The Job: Career-Matching Hubs

States back high-demand credentials with as new community college funding models emerge.

Pennsylvania and North Carolina mull incentives for career-connected education at community colleges as part of a next wave of state funding formulas. Also, ETS adds workforce credentialing capabilities with a global acquisition.

Community Colleges and High-Demand Fields

As states rethink how they help pay for community colleges, it’s a safe bet that the next wave of funding formulas will include a focus on the job market. They also will feature incentives for more short-term credentials and career-connected education.

At least 30 states have some form of performance-based funding on the books, with two-year colleges receiving more than $2B annually through those formulas. The funding often is tied to measures of student success (graduation rates) and access (Pell-eligible student enrollment).

Pennsylvania and North Carolina are examples of where states may be headed next. Lawmakers in both states likely will soon consider proposed funding formulas that will encourage community colleges to offer education and training in high-demand fields.

If they follow the carrot-and-stick approach of Texas, those formulas would include more money for two-year colleges.

Many details remain TBD for the sprawling new higher ed blueprint from Josh Shapiro, Pennsylvania’s Democratic governor. 

His plan would shrink the state’s overbuilt public college footprint by creating a unified system for its 15 community colleges and the 10 universities of the Pennsylvania State System of Higher Education. It also would require that students with family incomes up to the state’s median wage pay no more than $1K in tuition per semester.

Shapiro’s framing around the need for the blueprint is anchored in workforce development. He says the funding formula will incentivize colleges to recruit and support students as they earn credentials in fields that face labor shortages, including education and nursing, and in growing industries such as manufacturing and biotechnology.

The plan is designed to “help students build the skills they need to fill good-paying jobs and ensure employers can find the talented, prepared workers and strong thinkers they need to thrive and grow,” Shapiro said.

Workforce-Responsive: For funding models to help more learners enter high-wage jobs and advance their careers, solid information is needed on how earnings correlate with credentials and skills, say Julian Alssid and Kaitlin LeMoine, both consultants with J. Alssid Associates.

“It is also essential that employers are an integral part of the plan,” they say, so “their role is not only to hire learners but to support their ongoing career development by leveraging corporate learning and development and tuition programs.”

Pennsylvania has long needed to try something different, says Karen Stout, president and CEO of Achieving the Dream, who previously led the state’s Montgomery County Community College. The lack of a coordinating master plan has contributed to disconnects with the needs of the state, she says, and to its rock-bottom levels of state support and sky-high tuition rates, which are both among the nation’s worst.

“All of that data just screams to the need for a new approach,” Stout says of the blueprint push. “It’s responding to an urgent need.”

Stout has argued that two-year colleges must develop a new kind of relationship with employers, to become community hubs that do career matching and help more Americans achieve economic stability and upward mobility.

Pennsylvania’s funding formula could be a step in this direction, she says. But it will need to be well designed for that to happen, with a strong grasp of the labor market at the local level. And colleges will need serious support from the state to create programs in high-demand fields, which tend to be substantially more expensive to develop and maintain.

Community colleges aren’t keeping pace with the demand for training in fields with employment growth, new researchhas found. Leaders in the sector say that while state lawmakers talk a good game about workforce development, they typically don’t back it up with money to help create needed programs.

North Carolina’s Move: Propel NC seeks to change that dynamic. The funding proposal backed by North Carolina’s community college presidents would include an annual bump of roughly $70M for the 58 colleges, Margaret Moffettreports for Work Shift. It also would:

  • Make no distinction between credit-bearing programs and noncredit continuing education courses.
  • Reward colleges based on labor market outcomes and how many students enroll in high-demand, high-paying workforce sectors.
  • Encourage more alignment between credentials and jobs.

Alssid and LeMoine praised the plan’s emphasis on increasing instructional capacity across credit and noncredit programs. But they say that if the proposal is approved, it will require rethinking and more funding for operational areas beyond hiring instructors. 

The necessary transformation of community colleges into career-matching organizations requires more high-quality coaching, advising, and learner support structures, they say, in addition to better program design and delivery.

Efforts by two-year colleges to create credential paths that are aligned with high-demand fields can help students be more employable, including before they complete a program, says Lisa Larson, senior vice president of college transformation for the Education Design Lab. 

The shift also can encourage employers to validate credentials and necessary skills up front, she says, and to make hiring requirements more visible to jobseekers. “These better practices can also help to improve economic mobility for many that do not hold a degree but have demonstrable, verifiable skills and credentials,” says Larson, a former president of Eastern Maine Community College.

While many questions remain unanswered about this potential next generation of state funding formulas, experts hope they can tighten connections between community colleges and the labor market.

The Kicker: If successful, the funding could help drive economic and workforce development, says Larson, “which improves economic mobility, which improves educational outcomes. Everybody wins.”

Work Shift: North Carolina’s Community Colleges Make a Big Bid to Stay Relevant

The system is poised to ask state legislators to overhaul its funding formula to focus on how well colleges prepare students for high-demand, well-paying jobs.

Skills as Currency

Educational Testing Service turned heads last year when it announced a move into the skills space. Through a partnership with the Carnegie Foundation, ETS aims to create a “new currency of learning” and a suite of skills-based assessmentsdesigned to measure what’s necessary for success in high school, college, and the economy. 

The nonprofit testing giant’s acquisition last week of PSI, a global certification and licensure company, gives a glimpse of where its workforce play is heading. PSI adds a wide range of credentialing capabilities, as well as a global footprint of testing centers.

“PSI partners with test sponsors covering the breadth of professional sectors, from healthcare and IT to numerous highly specialized industries,” says Amit Sevak, CEO of ETS. “PSI also develops and delivers licensure tests across multiple industries including insurance, real estate, barber and cosmetology, construction and trades.”

Sevak says the newly merged portfolio will allow governments, institutions, and industry to have a single source for a wide range of assessments as learners move between them.

“ETS’s offerings in the workforce and work skills space will only be accelerated with the addition of PSI and the breadth and depth of experience and quality they bring to the table to help us bridge the gap between higher education and the workforce,” he says.

Open Tabs

Skills-Based Hiring
Massachusetts is at least the 17th state to drop degree requirements for a substantial number of jobs in state government. The executive order from Maura Healey, the state’s Democratic governor, seeks to go beyond that initial step by moving toward skills-based hiring. For example, it requires that all agency managers take a training course on those practices. The plan also seeks to promote skills-based hiring among businesses.

Jobs Portal
The National Science Foundation awarded $150M to 10 regional partnerships to spur economic and workforce development in sectors like semiconductor manufacturing, clean energy, and climate-resilient agriculture. The initiative is part of the CHIPS and Science Act and will bring together private industry, venture capital, governments, and higher education. The partnerships will be eligible for up to an additional $2B over the next 10 years.

Short-Term Training
Tapping H1-B Visa funds to help pay for short-term training vouchers for in-demand jobs under a congressional bid to revamp WIOA is a terrible idea, writes New America’s Mary Alice McCarthy. The H1-B grant money would be used to train workers for low-wage, low-quality jobs (truck driving, welding, phlebotomy, and personal care) instead of innovative workforce development that has led to good, high-skill jobs.

A Chicago-based nonprofit is sharing lessons from its first year of working with 40+ employers to expand tech apprenticeships with a federal Good Jobs Challenge grant. The group, P33, identified entrenched hiring practices and stigma around the term “apprentice” as major challenges to expanding apprenticeships, along with perceived and real costs. As a result, it is testing out a model that would “de-risk” apprenticeship by having a contract services firm act as participants’ first employer.

Career Scholarships
Indiana will spend $15M over the next two years on career scholarships for 3K high school students, reports Patrick O’Donnell for The74. The $5K grants from the new state scholarship fund can be used for career training by private providers or public schools, or for expenses like equipment. The scholarships are designed to create more hands-on learning experiences for students and to allow them to earn career credentials in high school.

Blurring Lines
Roughly half (53%) of Colorado high school students earn college credit or industry credentials through dual enrollment, with a growing number participating in apprenticeships or similar learn-and-earn models, Jared Polis, Colorado’s Democratic governor, writes in The74. Polis also cited an expanded zero-cost credential program, through which 1K students have pursued healthcare certifications at the state’s two-year colleges.

Workforce Discrimination
A comparison of occupational crowding and job quality shows that workforce discrimination creates inequities that higher education can’t overcome, according to researchers at the Urban Institute. For example, Black women tend to be crowded into lower-quality jobs and crowded out of higher-quality ones. Besides lower wages, the occupations they are crowded into typically lack health insurance, unions, and regular schedules.

Teenage Workers
An abundance of part-time, entry-level jobs, particularly in hospitality and retail, have brought more teenagers into the labor market, reports The Washington Post. At least 250K more teenagers are now working compared to before the pandemic, federal data show, with the highest percentage of teens either holding or looking for a job since 2009. In addition to the tight labor market and rising wages, inflation is a major factor behind the trend.

Job Moves
Kristen D. Fox has been named CEO of the Business Higher Education Forum, a nonprofit membership group for corporate CEOs and university presidents. Fox leaves her role as senior adviser at Tyton Partners

Last week at a meeting in NOLA I met with community college leaders who described what their colleges are doing on workforce development. I’ll be following up on what I heard with coverage here and in Work Shift. Let me know what you’re watching in the two-year sector? —PF

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