Report: Sector Strategies Create Better Wages, Increased Productivity, Less Turnover and Reduce Inefficiency

January 16, 2013

States Should Adopt this Approach to Job Training to Get People Back to Work, Strengthen Economy

Today, National Skills Coalition in partnership with the National Governors Association and the Corporation for a Skilled Workforce, released a new report, State Sector Strategies Coming of Age: Implications for State Workforce Policymakers, offering an overview of what makes sector strategies different from traditional workforce and economic development programs and actions that state administrators and policymakers can take to support them. 

 “Sector strategies engage diverse stakeholders in the community to offer workforce interventions that provide workers with skills needed by local employers,” said Eric Seleznow, state policy director for National Skills Coalition. “Not only can these strategies improve the local economy, but they can also lead to better wages, increased productivity, and greater job stability for workers. Despite the slow recovery and difficult budget decisions faced by many state policymakers, investments in sector strategies are one way for states to improve their economies and get people back to work.”

Sector strategies are one of the few workforce interventions with statistical evidence showing improved employment opportunities and wages for workers. These strategies do this by:

  • addressing current and emerging skill gaps by focusing scarce resources on industries that are major job providers in the area to provide the skills necessary for workers to fill those jobs;
  • engaging industries across city, county, and state lines and education and economic development areas to identify and address specific workforce needs in almost every industry; and
  • better aligning state programs and resources that serve employers and workers to reduce inefficiencies and streamline state efforts by coordinating various programs and braiding disparate funding streams.

More than half of U.S. states are exploring or implementing sector strategies. Their efforts, combined with those of their local and regional partners, have created over one thousand sector partnerships across the country that funnel a pipeline of workers to well-paying jobs that would otherwise go unfilled.

  • In 2009 in Pennsylvania, 84 percent of surveyed employers participating in industry partnerships reported significant increases in productivity.
  • The Aspen Institute found that 48 percent of participants in sector-based programs exited poverty.
  • In Massachusetts, 41 percent of surveyed employers participating in sector partnerships reported reduced turnover; 19 percent reported less rework on the job; 23 percent reported fewer customer complaints; and 100 percent of the companies said that participation in a sector partnership was valuable.