Panel Paper: Linking Disadvantaged Workers to Employment: An Sroi Case Study of a Nonprofit Labor Market Intermediary

Thursday, November 8, 2012: 11:15 AM
Baltimore Theatre (Radisson Plaza Lord Baltimore Hotel)

*Names in bold indicate Presenter

Kate Cooney, Yale University and Kristen Lynch-Cerullo, INdependent Consultant
Many workforce development human service organizations embrace an ambitious mission:  that is, they must secure high quality, durable employment for their disadvantaged clients within a constantly changing labor market, but also are under pressure to demonstrate measureable outcomes for their efforts to both third party funders and employers.  In sum, they must build effective and enduring bridges to employers in growth industries, match job trainees to good jobs, and document their economic and social returns on investment.  

The challenge of providing cost-effective employment training to disadvantaged workers and having that training result in employment that promotes workers’ long-term economic security are at the center of considerable policy research and practice debates (Friedlander, Greenberg & Robins, 1997; Lafer, 2002, Holzer, 2009).  Workforce development programs historically had difficulty demonstrating strong outcomes for their work in preparing and placing “hard to employ” clients, even at considerable cost.  Further, the standard tool for assessing effectiveness and efficiency for social programs--randomized control trials (RCTs), are quite valuable for broadly determining what works, but expensive to conduct, burdensome to the agencies under study, and less helpful for supporting ongoing performance management as the findings can quickly become irrelevant in a dynamic labor market.  Social Return on Investment (SROI) approaches to assessing the “double bottom lines” of social welfare initiatives, both cost effectiveness and social impact, have emerged as a tool for evaluating performance that can be less costly and potentially more illuminating for setting agency direction, guiding third party investment and informing service consumers about agency performance. 

The proposed paper presents a case study of a nationally-recognized Boston based nonprofit agency that conducted an SROI analysis on several of its core workforce development programs—here we focus on two:  (1) a training program that provides concrete skills training for specific labor market niches in the greater Boston metropolitan area and (2) an educational support program that offers pre-enrollment academic preparation and post-enrollment support for three degrees:   Associate’s Degree, Bachelor’s Degree, or Certificates (resulting in credentials for positions as a patient care technician, medical assistant, phlebotomy technician, and surgical technician).  In the first part of the paper, we review various approaches to SROI and the particular fit of the methodology utilized by the Boston agency with the anti-poverty mission of many workforce development organizations.  We then review the SROI findings for the two programs, focusing on the social impact of each – namely, the quality of employment opportunities accessed by graduates of the program, as reflected in the pre and post difference in earnings; and their economic impact, as evidenced by the aggregate return (client benefit) on the investment (program cost) for securing high quality employment.

The paper consequently offers two levels of insight for policy research and practice:  first, the results of an innovative workforce development initiative with respect to cultivating cost-effective but high-quality employment opportunities for disadvantaged workers; and second, effective strategies for conducting SROI analyses.