Workforce Development: Reducing Risk and Strengthening Economies
The nation’s workforce boards serve vital functions in our local economies: They reduce unemployment by preparing job seekers for in-demand jobs while simultaneously addressing the needs of regional employers. They bring out the best in our communities by forging partnerships between employers; job seekers; and local, state, and federal government entities. In times of economic uncertainty, they help individuals re– and upskill, and may even improve workers’ job security.
We hear from workforce professionals all over the country who are continuously striving to serve more job seekers with fewer resources, and that means getting creative. We are seeing many of them consider Income Share Agreements (ISAs) as a means to convert one-time funding allocations into renewable funding sources.
When a participant enters into an ISA, she receives access to a training program with no out-of-pocket cost. In return, she promises to “pay it forward” once she finds a job by making monthly payments based on her income. These payments are directed to a learning fund that can serve additional job seekers. The ISA includes important consumer protections, such as a minimum income threshold below which her payments are paused with no penalty, and a built-in expiration date. You can read more about ISAs here.
ISAs allow job seekers who can’t afford out-of-pocket tuition, and who may fear taking on additional debt in the form of a student loan, to pursue a better life. At the same time, ISA programs can be designed to help workforce boards stretch their budgets further to help more workers in their community. You can read about an example of this in practice here.
A well-designed ISA program isn’t just about cash flows from ISAs. It should address bigger needs within a community, and members all across the community will feel its impact. Employers are incented to support ISA programs that can train highly-desired workers; creating this pipeline can reduce their long-term recruitment and retention costs. Local schools and community colleges benefit from the opportunity to enroll students, and job seekers have a low-risk training opportunity. Our workforce colleagues excel at fostering collaboration: Innovating through ISAs is just the latest example of that leadership
To learn more about ISAs and how Vemo Education can benefit your institution and student body, contact us today online, at firstname.lastname@example.org, or 703-831-7231.