Workforce development programs are generally described in straightforward terms. Someone enters the program, gets trained, gets a job, and has more opportunity than before. After a recent NPO Conversation with leaders of several remarkable organizations, we are thinking about workforce development programs as social enterprises.

Why Social Enterprise?

A social enterprise relies on sound business practices to meet the specific and evolving needs of its target population. Similarly, leaders of nonprofits in the workforce development field have a dual focus. They must continuously stay true to their social mission while seeking compensation for the service they provide employers.

Grantmakers should delve into a few key ideas when evaluating the strength of workforce development programs as social enterprises. Consider the ways an organization balances its focus on both mission and enterprise, including:

Look for supports for program participants

The ‘people-first’ nature of workforce development is clearly mission-centric. A deep understanding of individuals’ needs should shape the program. Depending on who they serve, nonprofits often offer a continuum of services that go well beyond job training– or they are networked with other organizations that complete the continuum.  Organizations remain focused on the people they serve best, and rely on a strong network of peers to give a warm hand off to people who would be better served elsewhere.

The cost of being mission-centric is apparent.

• Many participants need direct services before they even begin the workforce development program. As one program leader put it, “It’s often the toughest worker who needs the most help.”
• Both hard skills and soft skills are crucial to employment. A young adult may have learned the carpentry skills to land a job, but will not keep it if he or she cannot arrive to work on time and ready to work with others. Look for ways a program integrates soft skills into its worker training.
• Graduates may need stable housing and specialized training to remain employed. A people-first approach may extend beyond program completion, but staying connected with graduates can be challenging and expensive. Is it realistic to offer support beyond job placement?

Identify strong cross-sector partnerships

Workforce development organizations are in an unusual position in today’s bustling economy. As unemployment has dipped below 4 percent, an increasing number of employers are relying on them to help fill job openings.

This income-generation opportunity shifts leadership’s focus to enterprise management. Look for organizations with deep employer partnerships and indications that they are meeting a market need.

• An employer’s willingness to pay for an organization’s workforce programs is good measure of success. The employer shows confidence in the graduates’ preparation for stable employment, and the organization demonstrates its expertise.
• Agile nonprofit leaders remain flexible to the changing needs of employers, adjusting their curriculum and placing their program graduates in good jobs.
• In a deep partnership, workforce development leaders influence the way businesses approach hiring and future training, education, and development of these new employees. These extended learning opportunities provide stronger footing for program graduates, and eventually shift both partners’ focus from job placement to career advancement.

Savvy organizations also find opportunities to generate income in contracts with government agencies. For example, state governments may reimburse for training individuals receiving SNAP benefits; Massachusetts appropriates $2 million in stipends to nonprofits each year through this program.

Articulate a clear purpose for philanthropic dollars

Funders may question a nonprofit’s grant application when they see the revenue its social enterprise generates.  The organization should clearly articulate the purpose of philanthropic dollars. The sources of a social enterprise’s revenue complement one another and allow it to remain focused on its mission, and, as its earned revenue grows, expand the scope of its operations to serve more people.

• Revenue generated from some employer relationships could not cover all the expenses of a mission-centric workforce development program. The social enterprise accomplishes what for-profit business does, while also serving a particular population’s complex needs.
• As the demands of the job market change, nonprofits need to adapt and develop new programs so their graduates remain competitive. Funding could be essential for nonprofits to explore new possibilities without directing general operating money away from established programs.

Measure a workforce development program’s success

Organizations structure their workforce development programs and measure success in different terms, largely driven by the needs of the population served and marketplace conditions. While success for some is measured in program completion and job placement, other organizations are also readying their participants for job retention and career advancement.

Retention and advancement are difficult to measure, and may point to different levels of success. In some industries, workers might not seek career advancement because they are hired into jobs with good pay and benefits. Other types of jobs have high turnover because of low wages; these are good for graduates in need of work experience that can propel them to the next, better paying job.

In some fields, alumni networks are effective in both hiring new employees and in career advancement.  The idea of an ‘old boys’ network’ of program graduates is an effective tool, according to one nonprofit leader. “When our graduates move up into hiring positions, they hire from our pool, and continue to support other alumni in the workplace.”

Data about participants’ jobs beyond graduation can be expensive and difficult to obtain, but organizations do have information about their participants and how they have progressed. Understanding the information that is available may be essential to leaders’ success in balancing their focus on both mission and enterprise.

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Learn more about GMA’s NPO Conversations

In the news:

Job Training Can Change Lives. See How San Antonio Does It. (New York Times 8/19/19)