New workforce nonprofit eyes better results
Aim is better biz ties, job training
This year, Detroit Mayor Dave Bing identified the Workforce Development Department as one of three departments -- along with the city's Health and Wellness Promotion Department and Human Services Department -- that could be spun off as nonprofits. Those departments are largely funded by federal and local dollars and don't perform core city services.
Most of the health department's functions will be taken over by the 501(c)(3) nonprofit Institute for Population Health on Oct. 1. The institute will operate at the health department's headquarters at the Herman Kiefer Health Complex.
Bing's press secretary was not able to provide information by Crain's deadline about the Human Services Department -- which manages weatherization funds and offers services to low-income residents and children -- but said Detroit COO Chris Brown is set to address the Detroit City Council on the topic this week.
-- Nancy Kaffer
Pamela Moore, president and CEO of Detroit Employment Solutions Corp., wants business to know something: The new nonprofit expects to be a better resource for employers than its city department predecessor.
The 501(c)(3) took over the functions, federal funding and $47 million budget of the now-dissolved Detroit Workforce Development Department on July 1.
But freed from the city's cumbersome purchasing and payment processes and legacy costs, Moore and Detroit Mayor Dave Bing say they expect the nonprofit to perform more efficiently, to work closely with the business community and to more closely align training with private sector needs.
So far, three contractors have been terminated in the Jobs, Education and Training programs, Moore said. The agency has hired a new contractor, New York City-based Grant Associates Inc., to run its three "one stop" centers for job seekers and employers.
Most job training is actually conducted by contractors. Contracts for the JET programs alone come to $11.5 million.
Nine JET contractors remain; the one-stop contractor will be paid $6.1 million.
Moore said 40,000 people either visited a one-stop office or participated in JET programs last year.
"Our contractors were not the best contractors," Moore said. "Everyone knows, inside and outside of the city, that the city doesn't pay on time. It's a big, inefficient system. Many processes are broken, especially with the financial crisis on top of everything else. It takes a long time to get paid."
Poor contractor performance was noted by the state, Moore said.
"When I came into the department at the end of 2010, the state gave me a whole list of compliance issues," she said. "We had disallowed costs, poor-performing contractors. ... Since I've been here, I have slowly taken a hard look at contractors and eliminated those not performing up to standards -- and the federal government sets those standards."
As a city department, "We (had) been dealing with things that are unacceptable," Moore said. "No effective business could operate within the kind of environment we've been trying to operate in."
Moore said the new structure will allow the nonprofit to work more effectively with employers, such as Detroit Manufacturing Systems Ltd. LLC, a joint venture of Wayne-based Rush Group Ltd. and French supplier Faurecia SA. The auto supplier is in Detroit's Gateway Industrial Park near I-96 and the Southfield Freeway.
Moore said the company wants to fill 500 assembly positions within the next 12 months.
"We're working with them through our one-stop operations," Moore said. "We've agreed to do all of the pre-screening for DMS, finding applicants, interviewing applicants, making sure they meet the requirements. ... By the time we forward these applicants, we know they can perform the work."
Pre-screening includes drug screening, math, reading and comprehension evaluation, a dexterity test and a background check.
"We are working with the city because that's part of the mission of the company," said John Mozena, who handles media relations for Rush Group as a senior public relations executive at Southfield-based Mort Crim Communications Inc.
"Detroit Manufacturing was founded in Detroit and is in Detroit on purpose, and part of our goal as a company, in addition to serving our customers, is to create jobs and economic opportunity in the city of Detroit," he said.
Mozena said Detroit Manufacturing has hired about 50 workers thus far.
Moore said the nonprofit can tailor programs to meet a company's needs.
"If they say, 'We need individuals with specific training,' if they say, "We can prepare the curriculum if you help us fund that,' which we can; if an employer commits to hiring certain number of individuals, we can do the training, we can even provide space for training," she said.
The agency has a $47 million annual budget, down from past years as federal funds have been cut. Moore said the nonprofit can solicit private sector funds.
"Federal funds are disappearing, but the other big piece in this is we are now positioned to go out and attract private dollars, because no one would have written a check to the city of Detroit," she said.
Bettie Buss, a senior research analyst at the nonpartisan Citizens Research Council of Michigan, who has studied Detroit, said that while improvement in workforce training is needed, the transition is in some sense a missed opportunity.
"An effective retraining program would be a critical piece in restoring the city's economic base, with the emphasis on 'effective,' " she said.
"More Detroiters work outside of the city than work in it. The labor market is a regional market, so training for available jobs should be done on a labor market basis rather than on the basis of political boundaries. Workforce development and job retraining efforts should be part of a regional initiative that addresses regional labor shortages and opportunities.
"To limit it to Detroit only could have a stunting effect on Detroiters who need retraining and need employment opportunities available."
Moore said she knows that a level of trust must be built between the nonprofit and the business community.
"What I want to make clear is, we are the new administrative and fiscal agent, and we are aware that with the former administrative and fiscal agent there were some challenges," she said. "That was part of the decision by the mayor and David Baker Lewis (chairman of the board of Detroit Employment Solutions) to make that change. We've talked to employers who said they tried to use the services five years ago, and you sent me people who were not ready to go to work. There wasn't a good job of screening."
Crain's Publisher Mary Kramer is on the nonprofit's board.
With a new operator for the one-stop employment centers, Moore said, screening operations will be better, focusing on soft skills like professional demeanor and communication skills, not just educational attainment.
"If you've graduated from high school but never had a job, you don't know what to wear and how to communicate at work, how to behave," Moore said. "Sometimes it doesn't have anything to do with the level of education if the soft skills are missing.
"We've heard from employers the problems of the past; we're really clear about that. ... I'm hoping employers see a huge difference in the services we provide and quality of those services as well as the job seekers."
The split from the city hasn't been entirely smooth.
The city is currently engaged in arbitration with the American Federation of State, County and Municipal Employees, which alleges that because of a collective bargaining agreement with the city of Detroit, its employees should all receive positions with the new nonprofit.
Workforce development employees were let go when the department was disbanded and were encouraged to apply for jobs with the nonprofit, Moore said. About 18 of 49 employees have been rehired to date.
The city's position is that the AFSCME contract expired June 30, one day before the nonprofit took up the department's duties.
Because the nonprofit is a new agency, the city says the old contract doesn't apply.
Nancy Kaffer: (313) 446-0412, email@example.com. Twitter: @nancykaffer