Pay-for-Success Helps Employers Find, Train, and Retain Employees
Philadelphia Works, the City’s workforce development board, Comcast, one of the region’s largest employers, and the Federal Reserve Bank of Philadelphia have partnered to pilot an innovative funding model called Pay-for-Success. Pay-for-Success aims to train Philadelphia residents for meaningful careers that pay a family-sustaining wage and correspondingly develops a viable talent pipeline for employers.
On this podcast episode of “Real Talk about Real Trends in Workforce,” Tyrone Hampton, manager of workforce system initiatives at Philadelphia Works, walks us through the new funding model, what stage of development the program is in, and outlines the projected outcomes.
What is Pay-for-Success and why has it received so much attention in the Philadelphia region?
Pay-for-success is an innovative contract financing mechanism used to better align public resources with sustainable workforce solutions. In this instance, Philadelphia Works is contracting with Comcast to help ensure that potential salesperson candidates, recruited from local PA CareerLink® centers are trained in advance to succeed in their roles. The contract is structured in a way that allows Philadelphia Works to be reimbursed as Comcast hits desirable performance measures over an agreed period of time. Essentially, Comcast is paying Philadelphia Works for success.
This model has gained so much attention in the Philadelphia region for several reasons. First, Philadelphia Works has never had the opportunity to be reimbursed for its training investments based on desired measurable outcomes. Second, is because of our employer partner, Comcast. Comcast is one of the largest private employers in the region, employing over 12,000 people. Having such a high-profile employer this closely engaged in workforce solutions is uncommon. Lastly, the Federal Reserve Bank of Philadelphia has created quite the media buzz regarding this new funding model. There have been a variety of news articles, round table discussions, and presentations that have placed a huge spotlight on Pay-for-Success. (See "Additional Resources" for published articles about Pay-for-Sucess at the end of this blog.)
Who are the stakeholders and what roles do they play in this initiative?
There are several key stakeholders involved in this initiative. Philadelphia Works’ role is to procure training providers and to upfront the initial cost of training candidates. In addition to funding the cost to train individuals, Philadelphia Works will also work closely with Comcast to create an outreach strategy to attract candidates and to develop the full scope of the project. Comcast, as the employer partner, will also heavily contribute to the request for proposal (RFP) process to procure training providers and the training curriculum that providers will utilize to support successful outcomes.
Social Finance, another stakeholder, is a nonprofit organization dedicated to mobilizing capital to drive social progress. They design and manage public-private partnerships like the Pay-for-Success contract model that tackle complex social challenges, such as achievement gaps, which will be addressed through the training people receive prior to employment. Although their contract ended in August 2019, they were essential in providing guidance around creating a model that is scalable for Philadelphia’s workforce system. The Federal Reserve Bank of Philadelphia, an early partner in the project, was integral in implementing this opportunity in the Philadelphia region. The organization will offer technical assistance throughout the pilot and analyze the return on investments once outcomes become available. Sorsen Impact of the University of Utah is another partner of the project that will provide funding and technical assistance to ensure that the project is measuring, articulating, and expanding the impact of the private-public partnership within the city.
Employers are often one of the most disengaged audiences in workforce. How important is it for employers to invest in workforce solutions?
It is extremely important for employers to invest in workforce solutions. Employer investment and engagement provides potential employees with essential access to the resources, skills, and training they need to get on and stay on a career pathway, thus strengthening our local economy. Their investment also helps them to retain local talent and develop a sustainable pipeline by fostering economic mobility for low-income or under skilled workers, talent pools that are often underutilized in recruitment.
Where is Pay-for-Success in its development and what can we expect in the upcoming months (i.e., next steps)?
The pilot is still in its early stages of development. Nonetheless, Philadelphia Works and Comcast are working closely together over the next few months to train a small cohort of five to seven individuals, registered with PA CareerLink®, to secure sales positions at Comcast. The first cohort will be intentionally small to identify areas of improvement and to easily make necessary adjustments that support growth. After that, cohorts can be expected to be around 20-25 individuals. Under the contract, a total of 75 candidates will be trained over the course of three years.
How long is training and what does it entail?
The required training for individuals is based on the needs of Comcast. The length and specific parameters of the training will be determined as Philadelphia Works collaborates with Comcast to write and finalize the RFP for training providers.
If career seekers are interested, how can they get more information about access to the program?
Although the pilot has not started yet, career seekers can visit their local PA CareerLink® center for additional information. They can also inquire through PA CareerLink® Philadelphia by calling 1-833-750-JOBS.
If other employers are interested in partnering with Philadelphia Works around this model, who do they contact?
Employers can contact Patricia Blumenauer, VP of operations or Tyrone Hampton, manager of workforce system initiatives directly if they are interested in partnering with Philadelphia Works to implement the Pay-for-Success model in their organization. Employers can also contact Philadelphia Works directly at firstname.lastname@example.org or 215-963-2100.
For over 15 years, Patricia Blumenauer has been working closely with city stakeholders to grow the number of quality programs and initiatives available to Philadelphia...