The Revolving Door

1. The Revolving Door Research Findings on NYC’s Employment Services and Placement System and Its Effectiveness in Moving People from Welfare to Work A Research Project by Community Voices Heard - July 2005

2. Presentation Format • ESP System Overview • Research Design • Research Findings • Connecting People to Long-term Employment • Providing Access to Training and Education • Addressing the Needs of a Diverse Population • Conclusion • Recommendations • Questions & Answers

3. ESP System Overview What is an ESP? Employment Services and Placement • Contracts that NYC’s welfare agency (HRA) has with private for-profit and not-for-profit entities (1999 - 2005) • Provide job readiness and job search assistance to mandated work-ready welfare recipients

4. ESP System Overview Why study the ESP System? • Federal government is currently debating expanding work requirements & hours(TANF Reauthorization) • NYC welfare agency is about to establish new employment services contracts(HRA Works) • Limited research has been conducted on work-first programmatic initiatives

5. ESP System Overview HRA-Designed Welfare-to-Work Path for Employable Welfare Recipients

6. ESP System Overview ESP Program Goals • Job Placement: • Connect Participants with Jobs • Job Retention: • Help People Retain Jobs • Case Closure: • Eliminate People’s Dependence on the Welfare System

7. ESP System Overview ESP Program Structure

8. ESP System Overview ESP System Summary • 9 vendors hold contracts • 26 sites operated across city • 4,100 individuals referred per month • 50,000 individuals referred per year • $130 million allocated for 3 years

9. ESP System Overview Performance-Based Contracts • Vendors paid for performance only • Maximum of $5,500 per client served • Payment milestones include: • Job Placement • 13 Week Retention / High Wage • 26 Week Retention / Case Closed • Renewal contracts shifted pay: • from original placement • to 13 week retention & high wage

10. Research Design

11. Research Design Data Source Categories • HRA Documents and Meetings • Proposals, policy directives, curriculum, RFPs, etc. • Client Surveys • 600 clients surveyed at 25 different ESP Sites • Provider Interviews and Material • 19 interviews conducted representing 8 vendors • HRA VendorStat Reports • Monthly performance reports from 2004 reviewed • Client Interviews • 12 in-depth interviews conducted

12. Research Findings

13. Connecting People to Long-Term Employment Job Placement & Retention • 8 percent of those referred to the ESP System are placed in jobs within six months • Of those placed in jobs: • 35% still hold those jobs six months later • 29% return to PA • 36% remain unaccounted for

14. Connecting People to Long-Term Employment Scope & Salary of Placements • 75 percent of those referred to jobs by their ESP Sites were referred to positions that paid $8.00 or less • 19 percent of ESP clients were referred to part-time positions • Many of the full-time positions were to temporary positions • 58 percent were uninformed about work-related benefits available to them

15. Connecting People to Long-Term Employment Systemic Problems • Conflicts between ESPs and the Work Experience Program (WEP) • Lack of Strategic Workforce Development for Welfare Recipients • No Coordination between HRA and the Dept. of Small Business Services (SBS)

16. Providing Access to Training and Education Job Readiness Preparation • While most clients of the ESP System were exposed to workshops that prepared them to get jobs, fewer were exposed to workshops that prepared them to retain jobs.

17. Providing Access to Training and Education Knowledge of Education & Training Rights • 1 in 3 ESP clients do not know about their rights regarding education and training. • Clients have different information depending on the vendor to which they are assigned.

18. Providing Access to Training and Education Education & Training Access • 18 percent of ESP clients were able to access vocational education and training to better prepare them for work. • Clients at America Works were the least likely to be in education and training; N-PAC clients were the most likely.

19. Providing Access to Training and Education Systemic Problems • Limitations of Individual Training Account (ITA) Vouchers • Performance-Based Contracts Undermine Education and Training

20. Addressing the Needs of a Diverse Population Barriers to Employment • 61 percent of ESP clients identify barriers that make it hard for them to get, accept, or keep a job. • While 77 percent of those with barriers say that workers at their ESP are aware of the barriers they face, only 50 percent feel the ESP program is able to help them deal with the barriers.

21. Addressing the Needs of a Diverse Population Referred, but Not Served • 30 percent of those referred to the ESPs each month Fail to Report (FTR). • 14 percent are sent back to HRA each month due to wrong initial referral. • 46 percent end up in receipt of a Failure to Comply (FTC).

22. Addressing the Needs of a Diverse Population Failure to Comply (FTCs) • 82 percent of people seen by the ESP System are FTCed, rather than placed in a job, by the end of six months. • 55 percent of clients had been to more than one job search / job readiness site; the average number of sites attended was 3. • Many clients find themselves in an endless cycle - a revolving door.

23. Addressing the Needs of a Diverse Population Systemic Problems • Faulty Referral and Assessment Processes and Practices • High Propensity to Issue FTCs • Performance-Based Contracts Discourage Service Provision

24. Conclusion

25. The Revolving Door Systemic Failure • NYC lacks a strategic workforce development approach for welfare recipients. • WEP fails to prepare people for work and discourages job searching. • The ITA Voucher System discourages enrollment in training. • Education and training providers are neither monitored nor evaluated.

26. The Revolving Door Systemic Failure (Cont.) • HRA fails to refer the right people to the right services. • HRA prioritizes sanctioning of clients over addressing their barriers. • The contracting system does not support working with clients with more challenges to employment.

27. The Revolving Door What’s Next? • ESP contracts expire this year • New contracts set to start Oct. 1, 2005 • HRA Works will: • Combine 3 employment contracts into 1 • Utilize up to $63 million per year • Serve 12,800 individuals per month • Some potentially positive program changes: • Collapsing of contracts • Having ESPs assign WEP sites • Add incentive pay for reducing numbers of sanctioned clients • More is necessary to address past limitations recognized

28. Recommendations

29. Recommendations To meet the goal of connecting more welfare recipients to long-term employment, city government should: • Coordinate HRA and SBS in Crafting a Single Workforce Development Strategy • Develop Career-Ladder Programs that Reflect Real Labor Market Needs • Create Industry and/or Occupation Employment Services Hubs for Welfare Recipients

30. Recommendations To facilitate access to education and training among welfare recipients, city government should: • Eliminate Sanctions and FTCs as Barriers to ITA Voucher Applications • Monitor and Identify Effective Training Programs • Add Payment Milestones that Encourage Placement in Training

31. Recommendations To more adequately meet the needs of a diverse population seeking assistance, city government and HRA should: • Develop an Assessment Process that is Broad in Scope • Establish a Separate Sanction Trouble-Shooting Program • Create Line Item Funds or Additional Milestones for Service Provision • Expand Paid Transitional Jobs into Other City Agencies • Create a Supported Work Program for the Hardest-to-Employ

32. Recommendations To ensure that we can really learn what works in moving people from welfare-to-work, city government should: • Contract an Outside Entity to Monitor and Evaluate HRA Works

33. Questions and Answers