July 19, 2006

The Workforce Investment Act, One Stop Management, and Engaging the Private

SectorDavid Heaney

What the European Social Fund Can Learn from the WIA ExperienceSaturday, November 7, 2009

9:00 am–5:30 pm

MAXIMUS OVERVIEW

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MAXIMUS: Background

• Founded in 1975 and a public company traded on the NYSE (MMS)

• Mission: “Helping Government Serve the People”

• Capacity: Over 6,200 employees in 280 offices across the U.S., Australia, Canada, the UK, and Israel

• Reach: In US• Over 5,000 government entities• 50 states• 50 of the 50 largest counties• 94 of the 100 largest cities

• Expertise: Principally focused on government health and human services

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Workforce Services

• Early outsourcing efforts in welfare (AFDC) employment programs in 1988 with award of LA GAIN Case Management contract

• Focus on blending thorough understanding of government, values of non-profits, and capacity to quickly deploy and manage large, highly visible, complex public programs.

• International presence allows implementation of best practices across four continents– Australia (1999): Over 73 Sites; Client: DEWR

– Israel (2005): Southern Region (Ashkelon); Client: Department of Labor Trade and Industry

– United Kingdom (2008): Sites in Leeds, Devon and Cornwall; regional provider for Surrey, Sussex and Kent. Client: Department of Welfare and Pensions; Skills and Learning Council

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Projects Across America

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THE WORKFORCE INVESTMENT ACTOne Stop Management and Challenges

for the Private Sector

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Framework for Workforce System

FOUNDATIONAL PRINCIPLES FOR THE CREATION OF A ONE STOP

CAREER CENTER SYSTEM

1. DESIGN AND MANAGEMENT AT THE LOCAL LEVEL

2. BUSINESS LED / EMPLOYER DRIVEN

3. ACCESS THROUGH A SINGLE LOCATION

4. INFORMED CUSTOMER

5. CUSTOMER CHOICE

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Balancing Employer and Jobseeker Needs

What does it mean to be employer driven?– A majority of the governing board is to be comprised of business leadership

– Training to be informed by business and labor defined need

– Local labor market information needs to shape unique programs of the One Stop’s service delivery area

– Responsive to the employer community needs

– Working in tandem with economic development• Working understanding of tax credits available to support employers

– Reflected in the design of the Center and the array of offered services and the expertise of the staff

– Business Processes need to reflect the same commitment to economy and efficiency

What does it mean to be jobseeker driven?– Leveraging appropriate resources according to demographic

– Orientation to available services and matching level of service to need

– Aligning jobseeker skills, interests, aspirations with employer needs to the best extent possible

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WIA and the One Stop System

• 1858 Comprehensive One Stop Career Centers; 1148 Affiliate Centers

• Only 32% currently competitively procure• The number of private companies bidding is diminishing • The challenges of building a model that embodies the ideals of the

legislation• Stereotypes

• Government- inefficient , red tape• Private sector for profits- obligation to investors and the bottom line• Non-Profits- ideologically driven, client-centered service rich model

• Dwindling resources

• Accounting Rules

• Difficult environment in which to do business

• Economic viability

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Competitively Procuring Services

My thinking assumes that open and fair competition between a diverse set of qualified bidders supports continuous improvement, high performance, and increased transparency.

Does limited participation by the private sector have inhibit the creation of more effective programs?

– Requires careful evaluation of empirical data.

Overall, this paper aims to encourage the development of policies which facilitate procurement processes and operational models designed to attract a greater number and more diverse set of qualified bidders from all sectors.

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Fiscal Considerations

When WIB’s do Competitively procure they are unnecessarily prescriptive: Administrative Caps, Profit Caps, Hold Backs

– How they work

– Designed to protect the public’s interest

– Is profit appropriate

Challenges– Expresses ambivalence about business

– Misrepresents accurate allocations

– Is inconsistent with outcome-based/ pay for performance methodology

– Disproportionate risk and reward

Alternatives– Carefully design payment methods that support performance and continuous improvement

– Keep focus on outcomes

– Negotiate risk/reward ratios based on performance

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Governance

Workforce Boards and Broad Representation: – Benefits and tradeoffs

The Managing Partner– Need to clearly define role and authority

The Organization– Flowing down risk

– Flowing down rewards

– Aligning partner interests

– Different organizational cultures/ Different rules

– Co-location without integration

Alternatives– Procedures to manage broad representation are easily created

– Institutionalize the authority of the Managing Partner

– Quality Assurance/Continuous Improvement Common Standards

– Performance transparency

– Address the creation of a common culture with common practice through MOU’s (?)

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Program Sequence and Performance Measures

Program Sequence– Core, Intensive, Individual Training Accounts

– Allowing greater discretion by aligning interests of provider and jobseeker

– Choosing the most direct path

Performance Measures– The greatest challenge has to do with program eligibility and enrollment

– The “gatekeeper” determines who shall reside in the performance measure denominators

– How do you compare performance which lies at the heart of a competitive model, when the denominator is managed by the organization whose performance is being measured

Alternatives– Provide discretion that creates flexibility to operate more efficiently and economically

focused on achievement of desired outcomes

– Establish standardized assessment tools to determine appropriate level of service possibly administered by an independent agency (as in Australia where an established cost schedule is tied to service level)

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Potential Offerings

Expertise– Consulting services bullpen– Technology solutions– Labor Law, Human Resources

Marketing/Communication– Promoting greater awareness– Knowledge of full range of services– Image management- “we are more than the unemployment office”

Business Process Design: – Responsive– Efficient– Cost effective

Technology– Jobs: posting, matching– Automating tax credit processes– Customer Service: call centers

Capacity to support employment services across a broader demographic– Middle to upper level management and professionals

Price

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Issues for Further Exploration

Organizational models that align mission, vision, values, goals, risk, reward What elements of the existing program can be resolved through procedural changes

as opposed to policy changes?– Review of “best practices” and application of these as appropriate

– Technical assistance to support new One Stop managers

Utilization of the One Stop system by business; – who is using the system and who is not?

– Is it sector specific?

Performance and Public, For Profit, Non Profits:Does it matter what sort of organization operates the One Stop or is it approach?

Best Practices for understanding and capturing employer’s needs Greater flexibility at the local level and innovation Contractor Payment Schemes

– Fixed Price

– Pay for Performance

– Risk/Reward flexibility based on tolerance

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Contact Information

David Heaneydavidheaney@maximus.com

619-823-3161