | 6.0% |
Significant differences at the 0.01 -level. (Chi-square test)
Re-employment Program Improvements
In order to help us better understand how re-employment programs should be improved, please tell us to what extent you agree or disagree with each of the following statements. Please circle a number on the scale from 1 to 7, where 1 means you strongly disagree with the statement, and 7 means you strongly agree with the statement.
23. People entering re-employment programs should be required to do research into training providers or vendors. (n=1226)
| Mean | 4.98 | 5.15 | 4.78 |
| Median | 5 | 5 | 5 |
| Std. Deviation | 1.77 | 1.78 | 1.74 |
*Significant difference at the 0.01 -level. (T-test)
24. People entering re-employment programs should be required to research their chosen career. (n=1232)
| Mean | 5.65 | 5.80 | 5.49 |
| Median | 6 | 6 | 6 |
| Std. Deviation | 1.55 | 1.48 | 1.60 |
*Significant difference at the 0.01 -level. (T-test)
| Total |
CMA |
Title III |
25. People entering re-employment programs should be required to do research to understand what jobs are available and how to get them. (n=1232)
| Mean | 5.66 | 5.76 | 5.49 |
| Median | 6 | 6 | 6 |
| Std. Deviation | 1.59 | 1.53 | 1.60 |
*Significant difference at the 0.05 -level. (T-test)
26. People entering re-employment programs should be left alone to make their own decisions. (n=1234)
| Mean | 3.29 | 3.29 | 3.29 |
| Median | 3 | 3 | 3 |
| Std. Deviation | 1.82 | 1.77 | 1.88 |
27. People entering re-employment programs should be required to meet with career counselors prior to enrolling in training. (n=1236)
| Mean | 5.92 | 5.98 | 5.86 |
| Median | 6 | 6 | 7 |
| Std. Deviation | 1.49 | 1.42 | 1.56 |
28. People in re-employment programs should be given freedom to spend financial assistance as they see fit. (n=1228)
| Mean | 3.60 | 3.68 | 3.50 |
| Median | 4 | 4 | 3 |
| Std. Deviation | 1.96 | 1.95 | 1.96 |
Significant difference at the 0.10 -level. (T-test)
29. People in re-employment programs should be allowed to choose any training program they want. (n=1233)
| Mean | 4.61 | 4.64 | 4.59 |
| Median | 5 | 5 | 5 |
| Std. Deviation | 1.97 | 1.91 | 2.03 |
30. I was treated like a responsible adult by my re-employment program. (n=1232)
| Mean | 6.04 | 6.07 | 6.02 |
| Median | 7 | 7 | 7 |
| Std. Deviation | 1.63 | 1.58 | 1.69 |
| Total |
CMA |
Title III |
Demographic Information
The following questions are extremely important to help us ensure that training services are delivered to all participants on an equal basis. Please remember that this information is completely confidential.
31. In what year were you born? [AGE] (n=1223)
| Mean | 44.39 | 43.81 | 45.04 |
| Median | 45 | 44 | 46 |
| Std. Deviation | 10.14 | 9.96 | 10.31 |
*Significant difference at the 0.05 -level. (T-test)
32. What is your sex? (n=1234)
| Male | 39.5% | 39.3% | 39.9% |
| Female | 60.5% | 60.7% | 60.1% |
33. What was the highest level of school that you had complete prior to enrolling in your re-employment program? (n=1216)
| 8th Grade or less | 0.6% | 0.3% | 0.9% |
| Some high school | 2.5% | 2.0% | 3.1% |
| Completed high school/GED | 26.7% | 22.7% | 31.3% |
| Some college courses | 33.1% | 37.6% | 28.1% |
| Completed two-year degree | 11.8% | 12.7% | 10.7% |
| Completed four-year degree | 12.3% | 11.6% | 12.9% |
| Some graduate courses | 5.4% | 5.6% | 5.2% |
| Completed graduate degree | 7.6% | 7.5% | 7.7% |
*Significant difference at the 0.01 -level. (Chi-square test)
34. Did you complete the training that was arranged through your re-employment program? (n=1223)
| Yes | 72.7% | 72.9% | 72.5% |
| No | 27.3% | 27.1% | 27.5% |
35. Are you currently employed? (n=1223)
| Yes | 70.1% | 72.9% | 67.0% |
| No | 29.9% | 27.1% | 33.0% |
*Significant difference at the 0.05 -level. (Chi-square test)
| Total |
CMA |
Title III |
36. With which racial or ethnic group do you most closely identify yourself? (n=1214)
| African American/Black | 14.7% | 15.6% | 13.6% |
| Asian/Pacific Islander | 1.6% | 1.6% | 1.6% |
| Caucasian/White | 74.5% | 73.9% | 75.1% |
| Hispanic or Latino | 4.2% | 4.4% | 4.0% |
| Native American | 3.0% | 2.7% | 3.3% |
| Other | 2.1% | 1.9% | 2.4% |
37. Please feel free to write any additional comments regarding your re-employment program in the space below or on back.
Eligible Training Provider Issues
Eligible Training Provider Background
The WIA principles encourage more choice for customers and, overall, a more market-oriented training system. Bringing training vendors--the suppliers of training services--into
the system so that customers can have access to them is an essential element of making these
principles real. Eligible training providers are training vendors who have applied to a
workforce board to receive training funds under WIA and have been approved by the board
and the state to do so. These providers face a variety of issues as they move into the WIA
system, issues that the workforce boards and One-Stops must understand and take into account
in operating the system. These issues include, among others, the approval process, a need for
information about the WIA training market, a new customer focus, requirements to provide
program and performance information, and how to respond to the new market conditions.
Training Provider Approval
For a training vendor to become an eligible training provider under WIA, they must complete
a process by which a local workforce board gives approval to them to provide specific
programs and in which the state agency verifies performance information. This involves
several steps and all levels of the system within a state.
The state develops application requirements, including performance levels, that programs not
eligible under the Higher Education Act nor a registered apprenticeship program must meet in
order to become initially eligible. The state must set minimum levels of performance for all
providers to remain subsequently eligible and the locals can adjust these upward. It is also the
responsibility of the designated state agency to create a list of eligible training providers
compiled from the submissions of the local boards. Those providers who have been approved
by the local boards and have had their information verified by the state are added to the list.
The state then has the responsibility to disseminate widely the list of providers. WIA is silent
on the mechanism to be used for dissemination, but many states are developing or examining
the use of web-based systems that can be easily accessed by One-Stops and individual
participants. WIA also requires that consumer reports on performance and cost be provided,
but is silent on how this will be accomplished.
Local Board responsibilities include:
The application and approval process must elicit commitments from applicants to provide
performance information, subject to audit, as required by WIA. If the process is too complex
or time consuming, training providers will be less likely to apply. For example, where a
training provider operates across the jurisdictions of multiple workforce boards, submission of
several applications and adherence to slightly different procedures could be seen as too
burdensome. If so, it might result in fewer applications than the workforce boards may hope
to receive. On the other hand, if the process fails to obtain the necessary commitments to
assure that complete, accurate performance information is provided, then the system will not
be able to equip individual participants with what they need to make informed decisions.
Need for Market Information
It is not inevitable that training vendors will flock to the new system. Instead, they will need
certain types of market information to make the decision on whether to apply to become
eligible training providers and which training programs they will apply to have included.
Providers will want to know how many participants are likely to receive ITAs, what amount of
money each ITA will include, and what range of training services will be allowed by the
workforce board and the state. Also, they will need financial and regulatory information; any
limitations on fees; contracting processes, if any; record-keeping requirements for accepting
the vouchers; data collection and reporting requirements; and the application and approval
process. They will also need information on how customers may connect with eligible
providers, such as referral processes, and the types of marketing opportunities that will be
available.
Such information will help providers calculate whether the time and expense necessary to
apply is likely to be recovered through the business they could do. For workforce boards and
One-Stops that are eager to attract a large number of providers, furnishing this type of
information will be a part of the process of doing so.
The WIBs or One-Stops must be responsible for acquiring, organizing, and disseminating
information for both consumers and providers.
A New Customer Focus
Under JTPA, the degree of individual choice about the use of training providers varied widely,
but in virtually all cases, WIA should result in increased customer choice. This means that
staff will play a different role in the decisions about what kind of training is needed and which
provider will be used. For the eligible training providers, this means a dramatic shift in who
their customer is. Instead of working to understand and meet the needs of JTPA staff, as they
often have needed to do in the past, they will have to understand and meet the needs of
individual WIA participants.
The responses of the providers must be understood by the staff who operate the system. They
must address such issues as:
It is likely that training vendors will communicate among themselves about the WIA system
and will attempt to influence its development and operation. While there is nothing untoward
about such an effort, it is essential that the workforce boards and One-Stops be aware of it.
While the interests of the training vendors and participants overlap, they are not identical.
Those who operate the WIA system must assure that the interests of the participants are
effectively represented.
Providing Program and Performance Information
WIA requires that all eligible training providers furnish information about their courses of
study and program outcomes. This program and performance information has at least two
uses. Workforce boards and states will use it to determine subsequent eligibility and
individual participants to inform their training decisions. If the system provides for easy
comparison of the performance of a relatively large number of providers, then eligibility
becomes less an issue; the choices of the individuals are likely to skew in the direction of those
who perform well.
Many proprietary schools have collected performance information in the past, however few
have ever had to generate verifiable information that will track against UI wage records. Still,
for many of them, the WIA requirements may be less a departure from business as usual. For
community colleges and other public sector providers, there is wide diversity of experience--
some have limited experience with it, others have none. Under WIA, programs eligible under
the Higher Education Act or registered under the National Apprenticeship Act at community
colleges or proprietary schools must meet the requirements of locally developed applications,
which will generally not require performance information. Programs which are not HEA-eligible (or registered under the Apprenticeship Act) --whether offered by a community
college, proprietary school or community-based organization -- will have to provide
performance information as per state-developed requirements. But providers of all programs
must provide the same performance information after the first year or period of initial
eligibility. They will also have to meet state or locally adjusted standards to remain eligible.
as other providers.
Types of program information valued by participants is likely to be quite broad. What might
be critically important for one may be inconsequential for another. For example, a participant
with limited financial capacity may care most about price, while one with limited
transportation may value geographic proximity more highly. A participant who needs to
support a family may care most about wages at placement, while one who is less confident in
his or her ability may be most focused on completion rates.
Market Responses
If the market for particular services includes several providers and if WIA allows them to
charge market rates, those providers will compete for the business of the ITA-eligible WIA
customers. This competition may take several forms, including marketing and price.
Some providers may want to communicate as much information about themselves as possible
through the eligible training providers list and the Consumer Report system. If the list is web-based, the state and workforce boards may decide to link the record of a provider directly to
that provider's website. This would provide a marketing channel that would otherwise be
closed to the provider. Another communication vehicle that providers may wish to use is
marketing or advertising at or near the One-Stop. Workforce boards and One-Stop operators
will need to deal with the issues that this raises. For example, on-site advertising could be a
valuable revenue source, but could also raise equity questions such as whether smaller, cash-poor providers may be disadvantaged relative to their larger counterparts. Near-site
advertising is probably beyond the direct control of a One-Stop, but staff will need to be
prepared for customers responding to these advertisements.
Other providers will want to compete on price. Since this information is already included in
the mandatory information, it will be kept as part of the eligible training providers' list and the
Consumer Report system. It will be important to allow changes to the list to be made easily
and frequently to capture the benefits of such price competition. The benefits will accrue to
the customers, who will be able to afford more training within the limits of the ITA, and to the
WIA system that will be able to serve more customers with the savings based on any price
competition. Some JTPA offices have in the past limited voucher payments to the lowest level
charged by any provider of a particular training. This strategy of price management may
control costs, but it also creates a risk of limiting the number of providers who participate in
the system and of making WIA training a "lowest-common-denominator" system.
In general, providers are likely to be quite creative in their responses to the more market-oriented WIA system. The exact responses cannot be anticipated, but they must be monitored
and understood so that the staff can play an effective role in assisting customers.
It is important to understand that the WIA system itself is part of the marketplace and that
vendors will respond to the way WIA is implemented. If the states and workforce boards
establish straightforward procedures, respond to problems quickly, and pay their bills on time,
then they will have a positive effect on creating a functioning market. If not, they may impede
the emergence of the training market that is so important to the strengthening of their regional
workforce.
CMA Issue Paper: Vendor Perspectives and
Likely Impact
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The Use of Vouchers in Adult Worker Retraining: Vendor Perspectives and Likely Impact |
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Prepared by | |||
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Public Policy Associates | |||
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and | |||
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Corporation For a Skilled Workforce | |||
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October 1998 | |||
Table of Contents
Institutional Purchasing Versus Individual Choice
Implications
Introduction
Vendors are providers of training or other services to customers of the adult worker retraining
system. They deliver services that are critical to accomplishment of the Job Training
Partnership Act (JTPA) mission--which is to move workers into jobs at attractive wages as
quickly as possible.
The use of vouchers in the JTPA system has profound implications for vendors and their
relationship with JTPA. The Career Management Account (CMA) Demonstration Project,
which tested a variety of approaches to vouchers at 13 JTPA sites across the nation, included
groups of 200 participants in voucher experiments for a period of about one and a half years.
Despite its limitations, the demonstration provided some insight into how vendors may
perceive and react to a broadened use of vouchers and how these perceptions and reactions
may change the relationship between the vendor community and the JTPA system.
In this paper, the differences between the traditional and voucher approaches are explored,
vendor responses are discussed, and implications for the role of JTPA are noted. Finally, key
issues of staff reorientation and training are articulated.
Institutional Purchasing Versus Individual Choice
A key distinction between the traditional Title III system and the use of vouchers is that, with
vouchers, individual customers have much greater latitude in selecting the specific vendors
who will provide their training. Viewed from the vendor perspective, this means that the
individual JTPA participant becomes the customer.
In any market, sellers attempt to carry out transactions with buyers. The adult worker
retraining market is no exception. However, if a JTPA agency purchases training slots in bulk
through a procurement process, or if it maintains a very narrow list of certified training
vendors, then, from the vendor's point of view, it is the JTPA staff that is the customer and
not the individual participant.
The shift to individuals as the customers has a variety of implications for vendors. Instead of
cultivating relationships with JTPA staff, they must consider marketing to individuals. Instead
of focusing on the institutional perspective on training needs, they must anticipate the desires
of individuals. Instead of focusing on system-wide timelines, they must respond to the
schedules of individuals.
Despite the small scale of the CMA demonstration, such responses were observed at many of
the 13 sites. For instance, in Palm Beach, some vendors wanted more of an opportunity to
advertise and get their information directly into the hands of the CMA customers. Several
referenced new materials and products they had developed to advertise more effectively to
individuals. In Baltimore, vendors who formerly provided class-size training were encouraged
to submit proposals and redesign their programs to accommodate individual schedules.
According to staff at that site, subcontractors could no longer depend upon their agency to fill
their classes. Instead, they had to begin rethinking how they did business.
Vendor Certification
If choice is to be meaningful, the range of available choices must be as broad as possible. The
freedom to choose from all vendors in a local training market is quite different from selecting
one of a few on a list of pre-certified vendors. The response of vendors to the certification
process appears to depend on the complexity of the process and the size of the market to which
certification provides access.
In order for choice to be meaningful to individuals and participation attractive to vendors, the
process of being added to the list must be relatively simple. On the other hand, the JTPA
system must be aggressive about policing fraud and abuse among vendors. This means that
management of the certified list is a critical function of a voucher system.
The broadening of the numbers and types of vendors certified, as well as the process for being
included, is very important in creating a positive perspective among vendors. If the scale of
voucher activities increases substantially, vendors will become highly motivated to be included
in such a list. Also, individual customers will need a relatively simple process for
"nominating" a vendor for inclusion. The CMA demonstrations showed this was possible. At
the Phoenix CMA site, 14 new vendors were added over the first four months of the
demonstration. The certification process took less than two weeks. In Oklahoma, the number
of training vendors expanded from about 50 to more than 160. Of the limited number of
vendors who were included in the study, very few complained about the certification or
approval process.
In addition to the number of vendors who are certified, the types of vendors is also important
to customers. The Georgia CMA site liberalized the vendor qualification process to meet the
needs of CMA clients seeking unconventional or high-skill training.
Massachusetts utilized a statewide registry developed as a result of a Request for Qualifications
solicitation issued by the Massachusetts Service Delivery Area Directors Association. This
approach addressed the potential problem of dealing with vendors who operate in multiple
service delivery areas. The Massachusetts demonstration sites maintained an outcomes report
on regional vendors which was available to customers, and there were many references to its
extensive use during site visits. According to staff, procurement of training became smoother
and more streamlined within the CMA model.
Market Dynamics One would expect that vendors would behave differently in a system driven by individual
choice, and the CMA experience provided some evidence that this is the case. Responses
were quite different, however, from private- and public-sector vendors. The JTPA operation
itself, with regard to certain services, is a special case of public-sector vendor. The market
response of this type of vendor must be clearly understood. The limitations of the data in this
area must be made clear--in many sites, vendors and staff indicated it was too early to see
much change in vendor behavior in response to vouchers. Despite this important limitation,
however, there were a number of clues about changes that can be expected to occur as
vouchers go to scale.
Responding to Individuals
Vendors respond quite differently to institutional customers than to individuals. In New York
City, a vendor reported that her organization bids aggressively for bulk contracts with JTPA.
Pricing is adjusted to compete with what her organization believes others will bid and what
JTPA is willing to pay. This same organization, however, has a strict policy not to negotiate
price with individuals.
In Portland, Oregon, quite a different story was heard. A customer who was seeking
computer training shopped the market for qualified vendors and was able to negotiate a
discounted price from the one he judged to be the best, based on the limits of the voucher and
the willingness of another vendor to sell at a lower price.
Despite concerns that moving from bulk contracts to individual accounts would necessarily
lead to higher training costs, there is evidence to suggest that vendors will respond to
competitive pressures in the training market and negotiate price reductions on an individual
basis.
Another type of response to individuals concerns the scheduling of training. The use of fixed-schedule, classroom-style training has been very common among JTPA programs. The
advantages of using this type of training often include volume purchase discounts and
predictability. Individuals, however, are often forced to change their training plans to
accommodate fixed schedules. Vendors who understood the voucher system expressed interest
in providing open-entry, open-exit training programs that would eliminate scheduling barriers
for individuals.
Marketing
While there are clear positives and negatives in the market response of vendors to a voucher
system, the key difference, compared to traditional Title III, is that their perception of who
their customer is shifts dramatically. This shift toward focusing on individuals implies a
different marketing strategy for vendors. Within such a system, they will want to market to
JTPA participants and JTPA-eligible individuals. If the market is structured well, this can be
a constructive process. If not, the marketing process can distort customer choices in a
problematic fashion. A key element of structuring the market to take this into account is
providing good consumer information.
The CMA demonstration was not large enough to stimulate extensive changes in marketing
activities. However, vendors understood the implications of the voucher system for their
approach to marketing.
Private Versus Public Sector
The level of information provided to vendors about the voucher programs varied widely
among the 13 sites. There were cases in which vendors did understand the CMA designs, and
when they did, they tended to like them both in concept and in practice. Conceptually, private
sector vendors tend to like market-oriented designs. Such vendors often said they felt
comfortable with the idea of competing for clients, although those who had enjoyed large-scale
contracts over long periods of time worried about the loss of such contracts. In most cases,
vendors who were aware of the program designs felt they were less bureaucratic and more
streamlined than the traditional approach. For instance, vendors to the Palm Beach program
felt it was flexible and easier to manage from a logistical/paperwork standpoint. Those in
Oregon appreciated the rapid payment for the vouchers, as did those in San Bernadino, where
the voucher system turned a 30-day process into a three-day process for issuing payment.
Staff of public-sector training entities, such as community colleges, were sometimes less
sanguine about the value of the voucher system for their institutions. They are generally much
less flexible in their scheduling and, therefore, have a competitive disadvantage compared with
trainers that can meet timelines of customers and potential employers. There was some
evidence, however, that the higher-education community will compete aggressively in a
voucher system. Central Texas College is moving to short-term training, such as a truck
driving program and computer certification, as a result of the shift in the marketplace and
funding streams.
In addition, there may be opportunities to include non-traditional training vendors within the
sphere of options available to voucher program participants. While there was scant evidence
within the CMA demonstration sites of the use of on-the-job training and internships, their
inclusion in the pool of available training providers would broaden the range of training
options available to individual participants.
JTPA as a Vendor
Among the public-sector (or sometimes private, non-profit) providers is one entity that brings
a unique perspective to the voucher environment--the JTPA agency itself. These agencies play
several roles in the JTPA system, including stewardship of funds, counseling and guidance,
and training. The shift to vouchers has forced JTPA offices to question whether the latter two
of these functions should be "voucherized" and whether the agencies offering them should
begin to operate in the same competitive environment as do other vendors. The answers to
this question varied widely among the CMA sites.
Most CMA sites offered some types of training or support services. These ranged from
classroom training for computer skills in Oregon to basic skills development in Maine. Most
offices provided resume development and fax/mailing service as part of their support for job
search activities. The rules on use of and payment for these services indicates the perspective
of these vendors about operating in a market-like setting. Most provided these training and
other services at no charge to the customer. Some allowed the voucher funds to be used to
purchase similar services from outside vendors, but most had serious reservations about such a
use of the funds. Only in a few cases was the competitive "playing field" on which the JTPA
office and outside vendors competed truly level.
In the area of counseling and career planning, it was even less common for the services to be
voucherized. However, there were a few exceptions. In Phoenix, for example, counseling
and career planning was available both from the JTPA office and from outside vendors. Since
the cost of JTPA services were not charged to the voucher, that office had a substantial
competitive advantage. It does bear noting that, in the few cases in which an outside vendor
was used, outcomes were not particularly positive. Florida went even further, as described on
page 11, by outsourcing their Basic Readjustment Services entirely.
The more common response of JTPA offices was to keep the counseling and planning-support
functions entirely outside the voucher framework. Most feared that, if customers had the
choice of either using these services or not, they would not invest sufficient resources in
planning. They also were deeply concerned about their ability to sell their services to
customers in a competitive environment. In New York City and elsewhere, the essence of the
concern was that, while the services have value, customers might not be able to see that value
prior to receiving service and, therefore, would not choose to use them. While this concern is
similar to what some private sector vendors expressed, the difference is that the JTPA offices
typically addressed their own concern by eliminating the possibility of competition or choice.
The Need for Market Information As vendors increasingly find themselves in the position of needing to market their services to
individual customers, the temptation to overstate their effectiveness will likewise increase.
Whether this amounts to simply putting the best appearance on their products or outright
fraud, customers will be faced with the need to examine critically the claims of vendors before
deciding to purchase their services. This requires such extensive information that it is not
feasible or efficient for individual consumers to develop it.
Likewise, vendors must receive adequate information about the voucher system to allow them
to decide whether to participate in the system and accept vouchers. The type and amount of
information must be sufficient for them to determine how the system operates, whether it is
mechanically and technically feasible to participate, and whether it makes good business sense
for them to be involved. If choice for JTPA customers is to be meaningful, the flow of such
information to prospective vendors must be robust.
Consumer Information
The data needed to support good consumer choice is fairly straightforward. It includes
information on content of training, customer satisfaction, outcomes in terms of placement rates
and wages, and cost. Armed with such data on a variety of vendors, a consumer can shop
around and make the selection that best fits his or her needs. This positions the consumer to
carry out a well-informed transaction with a vendor.
In Oregon, for example, as described in their final report, future plans include the increased
use of information on vendor performance--since the CMA project "yielded examples of how
empowered consumers were more likely to hold training vendors to a higher level of
accountability and were likely to shop around for the most cost-effective alternatives."
The staff of the San Bernadino CMA site reported that the flexibility CMA participants had in
choosing a training provider allowed them to challenge the credentials of less-credible schools.
Schools were not guaranteed enrollees and, therefore, had to in a sense "prove" themselves to
individual customers. For that site, this was an unanticipated benefit of the CMA
program--one that was made possible because individual consumers were put in a position to
acquire good information and utilize it as they shopped for services.
These illustrations provide promising evidence that, when this occurs, it influences both the
perspective and behavior of vendors. Acquiring this information is not always easy.
Problems encountered during the CMA demonstration included both quality of information and
availability of information. In several sites, staff were skeptical of the reliability of data from
proprietary schools. Part of the problem was a fear that these schools simply overstate their
placement rates. In addition, however, was a worry that data were drawn from a school's
entire pool of customers, which may be systematically different from the JTPA population.
Sometimes information was simply not available. The public higher education system was
rarely able to provide placement or wage information for its previous customers. In many
cases, community colleges and universities simply did not see such information as relevant to
their mission.
Vendor Information
The JTPA offices must provide the type of information needed by vendors to assess the value
of the program and decide whether and to what extent vendors may choose to participate.
This includes financial and regulatory information, such as the amount of the voucher; any
other limitations on fees; contracting processes, if any; record-keeping requirements for
accepting the vouchers; data collection and reporting requirements; and the certification
process. It also includes information on how customers may connect with vendors, such as
referral processes, size of the pool of customers, and marketing opportunities.
Because of the limited scale of the CMA demonstration, opportunities to develop and
disseminate vendor information were constrained. As a result, some confusion among vendors
occurred. At the Atlanta CMA site, for example, clients indicated that the process often
breaks down at a training site when financial-aid staff do not understand the voucher process.
Similar difficulties were seen at other sites.
In general, vendors were not particularly well-informed about the CMA systems--but this was
not always a problem. The Oregon voucher system was administratively simple, but vendors
could not generally describe the differences between it and the traditional system. They were
not particularly interested in understanding the fine points of the design. This result may
imply, then, that the need for vendor information can be minimized if the design of the
voucher program is very simple and market oriented.
The JTPA offices must be responsible for acquiring, organizing, and disseminating
information for both consumers and vendors. However, as with many functions, this
information could be provided by the JTPA system or from an entity with which JTPA
contracts, which would then carry it out with oversight from the JTPA office. Operating JTPA in a Market Setting An important influence on vendor perspectives about vouchers is the process through which a
JTPA office operates the voucher system. Payment processes are of great concern to vendors,
as is the competitive framework within which they must operate. JTPA offices also face the
question of whether they will continue to be providers of service as well as managers of the
voucher process. The answer may influence both the range of activities of the JTPA operation
and the perspective of vendors about it.
Vendors care a great deal about getting paid for the services they provide, but timeliness of
payment varied greatly across the CMA sites. As noted above, some sites accelerated payment
processes substantially. However, there were problems with the payment processes at some
sites. In New York City, for example, vendors who had been certified to provide services and
were selected by a customer for specific training were forced to wait as long as a year to
receive payment. Staff, vendors, and customers were equally frustrated with the problem.
But this difficulty did not seem to be specific to the voucher system. Rather, it appeared to be
endemic to the large NYC bureaucracy. However, the consequences may be more problematic
in a voucher system. While not nearly as severe as the New York City problems, vendors to
the Atlanta CMA program reported that the system was "smooth but slow." In Texas,
dissatisfaction was expressed with the site's 60- to 90-day payment cycle. In general, vendors
seem to expect payment on a timely basis, which commonly means 30 days.
Such difficulties inevitably sour vendors on accepting vouchers in the future--which will
ultimately narrow the range of available providers. With volume purchases, vendors may be
willing and able to wait for payment. However, when training decisions are made by
individuals, the vendors may decide that the voucher has little value because of the inherent
time lag in payment. Since the nature of the relationship between the vendor and JTPA is a
function of the transactional decisions of vendors, they may simply reject vouchers from future
customers after having a few negative experiences.
Another reality of the shift to a market-based system is that some vendors will prosper while
others may suffer or even fail. These differences are clearly reflected in the perspectives held
by vendors about the merit of the shift. A powerful illustration is the dependence of some
vendors on relatively large-scale contracts to provide training. Such a vendor may have gotten
to the point where a substantial fraction of the organization's income is derived from JTPA
services. The loss of such a revenue base--or even uncertainty about its continuation--can be
devastating. In New York City and elsewhere, community-based non-profit organizations
have been given notice that they will need to begin to compete for JTPA work based on
performance. The response has been politically difficult for the agencies that have taken such
positions.
The Florida CMA site, on the other hand, decided that it would no longer be a provider of
services. This very different approach illustrates an almost purely market-making role for the
JTPA organization. As described in that site's final report, internal Basic Readjustment
Services were discontinued early in the program because the "availability of these in-house
services was influencing the customers in some way and prevented outside providers from
participating in the program. By outsourcing (the services), the RESTART staff was able to
concentrate on facilitating 'customer choice,' overseeing the voucher process, and monitoring
the use of the Career Management Accounts."
A dramatic shift in the role of JTPA implies the need to equip staff to play a new role. If the
agencies are to be credible and effective in dealing with vendors, they will need to understand
the issues and responses that are likely to be elicited from those vendors as a result of the shift
to a market-based approach. This suggests the need for staff to be exposed to research and
training materials that address such issues. It will be critically important to help them
understand how the shift in the JTPA role changes the nature of their jobs and to equip them to
do that job well. This is, perhaps, the most important precursor to a successful voucher
system.
Implications
The Congress and Administration have moved toward vouchers because they are different
from the current system, and the response of vendors represents one of the key differences.
This difference requires the JTPA system to play a role in organizing the training market,
rather than simply purchasing services. The following are the key elements of this role:
Establish clear criteria for inclusion on a certification list
Implement a relatively easy and fast process for certification
Require that all vendors provide performance data, subject to audit
Police vendors aggressively for misrepresentation or fraud
Provide high-quality information to consumers and vendors
Process payments quickly
While some of these elements are similar to current JTPA activities, they would be carried out
in a different context. The response of vendors will depend upon the manner in which this
role is carried out. If JTPA staff are clear with vendors that they will no longer be the
primary customers of the vendors, then vendors are likely to understand and adjust to the shift
to a market-based voucher system.
Role of Workforce Boards and One-Stops
The Leadership Role of Workforce Boards
The workforce investment system under WIA emphasizes informed customer choice, system
performance, and continuous improvement. The eligible training provider process involves
several key strategic choices that can either advance or impede achievement of these goals.
State and local boards will work together to create the performance accountability measures
for the eligible training provider application process and to develop a list that identifies two
types of providers: those initially eligible and those subsequently eligible. As workforce
boards, in partnership with states, set the limits on identifying training providers whose
performance qualifies them to train adults and dislocated workers, they can do so in ways that
make the training market more robust or less so.
Establishing and maintaining the free flow of accurate, useful information between eligible
training providers and participants is perhaps the most critical leadership role. Without this
essential ingredient, it is just not possible to stimulate a more robust training market. The key
policy decision that states and workforce boards must make is whether the number of eligible
training providers will be constrained or relatively large. It is only when they choose the latter
course that customer choice has real meaning.
Other policy decisions that shape the nature of the WIA system include the performance
standards for inclusion on the eligible training provider list, the range of occupations that are
considered to be "demand occupations," and the level of encouragement and support that is
provided to staff to implement a truly market-oriented system.
At each decision point, the states and workforce boards must understand that they can exert
leadership that will influence not only the WIA system, but the entire training market and
therefore the labor market of the region.
The Changing Operational Role of One-Stop Staff
An individual training account-based system is truly a paradigm shift. This transformation
equates to new and different administrative burdens and new staffing roles. The role of case
manager in this One-Stop system changes from decision maker to coach and facilitator. Staff
are expected to assess skills and readiness and coach clients on courses of action that would
hopefully lead to strong labor market attachment. Staff must manage new individual payment
arrangements and new forms of paperwork, develop and maintain ongoing relationships with
clients, be accessible and able to coach them, and maintain working relationships with
vendors.
Since staff members are expected to play a role significantly different from their previous one,
they need to access a new set of tools when communicating with customers. If existing staff
members are to effectively implement a voucher system, it is essential that they both
understand and feel comfortable in their new role. One-Stops should invest in training early
on to prepare staff for greater responsibilities in assessing customer needs and to ensure
adequate transition to this system that is more focused on customer choice and decision making
in providing training services. Staff members should receive support in making these changes
through learning networks and technical assistance.
Similarly, in order for participants to benefit fully from the voucher program, it is imperative
that they understand how the system operates, what their responsibility is, and what choices
are available to them. Participants should participate in a comprehensive orientation session
and should be required to develop, and receive approval for, a re-employment plan that
provides a rationale for their career/training choices, as well as support services necessary to
attain their goals.
Many changes follow a voucher program's shift of authority from staff to customers. Not
only does the role of staff shift to guiding or supporting a research and planning process
carried out principally by the participant, but the perspective of vendors changes from viewing
staff as their principal customers to focusing on individual participants as customers. Even
state and federal policy makers will need to adjust their thinking, as the responsibility for
outcomes inevitably shifts from staff to their customers--accountability mechanisms must
address this change.
As the use of individual training accounts expands through implementation of the Workforce
Investment Act, staff and leadership must think carefully about their future planning and
activities. Leaders must send a clear message to staff regarding the changes that are in store
and the administrative support that will be provided to make an effective transition to a new
operating system.
CMA Issue Paper: Promoting and Sustaining
Change in Organizations Implementing CMAs
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Institutionalization of Change: Promoting and Sustaining Change in Organizations Implementing Career Management Accounts |
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Prepared by | |||
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Public Policy Associates | |||
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and | |||
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Corporation For a Skilled Workforce | |||
|
October 1998 | |||
Table of Contents
Organizational Change: Steps to Success
Institutionalizing Change: The Employment and Training System Perspective
Appendix A: The Eight-Stage Process of Creating Major Change
Endnotes
Introduction
In order to increase the "staying power" of future demonstration projects, this paper addresses
change management from the following two perspectives:
1. Organizational: This paper outlines strategies that have been developed by business
theorists for the introduction of new concepts into an organization. Based on these
theories, a number of steps are suggested in response to the Career Management
Accounts (CMA) experience.
2. Employment and Training System: A generic service-delivery model is offered, and a
review of CMA experiences in that context suggests a focus on a few system-level
supports.
The premise of this paper is that public programs must be able to introduce and test new ideas
efficiently in order to maximize opportunities in an era of limited public funds.
Defining "Institutionalization of Change"
Thomas Harvey, a business management theorist, defines the institutionalization of change as
the "integration of a change effort into the mainstream of the organization so that its
continuance is at least as certain as that of any other activity in the organization."(1) In addition,
Harvey lists the following fundamental determinates of institutionalizing change:
Planning and preparation
Timing
Congruence with mission
Environmental sensitivity
Clarity and simplicity
Unpretentious realism
Sufficient, not indulgent, resources
Strong, central leadership
Reduced individual, proprietary interest
Of these factors, the planning and preparation requirement is highlighted as the primary
requirement for success. Reflections on the CMA experience to date can be classified as
planning and preparation for the future.
The Employment and Training Environment
As the Workforce Development Act is implemented, one of the primary issues facing the
public employment and training system will be the extent to which the service providers are
able to embrace individual training accounts as a way to organize service delivery. The
experience to date suggests that the concept is acceptable on its face but that a great many
questions will arise as system-wide implementation proceeds. This relates to the wide latitude
in interpretation of the concept. In that context, the Department of Labor (DOL) will be called
upon to both facilitate and manage change across a service delivery landscape that is becoming
more localized and decentralized.
Along with job training reform legislation, a number of environmental factors are pushing
service delivery systems towards local design and variability. The following factors illustrate
this point:
Without question, the passage of the 1996 Personal Responsibility and Work
Opportunity Reconciliation Act (PRWORA) is the dominant factor pushing service
delivery design to the state and local levels (i.e., devolution).(2) DOL-administered
welfare-to-work money places service delivery authority with local JTPA providers
for services to the economically disadvantaged.
Career centers are being implemented without a presumed service deliverer. Local
decisions are being made about service delivery structures in order to meet a set of
objectives outlined by the DOL (universality, customer choice, integr