Build the infrastructure necessary to track performance and align resources to meet labor market demand. The state invests in infrastructure, including human capital, to track data capable of determining and rewarding program performance.

State Program Examples

  • Maryland

    Executive Order to Establish an Office of Performance Improvement

    In 2015, Maryland Governor Hogan signed an Executive Order establishing the Governor’s Office of Performance Improvement to oversee efforts toward continuous improvement and outcomes-based funding, and improve customer experience of state government. This Office also operates the Maryland Open Data Portal, which allows the public to explore 300 data sets including state budgets, program outcomes, and investment breakdowns down to the county level.

  • Illinois

    University of Chicago’s Data Science for Social Good (DSSG)

    DSSG developed a training provider outcomes toolkit that helps states to collect, analyze, and present information on employment outcomes from local training programs. The information sharing that this platform facilitates between training providers and the state helps states to meet WIOA reporting requirements and to have a better understanding of which training providers are meeting workforce needs and where they may be falling short. States can partner with institutions with significant research capacity, like universities, to compile and analyze cross-sector data that can inform decisions about where to allocate resources and can be shared with prospective students to guide them towards effective training programs. 

  • Rhode Island

    Executive Order for LeanRI Tools

    On April 9, 2015, Governor Gina M. Raimondo issued Executive Order 15-09 directing state agencies to use Lean tools to improve processes and focus on value-added activities. LeanRI is a coordinated statewide government effort to support Lean activities focused on training, projects and leadership.

Gather qualitative and quantitative data on how state and local education and training programs are meeting local and regional workforce needs. The state facilitates data collection at the state and local levels to close the delta between program performance and workforce needs. Essential metrics include completion rates, employment, wages and retention among workforce participants.

State Program Examples

  • Washington

    Workforce Training Results and Performance Accountability

    Since its inception, the Washington State Workforce Training and Education Coordinating Board (Workforce Board) has been charged in statute to evaluate the effectiveness of the state’s workforce programs. In an effort to gather qualitative and quantitative data on how state and local education and training programs are meeting local and regional workforce needs, Washington’s Workforce Board developed Workforce Core Measures - a common framework to measure workforce system progress. The system tracks the results and the taxpayer return on investment for 12 of the state’s largest workforce programs, accounting for over 98 percent of the federal and state dollars spent within the state workforce development system. Results WA, the states’ performance management system integrates performance management, continuous improvement, and cross-agency collaboration to achieve key goals and improve government effectiveness. In recent years, the Results WA has also held a Design Challenge as part of a broader statewide strategy to make government more user-centered.

Customize accountability metrics to address gaps in state industry-recognized career pathways needed for the future. The state includes in its federal education and workforce plans accountability metrics that communicate the value of multiple career pathways.

State Program Examples

  • Multi-State

    24 states: Industry-Recognized Credentials in ESSA Plans

    24 states have introduced student attainment of industry-recognized credentials as indicators of college and career readiness within their ESSA plans.

  • Delaware

    Value Career Readiness in Accountability Metrics

    Delaware includes in its federal education and workforce plans accountability metrics that communicate the value of multiple career pathways. In particular, Delaware's ESSA plan emphasizes college and career readiness as having equal value. The career readiness indicators include student attainment of state-approved industry-recognized credentials, dual enrollment (in a CTE pathway), and work-based learning. One interesting state-approved credential is the certificate of multi-literacy, which the state issues to recognize students who are fluent in English and another language.  Further, the youth accountability model is consistent across federal programs (the Workforce Innovation & Opportunity Act, the Every Student Succeeds Act, and Perkins V) to encourage implementation of these key elements through a state-approved program of study.

Promote transparency for the employment outcomes of postsecondary programs, including wage data of graduates. As of 2019, only Maryland and Montana have taken action to gain access to wage data on current college students and graduates, no matter where they are working. More states can benefit from making their state’s income tax and wage data more available for data-sharing initiatives, including cross-state wage data exchanges, to measure the wage outcomes of postsecondary education and training programs.

State Program Examples

  • Maryland

    Allow the Statewide Data Center to Receive Aggregate Wage Data to Measure Education Outcomes

    In 2019, Maryland enacted HB 1206, allowing the Maryland Longitudinal Data Center System, the state’s education and workforce data hub, to receive from the Comptroller aggregate wage data about students. This law makes Maryland one of the only states enabled to access tax data to measure student employment outcomes.

  • Montana

    Developed MOUs with private colleges to share student wage data

    Montana’s Office of the Commissioner of Higher Education and the Department of Labor and Industry (MDLI) have maintained a long-standing data sharing agreement. Since 2017, the state has successfully incentivized enhanced collaboration between these institutions, and most recently, added student data from private colleges, including credentials received and student GPA, to measure the workforce outcomes of eighteen private colleges throughout Montana. To do this, Montana developed MOUs with private colleges in order to allow the data-sharing of public postsecondary institution data with state wage records. However, because Montana’s UI wage data exclude workers whose employers do not pay into the UI system, the Montana Department of Revenue also initiated an MOU with the MDLI in order to capture more comprehensive wage data on students, and track wage and employment outcomes of students who remain in Montana after graduation. According to a report on Montana’s application of data by the National Skills Coalition, “Chief Economist Barbara Wagner stated ‘We established the MOU with only a few phone calls, and the agreement was in place within weeks, not months. We could not have achieved such a quick turnaround without a pre-existing relationship and good understanding of what data they could provide.’”

  • Multi-State

    All States: Participate in the State Wage Interchange System (SWIS)

    As of January 2020, 52 states and territories participate in the State Wage Interchange System (SWIS), a data sharing tool jointly managed by the U.S. Department of Labor (DOL) and the Department of Education (ED). SWIS enables states to report and track the performance of workforce training and education programs, as well as the exchange of anonymized individual-level wage and employment data with other states. This enables states to (a) comply with federal WIOA reporting requirements; (b) research and/or evaluate WIOA programs and (c) assess the performance of training provider programs to determine their eligibility to receive WIOA funds. This new system also simplifies the query process for states and enables more states to report results of pilot workforce training and education programs with one another.  Although states are not required to participate in SWIS, gaps in the employment and wage information can present challenges to states with a large percentage of their population working in another state.

Design funding systems that continuously improve toward the state’s workforce goals. Outcomes-based contracts help focus education and training program providers on delivering results. In contrast, traditional cost-reimbursement contracts often pay service providers regardless of whether they actually help people get jobs, gain skills, or earn higher wages. As rapid changes take place in the workforce over the next decade, states can consider dynamic funding strategies that scales up success by default, such as through outcomes-based payments, can help maximize the impact of state dollars.

State Program Examples

  • Tennessee

    Ties Postsecondary Performance Funding to Outcomes

    Many states have implemented postsecondary performance funding to evaluate student success, efficiency, and affordability in determining continuation of funding for higher education programs. Some states have experimented with comprehensive systems, in which all sectors of public higher education are measured, while others have applied these metrics to certain industries. In Tennessee, an outcomes-based financing model increased Tennessee’s attainment rate by 8.9 percent between 2013 and 2017 and exceeded the national average of 7.6 percent. A performance-based funding model could be a useful strategy for states who are currently seeing low-performance in their education and skills training programs and may wish to prioritize performance in specific industries which are at greatest risk of automation. 

  • Nevada

    Work-based Learning Pay-for-Performance

    In 2018, the Nevada Governor’s Office of Workforce Innovation released a Work-Based Learning Pay-For-Performance (PfP) Grant Request for Proposal that combined evidence-based strategy requirements with PfP.

  • Virginia

    Pay for Performance (PfP) for Improving Outcomes for Youth and Young Adults

    In 2018, the Northern Virginia Workforce Development Board’s SkillSource Group launched a contract to provide bonus payments, through WIOA PfP, to providers that achieve predefined milestones for programs serving those in foster care and justice-involved young adults.

  • Rhode Island

    ResultsFirst Initiative to Promote Outcomes-based Funding

    Rhode Island partnered with the Pew-MacArthur ResultsFirst Initiative  to develop more in- depth reports that connect budget, staffing, and performance data for data-driven decision making. The ResultsFirst Initiative utilizes an econometric model to analyze costs and benefits of investments in public programs. The model relies on the best available research on program effectiveness to predict the public safety and fiscal outcomes of each program in Rhode Island, based on the state's population characteristics and the cost to provide these programs.

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