Many long-term shifts in our economy – declining real wages, concentration of job growth in low-wage sectors, diminishing worker rights, growing contingent workforce and an increasing number of people facing uncertainty and instability of work – have taken a toll on U.S. workers, particularly those at the lower end of the wage scale.
At Heron, we believe that the first step toward rebuilding a more inclusive economy is to invest in the healthy growth of enterprises – and thereby, increase employment. A secondary but also instrumental group of players are supply side actors – enterprises organized to connect willing workers to jobs and improve the quality and opportunity of those jobs. Such actors include intermediary enterprises focused on job training, placement and advancement, and worker advocacy and policy change. All play critical roles in the workforce development ecosystem, but need to do a better job of responding to the rapidly changing economy.
Empirical studies have shown that the most successful efforts to build the workforce development ecosystem rely on close collaboration between demand and supply-side actors. After all, employers know what jobs they need to fill, so are the best positioned to advise on how workforce interventions can accommodate that demand. Moreover, the federal budget for employment and training initiatives has been halved since the 1980s, so workforce development initiatives are looking to be as efficient as possible and are turning to employers to help solve the structural challenges in our economy. Therefore, the initiatives are looking to be strongly targeted for success. These trends have driven a shift from what has historically been a disconnected workforce ecosystem to a more collaborative approach, where employers are more integrally involved in workforce interventions.
We believe that this collaborative approach to workforce development can offer better solutions to address the challenges faced by our economic system. Examples of successful collaborative efforts include:
Heron is interested in identifying more supply- and demand-side organizations that are working to blur the unecessary and unproductive demarcation of responsibilities between employers and supply-side workforce interventions. We are looking for those enterprises – for-profit or nonprofit – that can make the case for mutual benefits for low-wage workers and our economy as a whole. We will continue to search for such enterprises and when identified, determine how capital can play a role in scaling their impact.