Record Participation
1,353 students participated in classroom training, representing 31.5% of all adult participants.
Independent Workforce Study
Workforce Development, Inc.
This executive summary describes Workforce Development, Inc.’s review of classroom training investments, placement outcomes, and return-on-investment results.
1,353
Adult students
$1.5M
Training tuition investment
504%
Overall ROI
Methodology
Each year, the Board and staff of SE MN Workforce, Inc. (WFDI) reviews the placement outcomes of the training investments made in the previous year. Each person's career goals are charted according to a self-devised occupational index - thereby allowing us to compare results across occupational clusters and amongst the various schools offering training in our area.
We refer to our occupational index as the "WOW code", in that the numbering system is adapted from The World of Work Inventory; this allows our counselors to reference, or "map" customer's assessed career interests in light of our investment study.
For this study, a student was counted if their activity status was that of "classroom training" anytime between July 1 and June 30. The dollars attributed to the investment represents only those funds committed by WFDI, and may not equal the total cost of the course. However, if the course started prior to July 1, the dollars spent in the previous year were added to this past year's investment to give a more true picture of the total investment made per placement. The concept of "Return-on-Investment" (ROI) has been used by WFDI for the past eight years to help measure the efficiency and effectiveness of our training efforts. The ROI cited is calculated by : adding the welfare savings due to placement plus the income taxes paid due to placement and the Social Security contribution paid (.0755 employer's share), all divided by the overall cost of training. Training costs are calculated as the total cost of training for all students, including those that are not placed. The ROI is reported two different ways: one represents the tuition costs only compared to the return over a period of 90 days post-placement; the other is an annualized return that includes the cost of training plus the prorated portion of overhead assigned by WFDI for all adults.
This study involved 1353 adult students, and a classroom training tuition investment of $1,506,518.19.
Summary
Once again, the study underscores the importance of classroom training in preparing for a living wage job. However, the data continues to suggest that quality jobs can be secured with shorter-term industrial certification training yielding a much greater return on the public's investment. Extensive research on the part of the prospective student and a thorough assessment seem to be a critical factor in successful career planning. From a consumer's standpoint, and from the perspective of the average taxpayer, it would seem that a proliferation of training providers has created an expanded array of training options and has yielded higher returns. The trick now is to be able to navigate the myriad of options available in the most informed, yet least frustrated way possible. The role of the "honest broker" of regional workforce development services has obviously taken on added significance, and one that well suits Workforce Development, Inc.
Local Policy Implications
Key to making a quality investment is the successful completion of the course, and the realization of a training-related placement. The agency needs to continue its practices of hiring and retaining excellent caliber career counselors, while providing ongoing training and technical assistance on the latest techniques, tools and labor market information.
In reviewing the data for all occupations/courses from the last three years, only one field of study seems to yield no positive results, and that is "Data Entry". Common sense suggests that there are very few, if any, jobs available anymore that require only basic data entry skills. Measurably, we have sponsored eight people in the last three years with that expressed goal, and none of them have found a job. It would be recommended that no individual be funded with the simple career plan of "Data Entry" in the future.
One trouble spot appeared this year with a particular grant for nontraditional careers for woman wanting to enter the "Building Maintenance" career in the Albert Lea area. The area of building maintenance has not been a problem in the past, but the ROI yield was particularly low this year due to much higher than expected costs from the vendor. It is suggested that a different payment method be explored in the future.
Legislative Implications
Much valuable data is currently available within the WSA's regarding the training investment of public sector funds by the local Workforce Boards. In the absence of any universal "Consumer Reports" for all citizens, the local Workforce Boards ought to be looked to as the coordinator of Regional Workforce Development Planning.
Given the documented Return-on-Investment that job training represents, the legislature ought to consider investing even more resources into classroom training. First, it would be important to figure out how much is needed to maintain the current system of quality career planners. Then we would need to structure any additional grants so that at least 30% of all adult participants are able to enroll in training is each WSA.
The concept of local control of well-trained "honest-brokers"/career planners has worked so well to maximize the Return-on-Investment and course completion rates, that the State ought to consider utilizing the system for ALL publicly-funded higher-ed services, including Carl Perkins grants.
If data such as this were compiled by all WSA's and it were combined with the most recent/relevant Labor Market Information and Economic Development data, the returns could be even more astounding. A good place to start with the coordination of Workforce Development and Economic Development services would be to establish regional data clearing-houses and a common marketing approach to employers. These activities could easily take place now without a lot of governance or structural changes; a simple data/marketing account for each area would get it off the ground.
Significant Findings
Record ROI
WFDI achieved its highest recorded return on investment at 504%, with classroom training reaching 1,250.6%.
Most Popular Field
Information Technology accounted for 53.8% of all enrollments, followed by Healthcare at 14.9%.
Highest Placement Rates
Information Technology (86.1%), Service Technicians (84.6%), and Manufacturing Specialists (83.9%).
Top ROI Field
Information Technology generated an annualized ROI of 1,679.6%.
Training Completion Matters
ROI was 39.9% lower for participants who did not complete their training.
Additional Findings
Training Institutions and Providers
132 training institutions were utilized, up from 83 the previous year and 47 two years earlier. Most of the growth came from private computer-training providers.
Training Duration Analysis
Course completers averaged 629 instructional hours compared with 819 hours for non-completers, suggesting diminishing returns from longer training programs.