Case Study: Indiana

Indiana has made some big changes to its public workforce system in recent years. In June 2018, it received a waiver from the U.S. Department of Labor to dissolve its federally mandated state workforce development board (WDB), replacing it with the Governor’s Workforce Cabinet that was established in statute the year before.¹ With its stated intention to be “focused on accomplishment, not activity,” the smaller Workforce Cabinet was aimed at providing a more expansive and collaborative approach to workforce development, including but also exceeding the Workforce Innovation and Opportunity Act implementation functions of the state WDB.

The decision to apply for the state WDB waiver was driven in part by Governor Eric Holcomb’s establishment, also in 2017, of the Next Level Jobs initiative.² Alongside other changes to Indiana’s career and technical education processes, one of the most notable features of the new initiative’s authorizing legislation was a participant-focused grant program aimed at supporting students in pursuit of “high value workforce ready” training. Although similar workforce training grants had existed since 2007, these were only available for credit-bearing programs. The new Workforce Ready Grants (WRGs) could be used for credit-bearing as well as non-credit workforce programs at Ivy Tech or Vincennes University (Indiana’s singly accredited statewide community college and its statewide, predominately associate-granting university, respectively), as well as at several private providers.

The Workforce Ready Grant program aimed to support quick-turnaround training options at a time when Indiana’s unemployment rate was among the lowest in the country.³ Indiana’s Commission for Higher Education (CHE), charged with overseeing the WRG initiative, had for years engaged in college access efforts aimed at traditional college-age students. But after a 2016 analysis of public institution student records revealed about 750,000 Hoosier students with some college education but no degree, the focus began to shift towards adult learners.⁴ The Next Level Jobs initiative, which was initially branded as a first-time students’ complement to the “You Can Go Back” college completion grant, preserved a focus on adult postsecondary attainment, but with a view to incorporating credentials besides degrees that could serve students’ economic and educational needs.

Workforce Ready Grants function as a last-dollar scholarship, applied after all other federal or institutional aid for which a student is eligible, which covers all tuition and mandatory fees of credit-bearing programs. There is no prohibition on non-credit programs—though the maximum scholarship for these programs is $5,500—so prospective students have a wide range of training options to choose from. Ivy Tech is by far the most common choice for WRG-eligible students, mostly in credit programs, but about a quarter of WRG recipients enroll in non-credit programs offered by private providers.⁵ Regardless of where they are delivered and their credit status, all WRG programs are jointly administered and approved by CHE and Indiana’s Department of Workforce Development (DWD).

Prior to the establishment of the Governor’s Workforce Cabinet and the state workforce development board waiver, authority over workforce programs in Indiana sat entirely with the Department of Workforce Development. One might expect territorial frictions to emerge under the new regime, but with the shared forum of the Workforce Cabinet—and memoranda of understanding establishing a transfer of funds from CHE to DWD for its role in managing non-credit programs—that has not been the case. However, staff at the DWD recognized in the early days of the Next Level Jobs initiative that the participant-focused Workforce Ready Grants alone would not make the most of short-term workforce training.

In 2017, the Department of Workforce Development identified a $20 million line item for supporting sector strategies that had “run its course,” according to PJ McGrew, executive director of the Governor’s Workforce Cabinet. So DWD began using those funds for employer-focused training grants. “We wanted to provide individuals with access to training through [Workforce Ready Grants],” McGrew says, “but also a funding stream for employers if they wanted to train their new hires.” In 2018, the Employer Training Grant (ETG) program was codified in law, joining WRGs as a crucial feature of the Next Level Jobs initiative.

The Employer Training Grant program provides reimbursements to employers for eligible training delivered to new or incumbent workers. As with the Workforce Ready Grants, ETG training can be delivered through Ivy Tech, Vincennes University, or private training providers, but by contrast, a larger share of ETG funding goes to non-credit programs.⁶ Six occupational sectors are eligible for ETG funding, training must be at least 40 hours in duration, and the Department of Workforce Development must approve all training plans.⁷ Crucially, all employees trained under an ETG agreement must be retained by the employer for a total of six months before the employee’s training costs can be reimbursed. New employees must also receive a portable credential of value from their training, and incumbent employees must receive both a credential and an increase in wages.

In 2019, DWD reallocated the entire $20 million sector strategies fund to expand the ETG program. Even with a larger budget, companies have completely snapped up each new round of funding.⁸ About 55 percent of employer grantees have 50 or fewer employees, says McGrew, and many are repeat customers. The initial request for training approval takes only a few minutes and can be completed on a cell phone.

Together, the participant-focused and employer-focused supports available under the Next Level Jobs initiative have already had a remarkable impact. Over 43,800 Hoosiers have enrolled in educational programs with Workforce Ready Grant support since its launch, and over 26,500 have received training under Employer Training Grant agreements with over 2,900 employers. State longitudinal data show a roughly $6,000 payoff in additional wages for ETG program completers, and about $6,800 for WRG-supported program completers. The ETG program boasts an average hourly wage of $20.86 for all current trainees.⁹ Though Liz Walker, the Commission for Higher Education’s chief strategy officer, explains that many ETG and WRG programs are non-credit, her agency, the Department of Workforce Development, Ivy Tech, and Vincennes University work together to connect non-credit programs with credit-bearing ones, and to stack credit-bearing certificates into college degrees.

While the Next Level Jobs initiative was built during a time of near-full employment, it has proven adaptable to job market conditions brought on by the pandemic recession. In July 2020, Governor Holcomb announced the state would use CARES Act funding to provide an additional $22 million in Workforce Ready Grant funding, and an additional $17 million towards Employer Training Grants.¹⁰ At the same time, the state expanded eligibility for both programs, doubling the per-employer ETG cap to $100,000 per contract, approving 50 new WRG-eligible programs, and suspending the ineligibility of associate or bachelor’s degree holders for WRGs.

The participant-focused and employer-focused aspects of the Next Level Jobs initiative provide different access points for trainees, but both use shared public resources and benefit from government agencies’ commitment to quality and coordination. But the agencies involved are not done yet. McGrew, of the Governor’s Workforce Cabinet, wants employers receiving Employer Training Grants to think more about supportive services to help employees succeed educationally. Walker, of the Commission for Higher Education, hopes her agency can do more to help Workforce Ready Grant recipients performing high-value but low-wage jobs—like nursing assistants or commercial drivers, for example—to find quality placements. Both want to link WRGs and ETGs more closely. Though Walker confesses that “we can take for granted how good we have it in Indiana, compared to the rest of the country,” she would like to see a more fully unified system that lets students and workers evaluate a range of high-quality training options—both short-term and long-term, credit-bearing and non-credit. This could allow WRG-funded students to land good jobs more quickly and continue their education with employers already committed to workforce training through ETGs.