State’s W3 Program Needs Tweaking

The Wisconsin Workers Win program is only halfway through its pilot phase, but necessary upgrades already are apparent.

Like most job-training programs, the state’s Wisconsin Workers Win program, or W3, sounds good in theory, but it will require some legislative tinkering to meet its full promise, according to community providers involved in the W3 pilot program.

Signed into law by Gov. Scott Walker in 2011, W3 seeks to connect new unemployment claimants with employers who have job openings. A $750,000 pilot program was established to reveal any limitations or flaws, and several have become evident in the three regions of the state where the pilot is being conducted.

The program, which is voluntary for both employers and UI claimants, attempts to boost job placements by allowing recent unemployment insurance claimants to continue to receive unemployment benefits as they gain skills on the job at businesses approved by the Department of Workforce Development. There are plenty of job openings to be filled – 35,578 openings were posted on the state’s Job Center website as of Jan. 20, 2013.

Employers who have entered into W3 pilot agreements with the state have certified that positions are available. The belief behind W3 is that employers know best what their needs are, and the state wants them to take charge of training while it creates an incentive for both the employer and the prospective employee.

According to DWD Secretary Reggie Newson, the UI claimants are, in a sense, involved in an unpaid internship in which they are apprenticing. Prospective employees continue to collect UI benefits while receiving job training, and they also receive a $75 weekly stipend to help them with child care or transportation.

Three organizations have been selected to run the state pilot program: the nonprofit United Migrant Opportunities Service in Milwaukee; Racine County Human Services in Kenosha, Racine, and Walworth counties; and Community Action, Inc. in Rock, Green, and other southwestern Wisconsin counties. The providers operate the program and work directly with participating employers and those on unemployment to match and place W3 trainees based on location, skills, and other factors.

Rod Ritcherson, the spokesman for United Migrant Opportunities Service, compared the W3 pilot program to a company test-marketing a product in that a product is launched under certain parameters, including price, and the rollout gives the business a chance to determine what is working, what is not working, and what can be improved before a full product launch.

“As we go through this pilot period, we are finding things that the Department of Workforce Development, along with the Legislature, may want to take a look at as far as how the program can be improved,” he said. 

Training wheels

To qualify for the program, people must be in their first 20 weeks of collecting unemployment compensation, and there are 24 hours of training per week allowed over a six-week period. The employer pays for the training and there is additional skin in the game with workers’ comp, but they don’t have to pay the employee a salary or wage. During the six weeks of training, the employer has an opportunity to develop a relationship with the UI claimant, and the hoped-for end game is that the individual is hired at a good rate of pay.

The 24-hour-per-week training limitation has emerged as a sticking point for employers. Lisa Furseth, director of the Community Action Agency of Rock County, noted the 24-hour limit was established so that UI claimants still have sufficient time to engage in their job search, but employers would prefer a stronger commitment. “When you have a full-time position that an employer is trying to fill, that makes it a hardship for the employer because what are they going to do for the other 16 hours?” she asked.

In addition, employers worry that they will go through the expense of training only to have the UI claimant take a different job. Furseth said some employers only have part-time work available but would still like to look at the program, and that kind of feedback gets passed on to DWD officials.

“I think one of the other questions that we are going to have to continue to assess as the pilot moves forward is the question of participants,” she added. “You also need willing, unemployed individuals to come to the table to take those positions. Sometimes, even when we’ve got a placement, we’ve had a couple of people drop off because it’s either not a job they want to do or there was a readiness issue in one circumstance. So the other side of the equation is: what is the pool of people and are all of them ready and willing to go to work?”

Furseth said the majority of placement opportunities in the southwest region are coming from the manufacturing environment. “For the most part, they are entry-level positions,” she said. “We are seeing some employers come to the table looking for higher-level positions as far as the skill sets, but there are not as many of those. In some respects, the higher you go up in skill set, the more challenging the match process is because it’s about having the right person in the pool at the right time.

“The program requires that we engage somebody early on in their unemployment experience, so we’ve got to catch the right person at the right time to match the right employer need.”

One theory behind W3 is that it will be particularly good for small businesses that do not have the same training resources as a large company. Alice Oliver, manager of the Workforce Development Center of Racine County, acknowledged that different employers have different needs. “What we’re hearing from most employers that are not participating in the program is they would prefer to have someone full time rather than part time,” Oliver said. “The smaller companies are saying that they would prefer to have the flexibility to determine what the training should be.

“When you are a small company that has 10 employees, if you pull one person off of their job to assist with training, that’s a loss of productivity for the person who’s doing the training.”

In the state’s southeastern corner, an unexpected benefit is the number of direct hires, as companies decide to forgo training the employee. Partly as a result of the orientation training they receive in improving their interviewing skills, refreshing their résumés, and learning how to present themselves, the Racine County program has had 26 direct hires. 

“When the company wishes to take advantage of the employee’s availability, the person is directly hired,” Oliver said. “We’ve had more success with direct hires, and those direct hires are truly the result of the person coming in and getting a jump-start on how to obtain employment.”

 

All told, 59 people on unemployment insurance have found work, 49 direct hires and 10 who have gone through training. Commenting on initial results of the pilot, Newson said effective employment assistance with résumés, interviewing, and presentation holds the promise of helping people make faster transitions to new careers, reduces the length of time they spend collecting unemployment insurance, and strengthens the financial condition of the UI trust fund.

In Milwaukee, Ritcherson believes the size of the weekly $75 stipend is too low, especially given the cost of traveling in a large metropolitan area. “There was a similar program in Georgia where the stipend was three or four times higher, and their numbers went through the roof as far as people entering the program,” he noted. “But then they decided to lower the stipend, and the number of enrollees dropped off significantly.

“So during this pilot program of the W3 program, one of the things being tested is what is the right amount of stipend that will be enough to make it effective in helping job seekers enroll in the program.”

Making the connection

W3 is one strategy the state has employed to address high unemployment as it tries to narrow the “skills gap” between the jobs available and the workers applying to fill them. The intent of the W3 pilot is to uncover program limitations, report them to the Department of Workforce Development, and have the DWD make recommendations to the Legislature.

A good deal rests on the success of the program, especially for the state’s employers, who face the prospect of massive baby boom retirements causing a shrinking workforce. One study commissioned by Georgetown University’s Center on Education and the Workforce notes that Wisconsin will need to produce 925,000 new workers by 2018 to replace the seasoned workers who will be retiring over the next several years, including in a manufacturing sector that has yet to refill the worker pipeline that was depleted by the most recent recession.

All of the providers in the W3 pilot believe the program, which was enacted in the Legislature with bipartisan support, can deliver value for both the unemployed and labor-starved employers, provided the necessary changes are made. The pilot program ends on May 31 of this year, and while there have been monthly conference calls, DWD focus groups, and other meetings to assess the program’s value to employers and the unemployed, early June will be when the post-pilot work begins.

Making these kinds of connections isn’t as easy as it seems. Furseth said it should be easy to take a pool of people who are unemployed, identify the employers, and make a connection. In reality, “it’s more complicated than that,” she stated, “because each employer has a different culture, each employer has a particular need, each employee has their own personal interest and their own sense of what they really want to do and don’t want to do. Then, we have the structural limitations of the system, just like the 24-hour rule in this program.

“Sometimes, it’s hard to work out the bugs in each of those places to make it flow perfectly. I believe it’s really time to see if we can do this here, so I think they’ll tinker with it and give it some time.”

Noting that you can’t manage what you don’t measure, Newson said the pilot program was set up with the review of metrics in mind. “We will not spend money on these programs unless we see positive outcomes,” he stated. 

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