Sector-based initiatives help to address job-skills mismatch, according to a Cleveland Fed study of five such initiatives

Millions of people in the United States are unemployed, yet large numbers of job openings go unfilled. An oft-cited reason for this phenomenon is job-skills mismatch, i.e., the skills that job seekers possess are not aligned with the skills employers need. Sector-based initiatives can help to address this mismatch, says a new report from the Federal Reserve Bank of Cleveland that examines five such initiatives within the Bank’s region.

Sector-based partnerships typically involve employers from a particular industry collaborating with representatives from local and regional economic development offices, educational institutions, and non-profits that serve individuals seeking employment. Evaluations of sector-based training programs have identified successful outcomes for both workers and employers in the form of increased wages, reductions in turnover, and increased productivity.

The Cleveland Fed reviewed five successful sector-based initiatives within their region. While each is structured differently, the report highlights important similarities across all five.

“The first, and probably most important, is robust employer engagement and leadership,” says Paul Kaboth, vice president and Community Development Officer at the Cleveland Fed. “Employers go beyond attending meetings; they are also involved in advising on curriculum and they have direct engagement and interaction with the students.”

Another essential element is relationship and trust building among employers and across partners. “Sustained relationships among the many partners allow the initiative to evolve and grow,” says Kaboth, who adds that a strong intermediary can promote relationship building.

Kaboth says each of the case studies also points to “the incalculable value of employees’ having soft skills in addition to the appropriate technical skills.”

The sector-based initiatives reviewed by the Cleveland Fed:

• Tri-County Health Care Industry Partnership in western Pennsylvania, which is focused on incumbent worker training
• Regional Information Technology Engagement (RITE) Board, which works across multiple industries to meet IT demands in northeastern Ohio
• West Central Ohio Manufacturing Consortium, which prepares students for careers in advanced manufacturing
• Skills for Life Marine Mechanics Training Program, targeted at entry-level workers in northwestern Ohio
• Hiring Our Miners Everyday (HOME) Program, which is helping eastern Kentucky coal miners transition to other careers

Read: Addressing Employment Needs through Sector Partnerships

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell, doug.campbell@clev.frb.org, 513.218.1892