Workforce Innovation Fund

The Department of Labor (DOL) is currently funding  the Workforce Innovation Fund (WIF) to invest in programs that support, evaluate and enhance workforce investment strategies, particularly for vulnerable populations, youth, and dislocated workers in the public workforce system.  DOL awarded competitive WIF grants ranging from $1 million - $12 million to individual or a consortium of state workforce agencies, or local workforce investment boards, to implement new/untested ideas, promising ideas, or to adapt proven ideas at the systems or service delivery level.

Grantees have chosen strategies under a variety of approaches, including but not limited to:

• Better coordination among programs and partners;
• Improving linkages between employment and training services and labor market needs;
• New procurement strategies; and/or
• New uses of technology

Examples of specific funded programs include:

• The City of Los Angeles (LA) is partnering with the LA Unified School District to locate and reengage dislocated youth in earning high school diplomas or General Equivalency Degrees to ensure better employment opportunities.  This LA project is an integrated, holistic, and replicable approach to addressing a range of barriers faced by out-of-school youth, including: basic and work readiness skills gaps; educational, career guidance and mentoring needs; occupational and career pathway development needs; and a wide array of supportive service requirements.
• The @LIKE project implemented by the Riverside County Economic Development Agency (EDA) seeks to reconnect disconnected youth to education and/or stable employment.  It incorporates key strategies known to have positive impacts on disconnected youth (e.g., aligned assessments, life coaches, school credit recovery and navigation of education/workforce options, development of work readiness competencies, work-based experiences and connection to youth-oriented social media), and focuses on program alignment among multiple stakeholders to serve the disconnected youth with the greatest barriers.

By focusing on change at both the service delivery and the system levels, rigorous evaluation of each investment, and adding value for their customers, WIF seeks to:

• Re-tool service delivery strategies and/or policy and administrative systems and processes to improve outcomes for workforce system customers.

• Ensure that these investments form the basis for broader change and continuous improvement in the operation of the public workforce system.
• Contribute to the identification and documentation of evidence-based practices within the field of workforce development.

Evidence Standards and Evaluation:

One of the overarching goals of WIF is to build the evidence base in the workforce development field.  DOL has therefore awarded grants for three project types (PDF, 42 pages), to support innovation on a continuum of evidence.

• Project Type A: New and Untested Ideas: consists of  collection and analysis of process, output, and outcome data, and if feasible within the financial constraints, a rigorous method to evaluate impact.
• Project Type B: Promising Ideas: requires a higher level of rigor than existing evidence and i the most rigorous strategy available to demonstrate impact given the financial constraints.
• Project Type C: Adapting Proven Ideas: requires the highest level of evaluation rigor that is applicable to the proposed project and a service delivery innovation that is directly focused on participant outcomes.

The general evaluation requirements, guidance on evaluation rigor, and incentives for developing evaluation designs ensure the likelihood of building the evidence base.  Requirements include:

• Each grantee must commission its own independent evaluation.
• The evaluation type must be appropriate to the project type (see below).
• The evaluation must be rigorous.

In April 2012, ETA hired a National Evaluation Coordinator (WIF NEC) to oversee the independent evaluations commissioned by the WIF grantees.  The WIF NEC brought a built-in knowledge gathered through their work on the Investing in Education Fund (i3) and the Social Innovation Fund (SIF).  By integrating a team of evaluation experts, to participate in the grant review process, WIFNEC further ensured that the evaluation factors used in the WIF Solicitation for Grant Applications (SGA) were upheld.  Each grantee was provided a detailed evaluation improvement plan with guidance for overall evaluation improvement as well as for immediate application so that the grantees met the SGA requirements. Each of the evaluation plans was communicated individually and grantees were able to consult the WIF NEC for clarification and further guidance.  After award, the WIF NEC has also actively worked to assist each of the WIF grantees with securing third-party evaluators, and is assisting the evaluators with:

• Adopting a standard of rigor that is equivalent to WWC but appropriate to the WIF SGA
• Finalizing and submitting WIF evaluation designs for review by the WIF NEC Observing and documenting each evaluation’s progress
• Ensuring that grantees, FPOs, and all stakeholders understand the evaluation activities

Submitting analyses, data, and reports completed to the WIF NEC for review, WIF NEC’s final deliverables to ETA include a summary of all WIF evaluations, meta-analyses where feasible and common public use datasets. WIF NEC will also partner with ETA in developing a community of practice among third-party evaluators across the country and contribute to DOL’s research clearinghouse by helping WIF evaluations meet the clearinghouse criteria.

Pay for Success Pilot

The DOL will be investing up to $20 million of WIF in spring 2013 to support up to three Pay for Success (PFS) pilot projects to eligible government workforce agencies.  The goal of this pilot is to demonstrate the viability of this innovative funding strategy as a tool for state, local and tribal agencies to achieve specific workforce development outcomes.  PFS is a new way of financing social services to help governments target limited dollars to achieve a positive, measurable outcome.  Under this model, a government agency commits funds to pay for a specific outcome that is achieved within a given timeframe.  The financial capital to cover the operating costs of achieving the outcome is provided by independent investors.  In return for accepting the risks of funding the project, the investors may expect a return on their investment if the project is successful; however, payment of the committed funds by the government agency is contingent on the validated achievement of results.

This approach can have significant benefits for participating governments as well as the investors when used to support interventions that:

• have a high probability of success based on prior evidence;
• have measurable outcomes supported with authoritative data and strong evaluation methodologies;
• are overseen by experienced managers that have flexibility to adjust their approach; and
• yield significant future savings to the Government if successful.

Grantees will be expected to participate in a formal independent evaluation by the DOL to assess the implementation, outcomes, and benefits of projects funded under the PFS model.