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DOCUMENT RESUME

ED 317 734 CE 054 428

AUTHOR Van Horn, Carl E.; And OthersTITLE Workforce Futures: Strategic Planning in the States.

Research Report No. 89-06.INSTITUTION National Commission for Employment Policy (DOL),

Washington, D.C.PUB DATE Feb 90NOTE 52p.

PUB TYPE Reports - Research/Technical (143)

EDRS PRICE MF01/PC03 Plus Postage.DESCRIPTORS *Economic Development; *Education Work Relationship;

*Government Role; *Job Training; *Labor ForceDevelopment; Labor Market; Policy Formation; PublicSector; *Statewide Planning

IDENTIFIERS Indiana; Maine; Maryland; Michigan; New Jersey; NorthDakota; *Strategic Planning; Washington

ABSTRACTThis document examines recent developments in

strategic planning for employment, identifies key elements ofstrategic plans, examines issues to be addressed in implementing suchplans, examines 113w Jersey's state plan in detail, and provides shortsketches of the strategic plans for employment in six other states.Following an executive summary, the document's first sectionaddresses the need for strategic planning caused by new economicrealities such as the perception that knowledge is the premierwealth-producing asset; inefficient labor markets; poor programcoordination; and a limited response from the U.S. government. Thesecond section covers public sector strategic planning. It recommendsa framework that includes the following: a vision of what a workforce readiness system should be; a decision-making structure tocarry out the strategic vision; the coordination of programs acrossvarious functional areas and levels of government; new programinitiatives to respond to unmet needs; and methods of evaluating theperformance of all components of the human resources system inrelation to the state's vision. The third section discusses NewJersey's state strategic plan and the strategic planning efforts ofIndiana, Maine, Maryland, Michigan, North Dakota, and Washington. Thefourth section discusses how to overcome barriers to strategicplanning and the importance of long-term commitments from policymakers in the public and private sectors. A 33-item bibliographyconcludes the document. (CML)

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Reproductions supplied by EDRS are the best that can be madefrom the original document.

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WORKFORCE FUTURES:rk4

Strategic Planning in theStates

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RESEARCH REPORT

National Commission for Employment Policy

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Mr. John Gartland, ChairmanDirectorWashington Affairs, Amway Corporation

214 Massachusetts Ave., N.E., Suite 210Washington, D.C. 200002

Mr. Donald W. JonesHulston, Jones, &Associates2060 E. SunshineSpringfield, MO 65804

Mr. John 0. KoehlerPresidentKoehler InternationalConsultants, Ltd.112 Prospect StreetStamford, CT 06901

Mayor J. Michael Levesque51 Cedar DriveWest Warwick, RI 02893

Mr. Frank McDonaldPresident, McDonald Enterprises425 Rimrock RoadThousand Oaks, CA 91360

3

Mr. Jerry NaylorPresidentThe Jerry Naylor Company5308 Ambridge DriveAgoura, CA 91301

Mr. A. Wayne RobertsPresidentLake ChamplainChambe: of Commerce209 Battery StreetBurlington, VT 05401

Dr. James WinchesterWinchester and Associates131 Fairway DrivePass Christian, MS 39571

WORKFORCE FUTURES:Strategic Planning in the

States

RESEARCH REPORT NO. 89-06

February 1990

Carl E. Van HornEagleton Institute of Politics

Rutgers UniversityNew Brunswick, NJ

and

Ken Ryan and William TracyEmployment and Training Institute

Ringwood, NJ

The National Commission for Employment Policy1522 K Street, N.W., Suite 300, Washington, D.C. 20005

4

ACKNOWLEDGEMENTS

The authors wish to gratefully acknowledge the assistance of several individualswho were helpful in the preparation of this report: John Heidrich, Fred

Rad imam, Mary Jane Meehan, and Robert Guadagnino of New Jersey; Nina White ofIndiana; Mike Diesz and Lyle Halvorson of North Dakota; Chuck Middlebrooks, DaleZiegler and Jim Callahan of Maryland; Len Nilson of Maine; Ernie La Palm and MikeForslof of Washington; Sharon Cronk of Michigan; and Bob Gulotty of New York. Theauthors would also like to thank Esther Scheafer of the National Alliance of Businessand Evelyn Ganzglass of the National Governors' Association. Everett Crawford andCarol Romero of the National Commission for Employment Policy provided helpfulcomments for revision. Joanne Pfeiffer prepared the manuscript.

This report was prepared by the authors under contract with the National Commis-sion for Employment Policy. Researchers undertaking studies for the National Com-mission for Employment Policy are encouraged to freely express their own opinions.The views expressed herein are the authors' opinions and do not necessarily reflectthe official views of the Commission.

PREFACE

Strategic planning for employment is both a very old idea and a very new one. Mayors,governors, and presidents have all been concerned with reducing unemployment andincreasing the number, and the quality, of-jabs within their respective jurisdictions.

A new interest in the concept of strategic planning for employment emerged in theStates during the 1980s. Current newer interests and approaches are centered aroundeducation and research and development, quality of the labor force, and to some extentquality of life issues. In developing these new approaches the States frequently build onresources available through Federal legislation such as the Job Training Partnership Act.

This paper, prepared for the Commission by Professor Carl Van Horn of the EagletonInstitute at Rutgers University and his associates Ken Ryan and William Tracy, examinesrecent developments in strategic planning for employment. It identifies the key elementsof strategic plans and examines issues to be addressed in implementing such plans.

The authors examine New Jersey's strategic plan in some detail, and provide shortsketches of plans in six additional States: Indiana, North Dakota, Maryland, Maine,Michigan, and Washington.

The National Commission for Employment Policy is pleased to have sponsored thisinformative and stimulating policy paper. On behalf of the Commission, I express ourappreciation to the authors.

JOHN C. GARTLANDChairman

TABLE OF CONTENTS

EXECUTIVE SUMMARY i

THE NEED FOR STRATEGIC PLANNING 1

New Economic Realities 1

Inefficient Labor Markets 3

The Unmet Challenge of Program Coordination 4

Limited Federal Response 5

PUBLIC SECTOR STRATEGIC PLANNING 7

A Framework for Assessing Strategic Planning 9

EXPERIMENTS IN THE STATES 15

New Jersey: A Case Study of Strategic Planning 16

Strategic Planning Experiments in Six States 23

IMPLICATIONS AND RECOMMENDATIONS 31

Overcoming Barriers to Strategic Planning 32

The Ingredients of Success 37

BIBLIOGRAPHY 39

EXECUTIVE SUMMARY

Many policy analysts, business leaders,and state government leaders believethat strategic planning for employmentmay provide an important remedy forthe ills of America's workforce readinesssystem. Strategic planning for employ-ment is "the development of a set of ac-tions designed to enhance the jobopportunities fir a jurisdiction's workforce and minimize the chances for thatwork force's disemployment."

The evolving concept of public sectorstrategic planning is discussed and aframework for analyzing state and localinitiatives is outlined. State-level experi-ments with various forms of strategicplanning are summarized, with a specialemphasis on New Jersey's experience.The report concludes with an analysis ofbarriers to implementing strategic plan-ning and offers suggestions for overcom-ing them.

THE NEED FORSTRATEGIC PLANNING

The United States is failing, in severalimportant ways, to meet many of thechallenges of the post-industrial, interna-tional economy, according to dozens ofreports by prestigious national commis-sions, private research organizations, con-gressional committees, and federalagencies. Gaps between workers skillsand the demands of the workplace areharming the nation's overall economic

health. Large numbers of poorly edu-cated and trained workers will find it in-creasingly difficult to obtain permanentjobs at decent wages.

The gaps between workers' skills andworkplace demands result from theshortcomings of the human resource sys-tems for worker preparation. Workerpreparation includes basic education,training, and retraining. In part, theseshortcomings exist because of a lack ofcapacity in the systems and the failure ofthe separate institutions to functiontogether in any integrated way.

While the bureaucratic concept of coor-dination applies in this discussion, theissue is much more complex. The institu-tions that comprise the human resourcesystems must themselves be betterprepared to accomplish their missions in-dividually and in concert with other ele-ments of the systems. Leadership andplanning will be required to achieve thisgoal. Leadership, planning, and coor-dination are important components ofstrategic planning for employment.

Substantial improvements in labor forcepreparation and retraining are needed,but the nation's education and traininginstitutions are not prepared to dddressthis serious problem.

Failure to coordinate related employ-ment programs with one another or withrelated economic development andhuman service programs constitutes one

Workforce Futures: Strategic Planning in the States

of the most regularly and appropriatelycited reasons for ineffective humanresource policy and administration.

The federal government has sometimesencouraged, sometimes thwarted effortsto improve human resource programplanning and implementation. In the late1980s, the federal government has begunto play a more helpful role in stimulatingstrategic planning for employmentpolicy. For example, proposed revisionsto broaden the membership of the StateJob Training Coordinating Council man-dated by the Job Training PartnershipAct would create incentives for greatercoordination of human resourceprograms at the state and local level.

PUBLIC SECTORSTRATEGIC PLANNING

Several states have begun to experimentwith strategic planning a concept thatis not yet fully understood and acceptedthroughout the employment policy com-munity. Strategic planning typically en-compasses several policy goals includinga desire to improve the efficiency of labormarket matching, to increase the demandfor workers through economic develop-ment, to supplement the supply ofworkers, to redistribute job opportunitiesto disadvantaged groups, and to restruc-ture job opportunities. The mix of goalschosen by policy makers depends inlarge part on the economic and labormarket conditions present in their statesand communities.

Strategic planning for employment con-sists of several essential elements: avision of what a workforce readiness sys-

11

tem should be in the future; a decision-making structure to carry out thestrategic vision; the coordination ofprograms across various functional areasand levels of government; im_rpig..o raminitiatives to respond to unmet needs forservices to workers and employers; and,methods of psaktatingfonof all components of the human resour-ces system.

The development of a strategic plan-ning vision involves examining four in-terrelated issues: the nature of labormarket supply; the demand for workers;the scope and quality of labor market in-terventions; and, tactics for applying thestrategic plan.

In many ways, the states have a sig-nificant advantage in exercising theleadership, undertaking the planning,and providing the coordination neces-sary for developing and implementing ofstrategic planning for employment. Theyhave the statutory authority to plan andassess most human resource programsand, thus, are in a strong position to helpshape local programs so that they serveworkers and employers adequately.Through their positions of authority,they can help bring about significant andlasting change.

EXPERIMENTS IN THESTATES

Several states have begun to implementstrategic planning initiatives. Stategovernments are uniquely positioned toplay the critical leadership role.

9

New Jersey's public and private sectorleaders have begun a long-term project tocreate an effective strategic plan foremployment.

New Jersey's current labor demand andsupply profile is a mirror of widespreadpredictions about the labor market of the21st century. Six out of every seven newjobs created in the 1990s will be filled bya woman or a member of a minoritygroup. Urban high school drop-out ratesare approaching 50 percent.

Governor Thomas Kean formed aCabinet Task Force in early 1987 to ad-dress how New Jersey might develop amore productive workforce for the fu-ture. The Governor's charge to the TaskForce was concise yet comprehensive:determine the optimum employment andtraining system for the future of New Jer-sey.

New Jersey's strategic employmentpolicy is guided by several basic prin-ciples: the employment and training sys-tem must promote long-term economicindependence; encourage people to in-vest in their own education and training;incorporate the full range of services;coordinate state and local programs;must become a common endeavor of thepublic and private sector.

The overall governance of the futureemployment and training system becamethe responsibility of a revised JTPA JobTraining Coordinating Council. The newEmployment and Training Commissionis appointed by and reports to the Gover-nor. The Department of Labor is respon-sible for day-to-day policy making andoperation of the system.

Executive Summary

The Task Force further recommendedexpanding the responsibility of PrivateIndustry Councils (PICs) so that theycould function as a board of directorsover local education, employment andtraining interventions.

A key feature of the proposed employ-ment and training system is the mandateto establish a continuum of services forcitizens and employers. Client eligibilitywill be transferable across programs; cur-rent disincentives for enrolling in multi-ple programs will be eliminated; acommon intake and assessment methodwill be created across agencies; theGovernor's Employment and TrainingCommission will review all employmentand training initiatives.

New Jersey has outlined an ambitiousvision for reforming human serviceprograms. A commission that includesmany of the key players in employmentpolicy has been assembled; specificpolicies have been developed to improveinter-program coordination and to helpmonitor program performance.

The New Jersey employment policymodel has yet to be fully implemented.Continued progress will require consis-tent leadership from the Governor andhis staff to insure cooperation fromDepartments. A solid foundation hasbeen laid for Governor James J. Floriowho took office in January 1990.

Several other states have establishedstrategic planning frameworks. Notableprogress has been made in Indiana,Maine, Maryland, Michigan, NorthDakota and Washington. Each state hasdeveloped a unique recipe, but there areseveral common elements to strategic

Workforce Futures: Strategic Planning is the States

planning for employment: a vision of thefuture; a framework for action; privateand public sector participation. Strategicplanning initiatives have enabled gover-nors and other participants to transforminstitutions and restructure programsand agencies to define and meet theirstate's employment policy objectives.

OVERCOMING BARRIERSTO STRATEGICPLANNING

Strategic planning begins with a visionof what the state wants to achieve andhow it plans to get there. In most instan-ces, governors are the catalyst for change-- an essential ingredient for overcominginertia. Overcoming initial resistance tochange may be the most significant bar-rier to realizing creative state and localworkforce readiness strategies.

Developing a consensus on stateemployment policy will involve a largeset of participants. Several cabinet-leveldepartments are typically involved --most critically, those responsible foreducation, training, economic develop-ment and human services. Private sectorparticipation is also essential.

Some state officials argue that strategicplanning for employment should be am-bitious and comprehensive. But, anequally strong argument is made for at-tacking the problem incrementally. Thechoice depends largely on history,politics, constitutional arrangements andthe judgment of the governor and othersresponsible for initiating strategic plan-ning.

Ideally, strategic planning initiativesshould be considered at the earlieststages of a new gubernatorial administra-tion. The governor -elect and transitionteam should weigh strategic planning ob-jectives when appointing departmentaland subcabinet staff.

Most states began the planning processby rethinking basic tenets of theworkforce readiness system. The moresophisticated states, engage ina sort ofzero-based planning analysis. They as-sessed needs, considered how well con-temporary arrangements met thoseneeds, and then specified adjustments instate programs and services to fulfilltheir employment policy goals. Privatesector participation in the formulationand implementation of strategic plans isespecially important.

The institutional changes required toboth initiate and implement a strategicemployment plan are formidable. Moststates have built strategic planningreforms around existing structures --such as the JTPA-mandated State JobTraining Coordinating Council and localprivate industry councils. Few stateshave reorganized departments, butrather created interdepartmental coor-dinating groups, with strong control bythe governor's staff or a lead departmentdesignated by the governor.

Coordination for strategic planning hasvertical and horizontal dimensions. Ver-tical coordination, i.e, from local to stateto federal levels of government, impliesthe sharing of information and thedeveloping of mutually understood ob-jectives. Horizontal coordination, i.e,within local program areas suggests thepossible need for shared control.

Strategic planners must also promotelocal participation and coordination withthe state plan. For some states, inter-governmental conflict poses the largestbarrier to achieving an effedive strategicplan. States should use rorogram reviewand budgetary authoilty to encouragelocal cooperation in the implementationof an overall plan.

Strategic planning efforts need to estab-lish quantifiable change measures so thatthey can mark progress toward theemployment policy vision of the state.These measures may relate to changes ininstitutional structures and procedures,as well as more common employmentand training measures.

CONCLUSIONS

Achieving successful strategic planningrequires long-term commitments frompolicy makers in the public and privatesectors. Many significant roadblocksstand in the way of meaningful reform.

Excitement over strategic planning runshigh, despite previous failed attempts atgovernmental reform. There is an unor-ganized consensus in government andprivate organizations that humanresource programs are not workingeffectively and that reform is essential.Creative leadership is needed to mobilizethe consensus and put it to work on acommon goal.

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Executive Summary

Progress has been made by severalstates following a structured sequencetoward strategic planning. States mustassemble the relevant cadre of public andprivate sector leaders and articulate avision for the state's employment policy.This vision should be based on a carefuland open-minded assessment of labormarket supply and demand and existinglabor market interventions. Then, adecision-making structure must becreated to carry the vision from conceptto reality.

Despite serious barriers, strategic plan-ning for employment is underway. Thedegree of success will depend in largepart on political support, business leader-ship, and the risk-taking capacities ofagency administrators.

At this juncture, there is little hardevidence that strategic planning foremployment has achieved all that itsmost ardent supporters anticipate. Butthis is not surprising. Strategic planningis a relatively new public policyphenomenon. It is a very ambitious idea,for if strategic planning works, a totaloverhaul of human resource planningand implementation will be ac-complished. Strategic planning foremployment should be encouraged byfederal, state, and local policy makersand its progress should be carefullymonitored in the years ahead.

THE NEED FOR STRATEGIC PLANNING

The global, competitive economy of the1980s has created a strong demand forbetter trained workers. A rapidly chang-ing U.S. economy and its workforce haveincreased the mismatch between theskills required by companies and thoseavailable in the labor market. Complex,proliferating, and uncoordinated humanresource development programs are notadequately serving the changing needs ofemployers, employees, or job seekers.

In recent years, many policy analysts,business leaders, and state governmentleaders have suggested that strategicplanning for employment may providean important remedy for the ills ofAmerica's workforce readiness system.According to the National Commissionfor Employment Policy, strategic plan-ning for employment is "the develop-ment of a set of actions designed toenhance the job opportunities for ajurisdiction's work force and minimizethe chances for that work force's dis-employment."

This paper examines the economic, or-ganizational, and programmatic trendsthat encouraged policy makers to searchfor new employment policies. The evolv-ing concept of public sector strategicplanning is discussed and a frameworkfor ar .Alyzing state and local initiatives isoutlined. State-level experiments withvarious forms of strategic planning aresummarized, with a special emphasis onNew Jersey's experience. The report con-cludes with an analysis of barriers to im-

plementing strategic planning and offerssuggestions for overcoming them.

The idea that the public sector ought toengage in strategic planning for employ-ment has evolved from problem recogni-tion, to prescription, to implementationof specific approaches in several states.Profound changes in the nation'seconomic and political systems con-tributed to the emergence of state-levelstrategic planning for employment. Stateand local government action reflect intui-tive visions of labor market needs in atransformed world economy. The com-ponents common to these new strategicplanning initiatives will be highlighted insubsequent sections.

NEW ECONOMICREALITIES

One of the most important develop-ments in economics and politics is thegrowing perception that knowledge isthe premier wealth producing asset.(Drucker, 1989.) This widely acceptedpremise has led to critical reassessmentsand reforms in U.S. human resourcepolicies. In the view of many govern-ment and business leaders, improvingAmerica's human resource policies is es-sential to economic and political survival.Unfortunately, most analysts are notpleased with the U.S. position in theglobal economy. As summarized byLester Thurow (1986):


"I think the best way to think about theUnited States is that we are just anaverage country with an average levelof productivity and an average level oftechnology and we don't have thetremendous lead on the rest of theworld that we used to have."

The U.S. workforce is failing to meet thechallenges of the post-industrial, interna-tional economy, according to dozens ofreports by prestigious national commis-sions, private research organizations, con-gressional committees, and federalagencies. Gaps between worker skillsand the demands of the workplace areharming the nation's overall economichealth. Large numbers of poorly edu-cated and trained workers will find it in-creasingly difficult to obtain permanentjobs at decent wages. Several illustrativeconclusions follow:

"Clearly, the competitiveness ofU.S. industry is threatened whenmany young workers lack the basicskills to become productiveworkers" (President's Commissionon Industrial Competitiveness,1983.)

"The competitiveness of the steel,automobile, and electronics in-dustry will be largely determinedby the advancement of humancapital in the U.S." (Office of Tech-nology Assessment, U.S. Congress,1983.)

The "amount of labor market ad-justment presently generated byprivate markets and existinggovernment programs is less thanthe amount needed to upgrade ourhuman and physical capital tolevels consistent with rising living

2

standards while participating in in-ternational markets." (NationalCommission for EmploymentPolicy, 1988.)

"Unless America moves quicklyinto a new era in which upgradingand using our human capital be-come a central concern...We willbecome a nation of extractors, as-semblers, and retailers -- poor bythe standards of the rest of theworld." (Reich, 1983.)

U.S. investment in human capitaldevelopment during the post-war era fellsubstantially short of resources com-mitted by major economic competitors,including Japan, West Germany, Canada,and Sweden. (Scott and Lodge, 1985.) Arecent study conducted by the Education-al Testing Service of Princeton founa thatAmerican 13 year olds rank last in mathand next to last in science, in comparisonto students from six countries. (Time,1989.) Employment and training policyin the U.S. is dominated by income main-tenance programs, such as unemploy-ment insurance. A modest number ofstructurally unemployed individuals en-roll in "second chance" training programseach year, but most receive minimal, "pre-employment training," rather than inten-sive training in sophisticated skills.

U.S. human resource policies rest onseveral premises that are inappropriatein the contemporary internationaleconomy. Until very recently, policymakers assumed that young peoplecould be educated in their early years forlife-long productivity in the labormarket. After obtaining basic literacy,life-coping skills and values from theeducation system, job-specific skills

14

would be supplied effectively byemployers. It was assumed that employ-ment and training programs shouldfocus on preparing people to enter cor-porate training programs or for specificjob openings. Human resource programswere not regarded as critical componentsin an overall economic developmentstrategy.

These assumptions are now widely chal-lenged. American-style human resourcedevelopment policy is no longer ade-quate to the demands of a competitiveand changing economy. The publicschools do not work effectively foreveryone: many young people do notfinish high school. Drop out rates areespecially high for certain minorityyouth. Others do not attain basic literacyeven if they complete high school. Thosewho "fail" to obtain basic skills have dif-ficulty entering the labor force or holdingonto jobs that produce an adequate stand-ard of living. The long-term un-employed may obtain assistance througha multitude of employment and trainingprograms, but only a small portion of thepotentially eligible population benefits.

Basic educational programs and mostgovernment-funded training programsdo not adequately prepare people toadapt to change in labor force demandsor in job specific skills. There are fewnationwide mechanisms for coping withpeople whose skills become obsolete.With some notable exceptions, most com-panies do not provide regular skillsupgrading programs for their employeesand governmental assistance is virtuallynon-existent. And there are only modestincentives for public or private sector or-ganizations to retrain workers.

The Need for Strategic Planning

INEFFICIENT LABORMARKETS

Employers from a variety of industrialsectors report consistent ar d significantproblems in finding qualified workers tooccupy available jobs. The costs of labormarket transactions increased sharplyauring the 1980s, as the cost of hiringnew employees increased. Turnoverrates increased as firms found that newworkers quit to seek better employmentor could not handle the tasks assigned tothem.

Employers' problems in finding andkeeping qualified workers lower thefirms' efficiency (more time and money isspent on recruitment and training) andproductivity (output is reduced whilefirms search for workers or trainemployees to perform new tasks). Theseproblems are most severe for new, smalland medium sized firms. For them, thecosts of recruitment and training may beprohibitive.

A 1983 report by the Business-HigherEducation Forum on American Competi-tiveness succinctly summed up the na-ture and scope of the human capitalissues in the U.S. economy:

The growth of the U.S. labor forcewill slow dramatically in the 1990s.Consequently, today's workerswill constitute over 75 percent ofthe workforce in the year 2000.This aging workforce must beretrained to meet new challenges.

Two-thirds of all new entrants intothe workforce until 1995 will bewomen. Many of these will be


former welfare recipients and near-ly all of the new entrants will re-quire child care assistance for atleast a portion of their workingcareers.

The problem of youth unemploy-ment will continue to persist.Many young people are poorlyeducated in high school or func-tionally illiterate. These deficien-cies will prohibit many of themfrom participating in entry-levelcorporate training.

Perhaps as many as one in fiveAmericans is functionally illiterate.At least 10 percent are problemdrinkers and an unknown numberhave drug-related problems.

Problems associated with labor forcedeficiencies have been especially trou-bling for state governments competingfor new industry and commerce. State-level policy makers discovered that laborforce characteristics were frequentlyregarded as the critical component inrelocation/location decisions. (Car-navale and Gainer, 1989.) Many statepolicy makers realized that labor marketissues would have to be handled more ef-fectively if they hoped to lure new com-panies to their states and if they hoped tomaintain the ones that were already lo-cated there. (Tracy, 1989.)

THE UNMET CHALLENGEOF PROGRAMCOORDINATION

Substantial improvements in labor forcepreparation and retraining are needed,

4

but the nation's education and traininginstitutions are not prepared to addressthis serious problem. "America's publicand private institutions -- government,business, labor, and education -- have be-come barriers to the flexible responsewhich is the key to future prosperity," ac-cording to the Business-Higher Educa-tion Forum. (Tracy, 1983, 26.) The neweconomic and demographic realities,which place greater demands on existingemployment policies, have "not been metby a transformation in our traditional sys-tems of education and training."(Clunura, 1988, 5.)

Among the remaining problems arethese:

There is no system or strategy forinvesting in and developinghuman capital. Instead there is anarray of related but uncoordinatedprograms and institutions con-cerned with human capitaldevelopment.

Fi)lsiness participation in employ-ment programs has increased, butis still sporadic and labor marketrealities are still not consistentlyreflected in the plans and opera-tions of employment and trainingprograms, community colleges, letalone in the allocation of resourcesamong competing programs.

Contemporary education andemployment curricula do notreflect changing requirements forworkforce preparation. The focuson narrow-based technical skillstraining, for example, instead of thedevelopment of broader skills and

16

the capacity for life-long learning,is a continuing problem.

Failure to coordinate related employ-ment programs with one another or witheconomic development and human ser-vice programs constitutes one of the mostregularly and appropriately cited reasonsfor ineffective human resource policyand administration. The lack of effectiverelationships stems from conflicts inbasic missions, ignorance, and dissatisfac-tion over previous coordination effortsgone awry.

The issue of inter-program coordinationwas formally introduced into employ-ment and training policy in the early1970s through the Cooperative Area Man-power Planning System (CAMPS). Thesevoluntary and advisory state and localplanning structures did not producemuch real joint program planning in partbecause the authority to make decisionsremained with competing agencies.

The CAMPS emphasis on cross-agencynotification set the stage for somewhatmore ambitious coordination policiesadopted in the Comprehensive Employ-ment and Training Act (CETA) of 1973.For the most part, CE'rA-style coordina-tion consisted of little more than multipleagency sign-off on various operatingplans.

The Job Training Partnership Act(JTPA) of 1982 established coordinatedplanning requirements for the Employ-ment Service, the JTPA service deliveryareas, and Private Industry Councils. Ad-ditional cross-cutting planning respon-sibilities and authorities devolved tostates through JTPA.

The Need for Strategic Planning

After more than twenty-five years ofcoordination efforts, U.S. policy has stillnot reached an acceptable level of perfor-mance. "The fragmentation of humanresource programs remains one of themajor unmet challenges of domesticpolicy in America," according to a reportissued in July 1989 by the U.S. Depart-ment of Labor's job Training PartnershipAct Advisory Committee. "This chal-lenge of coordinating similar, butseparately authorized and delivered so-cial programs has been a perennial prob-lem in public administration." (U.S.DOL, July 1989, 5.)

Despite the formidable obstacles posedby the fragmentation of human resourceprograms, the JTPA Advisory Committeeand dozens of similar groups insist thatgreater policy coordination is required ateach level of government. Coordinationis not unto itself the goal of strategic plan-ning, but it must be attained if strategicplanning is to be developed and imple-mented.

LIMITED FEDERALRESPONSE

Over the years, the federal governmenthas sometimes encouraged, sometimesthwarted efforts to improve humanresource program planning and im-plementation. Throughout the 1960s and1970s federal policy reflected rapidlychanging perceptions of the proper mixof federal control and state/local discre-tion. (Baumer and Van Horn, 1985.) Inthe early 1980s, federal policy movedtoward a state-focused employmentstrategy. Congress debated the need fora comprehensive industrial policy, but

517

Workforce Futures: Strategic Planning in the Stag

failed to pass any new legislation or sig-nificantly expand human resourcesprograms. Instead, the Job TrainingPartnership Act and other federalpolicies relied upon the states to addressthe nation's human resource problems.The federal government's deficitproblems sharply cut its ability to fundnew initiatives.

In the late 1980s, the federal govern-ment began to play a more helpful role instimulating strategic planning foremployment policy. Congress requiredcoordination between JTPA and the JOBSprogram under the Family Support Act.Some aspects of the proposedreauthorization of the Perkins Act willstrengthen the linkage between vocation-al education and other job trainingprograms.

Proposed revisions to the Job TrainingPartnership Act would create incentivesfor greater coordination of humanresource programs at the state and local

6

level. Service Delivery Areas will be re-quired to develop formal agreementswithin their communities between educa-tion, welfare, job training and employ-ment agencies. (Dole, 1989.) Also, thestates would be required to create asingle advisory council to advise thegovernor and coordinate federally-as-sisted human resource prograr.s. Legis-lation designed to create such councils iscurrently pending in Congress. (SeeH.R.7, H.R.2803, and S. 543.)

In summary, over the last decade awide spectrum of political and businessleaders have come to remarkably similarconclusions. The U.S. must improve thepreparation and functioning of itsworkforce. This is imperative for thegrowth of the economy and in order toguarantee equal opportunity for allAmericans. Achieving a more effectiveworkforce readiness system will requiresubstantial changes in routine policyplanning and program administration.

18

PUBLIC SECTOR STRATEGIC PLANNING

The challenge of reworking humanresources planning and program ad-ministration is a formidable one. Con-ducting business as usual clearly will notbe adequate. Several states have begunto experiment with strategic planning -- aconcept that is not yet fully understoodand accepted throughout the employ-ment policy community.

Strategic planning is defined by the staffof the National Commission for Employ-ment Policy as a "set of actions that isdesigned to enhance the job oppor-tunities for a jurisdiction's workforce andminimize the chances for thatworkforce's disemployment." Accordingto the Commission staff,

"strategic planning includes, but ismore than, plans for economicdevelopment and economic growth.Strategic planning takes into accountchanges in the jurisdiction's economyand in skill requirements of itsworkers. Strategic planning also ad-dresses the public and private sectorinstitutions that can assist in assuringthat workers have appropriate skillsand are sufficiently adaptable to meetthe changing demands of theworkplace."

Private sector strategic planningoriginated more than 30 years ago. Itwas developed after successful corporateexperiments with program planning andbudgeting. Pioneering work at the Har-vard Business School convinced privatefirms that they should invest in careful

corporate strategic planning. In business,strategic planning was a device for in-tegrating various functions production,finance, marketing, logistics, and control.(Porter, 1987.)

Private sector organizations appliedstrategic planning to cope with rapid andunexpected change in their external en-vironments: new laws and regulations,changes in consumer attitudes, restruc-tured industries. A supplement to tradi-tional long-range planning activities,strategic planning enabled policy makersto identify issues in need of immediate at-tention. "The basic objective of strategicplanning is to achieve a dynamic balancebetween a planning organization and itsenvironment" so that resources are maxi-mized and the organization can copewith external threats. "Strategies arecourses of action intended to achieve andmaintain this balance." (Eadie and Ham-mond, 1986, 10.)

Applications of strategic planning prin-ciples in the public sector have been rareoutside the defense sector of the federalgovernment. Throughout the 30 yearevolution of public employment andtraining programs in the U.S., there hasbeen little or no strategic planning foremployment, as defined in this report.

There are several overriding explana-tions for the failure to engage in strategicplanning. The mass-productioneconomy in which the U.S. held a tremen-dous advantage for decades over its corn-


petitors did not demand a responsiveand carefully crafted human resource in-vestment strategy. The external threatsto U.S. economic competitiveness werenot perceived or even understood untilrather recently. Consequently, thefederal government did not establishstrategic planning as a priority at the na-tional or subnational level. Finally, theinstitutional and political oLstacles tostrategic planning have discouraged in-itiatives in many states and communities.

While the obstacles to strategic planningremain, the argument for engaging in it ismore compelling than ever. Federal,state, and local policy makers and privatesector leaders are finding virtue instrategic planning for employment. In-creasingly, they believe that strategicplanning principles can be readily ap-plied to the employment policy dilemma.Strategic planning promises several ad-vancements in the U.S. approach tohuman resource programs:

diagnosis of conditions that affectthe policy/program environment;

assessment of the competitive ad-vantages and disadvantages ofvarious approaches;

cross-program analysis and func-tional integration of program andservice delivery; and,

flexible adjustments in long rangestrategies to meet contemporaryneeds.

Human resource programs must bereordered. Strategic planning offers amechanism whereby policy makers canbreak away from program-specific

analysis and operation, and develop sen-sitive responses to the changing condi-tions affecting the state economy.(Chmura, 1988, 10.)

Strategic planning is thought of as an ef-fective method for reordering the ex-tremely fragmented human capitaldevelopment enterprise. Such planningshould give policy makers the tools toconsider numerous issues that cut acrossorganizational and programmatic respon-sibilities. A dynamic decision-makingprocess that relates changes in the labormarket environment to program interven-tions can be established. The value ofstrategic planning for employment restson the assumption that the governmentand the private sector can plan for andrespond to changes in the nature of thedemand and supply of labor.

The overall purpose of strategic plan-ning will depend in larger part on thedirections chosen by key policy makers.These directions in turn are derived fromconditions of the state's economic andlabor force environment. Many stateswill find that different goals are ap-propriate to different regions of the state.Some may be experiencing laborshortages; others may suffer from a lackof job opportunities and so on.

In general, this vision will include partsof the following policy goals:

1. Efficient Labor Market Matching:improving the balance between supplyand demand by achieving a more effec-tive match between job opportunitiesand the labor force. This usually meansgreater efforts to upgrade the skills of theunemployed and underemployed.

2. Demand Supplementation: correct-ing the imbalance in supply and demandby increasing job opportunities. Thisgoal usually requires more effectiveeconomic development strategies for theentire state or for targeted areas.

3. Supply Supplementation: increas-ing the supply of workers to allow theeconomy to expand. This frequently in-cludes efforts to import workers from outof state and to encourage various groups,such as women with young children orsenior citizens, to enter the labor force.

4. Redistribution: addressing the im-balance in employment among sub-groups in the population. The basicobjective is to produce a permanent in-crease in the target groups' share of jobsin a variety of occupations and at variouswage rates.

5. Job Restructuring: improving thewages of jobs in the secondary labormarket. Strategies to achieve this pur-pose usually include efforts to restruc-ture jobs, create career ladders, and newentry-level jobs in the primary labormarket.

Strategic planning initiatives usuallybegin when one or more senior policymakers in government or the private sec-tor -ecognizes the need to address aserif us human resource problem. Theproblem -- whether it is a labor shortageor high unemployment -- must cross over,a threshold of significance that trans-forms an on-going problem into a broad-based policy concern. It is hard to definethis threshold precisely, however. Muchdepends on the sensitivity of particularpolicy makers. For example, a governorseeking re-election may be very con-

Public Sector Strategic Planning

cerned about a modest increase in un-employment. An industry with sig-nificant investments in plants andfacilities in a state may be especially con-cerned about attracting a constant supplyof qualified workers.

In most instances, strategic planningbegins with the governor of a state andhis or her key advisors on employmentand economic development issues.Strategic planning is essentially an execu-tive function. While it may ultimately in-volve legislators and diverse interestgroups, the technical capacity and longterm interest in planning must comefrom the executive branch agencies thatare responsible for program and policyimplementation.

A FRAMEWORK FORASSESSING STRATEGICPLANNING

Strategic planning can be accomplishedin a variety of ways. However, there arecertain elements that are necessary for ef-fective strategic planning at the statelevel. "States need an economic strategythat consists of a diagnosis of oppor-tunities and risks, a vision for the future,and actions that are in accord with thatvision. States need effective institutionalarrangements for developing and im-plementing an economic strategy," ac-cording to the Committee for EconomicDevelopment (1986).

In our view, strategic planning foremployment consists of several essentialelements (See Figure I):

9


=1,71

FIGURE 1

STRATEGIC PLANNING FOR EMPLOYMENT

A MODEL OF THE ELEMENTS AND PROCESS

PROFILE OF

CURRENT AND FUTURE

LABOR SUPPLY

ANALYSIS OF

CURRENT AND FUTURE

WORKFORCE NEEDS

REVIEW OF SCOPE

AND EFFECTIVENESS

OF CL 1T INTERVENTIONS

VISION OF FUTURE

WORKFORCE READINESS SYSTEM

Decision-Makinz 7-lictureCoordination Goals

New InitiativesEvaluation Methods

1. A vision of what a workforce readiness(i.e., education, training, and retraining)system should be in the future;

2. A decision- makingstructure to carryout the strategic vision;

3. The coordination of programs acrossvarious functional areas and levels ofgovernment;

4. New program initiatives to respondto unmet needs for services to workersand employers; and,

5. Methods of evaluating the perfor-mance of all components of the humanresources system in relation to the state'svision.

In order to develop a vision for thestate's workforce readiness system, it ishelpful to undertake a careful diagnosisof the problems and opportunities in thestate's economy and labor force. Aftersuch an analysis, it will be possible tomore fully articulate a set of policy goalsfor the state's human resource systemand a series of tactical steps for realizingthose goals.

Ordinarily, a diagnosis of the state'shuman resource issues and programswill include several important steps.

Analyzing Labor Market Supply:Strategic planners must conduct anin-depth, and on-going analysis ofthe number, geographic location,gender, skill level, educationallevel, and employment status ofcurrent and future workers in thestate. A full range of sourcesshould be consulted includingdetailed analysis of census data,


educational institutions, un-employment rates, unemploymentinsurance claimants, and immigra-tion trends.

Analyzing the Demand forWorkers: Strategic planners mustalso conduct an in-depth and on-going analysis of the number andskill requirements of current andprojected job openings. Here stateor local planners may consulttrends and projections by occupa-tional areas and industry. Trackinggeneral economic conditions,takeovers and mergers, relocation,business start-ups, and employ-ment turnover is also necessary.

Assessing Labor Market Interven-tions: Having thoroughly ex-amined the gaps between demandand supply, the strategic plan mustthen investigate the performance ofpublic and private training andplacement programs, including theJob Training Partnership Act,Employment Service, vocationaleducation, vocational rehabilita-tion, proprietary schools, adulteducation, economic development,and welfare programs. Thisshould yield a comprehensiveprofile of these programs includingfunding levels, numbers served,performance, and relationshipwith other employment and train-ing programs.

Applying the Strategic Plan: Thevision-setting phase of strategicplanning forms the common direc-tion and foundation for a tacticalplan of action. Once a vision for thestrategic plan is established and in-

Workforce %tures: Strategic Planning in the States

formation on labor supply anddemand and program interven-tions has been assessed, policymakers must establish a decision-making structure to institutionalizestrategic planning and develop atactical plan of short term actionsthat focus on achieving those goals.Wherever it is located in state orlocal government this decisionmaking structure must applystrategic planning principles to theallocation of resources, the reviewand approval of plans, and the as-sessment of governmental perfor-mance.

Implicit in this framework is the impor-tance of developing the capacity to scanthe labor force environment for sig-nificant changes that may require adjust-ments in program interventions.Tracking the supply and demand ofworkers, and constructing effective labormarket interventions form the founda-tion of strategic planning. Strategic plan-ning for employment requires states todevelop the capacity for collecting,analyzing, and processing informationon essential external factors, such aschanging labor force supply and demandcharacteristics. This environmental scanis especially critical given the current andprojected shifts in labor supply, skilllevels and the demands of the workplace.

In order to plan and implement an effec-tive workforce readiness system, a broadarray of agencies and programs must becoordinated: welfare, education, labor,business, economic development, un-employment insurance, and so on. Vary-ing levels of coordination will be neededto fully implement a successful strategicplan. It is useful to think about program

12

coordination efforts along the followingcontinuum:

Notification of Action and Infor-mation Sharing is the simplest stepin the path toward interagencycoordination. Agencies sharerelevant data and ideas on mutualproblems or inform each other ofplanned or actual programs.

Regular Information Exchange oc-curs when agencies establish a sys-tem or regular procedure for in-forming each other about specificprojects and opportunities. Thisrequires more commitment to coor-dination and the development ofmore elaborate communicationmechanisms.

Consultation requires greater com-mitment than the first two types ofcoordination because agencies seekeach other's advice and/or endor-sement for proposals or actions.However, under this category ofcoordination, one agency retainssole control and responsibility forplanning or implementation.

Shared Control is the mostdemanding category of coordina-tion because here agencies agree tojointly participate in planning andadministration, and share respon-sibility and accountability for pro-gram outcomes. Usually, sharedcontrol requires that one or moreagencies yield some of their accus-tomed control or autonomy.

Building a cohesive workforce readi-ness system requires cross-cuttingstrategies that address inter-organization-

24

al issues. Policy makers and private sec-tor participants must be educated aboutthe strengths and weaknesses of the sys-tem. The entire array of the human capi-tal infrastructure must be consideredpart of the strategic planning enterprise,including basic education, career prepara-tion, and life-long learning programs.(Chumra, 1988, 11.) Because mosthuman resource programs operate at thestate and local level and in the public andprivate sectors, the task of program in-tegration is difficult indeed.


In assessing strategic planning experi-ments, we look for evidence that policymakers brought together the essential in-gredients to develop a comprehensivestrategic plan and established a set of ac-tions to make it work. We will considerwho initiates and participates in thevision-setting and tactical planningphases of strategic planning. Also ex-amined will be the techniques and proces-ses used to overcome barriers to effectiveimplementation of the strategic vision.

EXPERIMENTS IN THE STATES

In the late 1980s, the debate overworkforce preparation shifted fromprophesy to action. The concept ofstrategic planning emerged as a potentialremedy for the many problems identifiedby public and private sector policymakers and analysts. When federal ef-forts to create broad-based planning in-itiatives stalled, state governmentsmounted their own efforts to improveeconomic development and employmentprograms and to minimize the disrup-tions from economic recessions. Stateshave taken the lead in reformingeconomic development, education, andwelfare programs.

The experience of several states indesigning economic developmentstrategies was especially helpful in en-couraging strategic planning initiatives.During the early 1980s, as the nation wasrocked by a deep recession, dozens ofstates undertook ambitious effortsdesigned to recover from high unemploy-ment and to shield their economies fromsharp blows in the future. Many of theseefforts contained useful lessons for statepolicy makers, including the need forcareful policy analysis and broad-basedparticipation in the design of newstrategies.

State governments are uniquely posi-tioned to play the critical leadership rolein the development and implementationof strategic employment plans. They areresponsible for funding the bulk of theeconomic development, education, and

welfare systlms within their states.States administer the employment ser-vice, unemployment insurance, and largesegments of the Job Training PartnershipAct and vocational education. Manystates have their own training and retrain.ing programs. States are also centralpoints for gathering labor market infor-mation that can be applied to criticalresource allocation decisions. Withmajor responsibility for virtually allprograms that affect employment policy,states are the logical location for strategicplanning initiatives.

Several states have begun to implementstrategic planning initiatives. Statepolicy makers concluded that govern-ment managers would have to find waysto squeeze better performance out of ex-isting resources. Strategic planninggained in acceptance as policy makersrealized that employment programs werenot responding rapidly to dramatic chan-ges in the conditions of the labor market.Antiquated methods of organizing anddelivering programs were obsolete in thelate 1980s economy. Policy makers needsome mechanism for tracking andresponding to this rapid change.

Efforts to design and implement astrategic planning framework for employ-ment have occurred primarily at the stateand local levels. The decentralized ad-mir.;stration of human resource develop-ment programs, a hallmark of the "newfe eralism," has implicitly devolvedrespon,ioility for strategic planning to


the states. The conditions for strategicplanning were also fostered by the JobTraining Partnership Act (JTPA). JTPAcreated the infrastructure for state-levelstrategic planning by creating state andlocal public/private policy making coun-cils and by fostering attention on broaderhuman resource problems in theeconomy.

NEW JERSEY: A CASESTUDY OF STRATEGICPLANNING

The evolution of New Jersey's strategicplan for employment is a particularly in-teresting case. New Jersey's public andprivate sector leaders have begun a long-term project to create a holistic approachto government intervention in the labormarket. Institutions and procedures arebeing assessed and may be substantiallyredesigned as part of the larger strategy.

This paper examines the origin of thestrategic planning initiative in the contextof the workforce issues facing New Jer-sey, the composition of the groupcharged with developing a strategic plan,and the scope and nature of that charge.The core ingredients of New Jersey'sstrategic employment plan are sum-marized and the progress made in im-plementing these policies is described.

Origins of the StrategicPlanning Initiative

New Jersey was among the first statesto feel the impact of the transformation ofthe economic base from the industrial erato the technological era. From the

16

rustbowl recession of the late 1970s,when statewide unemployment exceededtwelve percent to today's three or fourpercent unemployment rates, New Jerseyis on the cutting edge of economicchange. For despite rapid andastonishing economic growth, New Jer-sey is beginning to experience a slow-down in the pace of growth due toseveral factors, including the impact oflabor shortages.

New Jersey's current labor demand andsupply profile is a mirror of widespreadpredictions about the labor market of the21st century. The state, with a total workforce approaching four million, has250,000 fewer teenagers than it had 20years ago. State projections indicate thatsix out of every seven new jobs created inthe 1990s will be filled by a woman or amember of a minority group. Urbanhigh school drop-out rates are approach-ing 50 percent. Yet, New Jersey con-tinues to be a magnet for high technologyand information-age jobs and infrastruc-ture. Its per capita income is secondhighest among the states. Foreign ex-ports and foreign capital investment areamong the highest in the country.

Beginning in 1986, a flurry of new pro-gram initiatives designed to address thetraining needs of various groupsemerged from different departments ofstate government. A major overhaul ofthe state welfare system, known asREACH for Realizing Economic Achieve-ment, placed strong emphasis on trainingand placing public assistance recipientsin full-time jobs. The state created a newyouth program for high school graduatesthat included guaranteed jobs and a con-tinuum of service for at-risk youth.Policies and programs in six state depart-

27

ments were linked with over 600 localschool districts. A special reportprepared by the State Job Training Coor-dinating Council analyzing the duplica-tion and fragmentation of New Jersey'semployment and training programs wasissued.

In response to the growing mismatch inthe workplace and the continued layer-ing of new and fragmented interventions,Governor Thomas Kean formed aCabinet Task Force in early 1987 to ad-dress the long-term issue of how New Jer-sey might develop a more productivework force for the future. The TaskForce, chaired by the Governor's Chief ofPolicy and Planning, consisted of theCommissioners of Community Affairs,Human Services, Education, HigherEdLcation, Commerce and EconomicDevelopment, and Labor. The businesscommunity was represented by JohnHeidrich, Vice-President for Administra-tion and member of the Executive Com-mittee of Johnson and Johnson. Anactive and seasoned participant in jobtraining policies, Heidrich was also theChair of the State Job Coordinating Coun-cil.

The Governor's charge to the TaskForce was concise yet comprehensive:determine the optimum employment andtraining system for the future of New Jer-sey. This broad mission of the TaskForce was further refined through a num-ber of guiding principles:

the system must provide access toappropriate education and trainingopportunities for all citizens, in-cluding the economically disad-vantaged, so that they may preparefor changes in the state's economy;

Experiments in the States

the system must be streamlined;

the business community must be afull partner in the design andoperation of the system.

Ingredients of theStrategic Plan

In developing policy recommendations,the Task Force closely examined three es-sential elements of the state's workforcereadiness system: the supply of workers,the scope and nature of the demand forworkers, and the efficiency of currentlabor market interventions.

Since most members of the state's laborforce through the year 2000 are alreadyliving in New Jersey, gross labor supplyprojections are relatively easy to forecast.New Jersey will experience a slowinggrowth rate in its work force, with nearlyall of the increase consisting of womenand minorities. More difficult toforecast, however, is the competency andskill level of the emerging workforce,whether dislocated or new entrants.While only gross estimates of illiteracyrates and dislocation are available, theTask Force projected skills shortages thatcould threaten future economic growth.

According to the Task Force Report:

17

28

"In the not-too-distant past, our prob-lem was creating enough jobs foreveryone. That won't be the problemin the years ahead...The future chal-lenge to New Jersey and its employerswon't be job creation, but findingenough of the right people to fill thejobs openings that will exist." (TaskForce, 1987, 19.)


The Task Force conducted a comprehen-sive review of current and projectedlabor demand by occupation and in-dustry. The skill and competency re-quirements for growth occupations werecarefully analyzed. Utilizing three dif-ferent competency levels relating topeople, data, and things, the Task Forcedramatically documented the increasedcompetencies required for the averagejob.

Those jobs requiring the highest com-petencies levels -- the greatest demandson thinking ability -- were projected to in-crease by the greatest percentage. Thelargest gains were projected to occur inmoderate competency jobs, such as word-processing, advanced clerical work,skilled crafts, accounting, and bookkeep-ing. The lowest growth was projected tooccur in the jobs demanding the lowestcompetencies, including laborers, generaloffice clerks, custodians, and so on.

Finally, the Task Force conducted a com-prehensive and ambitious analysis of cur-rent labor market interventions. TheTask Force reviewed all the job trainingand education efforts in New Jersey fromthree different perspectives; by depart-ment, by the type of service provided,and finally by target groups served.Sixty-three different programs werespending over $300 million a year provid-ing education and job training services toan estimated 800,000 citizens. "NewJersey's current employment and train-ing system, while sophisticated, complex,and diverse, lacks sufficient coherence, in-tegration, and uniform effectiveness to beof maximum utility in preparing thestate's workforce for the jobs of the fu-ture," wrote the Task Force in its con-clusion. (Task Force, 1987.)

18

The Task Force approached its missionfrom the perspective that human resour-ces are the primary wealth-producingasset of the emerging economy. The over-arching objective of the frameworkdeveloped by this group was the desireto empower individuals to achieveeconomic security through education andtraining aimed at meeting emergingworkplace skill and ability demands.Governor Kean adopted the recommen-dations of the Task Force as the state's of-ficial employment policy in December1987.

New Jersey's employment policy en-visions an employment and training sys-tem that will encompass a broadcontinuum of services to meet the vary-ing needs of different people. These ser-vices range from developmentaleducation to retraining to support ser-vices, such as day care and transporta-tion. The vision of future employmentpolicy is guided by six basic principlescontained in the Governor's Statement onEmployment Policy.

1. The employment and training systemmust be designed to promote the long-term economic independence of NewJersey's people.

2. New Jersey's work force must be en-couraged to invest in their own educa-tion and training.

3. New Jersey's employment and train-ing system must incorporate the fullrange of services our people need to be-come and remain employed.

4. To achieve a more effective and coor-dinated employment and training sys-

29

tem, state and local leadership of the sys-tem must be strengthened.

5. New Jersey's employment and train-ing system must be pursued as the com-mon endeavor of the public and privatesector.

6. New Jersey's employment and train-ing system must strive for r.e6:1ence.

In the context of the five optional direc-tions which shape the foundation ofstrategic employment policy, NewJersey's vision of its future workforcereadiness system primarily addresses thecrafting of a more efficient labor marketmatching system. The strategy em-phasizes improved linkages andprograms to prepare the unemployedwith educational skills, vocational skills,and job matching programs. Theprimary purpose is to meet job demandsand to absorb the unemployed.

To a lesser extent, New Jersey's visionincludes strategies for redistribution bytargeting existing and new programs tothe youth population. The redistributionstrategy is also broadly addressed whenexamining the state's urban and high un-employment areas. New Jersey's employ-ment policy stops short, however, ofspecific strategies targeted to urbancenters. For example, although UrbanEnterprise Zones have been created topromote job creation and capital invest-ment, New Jersey's employment policydoes not require the integration of jobtraining programs with such economicdevelopment initiatives.

The Task Force Report contained a num-ber of reccmmended action steps outlin-


ing "how" the state would move toward afuture employment and training system.

Decision-Making Structure. The TaskForce recommended that the overallgovernance of the future employmentand training system become a high-levelstate responsibility by reconstituting theJTPA Job Training Coordinating Councilas the state Employment and TrainingCommission. The Commission would beappointed by and report to the Governor.The membership of the new Commissionwould expand to include Commissionersfrom other departments and the policymaking body would be empowered to ex-amine all parts of the employment andtraining system. In contrast, the JTPAJob Training Council had a much morenarrow scope of responsibilities.

At a local level, the Task Force furtherrecommended expanding the respon-sibility of Private Industry Councils(PICs) so that they could function as aboard of directors over local education,employment and training interventions.The report also suggested that half of thecurrent PICs should be reconstituted tocover major labor markets. Inherent inthe recommended decision-making struc-ture is an expanded leadership role forthe business sector through its involve-ment in state and local policy-makingbodies.

Coordination. The Task Force clearlyrecommended that the new system focuson improving connections among exist-ing programs and services rather thancreate a new set of organizations. A keyfeature of the proposed employment andtraining system is the mandate to estab-lish a continuum of services for citizensand employers. The continuum of ser-

19

30


vices is envisioned as a seamless series ofservices designed to allow individualsand employers to draw upon resourcesbased on changing individuals needs, incontrast to categorical programs whichare not connected, particularly from theuser's perspective. According to theTask Force, such a continuum would "in-terrelate the range of disparate programs,services and supports that comprise thecurrent employment and training sys-tem." A number of specific action stepswere recommended by the Task Force topromote this coordination:

Make client eligibility transferableacross programs;

Eliminate current disincentives forenrolling in multiple programs;

Create common intake and assess-ment methods across agencies;

Insure collaborative planning withthe economic development system;

Establish coordinated servicedelivery as a local PIC priority;

Empower the Governor's Employ-ment and Training Commissionwith review and approvalauthority for all employment andtraining initiatives.

Program Initiatives. The Task Forcerecommended a series of specific stepsdealing with new programs and serviceswhich would be essential pieces of the fu-ture employment and training system:

A major new strategy which ad-vances the self-sufficiency of at-riskyouth;

20

An intensive campaign to increaseadult literacy;

A flexible funding pool to en-courage workers to invest in theirown career upgrading consistentwith changing skills demanded inthe workplace;

A new institute to design, coor-dinate and deliver staff develop-ment services to employment andtraining personnel across alldepartments;

Expanded and ongoing capacity togenerate comprehensive data onlabor supply and demand.

Evaluating the System. The new Com-mission would be responsible fordeveloping performance standards for allcomponents of the employment andtraining system and for monitoringprogress. Such a performance systemshould focus on outcomes and the long-term impact of program interventions.Common definitions and benchmarkswould be established across departmentsand programs.

A Progress Report

Substantial progress has been madetoward realizing some of the goals out-lined in the Governor's Task Forcereport. An executive order establishingthe New Jersey Commission on Employ-ment and Training was issued by Gover-nor Kean in April 1988. The Commissionwas charged with creating the futureemployment and training system out-lined in the report. Legislation was intro-duced in the state legislature to formalizethis action and it gained bipartisan sup-

31

port. This legislation was signed intolaw in January 1990. The key features ofthe State Employment Commission are:

1. The active and catalytic role playedby the private sector in the establishmentand focus of the commission. Private sec-tor representatives on this commissionare predominantly Chief Executive Of-ficers and executive committee membersof the state's largest corporations.

2. Commission review of all employ-ment and training activities of all depart-ments of state government. This sharedcontrol of the planning process has beenextended locally to Private IndustryCouncils.

3. The design of a market-based plan-ning system including the developmentof competency based labor marketanalysis to measure the skill gaps be-tween workers and jobs.

4. A local planning model that providesfor substantive PIC involvement in allhuman resource development programs.

5. Multi-agency goal setting, perfor-mance standard development and over-sight.

6. Flexibility to merge other councilsand committees under the jurisdiction ofthe Commission.

In short, New Jersey government andthe private sector have made an explicitcommitment to the refinement and im-plementation of a strategic employmentplan.

Since Governor Kean's second term wasnearing an end, the Commission decided


to appoint an interim executive Director.Frederick Radlmann was appointed Ex-ecutive Director of the Commission foran indefinite period of time in early 1989.Radlmann has over twenty years of ex-perience in the operation, administrationand policy development of job trainingprograms. Prior positions include Direc-tor of the State Employment and Train-ing Division and Regional Vice Presidentof the National Alliance of Business as aloaned executive from Johnson andJohnson.

The initial funding for the Commissionincluded $185,000 in state funds. Addi-tional staff support for the Commissionwas provided through various divisionsof the state Department of Labor. Thisyear the Commission has requested astate budget of $300,000. The newbudget provides four to five professionalstaff positions, increasing to nine through1991.

In addition to performing functions as-signed through the Job Training Partner-ship Act, the Commission has initiated anumber of activities in support of theGovernor's Employment Policy.

The Commission Chair met withthe majority of PIC Chairs, direc-told and local elected officialsthroughout the state promoting thenew Employment Policy.

Established small task forces ad-dressing such key issues as at-riskyouth and worker dislocation.

Formulated procedures to in-tegrate JTPA and employment ser-vice at the local level.


Reorganized the Planning Com-mittee of the Commission to in-clude liaisons from each statedepartment.

Contracted with the state univer-sity to develop uniform perfor-mance standards for the employ-ment and training system.

Oversaw the employment andtraining components of state's newwelfare initiative.

Coordination. Strategies that promoteinter-program coordination are an impor-tant element of New Jersey's futureemployment and training system.Beyond promoting coordination at thestate level, the Commission has takendirect action toward implementing coor-dination at the service delivery level.The Employment Service/JTPA Coor-dination Committee of the Commissionhas proposed a so-called Jobs New Jerseyconcept. Beginning with plans submittedin May 1989, local service delivery areaswere required to submit an integratedemployment and training plan, combin-ing the JTPA Job Training Plan and theLocal Plan of Service for the Job Service.

Planning instructions issued to PICs re-quired each plan to address how theywould accomplish the following:

Coordinated marketing under thecommon identity of "Jobs New Jer-sey;"

Unified intake process;

Integrated assessment;

Coordinated job search assistanceand placement;

Coordinated job development;and,

Coordinated recruitment.

Evaluating the System. Recognizingthe need for a comprehensive set ofbaseline performance standards for allprograms in the employment and train-ing system, one of the Commission's firststeps was to develop such standards. Areport including recommendations wascompleted by a faculty member at Rut-gers University and reviewed by theCommission.

Several important recommendationswere made in the report. Evaluation datashould reveal the interrelationships be-tween programs and should be or-ganized by population group servedand/or occupational training clustersrather than by program. The standardreporting year should be July 1 throughJune 30, requiring some agencies to re-array their data to conform to a standardreporting period. Standard definitions ofplacement and positive terminationsshould be adopted to insure consistencyin performance evaluation. Program out-comes should be expressed in absolutenumbers (for example, number ofemployed graduates or average earningsof graduates) or in productivity ratios(for example, cost per employedgraduate) not as placement rates. Asingle data retrieval system, such as un-employment insurance wage records,should be used to collect post-programearnings of participants in all programs.Experimental evaluations using a controlgroup of non-trainees should be con-ducted.

New Jersey has made a strong move inthe direction of a strategic employmentpolicy. An ambitious vision for reform-ing the human resources delivery struc-ture has been articulated; a fundedcommission which includes many of thekey players in employment policy hasbeen assembled; specific policies havebeen developed to improve inter-pro-gram coordination and to help monitorprogram performance.

The New Jersey employment policymodel has yet to be fully implemented.Continued progress will require consis-tent leadership from the Governor andhis staff to insure cooperation fromDepartments. The employment policy in-itiative came late in Governor Kean'ssecond and final term. But, the oppor-tunity to build on a solid foundation ex-ists for Governor James J. Florio whotook office in January 1990.

STRATEGIC PLANNINGEXPERIMENTS IN SIXSTATES

Since the passage of the Job TrainingPartnership Act in 1982 several stateshave initiated actions to establish astrategic planning framework for labormarket intervention. The following sec-tion presents a selective review of the ex-periences of several states that havemade notable progress -- Indiana, Maine,Maryland, Michigan, North Dakota andWashington. In each state, policy makersand human resource program prac-titioners have forged alliances with otherstakeholders to address common con-cerns. A robust blend of strategies for


the development and implementation ofemployment policy is emerging.

Given the diversity of economic, politi-cal, and organizational environmentsacross the states, it comes as no surprisethat they have developed unique recipesfor achieving strategic employment initia-tives. Nevertheless, our exploration ofthese states suggests that there areseveral common elements to strategicplanning for employment.

A vision of the future, refined into apolicy framework, is the key catalytic in-gredient. This vision, expressed invarious ways, is the glue that holdsstrategic planning efforts together. Aframework for action usually createssome structure -- a planning commission,an interdepartmental council, or acabinet working group -- that allows thevarious stakeholders to work with oneanother. In each state, governors havecalled upon private and public sector par-ticipants to develop a conceptualframework and implement it. Theseframeworks all possess the common ele-ments of Analysis of Labor Market Supp-ly; Analysis of Demand for Workers; AnAssessment of Labor Market Interven-tions; System-wide Application ofStrategic Information.

While sharing approaches, the con-clusions reached and directions taken aretailored to individual state needs and ob-jectives. Strategic planning initiativeshave enabled governors and other par-ticipants to transform institutions andrestructure programs and agencies todefine and meet their state's employmentpolicy objectives and strategic objectives.

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The six state summaries review thedecision making structures, programcoordination activities, new program in-itiatives, and offer brief assessments ofprogress to date in achieving strategicplanning goals.

Indiana

Indiana was one of the first states todevelop a strategic employment plan. In1982, the state promulgated a "State of In-diana Policy for Vocational Education,Training and Employment." This policyemphasized human resource develop-ment as a major facet of economicgrowth and was consistent with and sup-portive of the state's strategic economicdevelopment plan -- In Step with theFuture.

Drawing on this vision for state policy,the state developed a five year "StrategicPlan for Employment and Training."This plan established a mission for theemployment and training system:

"To provide, in support of Indiana'seconomic growth initiatives, a localpublic system which meets employerneeds both by matching qualified jobseekers with jobs and by developingqualified job seekers."

The state also adopted several prin-ciples for the employment and trainingsystem. The private sector is a fullpartner in program operation. PICsserve as the board of directors anddecision makers for all employment andtraining decisions at the local level. PICshave the authority to select programoperators for all services and are not re-quired to continue existing service

24

delivery systems or contractors. Publiclabor exchange is identified as the core ofthe system. PICs are responsible for pro-gram operation and control. The plan en-courages "one-stop" service delivery withunified service provision at the local level.

The state is responsible for establishingsystem parameters and uniform outcomemeasures that are consistent acrossvarious programs and agencies. Account-ability standards have been tightenedacross agency lines. New financialmanagement procedures have beendeveloped; performance standards havebeen designed to focus on program out-comes; coordination compliance sanc-tions are being developed; andguidelines for PIC membership are underdevelopment.

Currently, the state is planning a reor-ganization which will emphasize func-tional assignment of responsibilities andlocal delivery system support. A consis-tent statewide identity for the employ-ment and training system is underdevelopment.

Not surprisingly, controversy has ac-companied Indiana's decision todecentralize decision making to the PICs.State employees and their representativeschallenged this concept. Thus far,Indiana's strategic plan has withstoodchallenges. In March 1989, this new ap-proach was endorsed by the new ad-ministration of Governor Evan Bayh ondits full implementation is being spear-headed by Lt. Governor Frank O'Bannon,who has promised that these unified ser-vices will be fully operational by July 1,1990.

3 5

North Dakota

North Dakota was also one of the firststates to develop a strategic employmentplan. The Governor's Employment andTraining Forum was formed in 1983.Like Indiana's plan, this plan wasdeveloped from a vision of humanresource as an essential ingredient in thestate's economic development strategy.The genesis for the unified employmentand training system was a governor'sconference on economic development.The decision making structure has amajority private sector participation. Allemployment and training functions arecoordinated within the framework ofpartnerships for new job creation in ruralareas. This system has transcendedgubernatorial administrations.

North Dakota is one of a handful ofstates with a single Service Delivery Area(SDA), under JTPA, and single Private In-dustry Council. It is also one of the fewstates to designate the Job Service as theprincipal service delivery agency forJTPA Title IIA, IIB, and III activities.

The Governor's Employment and Train-ing Forum (GETF) is empowered by ex-ecutive order to effect additionalconsolidation of employment and train-ing related councils. GETF is also respon-sible for identifying and assessing thestate's training and vocational needs.GETF oversees the entire network of ser-vices and programs in an effort to avoidunwanted service duplication.

GETF's activities are coordinated witheight Regional Employment and Train-ing committees. These are arranged toserve the state's eight regional planning


districts. Economic development, educa-tion, social service and employment andtraining resources are linked with oneanother at the local service level.

A major thrust of GETF has beenpartnerships for new job creation in ruralareas.

North Dakota's size and economy havecontributed to the smooth implementa-tion of its strategic plan. Nearly 30 per-cent of the state's civilian labor force isassisted by this system each year. Thestate has also avoided debilitating institu-tional competition and resistance tounified employment and trainingdelivery structure.

Maryland

Maryland approached strategic employ-ment planning with a vision of a unifiedworkforce investment system. Thisvision is molded by the realization thatthere are no "spare people" and that in alabor short and growing economy, laborsupply supplementation is an essentialcomponent of the state's economichealth. In response to a request byGovernor William Schaefer, theGovernor's Employment and TrainingCouncil (GETC) undertook a major over-haul of the employment and trainingdelivery system to achieve this vision.

Beginning in 1987, the GETC reviewedall elements of state government to deter-mine the best way to implement a moreunified set of programs to help workersand c..-aployers.

CrTC established three basic coordina-tion re: onsibilities that will facilitate the


development of a unified work force in-vestment strategy:

Monitoring and evaluating theState's workforce investment sys-tem; including the departments ofEconomic and EmploymentDevelopment, Human Resources,and Education;

Developing unified workforceplans and policy investments forthe governor; and,

Developing and disseminating in-formation to support this mission.

Maryland's coordination goal is to bringtogether all employment and training ac-tivities at the local service delivery level.State initiatives in both welfare andeducation reform establish clear linkagesand service delivery coordinationthrough PICs.

The GETC has established a localdecision making structure for planningand service delivery of the state's newprogram initiatives -- for welfare reforminitiatives (Investment in Job Op-portunities and Project Independence);for economic dislocation and worker ad-justment assistance (EDWAA); and forat-risk youth and literacy programs(Maryland's Tomorrow and LiteracyWorks).

PICs serve as the "board of directors"for the employment and training relatedaspects of all of these initiatives. Theseinitiatives are both integrated and inter-dependent public/private partnerships.Individual program goals are linked tothe state's strategic employment plan.

26

Maryland has begun to build aworkforce development strategy and hasdisplayed flexibility in resolving conflictsand overcoming hurdles. An originalGETC position on decentralizing Employ-ment Service labor exchange functions(an approach adopted in Indiana) hasbeen modified. A market-based plan-ning framework, which gives PICs andJob Service Employer Committees localdetermination of labor exchange goalsand activities, has been instituted. Themarket-based planning framework is con-sistent with the strategic framework out-lined in this paper. Local goal settingand performance measurement are alsoimportance aspects of the Maryland ap-proach.

Maryland's strategic plan is being imple-mented in varying degrees by every PICin the state. The scope of activities andtimeframes for implementation are ex-tremely ambitious. Service deliveryareas and PICs are progressing at dif-ferent rates through the implementationprocess.

Maine

Maine is in the second year of a Com-prehensive Human Resource Develop-ment Plan. This plan developed from avision, articulated by the governor, that"...Maine's greatness and future dependon the aspirations and skills of its people."

This initiative, launched by GovernorJohn McKernan, is designed tostrengthen the multi-agency cooperativeapproach to the planning of state humanresource development programs. Ex-panding upon the Governor's coordina-tion and special services plan, Maine

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developed a decision making structurethat connects both policy makers andlead planners from the state's humanresource development agencies in the for-mulation of an annual plan. Individualagency goals, objectives and planningdocuments address the agency or pro-gram contribution to the overarchingHuman Resources Development goal ofensuring "that Maine's workforce isready for the 1990s and beyond."

The Governor announced six specificgoals for Maine's Human ResourcesDevelopment strategy:

Strengthen the multi-agencycooperative approach to the plan-ning of human resource develop-ment programs;

Coordinate human resource plan-ning with economic developmentto better utilize human resourcesdevelopment as an economicdevelopment tool;

Improve delivery and coordinationof human resource programs towelfare recipients to reduce wel-fare dependency;

Develop a strategy for helpingyouth make the transition fromadolescence to adulthood;

Increase retraining and upgradingopportunities for workers in exist-ing industries;

Improve employment oppor-tunities for groups who have tradi-tionally faced barriers to employ-ment.

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IIIn 1988, the governor formed a sub-

cabinet group to work with the MaineHuman Resource Development Councilto establish concrete objectives for the ac-complishment of the Governor's sixhuman resource goals and to establish ob-jective measures for assessing progress.This planning process resulted in specificsteps to be undertaken in support of thegovernor's goals.

Maine's experience with this model hasbeen encouraging. Collectively thispublic/private partnership established anew cooperative planning and servicedelivery system. The Maine HumanResource Development Council reportsthat of 29 tasks identified in the first yearplan (1988-1989), 22 have been initiatedand are operating successfully, six havemet with mixed success, and one has notbeen implemented. Successful taskshave been completed in the areas ofpreparing Maine youth for theworkplace, moving welfare recipientsinto productive employment, targetingtraining to new demand occupations,and increasing the Governor's TrainingContingency fund fourfold in the firstyear. A few programs have developedmore slowly than anticipated includingthe use of training funds earmarked fornew industries, the integration and in-crease of services to older workers anddisplaced homemakers, and a com-puterized tracking system for publicschool students.

The impact of the restructured servicedelivery system is summarized byCouncil's assessment of the first year ofoperation:

"Perhaps most importantly, theprocess of program coordination,


under the auspices of the MHRDC,was begun and will lead to long-termbenefits fol the citizens of Maine.Recognizing that people have verydiverse needs and sometimes require avariety of services to enable them to beproductive Maine workers, an auto-matic interagency cooperation and in-formation exchange is essential to thesuccessful and effective delivery ofstate services and programs."

Michigan

During the late 1970s and early 1980s,Michigan suffered severe declines in itsemployment and industrial production.The Michigan Human Investment Sys-tem was designed by Governor JamesBlanchard to insure that the state has aworld class workforce to compete in aglobal economy. The first steps to imple-ment this vision have begun with the es-tablishment of the Human InvestmentFund and the piloting of integrated ser-vices to three target populations -graduating high school seniors, MichiganYouth Corp participants and dislocatedworkers. Additional pilot programs thatfully integrate a diverse set of serviceswere scheduled to begin in late 1989.

The key design criteria of this HumanInvestment System are:

shared control of planning andcoordination at both state and locallevels of government;

"one stop" single point of entry tothe entire system

system-wide single service market-ing;

core services, such as labor marketinformation, assessment and place-ment assistance at no cost toanyone seeking assistance;

training and education servicesfree to eligible target groups andtuition based to others;

outcome oriented system-wide ac-countability and performancestandards;

an automated system to increasedirect service .,taff.

The unique component of this system isits use of automation. The strategy is toconnect the system beyond the level ofagency and program operating environ-ments. The use of an "OpportunityCant" a smart chip computer card, isbeing used to manage and coordinate theintegrated delivery of education, employ-ment and job training services to thegeneral public at demonstration sitesthroughout the state. Additionalautomated system integration tools arebeing developed including automated ac-cess to a wide variety of employmentand training information by the generalpublic.

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Washington

Washington has instituted several multi-agency initiatives in support of GovernorBooth Gardner's employment policy.These activities include joint marketing,funding across agency lines, functionalassignment of responsibilities amongagencies and shared control of planningauthority. Washington's approach tostrategic employment planning is to viewgovernment as an "entity acting on behalf

39

of its constituents." This vision en-courages government managers to thinkabout solving problems and addressingneeds with the appropriate resources,rather than just program-specific solu-tions.

This perspective, which is encouragedby Governor Gardner, provides a centralorientation for the state's strategicemployment planning efforts.

Pioneering high support employmentprograms for the homeless in Seattle;rural entrepreneurial programs for wel-fare recipients; and, occupational trainingvia satellite in "one-stop" employmentcenters are examples of new initiativesthat have been developed in Washing-ton's strategic planning environment.

The Washington State BusinessResource Network is also an outgrowthof the Governor's new employment andeconomic development policies. TheBusiness Resource Network coordinatesall workforce related programs and ser-vices available to employers in the state.It provides a comprehensive resource for


employers and the contact point for allstate and federal job creation, and jobtraining programs. It provides one-stopaccess to the Departments of CommunityDevelopment, Trade and EconomicDevelopment, Revenue, and Small Busi-ness Development Centers and connectsemployers with all training and educa-tion resources available to them. The net-work is linked with over 100 businessassociations and employer groupsthroughout the state.

Another comprehensive structure thatemerged from the state's strategicemployment plan is Washington's Fami-ly Independence Program, a prototypefor the federal welfare reform initiative.The Family Independence Program is awelfare to work initiative jointlyoperated by the Department of Socialand Health Services and the Departmentof Employment Security.

At both the local and state levelsdecision making structures are focusedon outcomes and program evaluationsare designed to assess agency contribu-tions to overall market impact.

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IMPLICATIONS AND RECOMMENDATIONS

Strategic planning for employment is anidea whose time has come. The need fornew approaches to tackling employmentissues has been widely acceptedthroughout the political and businesscommunity. New economic realities, in-cluding growing mismatches betweenthe job opportunities and job skill levelsof the population and a more competitiveglobal economy, and the growth of an in-formation and service-based economy,have heightened the importance ofhuman resources in the economicdevelopment equation.

Human resource programs and agen-cies proliferated during the 1980s,despite efforts at consolidation andderegulation. Resources for educatingand training the workforce are expand-ing, but not as rapidly as during the1970s. Efficient resource allocation iscritical to policy makers.

Several state governments are ex-perimenting with strategic planning as amechanism for focusing and reorderinghuman services programs. States havebecome the central planning and over-sight level of the American federal sys-tem. Bringing services to people remainsthe responsibility of schools, social ser-vice agencies, and training contractors incommunities, but states are more impor-tant than ever in the management ofeducation, economic development, urbanrevitalization, and welfare reform. As aconsequence, states have initiated effortsto improve their workforce readiness

programs and to promote economicgrowth and economic opportunity.

The focal point of strategic planning isappropriately lodged at the state level.The federal government can encouragestates to engage in strategic planning.Programs that enhance state and localcapacity are helpful. Federal laws andregulations can be drafted to stronglysupport integrated planning and deliveryof services.

Nevertheless, state governments are acritical link in shaping the mosaic of ser-vices for employers and workers and infostering economic growth. State govern-ments are able to influence and en-courage integrated service deliverythrough state-wide coordination and byeliminating barriers to local cooperation.Additionally, state governments can pro-vide critical analytic information to localplanners and offer financial incentivesfor communities that make progresstoward more effective human resourcesplanning and implementation.

Strategic planning for employment isundergoing rapid development. A num-ber of states that are engaged in what welabel "strategic planning" in this reportdo not apply that term to their activities.As with most governmental innovations,especially one as complicated as strategicplanning, a number of substantial bar-riers remain to be overcome. In this finalsection of the report, several majorobstacles to effective strategic planning


and approaches for overcoming themwill be considered.

OVERCOMING BARRIERSTO STRATEGICPLANNING

Developing the Vision

The literature on strategic planning, andour analysis of several state experiments,demonstrates that strategic planningmust begin with a vision of what thestate wants to achieve and how it plansto get there. Achieving consensus on avision for the strategic employment planmay be difficult. States have taken avariety of approaches that reflect politi-cal/organizational considerations andtheir economic environment.

Where does the vision come from? Thebeginning point of strategic planning isthe recognition of a need for better, moreambitious human resource planning andprogram delivery. The economic condi-tions of a state have a lot to do withwhether human resource issues rise tothe top of the policy agenda. We foundstrategic planning efforts begun in statesfacing economic stagnation, such asMichigan, and in states coping withrapid economic expansion and the atten-dant labor force problems, such as NewJersey.

The extent to which labor force issuesreceive primary attention is also a func-tion of the professional judgment andpolitical values held by key decisionmakers. Elevating strategic planning foremployment and defining it as a matter

32

for serious action begins in most instan-ces with the governor and his or her staffor relevant cabinet members. The state'schief executive can command significantportions of the bureaucracy and suffi-cient respect in the business communityto bring the various players together.Governors are the catalyst for change --an essential ingredient for overcomingthe inertia that governs most servicedelivery systems. Overcoming initialresistance to change may be the most sig-nificant barrier to realizing creative stateand local workforce readiness strategies.

Who should be involved in the vision-setting stage? Developing a consensuson state employment policy will involvea large set of participants. Severalcabinet-level departments are typically in-volved -- most critically, those respon-sible for education, training, economicdevelopment, and human services. In-volving a cross-section of employers indesigning the initiative is especially im-portant. Private sector employers maybe drawn from the ranks of Private In-dustry Council members, trade associa-tions, chambers of commerce, and smallbusiness organizations. It is important,however, to make sure that those whoparticipate are broadly representative ofthe employer community. Theemployers' knowledge and credibilitycontribute substantively to the planningprocess and help insure that programswill be sensitive to the real needs of smalland large employers.

Precisely who sits at the table when theplan is put together varies, dependingupon circumstances in each state. If thestate desires a total overhaul ofworkforce preparation programs, thengoal setting should be undertaken at the

4"

highest level of state government and theprivate sector. The chief state school of-ficer and others responsible for post-secondary education must be involved.If the state has more modest ambitions,such as improving the functioning oflabor exchange programs, then reformmay began at the subcabinet level; it maynot be necessary to have education offi-cials integrally involved.

Some state officials argue that strategicplanning for employment must be am-bitious and comprehensive. But, anequally strong argument is made for at-tacking the problem incrementally. Thechoice depends largely on history,politics, constitutional arrangements, andthe judgment of the governor and othersresponsible for initiating strategic plan-ning. For example, an ambitious reformeffort may not be possible in states wherean independently elected chief stateschool officer refuses to cooperate.

If those responsible for strategic plan-ning eventually hope to gain cooperationfrom multiple agencies, the legislature,the private sector, and local elected offi-cials, then representatives from these im-portant interests must be involved. Theprocess of setting clear policy goals maytake several months, but the right playersmust be invited into the process at theearly stages. It is important to avoidserious "mistakes" at this initial stage ofpolicy making. Usually, when powerfulparticipants are by-passed, they willpresent formidable roadblocks later on.

Excluding legislators from the planningprocess is a common mistake. Generally,the more ambitious the change con-templated, the more the executive branchwill have to rely on the legislature for

Implications and Recommendations

statutory and budgetary support. Moststrategic planning efforts will usuallyresult in requests to the legislature for ad-ditional or changes in appropriations,restructuring of the state bureaucracy,and new programs. Legislative leaderswho are shut out of the decision-makingprocess may simply thwart implementa-tion. Objections by legislators who werenot consulted during the development ofNew Jersey's employment policy haveresulted in costly delays

Timing is extremely important in or-ganizational reforms. Those promotingstrategic planning for employment willcertainly seek the optimum time and thiswill vary by state. Ideally, strategic plan-ning initiatives should be considered atthe earliest stages of a new gubernatorialadministration. The governor-elect andtransition team should weigh strategicplanning objectives when appointingdepartmental and subcabinet staff. Will-ingness to cooperate with the governor'sinitiatives should be sought early.

A Market Framework. The vision ofthe state's future employment and train-ing system is the core of strategic plan-ning. As noted above, considerationmust be given to three essential elementsof strategic planning:

the nature of workforce supply;

the nature of demand for workers;and,

the quality and scope of govern-ment and private sector workforcereadiness programs.

.e states examined for this report paidsejou.......tention to these issues in prepar-

334 3


ing their action plans. Effective strategicplanning requires constant and detailedattention to changing external factors inthe labor force. Such factors includedemographic trends, technological chan-ges, the effects of foreign competition,changes in the economy, and politics.

Most states began the planning processby rethinking basic tenets of theworkforce readiness system. The moresophisticated states engaged in a sort ofzero-based planning analysis. They as-sessed needs, considered how well con-temporary arrangements met thoseneeds, and then specified adjustments instate programs and services to fulfilltheir employment policy goals. Strategicplanning involves considerations of thestructures, systems, and policies that willserve the state's human resource needs,how they differ from the status quo, andthe steps necessary to move from here tothere. In other words, states begin withthe end goal and then select the actionsnecessary to get there.

Deliberations on the appropriateframework for strategic planning forlabor market changes are occurringthroughout the country. Resources tar-geted to employment issues at the statelevel are expanding. Increasingly, statesand localities are experimenting withnew services and service delivery sys-tems. For example, Vermont haspioneered with on-site and near-sitechild care in the workplace; Hawaii hasestablished transportation networks tosolve problems in inter-island supplyand demand mismatches; Idaho has ex-panded workplace literacy programs foradults; and, Massachusetts has mandatedregional human resource "boards of direc-tors."

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New Ways ofDelivering Services

The institutional changes required toboth initiate and implement a strategicemployment plan are formidable. Thehistory of employment and trainingprograms is replete with mostly unsuc-cessful attempts to consolidate and coor-dinate multiple programs with similarobjectives. (Baumer and Van Horn,1985.) As state policy makers began tounderstand the implications of a growingdisequilibrium between supply anddemand in the labor market, they beganto examine the purposes, outcomes, andrelationships between several com-partmentalized programs.

Thus far, most states have built strategicplanning reforms around existing struc-tures such as the JTPA-mandated StateJob Training Coordinating Council andlocal Private Industry Councils. A greatdeal of energy, time, and resources havealready been invested in these entities.States have expanded JTP. k council mem-berships and responsibilities. Few stateshave chosen the arduous task ofreorganizing departments of stategovernment and instead created inter-departmental coordinating groups, withstrong control by the governor's staff or alead department designated by the gover-nor. This insures serious attention fromthe participants and gives the governorleverage to ensure compliance with his orher agenda.

Certain elements of JTPA fostered afocus on state level service integrationthrough strategic planning. TheGovernor's Coordination and Special Ser-vices Plan provided an opportunity for

44

suggesting, if not imposing, new ways ofdoing business at the state and locallevels. State policy makers couldpromote strong linkages between localservice providers, provide financial in-centives for performance and targeting ofprograms, and position Private IndustryCouncils to significantly shape local jobservice plans and activities.

State initiatives in education and wel-fare reform brought about genuine coor-dination of resources and services amonga variety of state and local level humanresource delivery systems. Policymaking and program review authorityhave been lodged with the state job train-ing coordinating council in several states.In Massachusetts, Regional Labor MarketBoards set policy, allocate resources, andoversee service delivery for most educa-tion and employment and trainingprograms.

Few states have undertaken comprehen-sive restructuring of workforce prepara-tion programs, but specific cross-program coordination and planning iscommon. For example, forums on in-novative programs in the EmploymentService identified over 140 state and localinitiatives. Eighty percent involved link-ing the Employment Service with otherservice providers. (Tracy, 1989.)

The success of state-level program coor-dination has encouraged federal legisla-tive proposals for expanding the powerof State Job Training Coordinating Coun-cils. Currently, H.R. 7, H.R. 2803, and S.543 call for the creation of state employ-ment policy committees to oversee awide range of human resource programsat the state and local government levels.


The degree of service coordinationnecessary for effective employmentpolicy varies horizontally and vertically.The degree of vertical coordination --from local, to state, to federal govern-ment, for example -- may consist primari-ly of sharing information and mutuallydefining objectives. Moreover, federaland state government must take care toavoid program requirements that makecoordination at other levels of govern-ment impossible. Horizontal coordina-tion, within program areas, maynecessitate shared control.

Different strategic employment plans re-quire different levels of coordination.Clearly, regular information sharing is es-sential even for the most modest employ-ment plans. The more ambitiousstrategies that involve reworking thedelivery system will require some formof shared control. For example, acoherent strategy can be achieved when acoordinating committee or staff to thegovernor reviews departmental anddivision budget priorities to make surethey are in line with the overall plan.Similarly, individual departmental initia-tives may be reviewed and approved bya coordinating group responsible for im-plementing the state's strategic plan foremployment. Detailed analysis of con-flicting rules, eligibility requirements,and funding cycles must also be ac-complished and conflicts resolved.

Fostering Local Cooperation. In addi-tion to achieving cross-program coordina-tion at the state level, strategic planningmust also promote local participationand coordination with an overall stateplan. The local level is the point of con-tact with citizens and employers and isthus the end product of all strategic plan-


ning. Federal and states must foster localplanning and delivery through flexibleapproaches.

For some states, inter-governmental con-flict will pose the largest barrier to achiev-ing an effective strategic plan. Stateswith very large and therefore highlyautonomous jurisdictions may have dif-ficulty achieving influence. Local-levelresistance to change can be overcome intwo ways. Obviously, large cities andcounties should be encouraged to par-ticipate in the vision-setting process, asnoted above.

States should also use program reviewand budgetary authority to encouragelocal cooperation in the implementationof an overall plan. Similar problems ofstate/local conflict and cooperation areconfronted daily in the implementationof education and human servicesprograms. States have a significant ad-vantage in coordinating human resourceprograms, however, because they havethe statutory authority to plan and assessmost human resource programs. Thispower over the shape of local programscombined with the widespread consen-sus that employment programs are notadequately serving workers or employ-ers can be used to bring about significantand lasting change.

Harnessing the Energy of the PrivateSector. Consistent and strong leadershipfrom private sector participants is essen-tial to developing and implementing astrategic plan for employment. Govern-ment and business are beginning to un-derstand that the common problems ofthe workplace cannot be solved in isola-tion. Business is emerging as an equalpartner in policy making in many

36

programs related to a workforce readi-ness system. The shape and degree ofsuch policy making directly affects thesuccess of strategic planning.

Initially, strategic planners are likely tofind it relatively easy to get privateemployers involved in the process.Employers recognize the seriousness ofthe problem and are clamoring for practi-cal solutions. What may be more dif-ficult is keeping private employersengaged in the time-consuming, andfrustrating, process of governmentalreform.

Successful employment policy makinggroups function as boards of directors.(Ryan and Van Horn, 1984.) Under thismodel, private sector representativesserve as equal shareholders with electedofficials and agency representatives.Private sector representatives often createthe energy that leads to risk taking andinnovation. Fostering this entre-preneurial spirit in the public sector isone of the major contributions made byprivate sector participants.

Effective boards formulate the visionand define and redefine the mission ofthe workforce readiness system. Success-ful board participation requires a clearconsensus on the mission of the groupand concrete, achievable goals. Accord-ingly, boards should set targets that canbe measured and are technically andpolitically feasible.

Focusing on Performance

Strategic planning efforts need to estab-lish quantifiable measures of change sothat they can mark progress towards

46

realizing the employment policy visionof the state. At the broadest level, policymaking groups should assess the extentto which the problems that led to the es-tablishment of a strategic planning arebeing addressed effectively. Are labormarkets functioning more efficiently?Are target groups receiving more ap-propriate shares of job opportunities?Are labor shortages being addressed incritical industries and regions of thestate? Additionally, strategic plannersshould assess changes in institutionalstructures and procedures, as well asmore common employment and trainingmeasures.

Having objective measures of progressis an important tool for motivating thebureaucracy. They are also important forprivate sector oversight committees.Measures of progress should consist ofsimple bottom-line questions so thatpolicy makers can see whether theirinitiatives have made a difference. Like aprofit and loss statement of a corporationand its divisions, evaluation reports ofemployment policies should provide aquick snapshot of overall systemperformance. Included in the list ofuseful measures are such items asachievement of skills and competitive-ness, wage rates, retention in jobs, andemployer/employee satisfaction.

Longer range evaluations of cross-pro-gram performance should also be con-ducted. Policy makers and practitionersneed evidence to judge the long-term im-pact of the strategic plan. Oversight staffand committees should work on com-mon definitions for performancemeasures across a broad range ofprograms and agree on simple and con-sistent methods for data collection.


THE INGREDIENTS OFSUCCESS

Achieving successful strategic planningwill require long-term commitmentsfrom policy makers in the public andprivate sectors. Many significantroadblocks stand in the way of meaning-ful reform. The history of employmentand training program development, andmany other policy areas, suggests that farreaching change will not come easily orquickly.

Excitement over strategic planning runshigh, despite the fresh memory of pre-vious failed attempts at governmentalreform. There is already an unorganizedconsensus in government and private or-ganizations that human resourceprograms are not working effectively andthat reform is essential. The key par-ticipants in employment policy are notdivided over fundamental perceptions ofthe problem, as they are in many otherpolicy domains. Creative leadership isneeded to mobilize the consensus andput it to work on a common goal.

Progress has been made by governmentand the private sector in several states.Public and private sector leaders have ar-ticulated a vision for their state's employ-ment policy. These visions are based oncareful and open-minded assessments oflabor market supply and demand and ex-isting labor market interventions.

Decision-making structures have beencreated to carry the vision from conceptto reality. Mechanisms have been put inplace to insure the coordination of statehuman resource program planning andadministration. Linkages between state


goals and local policy and practice havealso been established.

Despite serious barriers, strategic plan-ning for employment is underway. Im-plementing the strategic vision willrequire consistent leadership andmonitoring of the bureaucracy. The de-gree of success will depend in large parton political support, business leadership,and the risk-taking capacities of agencyadministrators. The leaders of key stateand local employment agencies andprograms are especially important. Ifserious progress is made, it will be thesepublic sector entrepreneurs who make ithappen.

At this juncture, there is little hardevidence that strategic planning foremployment has achieved all that itsmost ardent supporters anticipate. Butthis is not surprising. Strategic planningis a relatively new public policyphenomenon. It is a very ambitious idea,for if strategic planning works, a totaloverhaul of human resource planningand implementation will be ac-complished. Strategic planning foremployment should be encouraged byfederal, state, and local policy makersand its progress should be carefullymonitored in the years ahead.

Bibliography

BIBLIOGRAPHY

Donald C. Baumer and Carl E. Van Horn, The Politics of Unemployment (Washington,DC: CQ Press) 1985.

Business-Higher Education Forum, America's Competitive Challenge, (Washington,DC: American Council on Education) 1983.

Business Week "Human Capital: The decline of America's Work Force." A comprehen-sive report by the editors and writers. September 19,1988.

Anthony P. Carnevale and Leila J. Gainer, The Learning Enter rise (Washington, DC:American Society for Training and Development) 1989.

Anthony P. Carnevale and Leila J. Gainer, and Ann S. Meltzer, Workplace Basics,(Washington, DC: American Society for Training and Development) 1988.

Tom Clunura, "Regional Human Resources Foundations: Meeting the Human CapitalChallenge," Working Paper Prepared for a Roundtable on New Economic Foundationfor a Global Economy, (Princeton, NJ: SRI International) 1988.

Committee for Economic Development, Leadership for Dynamic State Economies,(Washington, DC: CED Research and Policy Committee) 1986.

Committee for Economic Development, Investing in America's Future, (Washington,DC: CED Research and Policy Committee) 1988.

Council on Competitiveness, "Governing America: A competitiveness policy agendafor the new administration," in Challenges, Vol 2. No. 4,(February 1989).

Elizabeth Dole, U.S. Secretary of Labor "Statement before the Committee on Educationand Labor of the U.S. House of Representatives," June 28, 1989.

Peter F. Drucker, The New Realities: In Government and Politics/In Economics andBusiness/in Society and World View, (New York: Harper and Row), 1989.

Douglas C. Eadie and Joan A. Hammond, "System Building in Chewable Bites: TheApplication of Strategic Issue Management in Employment and Training," (NationalAssociation of Counties) February 1986.

Workforce Futures: Strategic Manning in the States

R. Scott Fos ler, (ed.) The New Economic Role of American States., (New York: OxfordUniversity Press) 1988.

Honorable Thomas H. Kean, Governor of New Jersey, 1\%th,Ise_y"sa__ynEmployment Chal-lenge: Developing a Productive Work Force for the Future, Trenton, NJ, 1987.

National Alliance of Business, "JTPA operations at the Local Level: Coordination orDiscord," Washington, DC: 1987.

National Alliance of Business, "Shaping Tomorrow's Workforce: A Leadership Agendafor the 90's," Washington, DC: 1989.

National Commission for Employment Policy, Thirteenth Annual Report, (Washington,D.C.: Government Printing Office), July 1988.

National Governors' Association, Making America Work: Productive People, Produc-tive Policies, Washington, DC: 1987.

National Governors' Association, J21)s Growth, and Corn etitiveness Washington,DC: 1987.

Honorable Frank O'Bannon, Lt. Governor of Indiana, "Challenge for Indiana's Employ-ment and Training System", (Photocopy, March 16, 1989).

David Osborne, Economic Competitiveness: The States Take the Lead, (Washington.D.C.: Economic Policy Institute), 1987.

Michael Porter, "The State of Strategic Thinking," The Economist, May 23, 1987.

President's Commission on Industrial Competitiveness, Innovations in Industrial Com-petitiveness at the State Level, Prepared by SRI International, Menlo, Park, CA: 1984.

Robert B. Reich, The Next American Frontier, (New York: Times Books), 1983.

Ken Ryan and Carl E. Van Horn, Inside the PIC Boardroom, (Washington, DC: Nation-al Alliance of Business), 1984.

Lester Thurow, "A National Perspective on the Changing Economy," Speech Deliveredat a conference sponsored by the Bay State Skills Corporation, October 5, 1986.

Time Magazirm September 11, 1989, 68.

William Tracy, "The Employment Service Information Exchange Forums", 1989.

40 50

Bibliography

Bruce R. Scott and George C. Lodge (eds.), U.S. Competitiveness in the WorldEconomy, (Cambridge, MA: Harvard Business School Press), 1985.

Roger J. Vaughan, Robert Pollard, Barbara Dyer, The Wealth of States: Policies for ADynamic Economy (Washington, DC: Council of State Planning Agencies), 1986.

U.S. Congress, Office of Technology Assessment, Technology, Innovation, andIlggional Economic Development Washington, DC: 1984.

U.S. Department of Labor, Job Training Partnership Act Advisory Committee, WorkthgCapital: ]TPA Investments for the 90's Washington, DC: March 1989.

U.S. Department of Labor, Job Training Partnership Act Advisory Committee, WorkingCapital: Coordinated Human Investment Directions for the 90's Washington, DC: July1989.

U. S. Government Printing Office. 1990 262 289 (06730)

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