The document summarizes initiatives in Australia and the United States to address skills shortages and mismatches between worker skills and employer needs. Both countries face difficulties filling job openings, especially in skilled trades, engineering, and IT. Partnerships between workforce agencies, educational institutions, and businesses are highlighted as ways to better understand employer skills needs and increase worker skills. The US system emphasizes local and sector-based partnerships through local workforce investment boards, while Australia contracts job services nationally but provides local placement services.

1. GLOBAL PERSPECTIVES OF
INNOVATIVE EMPLOYMENT AND JOB
CREATION INITIATIVES:
AUSTRALIA AND UNITED STATES
20 June 2013
Randall Eberts, President,
W.E. Upjohn Institute for Employment Research
United States
Working Communities
International Conference
20-21 June 2013
Sydney, Australia

2. Outline
• OECD cross-country study of the contribution of local
labor market policy to job creation
• Purpose is to examine practices across countries that are likely to
boost quality employment
• Focus on one of four thematic areas: aligning policies and programs
to local economic development
• More specifically, offer examples of ways workforce agencies,
educational and training institutions, and businesses have partnered
to meet business needs
• Background:
– Prevalence and consequences of skills shortage and mismatch
– Importance of knowledge/skills/training to workers, firms, and regions
– Importance of local flexibility and autonomy balanced by local staff capacity
• Examples of successful partnerships
• Lessons
2

3. 3
• Employers complain they can’t find enough qualified
workers
• Workers complain their jobs do not require the skills for
which they were trained
• Without qualified workers, employers can’t fill job
openings and thus can’t create jobs
• Critical challenges:
• Understanding the skills needs of employers
• Increasing the skills employers need
• Using workers skills more effectively
• Improving the match between the supply of and demand
for skills
Skills Shortage and Mismatch

4. Australia and US share the same
difficulty in filling job openings
0
10
20
30
40
50
60
70
80
90
Japan
Brazil
Australia
US
India
NewZealand
Taiwan
Argentina
MEXICO
Germany
Turkey
Austria
Singapore
Poland
Sweden
HongKong
GlobalAverage
Hungary
Colombia
France
Canada
China
Italy
UK
Spain
Ireland
4
Source: 2012 Talent Shortage Survey Research Results, Manpower

5. Australia and US share in the types
of jobs that are difficult to fill
Australia
1. Skilled trades workers
2. Engineers
3. Sales Representatives
4. Accounting and Finance
5. IT staff
6. Management/Executives
7. Technicians
8. Drivers
9. Mechanics
10. Chefs/cooks
US
1. Skilled trades workers
2. Engineers
3. IT staff
4. Sales representatives
5. Accounting and finance
6. Drivers
7. Mechanics
8. Nurses
9. Machinists/machine
operators
10. Teachers
5
Source: 2012 Talent Shortage Survey Research Results, Manpower

6. 6
In U.S., larger the skills gap, the lower the job creation
Real Consequences of Skills Gap
Each dot is a US metro area; data provided by Rothwell, 2012

7. 7
Larger the skills gap, the higher the unemployment rate
Real Consequences of Skills Gap
Each dot is a US metro area; data provided by Rothwell, 2012

8. 8
Regional Benefits of skill attainment
• Increase in skills lifts aggregate wages in a region
– A 1% point increase of college graduates in a region’s workforce
increases wages by 1.3% (Moretti, 2004)
– Affects the wages of high school dropouts (1.9%) more than the
wages of other college graduates (0.4%)
• Knowledge is a major contributor to productivity growth
– Accounts for upwards of 10% of productivity growth (BLS)
– A 1% point increase in share of college graduates increases the
number of patents by 0.9% (Glaeser, 2003)
– Reflects the ability of skilled workers to produce and use technology
– An increase of 1% in university research increases corporate patents by
0.6% (Jaffe, 1989)
• Positive relationship between university R&D and the number
of firm startups in the same metro area
(Bania, Eberts, Fogarty, 1993)
• Skills may be a crucial part of the reinvention process of cities
and regions (Glaeser, 2003)
– Particularly important for regions with declining industries, such as
agriculture

9. Disconnect between
Education and Business
• McKinsey study illustrates the disconnect between workers
(youth), employers, and educational providers
• Differences in perception of job readiness
– In US 87% of educators believe new graduates are adequately
prepared for entry-level jobs
– Only 49% of employers believe they are prepared
• Lack of communication
– One-third of employers say they never connect with education
providers
– More than a third of education providers report that they are
unable to estimate the job-placement rates of their graduates
– Fewer than half of youth said they understood the job prospects
of the discipline they studied in school
9
McKinsey Center for Government: “Education to Employment,
Designing a System that Works, ” 2012.

10. Key Finding: Engage business
• Crucial to success at improving outcomes: “education providers and
employers step actively into each other’s worlds, interacting
intensively, often on a near-daily basis.”
– For example, employers may help shape the curriculum and offer their
employees as faculty, while providers can provide workplace-simulation
environments for learning
• Key thematic area of the OECD study: aligning policies and
programs to economic development.
• Lessons from the US and Australia studies: need to create proper
environment with real incentives for all parties to engage
– Need to overcome institutional impediments and initial costs
– Need to establish continuum from education to employment
– Need proper data
– Need to focus within sectors
– Need to share costs
– Engagement must occur where jobs and education take place
10

11. U.S. Public Employment and Training
Federal
Agency
Mandatory Programmes
Federal Fiscal
Year 2013
Appropriation
($ millions)
Participants
(4 quarters
ending June
2012)
Appropriation
per participant
Department
of Labor
WIA Adult 770 6 979 125 $110
WIA Dislocated Worker 1 232 1 138 379 1 082
WIA Youth 824 239 605 3 439
Employment Services
(Wagner-Peyser)
721 19 081 905 38
Trade Adjustment
Assistance
1 100 144 659 7 604
Veteran’s Employment and
Training Programme
264 142 000 1 859
Unemployment Insurance 3 236 9 171 467 353
Job Corps 1 703 97 474 17 471
Senior Community Service
Employment Programme
448 76 864 5 828
Employment and Training
for migrant and seasonal
worker
84 19 700 4 264
Employment and training for
Native Americans
47 38 822 1 211
total 10 429 37 130 000

12. Partner Relationships
WIB
Individuals
12
K-12 CC/TS
Econ
Dev
Businesses
Labor Education Commerce
Labor Education Commerce
National
State
Local
Customers
Intermediaries
Services
Services
Funds

13. Partnership held together by aligning
strategic plans and accountability measures
• Public workforce system (WIA) is a partnership among federal and
state agencies and local entities
• Federal Legislation requires the Governor of each state to submit a
five-year plan to USDOL
• The plan has three key components:
– State Workforce Strategic Plan: Includes the high-level
vision, goals, economic and workforce analysis, strategies and
outcomes that the Governor and strategic partners collaboratively
identify for the State’s future
– State Operational Plan: Clarifies how specific workforce programs
for targeted populations will operationalize, administer, and implement
systems and structures to achieve vision, strategies, and goals identified
by the Strategic Plan
– Assurances: State assures the U.S. Department of Labor that it is
complying with applicable law
• All entities subject to performance measures and targets
13

14. Partner Relationships
WIB
Individuals
14
K-12 CC/TS
Econ
Dev
Businesses
Labor Education Commerce
Labor Education Commerce
National
State
Local
Customers
Intermediaries
Services
Services
Funds
Local
Partnerships

15. • Similarities
– Contract out JSA to private providers
– Local providers
– Performance outcomes
– Initial screening and identification of needs
• JSCI for Australia; WPRS for US
– Reemployment Assessment Plans
– Strategic plans
– Local and state economic development efforts
Models of Integration: US and Australia

16. Australia United States
National agency contracts JSA Local WIBs contract JSA and training
Payment based mostly on performance
outcome
Payment based mostly on formula, with
financial incentives for making/missing
targets
National VocEd qualifications Local and/or industry qualifications
Demand-driven training: industry, unions,
professional associations at national level
define outcomes required from training
Demand-driven training: employers and
local community colleges at local level
develop training curriculum
More national skills standards, national
training products
Few national skills standards; mostly state
and local standards
16 mandated programs co-located at One-
Stop Career Centers
Local Employment Coordinator: identifies
needs and match with employers,
education and training facilities
Local WIBs offer opportunity to be catalyst
for integrating economic development and
workforce development at local level
Models: Differences

17. • Decentralized approach to workforce development in US
provides governance mechanism that enables local areas
to adjust programs and services to meet business needs
– Allows appropriate flexibility and autonomy in the
management and delivery of services
– Governance structure of local WIBs provides a forum
for partnerships and integration at the local level
– Key stakeholders, majority of which are local
businesses, are members of the Local WIBs
– LWIBs can act as a catalyst for bringing together key
stakeholders
U.S. findings

18. • WIA serves both job seekers and businesses
• Business leaders comprise a majority of the LWIB
• In California and Michigan, community colleges work closely
with businesses in designing training curricula
• At times, industry experts are used to staff training courses
• Many LWIAs identify strategic sectors and implement
strategies to meet needs of businesses within sectors
• Strong evidence-based approach to identifying business
needs, designing curricula, and developing strategic plans
• Employers can compete for public funds to train their
incumbent workers
Engage business

19. • LWIBs actively pursue and maintain partnerships among key
regional stakeholders
– LWIBs in Southeast Michigan is a partner of WIN, a 9-county
consortium that includes 7 LWIBs, 8 community colleges, and
numerous economic development organizations
– Six LWIBs have formed a formal partnership through a MOU
that establishes joint processes that enable the LWIBs to support
regional initiatives
– In Sacramento, four LWIBs developed integrated plans for the
broader metro region and strong personal relationships and
trust among partner leaders have held the partnership together
• Evidence-based decision making and performance outcome
metrics have also been the glue to bond strong partnerships
Form Partnerships

20. • While many of the appropriate policies and programmatic
structures are in place, the system does not have the capacity
to serve all those who need assistance
• Staff capacity is also a concern, both in numbers and in
qualifications
• Effective partnerships depend upon local leadership, and this
varies across regions
– Proper incentives and mechanisms are needed to encourage
collaboration and leadership from higher levels of government
• Few if any resources for establishing partnership
infrastructure, such as financial assistance for data-sharing
and administrative costs
Shortfalls