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Layoff Aversion Under the Workforce Investment Act

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A look at the full scope of layoff aversion activities allowable under the Workforce Investment Act.

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Layoff Aversion Under the Workforce Investment Act

  1. 1. Layoff Aversion: Preventing & Minimizing Unemployment U.S. Department of Labor Employment and Training Administration Presenters: Tim Theberge Michelle Paczynski 2010 National Reemployment Summit December 14 & 15 - Washington DC
  2. 2. What does layoff aversion mean to you?
  3. 3. A Definition <ul><li>ETA defines layoff aversion as the prevention or minimization of unemployment, either for employees of companies that have announced layoffs, are struggling, or are looking to retool for new products or industries, through a range of strategies and approaches. </li></ul>
  4. 4. TEGL 30-09 <ul><li>June 8, 2010 </li></ul><ul><ul><li>Savings to workers </li></ul></ul><ul><ul><li>Savings to employers </li></ul></ul><ul><ul><li>Savings to the economy </li></ul></ul><ul><li>Linkages </li></ul><ul><ul><li>TAA for Firms </li></ul></ul><ul><ul><li>Manufacturing Extension Partnership (MEP) </li></ul></ul><ul><ul><li>Small Business Development Centers </li></ul></ul><ul><ul><li>Chambers of Commerce </li></ul></ul>
  5. 5. Something to Consider <ul><li>Rapid Response may be a critical facilitator of layoff aversion strategies </li></ul><ul><li>Rapid Response can play this key role often without spending Rapid Response funds on an activity </li></ul><ul><li>Fully networked Rapid Response systems can ensure connections are made between those with needs and those with resources </li></ul>
  6. 6. When is layoff aversion appropriate? <ul><li>Aversion is an ongoing process that starts with program awareness for the businesses / employee community </li></ul><ul><li>At the company meeting (What questions do you ask?) </li></ul><ul><li>During onsite services </li></ul><ul><li>Other times? </li></ul>
  7. 7. The Two Sides of Layoff Aversion <ul><li>Saving the company or jobs </li></ul><ul><li>Lessening the number of employees that the company needs to layoff </li></ul><ul><li>Workshare </li></ul><ul><li>Furloughs </li></ul><ul><li>ESOPs -Employee buyouts </li></ul><ul><li>Finding a buyer for the closing business </li></ul><ul><li>Linking with Economic Development </li></ul><ul><li>Incumbent worker programs- based on affected company </li></ul><ul><li>Broader Aversion Idea: lessening the impact of layoffs </li></ul><ul><li>Fewer people filing for UI benefits </li></ul><ul><li>Linking with other companies that are hiring (Company Match) </li></ul><ul><li>OJT programs-linking with growing companies </li></ul><ul><li>Early warning networks </li></ul><ul><li>Effective partnerships </li></ul>
  8. 8. Layoff Aversion Processes <ul><li>Company – Furloughs </li></ul><ul><li>Workshare (Short Term Compensation) </li></ul><ul><li>Early Warning / Forecasting processes </li></ul><ul><li>Workforce Training Fund </li></ul><ul><li>Company Match / Labor Exchange </li></ul>
  9. 9. Company Furloughs <ul><li>Companies have been using furloughs in an attempt to avoid layoffs. </li></ul><ul><li>Rapid Response offers assistance to companies and their employees in the delivery of services through the furlough process. </li></ul><ul><li>Furloughs may be an indicator of concern that could allow for future services due to the partnerships that are built - future services could include an aversion plan. </li></ul>
  10. 10. Workshare <ul><li>Provides partial UI benefits to a worker group whose employer has an approved plan </li></ul><ul><ul><li>Employer reduces hours </li></ul></ul><ul><ul><li>Employees receive partial UI payments to offset the loss of wages </li></ul></ul><ul><li>Rapid Response staff must be well versed in the UI workshare program and able to connect companies to this service as an alternative to layoffs. </li></ul><ul><li>Workshare allows companies to defray costs during slow periods. </li></ul>
  11. 12. In cumbent Worker Training Programs <ul><li>Can be funded with Rapid Response with approved waiver from ETA </li></ul><ul><li>Incumbent worker training must be part of broad layoff aversion strategy to receive waiver </li></ul><ul><li>Rapid Response can play an important role in facilitating IWT even without spending Rapid Response funds </li></ul>
  12. 13. Company Match <ul><li>Minimize the impact of the layoffs that are occurring at a particular plant closing or downsizing by placing employees in new jobs prior to layoff </li></ul><ul><ul><li>Also to minimize the length of unemployment if not placed prior to layoff </li></ul></ul><ul><li>Matching the skills of employees who have been notified of a layoff (and not yet laid off) with those of companies that are in need of skilled employees. </li></ul><ul><ul><li>Jabil/Raytheon - Direct Match </li></ul></ul><ul><li>Training employees and placing them in new careers prior to layoff </li></ul><ul><ul><li>Biotech Training-Polaroid/Bose </li></ul></ul>
  13. 14. Real-World Success Polaroid
  14. 15. Company match + training = pre-layoff placements <ul><li>38 former Polaroid employees were enrolled in WPI course </li></ul><ul><li>After a 5-month course 33 were placed in employment with biotech companies in Massachusetts prior to layoff </li></ul><ul><li>Average salary: $20.98 </li></ul><ul><li>Entire program cost $3,250.00 per student </li></ul><ul><li>Company matching is great way off averting layoffs </li></ul>
  15. 16. OJT as Layoff Aversion
  16. 17. OJT Programs <ul><li>Connect growth employers with workers losing their jobs </li></ul><ul><li>Use OJT funds to assist employers to be able to hire needed workers </li></ul><ul><li>Think of OJT as a layoff aversion program in addition to a jobs program </li></ul>
  17. 18. “ Old-School” Aversion ESOPs In Action
  18. 19. Litecontrol Corp. Plympton, MA (ESOP) <ul><li>200 – employees </li></ul><ul><li>High-end light control systems </li></ul><ul><li>Company decision to stay in Plympton, MA and sell to employees </li></ul><ul><li>15 year plan paid off in 7 years </li></ul>
  19. 20. Building a Functional Forecasting Community
  20. 21. Forecasting/Early Warning Systems <ul><li>Creating mechanisms to try to predict layoffs before they happen and develop a strategy to avert or lessen the number of employees affected by potential downsizings and/or company closures </li></ul>
  21. 22. Partners in Forecasting Project <ul><li>State and Local Workforce Development Agencies </li></ul><ul><li>State and Local Economic Development Agencies </li></ul><ul><li>Quasi Public Agencies </li></ul><ul><li>Business Service Providers </li></ul><ul><li>Unions </li></ul>
  22. 23. Forecasting Data Sources <ul><li>Traditional </li></ul><ul><ul><li>Economic Development </li></ul></ul><ul><ul><li>Job postings </li></ul></ul><ul><ul><li>WARN – Mass layoffs </li></ul></ul><ul><ul><li>UI Claims </li></ul></ul><ul><ul><li>Occupational / Industry Projections </li></ul></ul><ul><li>Social: </li></ul><ul><ul><li>Local Boards / Members </li></ul></ul><ul><ul><li>Local Elected Officials </li></ul></ul><ul><ul><li>Facebook / Twitter </li></ul></ul>
  23. 24. Forecasting Data Sources <ul><li>Non-traditional </li></ul><ul><ul><li>Banks </li></ul></ul><ul><ul><ul><li>Bankruptcy Filings </li></ul></ul></ul><ul><ul><ul><li>Small Business Loan Rates </li></ul></ul></ul><ul><ul><ul><li>Check / Payroll Shortages </li></ul></ul></ul><ul><ul><li>New Hires </li></ul></ul><ul><ul><li>SEC filings (debt to earnings, profit margins) </li></ul></ul><ul><ul><li>USDA output reports </li></ul></ul><ul><ul><li>Commerce import/export reports </li></ul></ul><ul><ul><li>Utility usage rates / permit issuances </li></ul></ul>
  24. 25. Monthly Forecasting Meetings (continuous communications) <ul><li>Meetings should always include at least one business partner </li></ul><ul><li>Suggested Subgroups </li></ul><ul><ul><li>Labor Market Information </li></ul></ul><ul><ul><li>Business Visitation </li></ul></ul><ul><ul><li>Communication/Marketing </li></ul></ul>
  25. 26. Development of a Resource Tool (Reference guide of contacts and information) <ul><li>Agencies that provide services for businesses </li></ul><ul><li>A brief summary of the services </li></ul><ul><li>Business indicators </li></ul><ul><li>Contact and website information </li></ul>
  26. 27. Forecasting Project <ul><li>Address confidentiality concerns </li></ul><ul><li>Compile information of utilities cost and issues for the business community </li></ul><ul><li>Include more business services </li></ul><ul><li>Roll out Forecasting project to local areas </li></ul><ul><li>Highlight examples of success </li></ul><ul><li>Develop Website </li></ul>
  27. 28. Forecasting Prototype <ul><li>Companies in need of services could choose a service by picking a key word from the system that would link them to the appropriate services/agency. </li></ul><ul><li>The system will also track services being offered to business customers to avoid duplication. </li></ul><ul><li>Maintain a history of services to create a database of indicators. </li></ul>
  28. 29. Wrapping Up
  29. 30. Layoff Aversion Key Principles <ul><li>Innovative </li></ul><ul><li>Proactive </li></ul><ul><li>Flexible </li></ul><ul><li>Persistent </li></ul><ul><li>Knowledgeable </li></ul>
  30. 31. QUESTIONS?
  31. 32. http:// www.steelvalley.org/files/lag.pdf
  32. 33. Contact information <ul><li>Michelle Paczynski </li></ul><ul><li>Director, Business Services </li></ul><ul><li>South Carolina Department of Employment & Workforce </li></ul><ul><li>803-737-3828 </li></ul><ul><li>[email_address] </li></ul><ul><li>Tim Theberge </li></ul><ul><li>Federal Project Officer </li></ul><ul><li>US Department of Labor/ETA </li></ul><ul><li>617-788-0139 </li></ul><ul><li>[email_address] </li></ul>

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