June 7, 2004

REGION 5 ETA WORKFORCE DEVELOPMENT LETTER NO. 008-04

TO:              STATE WORKFORCE SYSTEM ADMINISTRATORS

FROM:         Byron Zuidema
                   BYRON ZUIDEMA
                   Regional Administrator              

SUBJECT:    Negotiating PY 2004 Expected levels of Performance for the Labor Exchange System Entered Employment Rate and Employment Retention Rate Performance Measures

1. Purpose. To provide guidance to State Workforce Agencies (SWAs) on the fraemwork for negotiating PY 2004 performance measures for the public labor exchange system

2. References. Training and Employment Guidance Letter 22-03 (.pdf), June 3, 2004, Information Bulletin 129-01, May 31, 2001.

3. Links. This Workforce Development Letter is in the Region 5 website Library at http://www.doleta.gov/regions/reg05.

4. Background. On May 31, 2001 the Department published final performance measures for the public labor exchange.  On July 1, 2002, States began using revised reporting requirements to collect and report on the new measures.

5. Substance.  For PY 2004, States will negotiate levels of performance with the Regional Office on the Entered Employment Rate (EER) and Employment Retention Rate (ERR) measures within a framework outlined in TEGL 22-03 and this Letter. States will not be required to modify their Five-Year Strategic Plan as part of this process.

Exceeding or meeting negotiated rates will not be a criterion in awarding incentive grants. Failing negotiated rates will not be a criterion in determining sanctions. The Regional Office will monitor State progress toward achieving negotiated performance levels and may request corrective action plans if warranted.

6. Framework for reaching Agreement on State Performance Levels. State and Regional Office negotiation of EER and ERR PY 2004 performance levels will be completed by July 31, 2004. The Regional Office will consider the following performance goals and reported outcomes related to the EER and ERR measures in the negotiation process:

A. Government Performance and Results Act (GPRA) PY 2004 Goals 

- 58 percent of job seekers registered with the public labor exchange will enter employment with a new or different employer by the end of the second quarter following registration;

- 72 percent of job seekers who entered employment with a new or different employer will continue to be employed two quarters after initial entry into employment with a new or different employer.

B.  PY 2002 Labor Exchange Performance Outcomes

- State quarterly reports for the period ending March 31, 2003, reported a national average 62 percent entered employment rate for job seekers registered in the first two quarters of PY 2002. Region 5 States reported an average 60 percent entered employment rate for total job seekers.

- The first set of State-reported employment retention rates appear in the quarterly report for March 31, 2004. For this period, all States reported a national average 79 percent employment retention rate for total job seekers. Region 5 States reported an average 76 percent employment retention rate for total job seekers.

C.  ETA/VETS PY 2001 Pilot Study

- Seven States participated in a pilot study which focused on the collection of PY 2001 labor exchange registrant information and matching UI wage records to obtain a proxy for performance under the new measures. The study indicated an average 63 percent entered employment rate for all registrants; and an average 76 percent employment retention rate for the same population.

D.  Data Envelopment Analysis

- ETA recently developed a Data Envelopment Analysis model which indicates optimal performance targets based on resource data, factors such as service delivery strategies, and observed outcomes. Model-generated analysis for each State has been made available to the Regional Office.

E. Other Factors

- States may wish to consider economic conditions such as the rate of job creation/loss, new business start-ups, or State legislation or polices which may have an impact on performance.

7. Action Required. Program Administrators are requested to develop and transmit proposed performance levels for the labor exchange system EER and ERR to the Regional Office on or before June 30, 2004. The transmittal should contain proposed EER and ERR performance levels, as well as the data used to arrive at the targets, including the time period from which the data were drawn, and if the data are part of a trend or anomalous. The transmittal should be sent to the attention of Leslie Matthews.

The Regional Office will complete the negotiation process with States by July 31, 2004.

8. Contact. Questions about performance measures under the labor exchange system may be directed to Leslie Matthews on 312.596.5529. Questions or comments about the format of this Letter may be directed to Tom Coyne on 816.502.9014.

9. Effective Date. Immediate

10. Expiration Date. July 31, 2004

11. Attachments. None