Emerging Talent Demand Strategy Update (6/24)

After publishing the Emerging Talent Demand Strategy in December 2023, we have advanced several workstreams to test our approach and invest in high-impact programs across the United States. This strategy seeks to drive income increases by leveraging macroeconomic trends in the IT, Green Jobs, and Skilled Trades sectors - which have experienced a high level of job openings and continued public and private investment, driving labor supply shortages and higher wages. While the economy has experienced a bit of turbulence, especially in the technology industry, these sectors continue to provide strong pathways for low-wage workers to attain living-wage careers.

What We’re Learning:

1. Focusing on the most vulnerable workers: As we deployed our Emerging Talent Demand strategy, a key question rested on how to overcome employment barriers to ensure that low-income workers can get and keep higher-paying jobs. Our grantee partners share that this is nuanced and greatly depends on geographic and individual-level considerations. As we advance this strategy, we will narrow in on organizations working to overcome persistent poverty in distressed communities that use effective strategies for people to overcome barriers. This will complement our current investments that highlight the benefits of robust talent pipelines and wrap-around supports to promote job durability.
2. Going beyond training and placement: Our most effective partners have found ways to directly train and place workers while improving current systems. FreeWorld and Coalfield Development get proximate with their beneficiaries; this helps them develop more targeted services and upstream solutions, including new businesses, access to education, and navigate policies like the Workforce Innovation and Opportunity Act (WIOA).
3. Employer Engagement: Through education and experimentation, organizations such as Jobs to Move America, CAEL, and the National Fund illustrate how we can increase workers' income by engaging and influencing employers. By helping to demonstrate how higher pay and benefits can lead to increased firm revenue, and by designing training programs with employers at the table to meet their needs, our grantees can influence how employers treat and pay their workers. Similar initiatives are underway in the private sector, which can help drive a movement.
4. Catalyzing Public and Private Investment: Across each of our strategic areas, our funding has helped grantees gain access to matching grants, competitive funding, and new networks. Examples including, The Industrial Common’s $160M National Science Foundation grant opportunity and Coalfield Development’s $88M Appalachian Regional Commission investment opportunity illustrate how our early and fast funding model leads to greater impact.

Activity to Date

We have invested ~$5M in 12 grantees focused on increasing workers’ incomes through training and placement, employer engagement, and catalyzing public and private investment.

Green Jobs for Economic Opportunity RFP

We launched the Green Jobs for Economic Opportunity Fund in March 2024 after conducting 50+ interviews with industry, government, nonprofit, and foundation experts to learn more about the tremendous opportunities to place low-wage workers into high-earning green jobs. Significant public and private investment continues to flow into the climate, energy, and “green” space and offers a clear avenue for continued workforce development investment. However, a key gap is the amount of funding available for new and innovative ideas. Here, the GitLab Foundation is excited to help develop local and national economic development strategies.

From our call for proposals, the Foundation received 115 applications from 31 states, 40 of which advanced to the final application stage. By July 2024, we will work with our Impact and Measurement team, Advisory Board (including Caroline Whistler), and staff to award $3M to 7-12 high-impact organizations. Given the interest from other philanthropies, we will collaborate with the Partnerships team to develop co-funding opportunities.

Next Steps

1. Refine strategies to effectively target low-income workers, including applying demographic and geographic considerations; we will conduct in-house research and may bolster it with targeted commissioned research to uncover the most promising populations to drive outsized income gains
2. Examine how systems and policy change can benefit workers in the long term to bolster ROI across each strategy
3. Continue to explore employer-focused approaches and seek out opportunities to leverage our funds through grants that unlock government or private sector funding
4. Select 7-12 Awardees for the Green Jobs for Economic Opportunity Fund and pursue philanthropic partnerships for co-investment in this fund

Context and Overview

Our U.S. Emerging Talent Demand portfolio rests on a hypothesis that sectors with high labor demand and low labor supply will provide opportunities for outsized income gains for those who have the appropriate skills. In some areas, a supply and demand mismatch in the United States already exists. For example, the trucking industry has a gap of more than 1M drivers, while the technology sector requires tens of thousands of skilled workers across several industries. In other areas, we can predict growth in labor demand due to public and private funding commitments. The CHIPS and Science Act has prompted the construction and expansion of dozens of semiconductor factories nationwide. As a result, the industry projects the need to fill hundreds of thousands of positions. In each instance, the US is missing out on economic activity that can employ thousands of people with living wage jobs, which can help to support entire communities.

As the economy changes, individuals’ outcomes will largely depend on the availability and accessibility to training and placement services as well as how their employers treat them. The GitLab Foundation is interested in increasing individuals’ incomes and supporting a path to a living wage. However, certain segments of the population have been left out of economic growth, and more than 20% of all workers are stuck in low-wage jobs. While public and private investment continues to flow, we believe that investing in marginalized populations presents the highest opportunity to drive outsized wage increases in these sectors. This can include helping to channel funding to promising or untested solutions, unlocking public funding, or organizing disparate actors.

The investment areas below form the focus of the GitLab Foundation’s U.S. Emerging Talent Demand strategy. These job types are projected to generate millions of openings over the next five to ten years, are known to command higher entry-level salaries and the opportunity for career advancement, and are available to individuals with a range of education levels and work experience.

Strategic Considerations and Investment Areas

As we invest in these three areas, we will refine our strategic direction by tracking macroeconomic trends, assessing how each sector performs locally, and identifying which areas are uniquely positioned to increase earnings for those working below a living wage.

• Information Technology: As the world continues to integrate technology into daily life, technology-enabled careers will [grow steadily](https://www.bls.gov/news.release/ecopro.nr0.htm#:~:text=--Computer and mathematical occupations,for cybersecurity products and services.) in the next decade and will provide higher-earning career trajectories. Workers with limited experience or educational achievement can start in the industry making a living wage and, through stackable credentials and on-the-job training, can advance in their careers to increase their incomes. As public, private, and civil society adopt new technology platforms, we anticipate job growth in all sectors and across various job types. Cybersecurity, data analysis, and engineering are a few of the dozens of classifications projected to grow. While some higher-profile companies have downsized or reduced hiring, we are confident that technology-enabled job openings will continue to increase.
  • Guiding questions:
    • How can low-wage workers connect with high-paying opportunities, and what are the prerequisites to get these jobs?
    • Are high-growth careers available to rural and geographically isolated communities, and how can technological advances and infrastructure increase opportunities?
• Green Jobs: Significant public and private investments are helping to drive a renaissance in how we produce and consume goods and deliver services. As the world makes this transition, many roles and job functions will change. Renewable energy, advanced manufacturing, engineering, and sustainability are a few of the fast-developing sectors spurred by technological advancements, policy, and public will. Over the next decade, more than nine million jobs will be created through several national policies. The CHIPS and Science Act, Inflation Reduction Act, and Infrastructure Investments and Jobs Act will stimulate these sectors and help provide multiple entry points and career advancement opportunities for those with varying levels of education achievement and experience.
  • Guiding questions:
    • Are specific sectors more prepared than others for a green jobs transition - Manufacturing, renewable energy, batteries, etc.?
    • Given current private and public investments, how can philanthropy ensure that these jobs are available to varying levels of education and work experience? How can foundation investment help lower barriers to open jobs to historically excluded communities?
    • How can philanthropic dollars help to unlock public funding, and what is the role of developing small to mid-size organizations to position them to apply for public funding?
• Skilled Trades and Services: Construction, manufacturing, and transportation are among several job classifications known for ease of entry and higher-than-average starting salaries, due to low labor supply. The need for these positions is expected to grow as fewer individuals are currently enrolled in vocational training, older workers are retiring, and the country is investing billions of dollars into maintaining and developing new infrastructure projects. Public and private actors anticipate 1.3M annual openings in the skilled trade sectors through 2028. Additionally, as some positions open, others will be downsized or changed due to advances in technology and automation. We anticipate a continued need for upskilling, placement, and training as the skilled trades and services sector adapts to a changing economy.
  • Guiding questions:
    • How do vocational education, apprenticeships, and on-the-job training programs develop a strong pipeline of workers?
    • Which sectors are more susceptible to automation-driven job losses, and how can workers adapt to a changing environment?

Additional Considerations:

• What We Will Not Focus On: At this time, we have excluded retail and healthcare roles from our focus, given continued industry challenges in pay, job quality, and career progression. As we continue to develop our strategies, our focus areas may change. We will be open to thinking about how to move these workers from their current roles to higher-earning jobs.
• Acknowledging and Addressing Employment Barriers: A job opening is not a guarantee to a new career. We understand that barriers to employment persist, and we seek opportunities to overcome these challenges. Poor employer practices, inadequate transportation, prejudice, and low skill development can inhibit career growth. As we invest in these sectors, we will prioritize how partners develop creative ways to overcome obstacles to increase individuals' lifetime earnings potential.

Next Steps

1. Further research into local and national labor market trends, supported by our Impact Measurement & Analytics team and partners
2. The Foundation will issue a Request for Proposals in early 2024 to support this thesis area
3. Refresh this strategy, Q2 2024