USCCF calls for a paradigm shift in financing a competitive workforce

At a critical junction for the American workforce, the U.S. Chamber of Commerce Foundation (USCCF) has launched a new initiative to develop new models for investment in the workforce of the future. Partnering with Federal Reserve Bank of Atlanta, the Talent Finance initiative advances a new public-private approach to talent development that is intended  to address the challenges and requirements of the new economy — one that competes on talent. In the wake of the pandemic’s upheaval of the economy, workers are facing greater uncertainty and the prospect of jobs that may not return.

USCCF, the Federal Reserve Bank of Atlanta, the Greater Houston Partnership and WorkingNation have partnered on the initiative that is intended to develop new ways for employers and the financial services community to work together to identify new ways to develop new tools for financing talent, managing risk in the labor market, and managing how to pay for workers to get and refine the skills they will need in the changing marketplace.

Jason Tyszko, vice president of USCCF’s Center for Education and Workforce, said the Talent Finance initiative is the culmination of seven years of work in closing gaps in the workforce development system that began with a 2014 white paper on Talent Pipeline Management (TPM), a framework that flipped the workforce system and considered employers as the end users of education and workforce partnerships. That effort has now resulted in more than 400 organizations across 33 states using the practices set out in the TPM approach to closing the skills gap and developing a talent pipeline for employers. It has also been expanded to include training for employers looking to upskill their workforce.

Now Tyszko said the USCCF is looking to create greater change in the way the money works in financing the talent pipeline while identifying and measuring risk in new ways. Instead of expecting students to shoulder greater amounts of debt or financing free community college options that may not be the best pathways for all students, the Talent Finance initiative is designed to “meet people where they’re at,” Tyszko said.

The effort aims to keep diversity, equity and inclusion at the center of the initiative. “By changing the way we finance and invest in talent, we can fundamentally change the talent marketplace to close race-based opportunity gaps and make our systems more equitable,” notes a recent release on the initiative.

The white paper on the initiative includes recommendations for how to design and implement a new financing system to develop a responsive workforce. It argues that government needs to reconsider how its investment can prepare new and existing workers to be successful in the changing economy. A system of traditional college pathways has separated work and learning and in many instances has not provided equal access for all individuals. The report advocates for “an agile and responsive public-private approach that can forge a new consensus and strike the right balance between the roles of employers, workers, and government in talent finance and risk management.” A framework is organized to map how investment in talent is currently financed.

In looking at ways to transform the system, the paper makes a series of recommendations, including development of employer benchmark and trend data on talent finance; promote innovations in employer financing and  private sector financial instrument innovations that could be used by employers and employer collaboratives; promote service provider business model innovation found in public universities, community and technical colleges, and other service providers with employers and public and private investors; provide more balanced and aligned government financing for employer investment and collaboration; and leverage government investments to promote diversity, equity, and inclusion; and a variety of other recommendations.

The report also calls for reimagining the public sector role in talent finance and development, developing new instruments for both upside opportunities in education, training and credentialing as well as downside risk management for employment and income volatility. In order to make advancements successful and scalable, the report also considers enabling a reporting and data infrastructure for such innovations that would include improving human capital and reporting standards, and improving risk identification, measurements, assessments and scoring.

Such an effort would be a significant undertaking, which is noted in the paper and its call to action: “What we seek is nothing less than a paradigm shift. Should we be successful with implementing the recommendations in this paper, you can begin to imagine a transformed experience for learners and workers in how they navigate education, training, and employment.”

Following the paper’s release, the USCCF rolled out a virtual event series to provide a deeper dive into the topics raised throughout the paper. Those looking to join the effort may sign up to receive updates about the initiative and find opportunities to get involved here.