Understanding the Costs of the DOL Welfare-to-Work Grants Program. Cost per Placement Clearly Reflects Job-Matching Strategy


While all the WtW programs provided placement support to their participants (Nightingale 2002), they still varied in how their staff worked with participants searching for employment. Program staff could be more or less active in identifying job opportunities appropriate for their clients and in letting them know about these opportunities. Similarly, staff could work more or less actively with participants to help them identify and pursue job opportunities that may be appropriate for, or appealing to, them as individuals.

Program efforts to help WtW participants secure unsubsidized employment seemed to follow three general approaches:

  1. Self-Directed Matching. Under this approach, participants generally identified their own matches to available job listings, with some guidance and support from WtW program staff. While participants may have attended job clubs or even received some job leads from WtW staff, they were principally responsible for identifying appropriate opportunities and pursuing them. Nashville-Pathways, West Virginia-HRD, and Chicago-Catholic Charities used self-directed matching.
  2. Staff-Assisted Matching. Programs that used this approach had dedicated staff who worked actively to identify job openings suitable for their WtW clientele and to match participants individually to them. In several programs with staff-assisted placement--Chicago-Maximus, Chicago-E&ES, Philadelphia-TWC, Phoenix-EARN, and the Yakima programs-WtW staff also had well-established placement relationships with some local employers. Since the programs continuously made placements with this set of employers, ensuring good matches was considered important to keep these employer clients satisfied.
  3. Employer-Focused Matching. Under this approach, program staff worked exclusively with selected employers and industries that had job opportunities available and helped WtW participants gain the skills and qualifications needed for such positions. Examples of this approach are the three employer-tailored WtW programs: Boston-Marriott, Boston-Partners, and Chicago-Partners. In these programs, job placement was guaranteed to participants who completed the employer- or industry-specific training.

Overall job-matching strategy helps explain differences in placement rates and costs per placement (Table III.5). On average, programs that used employer-focused or staff-assisted matching approaches achieved higher placement rates. This outcome is to be expected, as these programs took a more active role in facilitating placement and ensuring good job matches for the generally hard-to-place WtW population.

These programs also had, on average, higher overall costs per participant. While their more active approach to placement required additional resources for job development and placement activities, differences in the costs of these activities did not fully account for their higher overall per-participant costs. Thus, the higher average costs for these programs suggest that they worked more intensively with WtW participants in other areas besides placement.

Table III.5
Wtw Costs per Placement by Job-matching Approach
WtW Programs, by Job-Matching Strategy Cost per Placement
(in Dollars)
Placement Rate (Percent) Cost per Participant
(in Dollars)
Per Participant Cost of Job Development and Placement
(in Dollars)
Average Starting Hourly Wage
(in Dollars)
Self-Directed Matching          
Fort Worth-ANS 7,725 33 2,365 80 NA
Chicago-Catholic Charities* 8,339 40 3,310 369 7.00
Fort Worth-WC 5,241 42 1,887 302 NA
West Virginia-HRD* 6,182 61 3,771 NA 5.84
Nashville-Pathways* 3,685 53 1,964 100 7.19
Averages 6,234 46 2,660 213 6.68
Staff-Assisted Matching          
Philadelphia-TWC* 13,778 48 6,641 487 7.26
Yakima-OIC* 8,762 51 4,433 695 7.40
Chicago-Easter Seals* 5,758 54 3,086 354 6.64
Yakima-FWC* 8,065 61 4,912 494 7.07
Chicago-E&ES 5,453 62 3,392 524 7.05
Phoenix-EARN 6,301 66 4,133 504 7.46
Yakima-PFP* 4,829 73 3,530 398 7.75
Chicago-Maximus 4,622 78 3,605 719 6.98
Averages 7,196 62 4,217 522 7.20
Employer-Focused Matching          
Boston-Partners 8,192 66 5,407 813 8.98
Boston-Marriott 3,251 71 2,308 188 9.67
Chicago-Pyramid* 8,037 73 5,827 559 7.43
Averages 6,493 70 4,514 520 8.69
Note: NA = not available; * = WtW programs that offer paid work experience.

Other characteristics that one may associate with WtW programs that worked more intensively with participants were not as important in understanding cross-program differences in placement rates and, therefore, costs per placement. For example, TE programs, which worked with WtW participants to gradually and systematically upgrade their employability skills, achieved the same placement rates, on average, as EDE programs, which tried to place WtW participants in unsubsidized employment as soon as possible (Table III.6). On average, the costs per placement for TE programs were higher, due mainly to the programs' higher average costs per participant.

The TE programs and others that offered paid work experience also had high average costs per placement (Table III.7). However, presence of a paid work experience component was not synonymous with marked differences in WtW placement rates. Rather, programs with a work experience component had higher overall costs per participant (as discussed previously), and this was the principal factor contributing to their higher costs per placement.

Table III.6
Wtw Costs per Placement by Program Model
Model Average Cost per Placement Average Placement Rate Average Cost per Participant
Enhanced Direct Employment (EDE) $6,449 57% $3,559
Transitional Employment (TE) $7,291 58% $4,077
Table III.7
Wtw Costs per Placement by Use of Paid Work Experience
Paid Work Experience Average Cost per Placement Average PlacementRate Average Cost per Participant
Offered $7,493 57% $4,164
Not Offered $5,098 52% $2,887

Differences in placement rates and, therefore, the costs per placement of WtW programs could also reflect differences in how selective WtW programs were in the types of jobs into which they placed participants. For example, some programs may have only placed participants in jobs offering a minimum wage rate or number of hours, benefits, or strong advancement opportunities. However, the starting wages appeared to be similar for the jobs that WtW programs helped their participants secure. In general, WtW programs placed participants in jobs with starting wages that ranged from about $6 to $7 per hour. The only notable exception was employer-focused programs, whose participants, on average, secured jobs with higher starting hourly wages (Table III.5). As we discuss below, these programs may have targeted WtW-eligible people who were relatively more job ready, which could have contributed to the higher wage rates for their initial unsubsidized placements.

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