Workforce Investment Act: Employers Are Aware of, Using, and	 
Satisfied with One-Stop Services, but More Data Could Help Labor 
Better Address Employers' Needs (18-FEB-05, GAO-05-259).	 
                                                                 
The economy of the United States is fueled by 8 million private  
sector businesses that employ 106 million of the nation's 137	 
million workers. Employers are seeking better ways to meet their 
workforce needs as they compete in the global economy. This	 
report examines (1) the extent to which employers, including	 
small businesses, are aware of and using the one-stop system; (2)
the degree to which employers who use one-stop services report	 
satisfaction and what factors cause employers not to use them;	 
and (3) what Labor has done to support employer awareness and use
of the workforce system and how Labor measures its success in	 
meeting the needs of employers. 				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-259 					        
    ACCNO:   A17979						        
  TITLE:     Workforce Investment Act: Employers Are Aware of, Using, 
and Satisfied with One-Stop Services, but More Data Could Help	 
Labor Better Address Employers' Needs				 
     DATE:   02/18/2005 
  SUBJECT:   Human resources utilization			 
	     Labor statistics					 
	     Private sector					 
	     Small business					 
	     Employment 					 
	     Employment or training programs			 
	     Surveys						 
	     Data collection					 
	     Reporting requirements				 
	     JTPA Job Bank					 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Product.                                                 **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
******************************************************************
GAO-05-259

United States Government Accountability Office

GAO

                       Report to Congressional Requesters

February 2005

WORKFORCE INVESTMENT ACT

 Employers Are Aware of, Using, and Satisfied with One-Stop Services, but More
             Data Could Help Labor Better Address Employers' Needs

GAO-05-259

[IMG]

February 2005

WORKFORCE INVESTMENT ACT

Employers Are Aware of, Using, and Satisfied with One-Stop Services, but More
Data Could Help Labor Better Address Employers' Needs

                                 What GAO Found

While about half of all employers are aware of their local one-stops,
awareness increases with employer size, with about half of small,
two-thirds of medium, and three-quarters of large employers knowing about
their local one-stops. Similarly, of all employers aware of the one-stops,
about threequarters of large employers are likely to use one-stop
services, while approximately one-half of medium and one-quarter of small
employers are likely to do so. Employers of all sizes primarily use
one-stop services to help fill job vacancies.

Overall, about three-quarters of employers who use one-stop services are
satisfied with the services they receive. These employers are most
satisfied with one-stop efforts to provide timely services and respond to
their needs. In addition, most employers who have used one-stop services
would likely use them again, and about one-third of employers who are
aware of one-stop services, but have not used them, would consider using
them in the future. Among employers who are aware of one-stop services,
very few decline to use them because of concerns about the quality of
services. Instead, many of these employers choose not to use one-stops
because they rely on other resources to hire and train workers or do not
have enough information about the services one-stops offer.

Labor has initiatives to support employer awareness and use of the
one-stop system but does not know the extent to which employers use the
system. Labor has developed partnerships with businesses and industry to
provide employers easier access to the resources of the one-stop system.
To measure how the one-stop system is meeting the needs of employers,
Labor requires states to collect information on employer satisfaction with
the one-stop system, but not on employer use of the system. Labor's
employer satisfaction measure provides a high-level indicator of whether
employers are satisfied with the one-stop services they receive; it does
not, however, provide enough information on the services employers use to
help Labor manage its resources.

Percentage of Business Establishments Aware of, Using, and Satisfied With
One-Stops Aware Used Satisfied

                  Percent          Percent           Percent        
                 100 79 80        100 80 71         100 80 78 75 79 
                     60               60                60          
                     40               40                40          
                     20               20                20          
                     0                0                 0           
               All employers      Employers               Employers 
                                   aware of                who used 
                                  one-stops               one-stops 

 Small (2-49 employees) Medium (50-499 employees) Large (500 or more employees)

Source: GAO 2004 survey of private sector business establishments in the United
                                    States.

                 United States Government Accountability Office

Contents

Letter

Summary of Findings

Large and Medium-Sized Employers Are More Likely than Small Employers to
Know About and Use Their Local One-Stops and Other Resources of the
Workforce System

Most Employers Are Satisfied with One-Stop Services, and Few of Those Not
Using Them Have Concerns about Service Quality

Labor Has Taken Steps to Support Employer Awareness and Use of the
One-Stop System but Lacks Data on Employer Usage

Conclusions

Recommendation for Executive Action

Agency Comments 1 3

4

7

8 10 10 10

Appendix I Briefing Slides

Appendix II Objectives, Scope, and Methodology

Appendix III Additional Employer Survey Data

Appendix IV Comments from the Department of Labor

          Appendix V          GAO Contacts and Staff Acknowledgments       44 
                                           GAO Contacts                    44 
                                      Staff Acknowledgments                44 
     Related GAO Products                                                  45 

Tables

Table 1: Private Sector Business Establishments by Size 3 Table 2:
Two-Phase Business Establishment Sample by Size Category 38 Table 3:
States and Local Areas We Visited 40

Table 4: Business Establishments Aware of One-Stops That Used

Their Services 41 Table 5: Primary Reason Business Establishments Aware of
One-

Stops Did Not Use Them 41 Table 6: Hiring Resources Used by Business
Establishments 42

Figures

Figure 1: Percentage of Business Establishments Aware of and Using
One-Stops, by Employer Size 5 Figure 2: Percentage of Business
Establishments That Used One-Stop Service 6

Abbreviations

AAPOR American Association for Public Opinion Research
ACSI American Customer Satisfaction Index
AJB America's Job Bank
BLS Bureau of Labor Statistics
EMILE ETA Management Information and Longitudinal Evaluation
ETA Employment and Training Administration
SIC Standard Industrial Classification
WIA Workforce Investment Act

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.

United States Government Accountability Office Washington, DC 20548

February 18, 2005

The Honorable Michael B. Enzi

Chairman

The Honorable Edward M. Kennedy

Ranking Minority Member

Committee on Health, Education, Labor, and Pensions United States Senate

                           The Honorable Patty Murray

                            Ranking Minority Member

Subcommittee on Employment and Workplace Safety Committee on Health,
Education, Labor, and Pensions United States Senate

The economy of the United States is fueled by 8 million private sector
businesses that employ 106 million of the nation's 137 million workers.
While most of these businesses employ fewer than 50 workers, the majority
of workers are employed by larger businesses. Employers are seeking better
ways to meet their workforce needs as they compete in the global economy.
In 1998, the Workforce Investment Act (WIA) created a comprehensive
workforce system, called the one-stop system, designed to help both job
seekers and employers. WIA requires states and localities to bring
together 17 federal programs and make their services available through
about 1,900 one-stops nationwide. The total budget for these programs is
about $15 billion in federal funding. The Department of Labor (Labor) is
responsible for assessing the effectiveness of Labor-funded programs and
providing guidance to states and localities on services delivered through
the one-stops. WIA also requires that states report information to Labor
on employer satisfaction with one-stop services. However, little is known
about how well the services provided by the onestops are helping employers
find the workers they need.

WIA increased the focus on the employer as a customer of the publicly
funded workforce system and requires that employers constitute a majority
of members on state and local workforce investment boards. These boards
develop policy and provide oversight for the one-stops. The one-stops
provide employers with services such as applicant screening,

skill assessment, and training. The publicly funded workforce system also
provides employers and job seekers with other resources, such as a
national, online job openings database-called America's Job Bank-and labor
market information such as current wage rates.

Because of your interest in how well the workforce system is meeting the
workforce needs of all employers, both large and small, we examined (1)
the extent to which employers, including small businesses, are aware of
and using the one-stop system; (2) the degree to which employers who use
one-stop services report satisfaction and what factors cause employers not
to use them; and (3) what Labor has done to support employer awareness and
use of the workforce system and how Labor measures its success in meeting
the needs of employers.

To address these issues, we surveyed a nationally representative sample of
private sector employers, surveyed state and local workforce officials,
and visited four states and a total of eight one-stops within those
states. For the employer survey, we obtained a sample of 3,232 small,
medium, and large private sector employers from a nationwide database of
businesses. We surveyed employers between June and October 2004, and
report on their use of one-stop services during the 12 months prior to the
period when we surveyed them. We achieved a 54 percent response rate after
adjusting for cases that were ineligible for our study or whose
eligibility could not be determined. We interviewed some of those that did
not respond to our survey and found that their views did not differ
substantially from the views of those that responded to our survey.
Therefore, we are generalizing our survey results to all private sector
business establishments in the United States.1 For this report, we
considered individual business establishments with two or more workers as
single employers. A business establishment is the physical location of a
certain economic activity, for example, a factory, mine, store, or office.
We chose to survey personnel at business establishments rather than
corporate headquarters because they are more likely to be responsible for
local hiring and training practices, such as use of one-stops. We divided
these business establishments into size categories based on their number
of employees. (See table 1.)

1Sampling errors for estimates presented in this report do not exceed 9
percentage points, unless related to employer satisfaction or reasons for
not using one-stop services, in which case, they do not exceed 15
percentage points. Specific sampling errors are noted where appropriate in
appendix I.

Table 1: Private Sector Business Establishments by Size

Total number of Average number of Employer size employees employees

Small

49 or fewer

Medium 50 to 499

Large 500 or more 1,176

Source: Quarterly Census of Employment and Wages, Bureau of Labor
Statistics, March 2003.

Survey results that represent all private sector employers in the United
States are heavily influenced by the results for small businesses because
over 95 percent of all business establishments are small. However, medium
and large business establishments employ a majority of the workforce, so
we generally report the survey results for each employer size category
separately. To determine what information states and local areas collect
on services to employers, we surveyed all 50 states and 568 local
workforce investment areas, and we received responses from all 50 states
and 463 local areas (81.5 percent). We selected 4 states-Florida,
Michigan, Oklahoma, and Wyoming-based on their geographic dispersion and
the diversity of their employment growth rates. In each state we visited 2
local areas-1 urban and 1 rural-and interviewed workforce officials and
local employers. We interviewed officials from the Department of Labor,
employer associations such as the U.S. Chamber of Commerce, and others.

On January 27, 2005, we briefed your staff on the results of our work.
This report summarizes the information we shared with your staff and
transmits slides we used to brief your staff that day. (App. I contains
these slides.) We conducted our work between October 2003 and January 2005
in accordance with generally accepted government auditing standards.
Appendix II provides further details about our scope and methodology.

Summary of Findings 	While about half of all employers are aware of their
local one-stops, awareness increases with employer size, with about half
of small, twothirds of medium, and three-quarters of large employers
knowing about their local one-stops. Similarly, of all employers aware of
the one-stops, about three-quarters of large employers are likely to use
one-stop services, while approximately one-half of medium and one-quarter
of small employers are likely to do so. Employers of all sizes primarily
use one-stop services to help fill job vacancies. About three-quarters of
employers that

used one-stops said that they are satisfied with the services they
received, and 83 percent would consider using them again in the future.
Labor has taken steps to support employer awareness and use of the system.
However, it lacks data on employer usage. Because Labor collects little
information on employers' use of the one-stops, the extent to which these
services help employers is unknown, as is how these services could be more
effectively targeted to meet employers' workforce needs.

In this report, we are making a recommendation to the Secretary of Labor
to require states to collect and report on employer use of the workforce
system. In its comments on a draft of this report, Labor agreed with our
recommendation and provided technical comments, which we included as
appropriate.

Large and Medium-Sized Employers Are More Likely than Small Employers to
Know About and Use Their Local One-Stops and Other Resources of the
Workforce System

While about half of all employers are aware of their local one-stops,
awareness levels increase with employer size, with about half of small,
two-thirds of medium, and three-quarters of large employers knowing about
their local one-stops. (See fig. 1.) Regardless of size, most employers
learn about one-stops through word of mouth in the private sector.
Moreover, large and medium employers are more likely than small employers
to learn about one-stops from a one-stop official or government
representatives. This may be because larger employers are more likely to
hire workers.

Figure 1: Percentage of Business Establishments Aware of and Using
One-Stops, by Employer Size

Aware Used

Percent Percent

100                 100 
              79           
    80                  80        71 
    60                  60 
    40                  40 
    20                  20 
      0                  0 
        All employers      Employers 
                            aware of 
                           one-stops 

Small (2-49 employees) Medium (50-499 employees) Large (500 or more
employees)

Source: GAO 2004 survey of private sector business establishments in the
United States.

Large and medium employers who know about one-stops are more likely than
small employers to use their services. Of all employers aware of the
one-stops, approximately three-quarters of large employers are likely to
use one-stop services, while about one-half of medium and one-quarter of
small employers are likely to do so. As shown in figure 2, employers of
all sizes generally use one-stop services to help fill job vacancies
through posting job announcements and screening job applicants, with large
employers being three to four times more likely than small employers to
use these services. (See app. III for more information.) Small employers'
lower rate of usage could be associated with their lower likelihood of
hiring. Small employers are less likely than large and medium employers to
have hired an employee in the previous year. In addition, few employers of
any size are likely to access training services through one-stops. This is
consistent with what most employers we interviewed on our site visits told
us-they said they did the majority of their training internally.

Figure 2: Percentage of Business Establishments That Used One-Stop Service

Percent

100

80

65

60

40

20

0 Post job Screen job Training openings applicants services

Small (2-49 employees)

Medium (50-499 employees)

Large (500 or more employees)

Source: GAO 2004 survey of private sector business establishments in the
United States.

Awareness and use of two other resources of the workforce system-
America's Job Bank and labor market information funded by Labor-also vary
by size of employer, with larger employers more likely than small
employers to use them.2 While 56 percent of large employers are aware of
the America's Job Bank Web site, 17 percent of small employers are aware
of this resource. Likewise, large employers are about twice as likely as
small employers to be aware of labor market information funded by Labor
(74 percent versus 40 percent). In addition, large and medium employers
are significantly more likely than small employers to use both of these
resources. According to Labor, employers use the America's Job Bank Web
site to find prospective employees, and they use labor market information
to learn about employment trends and wages. Several employers we
interviewed on our site visits said they used labor market

2America's Job Bank and labor market information are accessible through
one-stops and through the Internet.

Most Employers Are Satisfied with One-Stop Services, and Few of Those Not
Using Them Have Concerns about Service Quality

information on current wage rates in order to comply with wage laws or to
set compensation rates.

The vast majority of employers who use one-stop services are satisfied
with them; particularly, they express satisfaction with the timeliness of
services and the extent to which services address their needs. In
addition, most employers who use one-stop services would likely use them
again, and about one-third of employers who are aware of one-stop services
but do not use them would consider using them in the future. Among
employers who are aware of one-stop services, very few decline to use them
because of concerns about the quality of services. Instead, many of these
employers choose not to use one-stops because they rely on other resources
to hire and train workers or do not have enough information about the
services one-stops offer.

Most Employers Are Satisfied with One-Stop Services

Overall, about 78 percent of employers in the United States who have used
one-stops are satisfied with the services they received. These employers
are most satisfied with one-stop efforts to provide timely services and
respond to their needs. Most employers we interviewed on our site visits
also expressed satisfaction with one-stop services, and some pointed to
cost and time savings as the primary benefit of using one-stops. For
example, one employer said that because one-stop staff selected qualified
applicants using the company's own screening criteria, the company saved a
lot of time. Furthermore, our survey showed that the majority of employers
who use one-stop services would consider using them in the future, and a
majority would also recommend one-stop services to another businessperson.
Eighty-three percent of employers who use one-stops said they are willing
to consider using one-stops in the future, and this proportion does not
vary much by employer size. Similarly, about threequarters of employers
who use one-stops are willing to recommend onestop services to other
businesses. Furthermore, about one-third of employers who are aware of
one-stop services but have not used them would consider using them in the
future.

Most Employers Not Using Of those employers who are aware of but not using
one-stop services, very One-Stop Services Give few (3 percent), had
concerns about service quality. The most common Reasons Other than reason
employers did not use one-stop services was that they primarily

use other resources to hire and train workers-this was true for
allConcerns about Quality of employer size categories. About 21 percent of
employers chose not to useServices one-stops because they lacked
information about their services. In

addition, several employers we interviewed on our site visits said that

Labor Has Taken Steps to Support Employer Awareness and Use of the
One-Stop System but Lacks Data on Employer Usage

although they were aware of one-stops, they did not know about the breadth
of services they offered. Nearly all employers we interviewed on our site
visits thought that one-stops should try to increase general awareness of
one-stops among employers.

Labor has initiatives to support employer awareness and use of the onestop
system but does not know the extent to which employers use the system.
Labor has developed partnerships with businesses and industry to provide
employers easier access to the resources of the one-stop system. To
measure how the one-stop system is meeting the needs of employers, Labor
requires states to collect information on employer satisfaction with the
one-stop system but not on employer use of the system. Labor's employer
satisfaction measure provides a high-level indicator of whether employers
are satisfied with the one-stop services they receive. It does not,
however, provide enough information on the services employers use to help
Labor manage its resources.

Labor Has Initiatives to Support Employer Awareness and Use of the
One-Stop System

Labor has developed a number of initiatives to support employer awareness
and use of the one-stop system but has limited information about the
extent to which employers use the system. Labor established its
Partnerships for Jobs Initiative with 23 large, multistate employers,
including the Home Depot and Citigroup, to provide better access to the
resources of the approximately 1,900 one-stops nationwide. This initiative
helps employers learn about state and local workforce resources provided
through the one-stop system. Through its ongoing High-Growth Training
Initiative, Labor has also directed more than $92 million, as of June
2004, to public-private partnerships in which growing industries work with
education and training providers to ensure that workers get the skills
they need to compete in growing fields like biotechnology and high-tech
manufacturing. In addition, Labor provided a $1.6 million grant to a
sevenstate consortium to develop model outreach strategies for marketing
onestop services to employers.

Labor has identified various ways to measure the success of these
initiatives, such as hiring rates and expansion of services. For example,
through its Partnership for Jobs initiative, the 23 national employers
have hired approximately 15,000 individuals through the one-stop system as
of June 2004. Through its High-Growth Job Training Initiative, Labor has
identified workforce solutions, such as expanding the pipeline of youth
entering high-growth industries and enhancing the capacity of educational
institutions to train students in industry-defined competencies.

Labor Requires Collection of Information on Overall Employer Satisfaction
but Not on Employer Use of One-Stop Services

To measure the success of the one-stops in meeting employer workforce
needs, Labor requires states to report on employers' overall satisfaction
with one-stop services, but not on their use of these services. Labor
requires that states conduct quarterly telephone surveys of employers to
obtain information on their overall satisfaction with the services
provided by the one-stops. Each state negotiates with Labor to set its own
goal for employer customer satisfaction.3 Because of the general nature of
the employer satisfaction measure, it has limited usefulness to Labor for
management of its one-stop system resources. Moreover, usage information,
such as the number of employers using one-stop services, is not available
to Labor because it does not require that states collect information on
employers' use of one-stop services.

Labor recognizes that the satisfaction measure provides only general
information and that there is a need for more information than the
employer satisfaction measure provides. Labor's Employment and Training
Administration (ETA) has proposed a new data collection and reporting
system called the ETA Management Information and Longitudinal Evaluation
(EMILE) to, among other things, obtain more detailed information about
employers' use of one-stop services. Labor's proposed reporting system
would require states to collect specific employer-related information,
such as the characteristics of the employers and the services they use.
However, Labor is in the process of responding to public comments on the
proposal and has not yet finalized its implementation plans.

Many Local Areas Collect Information on Employer Use of One-Stop Services,
but Most States Do Not Track This Type of Information

While many local areas track their own measures of how one-stops serve
employers, this information is not reported to most states or Labor. At
least half of the local areas track such measures as the number of
employers that use one-stop services, the type of services that employers
use, and the number of employers that hire one-stop job seekers. While
this type of information allows local areas to better manage their
resources to respond to the changing needs of their employer clients,
information on employer usage is not communicated to most states or Labor.

3Labor's employer satisfaction measure is based on the American Customer
Satisfaction Index (ACSI). The index is a uniform and independent measure
that tracks trends in customer satisfaction and provides benchmarks of the
consumer economy for industry and government agencies.

Conclusions

Recommendation for Executive Action

Agency Comments

Relatively few states require local workforce areas to report on employer
measures, such as the number of employers they serve and the number that
hire one-stop job seekers. For example, about one-third of all states
require local areas to report on the number of employers that use their
services, while 11 states track the type of one-stop services that
employers use. Because states are currently not required by Labor to
collect this type of information, it is unavailable at the state and
federal level to help them manage federal workforce resources.

The federal government currently invests in a workforce system with
multiple programs to help workers find jobs, and to help employers find
the workers they need. We found that large numbers of employers know
about, use, and are satisfied with their local one-stops. While Labor has
taken steps to support employer awareness and use of the system, it
collects little information on employers' use of the workforce system.
Although many local areas and some states collect information on employer
use of the one-stop system to manage their resources, this information is
not reported to Labor. Collecting employer information involves additional
effort for states and local areas but enhances their ability to manage
their resources. Without this information on employer use of the one-stop
system, Labor cannot identify whether or not state and local programs are
responding to the needs of employers and what types of services best meet
employers' workforce needs. As a result, Labor does not have the
information necessary to identify areas where additional employer
assistance may be needed or to design a strategy for effectively targeting
limited workforce funds.

To ensure that Labor has a better understanding of the degree to which the
publicly funded workforce system meets employers' needs, we recommend that
the Secretary of Labor require states to collect and report on employer
use of the one-stop system in addition to continuing to collect general
employer satisfaction information.

We provided officials at the Department of Labor an opportunity to comment
on a draft of this report. Formal comments appear in appendix

IV.

Labor agreed with our findings and recommendation that the Secretary of
Labor require states to collect and report on employer use of the one-stop
system to better understand the degree to which the system is meeting the
needs of employers. Labor stated that one component of its proposed

revised reporting system would collect information on employers' use of
one-stop services. However, the agency continues to reconcile comments on
its proposed reporting system and to determine its feasibility.

As agreed with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days from
its
date. At that time, we will send copies of this report to the Secretary of
Labor, appropriate congressional committees, and other interested parties.
In addition, the report will be available at no charge on GAO's Web site
at
http://www.gao.gov.

A list of related GAO products is included at the end of this report. If
you
or your staff have any questions about this report, please contact me at
(202) 512-7215 or Joan Mahagan, Assistant Director, at (617) 788-0521. You
may also reach us by e-mail at [email protected] or [email protected].
Other contacts and staff acknowledgments are listed in appendix V.

Sigurd R. Nilsen
Director, Education, Workforce,

and Income Security Issues

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                  Reason                Small Medium Large All establishments 
           Used other resources          48     69    52           49         
    Did not know enough about services   22     12    23           21         
Did not hire or train any employees   15     7      6           15         
          in the last 12 months                            
      Had concerns about quality of       3     5      6           3          
                 services                                  

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

                          Appendix I: Briefing Slides

Appendix II: Objectives, Scope, and Methodology

We examined (1) the extent to which employers, including small businesses,
are aware of and using the one-stop system; (2) the degree to which
employers who use one-stop services report satisfaction and what factors
cause employers not to use them; and (3) what Labor has done to support
employer awareness and use of the workforce system and how Labor measures
its success in meeting the needs of employers. To address these questions,
we surveyed a nationally representative sample of private sector
employers, surveyed states and local areas, interviewed officials from the
Department of Labor and employer associations, reviewed relevant studies,
and visited four states and two local areas within each state.

                                Employer Survey

To determine the extent to which employers are aware of and using the
workforce system and their satisfaction with the one-stop services they
received, we surveyed a nationally representative sample of employers. We
developed a questionnaire and contracted with Opinion Research
Corporation, a national public opinion research firm, to conduct a
telephone survey of a stratified random sample of all sizes of private
sector business establishments in the United States. We divided these
business establishments into groups depending on their number of employees
(small: 2-49 employees, medium: 50-499 employees, and large: 500 or more
employees). Before calling began, an independent reviewer within GAO
reviewed the questionnaire, and we pretested the survey with two
businesses.

Opinion Research Corporation attempted to contact 3,232 business
establishments between July and October 2004 and completed 1,356
interviews.1 The overall response rate to the survey was 54 percent after
taking into account out-of-scope cases and cases whose eligibility could
not be determined. The response rate for each employer size category is as
follows: small and unknowns, 50 percent; medium, 53 percent; and large, 60
percent. Response rates were calculated using the American Association for
Public Opinion Research (AAPOR) response rate three method of calculation.
Although we do not know the views of all the remaining business
establishments that did not respond to our survey, we did some limited
interviewing and found that their views did not differ substantially from
the views of those that responded to our survey. We

1For questions on employer use of services, we asked employers about their
use within the 12 months prior to the time of the interview.

Appendix II: Objectives, Scope, and Methodology

attempted to contact 183 of these nonrespondents and completed a short
interview with 27 of them.

We purchased the sample from infoUSA, a national provider of business
addresses and phone numbers. InfoUSA's database contained approximately
11.3 million relevant business establishments. We conducted routine steps,
such as document review and interviews with officials, to examine the
reliability of the infoUSA data for our purposes. To provide us with the
sample, infoUSA conducted a stratified random sample selection process
that we specified. InfoUSA completed this process in two phases. This
process allowed for a sample of all sizes of private sector business
establishments in the United States. We forwarded contact information for
3,232 of these sampled business establishments to Opinion Research
Corporation for the survey. (See table 2.)

Table 2: Two-Phase Business Establishment Sample by Size Category

                                         Medium Large (500   Unknown   
                        Small (2-49     (50-499     or more number of  
                         employees) employees)  employees)  employees   Total 
             May 2004           850         850         850        100  2,650 
            July 2004            74          94          94        320    582 
                Total           924         944         944        420  3,232 

Source:GAO.

We chose to survey business establishments (as opposed to corporate
headquarters) because personnel at the establishments are more likely than
headquarters staff to be responsible for their business' local hiring and
training practices, such as use of one-stops. We used the Bureau of Labor
Statistics (BLS) definition of business establishment: the physical
location of a certain economic activity, for example, a factory, mine,
store, or office. To qualify for inclusion in our sample, the
establishment must have had at least two or more employees and must also
have been engaged in a commercial enterprise. Using four-digit Standard
Industrial Classification (SIC) code designations, we excluded religious,
governmental, and academic institutions from the sample because they are
not primarily engaged in commercial enterprise.2 We noted that religious
organizations that have a primary business as a nonprofit enterprise (such

2Although private schools are engaged in commercial enterprise, we
excluded this group from our sample because it was in a mixed code
category with public sector schools.

Appendix II: Objectives, Scope, and Methodology

as a social service provider) would be identified as such on the basis of
the SIC code associated with the listing. We noted that the schools and
universities were classified as public sector for some of Labor's BLS
employment reports and decided to use this approach for our employer
sample. We excluded single-employee businesses, assuming they have not
hired additional employees.

In addition to survey nonresponse, the practical difficulties of
conducting any survey may introduce other types of errors, commonly
referred to as nonsampling errors. For example, differences in how a
particular question is interpreted, the sources of information available
to respondents in answering a question, or the types of people who do not
respond can introduce unwanted bias into the survey results. We included
steps in the development of the survey, the collection of data, and the
editing and analysis of data for the purpose of minimizing such
nonsampling error. For example, in cases where an employer gave an answer
other than the choices provided, we reviewed, verified, and then
categorized each answer. Another type of nonsampling error that exists in
this survey is coverage error. The infoUSA listing was used as a proxy
listing for private sector business establishments. We are aware that
coverage error exists in this database but we cannot quantify the amount
of this error.

State and Local Area Surveys

To determine what information states and local areas collect on services
to employers, we surveyed all 50 states and all 568 local workforce
investment areas. We conducted both surveys using the Internet. We
received responses from all 50 states and 463 local areas (81.5 percent).
Because these were not sample surveys, there are no sampling errors.
However, the practical difficulties of conducting any survey may introduce
nonsampling errors. We took steps in the development of the
questionnaires, the data collection, and data analysis to minimize these
nonsampling errors. For example, we pretested the questionnaires to ensure
that questions were clear and understandable. In that these were Web-based
surveys whereby respondents entered their responses directly into our
database, there was little possibility of data entry error. In addition,
we verified that the computer programs used to analyze the data were
written correctly.

Site Visits 	We selected four states-Florida, Michigan, Oklahoma, and
Wyoming- and traveled to at least two local areas in each of these states.
We selected these states based on their geographic dispersion and the
diversity of their employment growth rates. We chose two states that had
relatively high

Appendix II: Objectives, Scope, and Methodology

employment growth rates (Florida and Wyoming) and two states that had
relatively high employment loss rates (Oklahoma and Michigan). In each
state we visited two local areas, one urban and one rural, and interviewed
workforce officials and local employers. We interviewed local employers of
various sizes based on their number of employees: small (2-49), medium
(50-499), and large (500 or more). See table 3 for a list of the states
and local areas in our study.

                   Table 3: States and Local Areas We Visited

    State            Local boards                    One-stop center          
            Citrus Levy Marion Regional       One Stop Workforce Connection   
Florida  Workforce Development                    (Crystal River)          
                  Board, Inc. (Ocala)       
            Workforce Central Florida (Lake Orange County One-Stop Career     
                         Mary)              Center (Orlando)                  
            Area Community Services              Michigan Works! Service      
Michigan Employment and Training               Center-Leonard (Grand       
                Council (Grand Rapids)                   Rapids)              
            Kalamazoo/St. Joseph Workforce  Michigan Works! Service           
            Development Board               Center-Employment and             
                      (Kalamazoo)              Training Connections (Three    
                                                         Rivers)              
Oklahoma Eastern Workforce Investment    Workforce Oklahoma-Tahlequah      
            Board, Inc. (Muskogee)          Center (Tahlequah)                
            Tulsa Area Workforce Investment Workforce Oklahoma-Downtown Tulsa 
            Board, Inc. (Tulsa)                                 Career Center 
                                                         (Tulsa)              

Wyoming 	None. [Note: Wyoming has one state workforce board that Cheyenne
Workforce Center (Cheyenne) oversees all one-stops.] Torrington Workforce
Center (Torrington)

Source: GAO.

Information that we gathered on our site visits represents only the
conditions present in the local areas at the time of our site visits, from
May 2004 through August 2004. Furthermore, our fieldwork focused on
indepth analysis of only a few selected states and local areas or sites.
On the basis of our site visit information, we cannot generalize our
findings beyond the local areas we visited.

Appendix III: Additional Employer Survey Data

  Table 4: Business Establishments Aware of One-Stops That Used Their Services

                                 In percentages

                                                                          All 
                                Service category Small Medium Large employers 
                               Post job openings    19     49    65 
                           Screen job applicants    10     26    37 
                  Obtain information on employee                    
                                        supports                    
            (e.g., child care or transportation)     3      4     8 
             Obtain financial information (e.g.,                    
                                          loans,                    
                        grants, or tax benefits)     2      8    21 
                                        Training     2      4    14 
            Assistance with business' downsizing     1      4    12 

Source: GAO 2004 survey of private sector business establishments in the
United States.

Note: Percentages may total to more than 100 because employers may have
used more than one service.

Table 5: Primary Reason Business Establishments Aware of One-Stops Did Not
Use Them)

                                 In percentages

All Reason Small Medium Large employers

Used other resources 48 69 52

                      Did not know enough about services   22     12       23 
              Did not hire or train any employees in the               
                                          last 12 months   15     7         6 
                  Had concerns about quality of services   3      5         6 
                              Location is not convenient   3      2        <1 

Had concerns about one-stop organizational
structure or administrative processes < 1 2 2 < 1

Source: GAO 2004 survey of private sector business establishments in the
United States.

Note: These data do not add up to 100 percent because we excluded
responses in which employers selected "don't know" or "other" when asked
why they do not use one-stops.

Appendix III: Additional Employer Survey Data

           Table 6: Hiring Resources Used by Business Establishments

In percentages

                                                                          All 
                       Sources to hire employees Small Medium Large employers 
                                       Referrals    84     93    94 
                 Television, radio, or newspaper    42     67    82 
                                  advertisements                    
                        Educational institutions    28     45    74 
          Recruiting firms or temporary agencies    20     41    73 
                       Private Internet services    15     35    69 
                        Public Internet services    11     25    46 
                               One-stop services    10     28    47 
                                       Job fairs    10     31    62 
                                        Walk-ins     5      7     3 
          Internal postings and company Web site     1      2     7 

Source: GAO 2004 survey of private sector business establishments in the
United States.

Note: Percentages may total to more than 100 because employers may have
used more than one resource.

Appendix IV: Comments from the Department of Labor

Appendix V: GAO Contacts and Staff Acknowledgments

GAO Contacts

Staff Acknowledgments

Joan Mahagan (617) 788-0521 Anna Kelley (617) 788-0551

Susan Pachikara and Paul Schearf made significant contributions to this
report in all aspects of the work, and Chris Moriarity and Walter Vance
provided methodological assistance throughout the assignment. In addition,
Stefanie Bzdusek, Cathy Hurley, and Art James contributed to the
administration of our employer survey, and Nitin Rao and Blake Walters
assisted in the data collection and analysis phase of this assignment.
Jessica Botsford and Richard Burkard provided legal support.

Related GAO Products

Workforce Investment Act: Labor Has Taken Several Actions to Facilitate
Access to One-Stops for Persons with Disabilities, but These Efforts May
Not Be Sufficient. GAO-05-54. Washington, D.C.: December 14, 2004

Public Community Colleges and Technical Schools: Most Schools Use Both
Credit and Noncredit Programs for Workforce Development. GAO-05-4.
Washington, D.C.: October 18, 2004

Workforce Investment Act: States and Local Areas Have Developed Strategies
to Assess Performance, but Labor Could Do More to Help. GAO-04-657.
Washington, D.C.: June 1, 2004.

Workforce Investment Act: One-Stop Centers Implemented Strategies to
Strengthen Services and Partnerships, but More Research and Information
Sharing Is Needed. GAO-03-725 and related testimony GAO-03-884T.
Washington, D.C.: June 18, 2003.

Workforce Training: Employed Worker Programs Focus on Business Needs, but
Revised Performance Measures Could Improve Access for Some Workers.
GAO-03-353. Washington, D.C.: February 14, 2003.

Older Workers: Employment Assistance Focuses on Subsidized Jobs and Job
Search, but Revised Performance Measures Could Improve Access to Other
Services. GAO-03-350. Washington, D.C.: January 24, 2003.

Workforce Investment Act: States and Localities Increasingly Coordinate
Services for TANF Clients, but Better Information Needed on Effective
Approaches. GAO-02-696. Washington, D.C.: July 3, 2002

Workforce Investment Act: Improvements Needed in Performance Measures to
Provide a More Accurate Picture of WIA's Effectiveness. GAO-02-275.
Washington, D.C.: February 1, 2002.

Workforce Investment Act: Better Guidance Needed to Address Concerns over
New Requirements. GAO-02-72 and related testimony GAO-02-94T.

Washington, D.C.: October 4, 2001.

GAO's Mission	The Government Accountability Office, the audit, evaluation
and investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people. GAO
examines the use of public funds; evaluates federal programs and policies;
and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO's
commitment to good government is reflected in its core values of
accountability, integrity, and reliability.

Obtaining Copies of The fastest and easiest way to obtain copies of GAO
documents at no cost

is through GAO's Web site (www.gao.gov). Each weekday, GAO postsGAO
Reports and newly released reports, testimony, and correspondence on its
Web site. To Testimony have GAO e-mail you a list of newly posted products
every afternoon, go to

www.gao.gov and select "Subscribe to Updates."

Order by Mail or Phone	The first copy of each printed report is free.
Additional copies are $2 each. A check or money order should be made out
to the Superintendent of Documents. GAO also accepts VISA and Mastercard.
Orders for 100 or more copies mailed to a single address are discounted 25
percent. Orders should be sent to:

U.S. Government Accountability Office 441 G Street NW, Room LM Washington,
D.C. 20548

To order by Phone:	Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061

To Report Fraud, Contact:
Waste, and Abuse in Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: [email protected] Programs Automated answering system: (800)
424-5454 or (202) 512-7470

Congressional	Gloria Jarmon, Managing Director, [email protected] (202)
512-4400 U.S. Government Accountability Office, 441 G Street NW, Room 7125

Relations Washington, D.C. 20548

Public Affairs	Paul Anderson, Managing Director, [email protected] (202)
512-4800 U.S. Government Accountability Office, 441 G Street NW, Room 7149
Washington, D.C. 20548
*** End of document. ***