FOCUS ON WIOA: Incentivizing Outcomes: How the New WIOA Reauthorization Bill Could Better Serve Diverse Working People
By Jess Praphath, Third Sector
The U.S. Senate is currently considering a bill that would reauthorize and potentially strengthen the Workforce Innovation and Opportunity Act (WIOA), the nation’s primary federal workforce development law, which provides critical funds to state and local communities that are doing the work of ensuring everyone can find and obtain a job that will set them on the course for true economic mobility.
Our nation is emerging from the ravages of a global pandemic that upended nearly everything about the culture of work. While inflation is down, millions of people are still reeling from a too-long period of rising food, gas, and other essential costs. And yes, our unemployment rate at 3.9 percent is relatively low, but our employment picture is more complicated than that number suggests. Too many people are in jobs with lower career trajectories, and we have a number of industries that are creating thousands of jobs and cannot find people with the right skills to fill those positions.
Clearly, WIOA reauthorization couldn’t come at a more critical time. And for those of us who are working on the ground with workforce boards and communities, a big question is whether or not we will enact a law that can truly meet the moment and help make it possible for more people of all races, backgrounds, and circumstances to live the lives of their dreams. Provisions in the new WIOA reauthorization bill passed by the House last month would address many of the barriers that prevented states and LWDBs from pursuing pay-for-performance initiatives, including substantially raising the cap on local workforce board’s use of pay-for-performance funding, eliminating the burdensome requirement for feasibility studies, and providing governors with the ability to use federal funds to incentivize pay-for-performance. These changes from the current, too rigid, compliance-oriented version of the law will certainly enhance the opportunities and mechanisms to leverage a pay-for-performance approach.
If we were to truly modernize WIOA, we would fund the full cost of training, including critical support services like child care and transportation, to enable individuals with the highest barriers to access and succeed in employment training programs. We would incentivize coordination with human service agencies and community-based organizations and pay for the achievement of short- and long-term outcomes to ensure that people who need workforce services the most can actually benefit from them. Rather than applying a one-size-fits-all approach, as seen with traditional cost reimbursement contracts, governments could consider the unique challenges faced by marginalized individuals — through the use of quantitative and qualitative data — and prioritize where and how to deliver services to achieve the greatest impact.
These approaches would help to realize the promise of outcomes-focused strategies, like pay-for-performance and performance-based contracting, as vehicles to help our government become more responsive. Pay-for-performance and performance-based contracting provide the flexibility to achieve outcomes in many different, creative ways without prescribing how services should be delivered, and they promote opportunities for continuous improvement. Pay-for-performance enables our partners to create bigger tables that leverage the insights and expertise of partners like career and technical education, human service agencies, and others around shared, measurable metrics of success. But in order to be truly successful, these strategies cannot create undue administrative burdens that prevent often understaffed, overworked workforce boards from having the flexibility to deploy the funds in ways that meet the needs of their communities. That makes achieving equitable outcomes and realizing WIOA’s promise more difficult than it should be.
Our government should be in the business of responding to community needs. Achieving equity demands that we first confront inequity and dismantle the constraints and barriers that block progress — even if they are laws that we have enacted in good faith that do not work as intended, like WIOA.
We have an opportunity now to enact a new law that creates the flexibility and incentives that will enable workforce boards, state and local governments, and other stakeholders to achieve equitable outcomes for those they serve.
From a pay-for-performance perspective, that would mean that every procurement process must be an opportunity to start, continue, and deepen a conversation with stakeholders and the community. It should be an opportunity for finance and program government staff to move from a one-way flow of funding and distribution of taxpayer dollars to a relationship and conversation, backed by clear outcome goals, data, and incentives for improvement, to ensure that these responsive services happen.
Can a new law incentivize our local governments to deploy public funds to vendors, community leaders, and service providers who are actually trusted, respected, and proven changemakers in their communities? Can it allow these governments to create processes for contracts and other procurements in partnership with the communities they serve so they are making decisions informed by the actual needs? Can we enact a new law that incentivizes and supports local governments to focus on continuous improvement — constantly looking at the data and being in conversation with communities to keep tweaking, tailoring, and fixing programs so they are always responsive to their community’s needs?
Because yes — those needs shift. Constantly. That is a feature of life, not a bug. To be truly responsive to community needs is to be perhaps more flexible than we really allow government to be. But doing so — particularly with something like WIOA reauthorization with its potential to transform millions of lives — is critical.
Jess Praphath is a Managing Director, Economic Mobility at Third Sector, a national technical assistance nonprofit that helps the government unlock the possibility of providing responsive services and achieving equitable outcomes for all people, regardless of race, background, or circumstance.