The Obama administration is putting its money where its mouth is when it comes to investing in tech education projects.
On June 27, the U.S. government released $150 million in Department of Labor grants for 39 tech-related partnerships across the country. Using these funds, awardees will launch innovative training and placement models to develop tech talent as a way to keep and create jobs in local economies.
In addition to the federal funding, grantees are using nearly $50 million in philanthropic, private and other funding to contribute to their own local partnerships.
President Obama (pictured with Google CEO Sundar Pichai at Stanford June 24) referenced these grants and the TechHire program at his appearance June 24 at Stanford University. You can read an account of that presentation here.
A Large and Growing Opportunity for Local Economies
Having a pipeline of tech talent can be an important factor in bringing new jobs to local economies, facilitating business growth and lifting more local residents into the middle class. These grants will enable more communities to expand their own local tech sectors, Obama said.
Some data points on this topic offered by the White House include the following:
--Tech jobs are a pathway to the middle class. Tech jobs pay one and a half times the average wage of a private-sector job. Studies have shown that these opportunities are also accessible to those without college degrees—men and women with non-degree certificates in computer or information services earned more than 65 percent of men and women, respectively, with more traditional associate degrees.
--There is a large and growing unmet demand for tech workers. At the present time, there are more than 600,000 open IT jobs across all sectors—more than two-thirds in fields outside the tech sector, such as manufacturing, financial services and health care. Across the country, employers are struggling to find skilled talent for these positions.
A study from the Corporate Executive Board found that in 10 major metropolitan areas (including New York, Atlanta, Seattle, and Houston), there are only five skilled job seekers available for every eight open IT jobs. Compared to 2010, it now takes employers five additional weeks to fill the average vacancy—at a cost to employers of $8.6 million per 1,000 vacancies.
--New innovations in training and hiring can help meet the tech job demand. Nearly 40 percent of tech jobs do not require a four-year degree. In recent years, there has been a proliferation of fast-track tech training programs like "coding bootcamps" that prepare people with little technical know-how for tech jobs, often in just a few months.
Bootcamps Proving to Be Successful Events
A recent survey from Course Report found that bootcamp graduates saw salary gains of 38 percent (or about $18,000) after completing their programs. At the same time, employers in cities such as Albuquerque have been adopting new "skills-based" hiring approaches that enable job seekers to demonstrate their skills to get hired, even if they lack traditional qualifications such as computer science degrees.
--Tech talent can be an important driver of local economic development. Companies report that one of the main factors in deciding where to locate is the availability of skilled talent. Moreover, research from economist Enrico Moretti shows that for each job in the average high-tech firm, five new jobs are indirectly created in local economies.
In response to this opportunity, Obama in March 2015 launched TechHire, a multi-sector effort and call to action for cities, states, and rural areas to work with employers to design and implement new approaches such as coding bootcamps to train workers for well-paying tech jobs often in only a few months.
Since then, 50 communities with nearly 1,000 employer partners have begun working together to find new ways to recruit and place applicants based on their skills and to create more fast-track tech training opportunities. These range from programs in New York City that connect low-income young people to tech training and internships to a program in rural Eastern Kentucky that teaches former coal miners to code.
More Details on the Announcements
The Department of Labor is awarding 39 grants—totaling $150 million—for programs in 25 states and Washington, D.C. to support innovative ways to get workers on the fastest paths to well-paying information technology and high-growth jobs in in-demand sectors like healthcare, advanced manufacturing, and financial services.
Of these grants, $126 million will specifically target strategies designed to best support young Americans ages 17 to 29.
All of the partnerships funded today engage in the following practices:
--Expand access to accelerated learning options that provide a quick path to good jobs, such as 'bootcamp'-style programs, online options, and competency-based programs.
--Use data and innovative hiring practices to expand openness to non-traditional hiring by working with employers to build robust data on where they have the greatest needs, identify what skills they are looking for, and build willingness to hire from both nontraditional and traditional training programs.
--Offer specialized training strategies, supportive services, and other participant-focused services that assist targeted populations to overcome barriers, including networking and job search, active job development, transportation, mentoring, and financial counseling.
--Emphasize inclusion by leveraging the high demand for tech jobs and new training and hiring approaches to improve access to tech jobs for all citizens, including out-of-school and out-of-work young Americans, people with disabilities, people learning English as a second language, and people with criminal records.
Grants totaling $126 million will create pathways to careers for at-risk and out-of-school, out-of-work young Americans, Obama said.
Examples of selected communities and programs include:
--Atlanta, Ga. ATL TechHire: Fostering an IT Workforce Ecosystem to Inspire Atlanta's Under-Represented IT Workforce to Pursue IT Careers ($4 million):
ATL TechHire will train the city of Atlanta's youth and young adults with barriers to employment and other unemployed and underemployed for open jobs in tech. Led by the Atlanta Workforce Development Agency, in partnership with Iron Yard and TechSquare Labs, ATL TechHire has developed customizable training tracks to serve differing needs. Participants will be enrolled in TechSquare Labs' innovative Culture Fit and Career Readiness programs, as well as fast-track training with one of the Iron Yard's coding bootcamps, to train participants for jobs in front- and back-end engineering, mobile engineering, data science, and design; or with the Atlanta Technical College for degrees that lead to in-demand IT jobs.