Using Outcomes-Based Payments to Increase Pathways to Good Jobs: Allegheny County, PA
Published on: December 3, 2025
- Outcomes
- High-quality employment
MORE ABOUT THE STRATEGY USED IN THIS CASE STUDY Job placement services and supports
Overview
Summary
In 2025, local workforce leaders in Pittsburgh and Allegheny County recognized that the region would experience a shortfall of over 80,000 workers over the next decade. The shortfall would primarily be driven by retirements, economic growth, occupational transitions, and misaligned workforce training.The impact would be felt across a wide range of industries, including construction, financial services, manufacturing, clean energy, healthcare, and information technology.
Partner4Work, a Pittsburgh-based workforce development non-profit, knew that existing workforce training approaches across the region were insufficient to meet this challenge. The existing Individual Training Account (ITA) funding model, maintained at the state level, limited local control in selecting workforce training providers. This led to a misalignment between state-approved training providers and local industry demand, with resources often focusing on too narrow a set of industries or roles.
To close this gap, P4W launched a market-responsive approach: the Industry Recognized Training Pipeline. The approach uses competitive procurement to direct funding to proven, industry-aligned training, such as apprenticeship and pre-apprenticeship programs in high demand industries.
Keys to the model’s success included early and frequent employer engagement, partnerships with proven training providers, effective negotiation over pricing with training providers, and structuring contracts with and payment terms for providers to incentivize performance.
Challenges that IRTP needed to navigate included introducing a new procurement process and payment terms to existing training providers and standing up data systems able to provide reliable insights into program outcomes. Implementing the new contractual relationship required significant change management among training providers to shift from the long-standing ITA model. It also necessitated new data systems (leading P4W to implement Microsoft Power BI to track participants, services, and outcomes), and to advance a wage data agreement with the state to better assess job quality.
Most Recent Portfolio Statistics - Program Year 2024/25
$1.4M
$1.4 million were directed toward evidence-based workforce programs in 2024-2025.
218
218 individuals accessed training through IRTP in 2024-2025, with 80 percent successfully earning credentials.
$20/hour
Participants who completed training through ITRP earn an average hourly wage of $20 per hour.
Aligning funding with organizational values: For program year 2024/2025, IRTP directed $1.4M of blended federal and state funding to workforce training programs through an outcomes-based procurement model that ties payments to participant completion and credential attainment.
Using strategic partnerships to amplify impact: Through partnerships with nearly a dozen training organizations via IRTP, Partner4Work (P4W) is demonstrating how outcomes-based payments can increase workforce training quality across a variety of training models, including pre-apprenticeship, apprenticeship and other work based learning.
Using procurement to support good jobs pathways: Underserved populations are receiving industry-recognized training and credentials in construction, healthcare, manufacturing and technology through ITRP partners. With additional supports, like childcare and transportation assistance, 80 percent of participants complete training. Upon completion, participants are placed in roles with a $20 hourly wage on average.
Solution
What was the challenge?
Lack of flexibility in the ITA model: Prior to creation of the Industry Recognized Training Pipeline (IRTP), the vast majority of workforce training funds were deployed through the Individual Training Account (ITA) system. ITAs are a core function of the Workforce Innovation and Opportunity Act but can limit local control of training provider quality, as Eligible Training Provider lists are maintained at the state level. Local labor market demand varies and statewide providers often lack localized employer relationships, creating a misalignment between state-approved providers and local needs.
Funding a limited set of occupations: Centralization of funding through ITAs limited the number of careers for which trainees were being prepared, as program selection was based on individual choice, not local demand. IRTP enables Partner4Work (P4W) to ensure a more diverse set of training opportunities and investments with proven providers who offer full time job opportunities with local employers. It also enables P4W to evolve the training as shifts occur in the market.
Limited ability to connect outcomes to payments: The P4W board also wanted to direct funding to programs that demonstrated results by tying payments to outcomes and negotiating training costs, to avoid price gouging or artificial inflation. However, P4W found the ITA process was not well suited to competitive procurement or subrecipient-style contracts.
What was the solution?
Establishing competitive procurement processes: P4W established the IRTP as a mechanism to set funding aside each year to competitively contract with proven, high-quality training providers who would deliver locally-responsive training for target industries and occupations outlined by the board’s sector partnerships. The competitive process allowed P4W to negotiate the training costs per participant up front and customize the award size accordingly.
Shifting to outcomes-based payments: IRTP contracts are outcomes-based, specifying that 50% of the payment is contingent on successful completion/credential attainment. This incentivizes training providers to ensure participants thrive in the programs and better enables P4W to meet WIOA requirements.
Preferring providers with strong employer relationships: When evaluating prospective training providers, preference was given for respondents who could demonstrate employer agreements or strong buy-in from employers, as this leads to higher rates of placement and wages. Acceptable evidence included memorandums of understanding, commitments to interviews, and use of apprentices to ensure proper pathways were in place prior to awarding a contract.
Focusing on job quality: The IRTP request for proposal required that successful awardees would train participants for jobs that provide family-sustaining wages (in accordance with P4W’s self sufficiency standard). A strong focus was placed on apprenticeship, pre-apprenticeship and work-based learning.
Who were the key stakeholders?
Partner4Work board: The board established the strategic vision for high demand occupations and how training for these occupations could be funded, which led to the launch of the IRTP. The board staff collects data on program outcomes, issues payments when milestones are met, directs active contract management activities and regularly assesses labor market information to ensure programs remain aligned with industry needs.
Employers in industry sector partnerships: Employers provided demand size guidance to P4W on the skills, certifications, and training programs which would meet their needs, helped to inform curriculum, and gave demand signals for the number of workers needed. Employers continue to provide input on an ongoing basis as needs shift in their industries.
Industry associations: Associations, such as Pittsburgh Technology Council and Builders Guild of Western PA, served as an important conduit to employers and shared what they were hearing about employer talent needs to inform program development.
Training providers: Providers partnered closely with P4W to adapt existing programs to the contractual structure and budget or to co-develop programs to meet the local needs. They also engage regularly with P4W to assess programs for continuous improvement.
What factors drove success?
Engaging employers early and often: Through the industry partnership model and the board structure, employers are engaged around what to fund, the necessary curriculum, shifts in market demand and more. Partner4Work invests significant time in streamlining communication and partnering across organizations so that priority industries, localities and employers are positioned to benefit from the program.
Partnering with proven training providers: P4W focused on procuring off-the-shelf training with proven results through models such as apprenticeship, pre-apprenticeship and related work-based experience. This allowed P4W to review past performance, including any available evaluations and understand expected results. Its requirements around employer partnerships also improved participant opportunities by including guaranteed interviews, job shadows or other types of employer engagement as part of the core model of contracted training programs.
Negotiating costs by contract: A competitive procurement process allowed Partner4Work to negotiate bespoke training costs with each of the 11 training providers, rightsizing its costs and carefully considering unique elements necessary to support each program such as materials, transportation, childcare or other supportive services. Subrecipient-type contracts created more space for relationship building and partnership than a typical vendor relationship. Contract values were then established based directly on the agreed upon costs per person and the number of individuals who would be served. Negotiated costs ran from $4,000-7,000 per participant, resulting in contracts ranging from $60,000-300,000 per contract. This approach allowed P4W to reduce or eliminate out of pocket costs for training program participants.
Using a 12-month contract with option years: The 12-month duration provided sufficient time for training providers to demonstrate success serving multiple participants while also building in a safeguard which allows P4W the option of non-renewal. Non-renewal can be based on performance issues, such as failure to meet WIOA metrics, funding changes or shifts in employer need. While to date all contracts were renewed for the second year, this structure provides maximum flexibility.
Changing payment terms to a 50/50 model: This approach is a split where P4W pays 50 percent of the negotiated per participant cost when a participant starts and then the remaining 50 percent is paid when the individual finishes the program (as demonstrated by certificates of completion, measurable skill gain and credential attainment). If a participant starts the program and drops out, the remaining 50 percent is not paid and can be used for another program. Once P4W implemented the 50/50 model, it saw some improvements in completion as it motivated providers to provide the support needed to assist the individual in achieving success.
What were the major obstacles?
Setting up high-quality data systems: Identifying IRTP programs across the region required new data collection mechanisms and more expansive insight into job quality. Partner4Work implemented Microsoft Power BI to track participants, services, and outcomes. Additionally, Partner4Work is also finalizing a wage data agreement with the state to expand their access to earnings information and better assess job quality.
Provider change management: Training providers in the area had operated using the Individual Training Account (ITA) model for many years under both WIOA and WIA funding. The launch of the IRTP program introduced a new contractual relationship with training providers, elevating the focus on performance by linking payments to outcomes and placing increased focus on a particular set of industries with a demand for talent. When changing payment structures (e.g., 50 percent at enrollment and 50 percent at credential completion), clear communication and proactive change management with training providers was essential. P4W defined the payment structure upfront in the RFP, which helped set expectations early. P4W emphasizes communicating payment terms as early as possible—ideally during the procurement process—to ensure alignment and minimize confusion.
Timeline
Partner4Work, through coordination with their board and industry partnership teams, develops a new strategic initiative for cohort training called the Industry Recognized Training Pipeline to meet growing labor market needs. P4W sees this as an opportunity to strengthen referral pathways between quality training and the existing workforce system partners as well as increase placements in priority industries for youth and adults. The organization then begins to identify potential employer and training partnerships along with available funding.
Partner4Work issues an initial IRTP solicitation to fund five or more cohort trainings in priority occupations (construction, financial services, transportation/logistics, manufacturing, healthcare, information technology/STEM, public sector, transportation, retail and hospitality). Available funding was primarily focused on young adults ages 18-24 in the City of Pittsburgh, with more limited funding for adults and dislocated workers. Awards are outlined as vendor contracts and included an outcomes-based payment of 50 percent for credential attainment.
Training provider RFPs are reviewed and training provider contracts selected. Training provider contracts kick off in November using a new outcomes-based approach to payment. Initial funding is available for eight months, through June 30th, 2021, with the possibility of up to 3 option years for a total of $870,00 in training investment. Each training provider has at least one employer partner who has guaranteed to hire, provide preferential interviewing, or deliver related support for placement. The P4W board closely tracks progress in launching programs and continues to reiterate commitment in using outcomes data to drive organizational strategy and continuous improvement.
Per Scholas, a nationally recognized training partner, delivers its first cohort of training in the Pittsburgh market. Thirty students are included in the launch for full stack Java development with plans for subsequent cohorts and expanded areas of training focus. The workforce board tracks Per Scholas work as model of industry partnership and begins to develop a relationship.
Partner4Work began partnering more closely with Per Scholas in January 2022. Per Scholas was selected as an Industry Related Training Pipeline (IRTP) provider through competitive procurement.
Partner4Work sets out a new strategic plan for the organization (2023-25) which includes a focus on effective, worker-centered programming that will strengthen the local workforce. The organization refines its priority sectors in accordance with the market to reflect construction, financial services, manufacturing (including advanced manufacturing and biomanufacturing), clean energy, healthcare, information technology/STEM (including robotics) and retail & hospitality (focus on supervisory positions). The plan deepens the organization’s commitment to using evidence-based work-based learning approaches such as apprenticeships and coupling them with supportive services that remove barriers to entry.
Partner4Work, building off the efforts of their industry sector partnership teams and earlier work to launch the IRTP strategy, decides to issue a new competitive procurement process to expand the high quality training providers in its priority occupations. This decision is made to provide maximum flexibility in directing dollars to programs with a proven track record of connecting workers to good jobs.
P4W receives 18 distinct proposals totaling $5 million. Eleven organizations were selected and approximately $1.4M awarded. Proposals covered training in the following industries: construction and labor, manufacturing, transportation and logistics, healthcare, and technology.
P4W finalizes contract negotiations with 11 selected training providers. Initial agreements begin July 1, 2024 and extend through June 30, 2025, with options for renewal. The training providers begin enrolling participants.
Partner4Work reviews and renews all 11 contracts for option year one. The new WIOA plan (2025-2028) officially launches, further codifying Partner4Work’s commitment to IRTP as a crucial component of the workforce development training ecosystem.
Implementation
What were the key components of the program’s design?
Participants receive support in selecting the right program for their needs: Prospective participants can review information about each of Partner4Work’s training partner programs online and receive personalized support either in person or virtually with dedicated points of contact for program selection and enrollment through the PA CareerLink Pittsburgh offices. Success stories are also featured to help describe the impact that the training can have in the life of an individual.
A set of proven workforce training models: P4W supports eleven training providers that offer evidence-based apprenticeship, pre-apprenticeship and work-based learning models. This provides participants with access to a wide range of training opportunities, from ApprentiPGH’s FortyX90, a technology-focused apprenticeship program, to Freedom House 2.0, which prepares clients for careers in healthcare.
Competitive procurement with negotiated training costs: Training providers were evaluated on the success of their programs in providing full time work to those who complete the program. P4W established a fixed cost per participant with each training provider based on a breakdown of the cost components. This was used to calculate the total value of the contract to each training provider making expenditures more predictable and easy to manage.
Leveraging performance-based payments: Providers only become eligible to invoice for the remaining 50 percent of the per participant cost upon each participant’s completion of the training program or obtainment of an industry-recognized credential, depending on the program. Providers are not paid the second payment in the event the participant drops out or is unable to obtain the credential.
Focusing on quality jobs: P4W required training providers to attempt to place participants in jobs that possess the key attributes of good jobs, as defined in TEGL 07-22. The degree to which RFP responses demonstrated likely success in doing so was a key component of the evaluation and included in scoring of the training program description which represented 50 out of 100 points in the evaluation.
How were key partners engaged?
Creating deep partnerships with training providers: The subrecipient contract structure, which enables customized costs and program designs across providers, is built around close partnership with training partners. P4W invested significant attention from RFP launch, through bidder’s conferences, Q&A and other interactions, to contract negotiation and ongoing contract management in creating open, engaged partnerships. Training providers meet monthly with P4W to actively track progress and identify improvements.
Co-developing strategy with employer partners: P4W works closely with employer partners through their industry partnership councils and their boards to understand their workforce needs and increase their access to skilled talent. Training investments are ultimately informed by both market data and qualitative input from the employers. For example, the IRTP program with Freedom House works with UPMC, the largest employer in the state, and the PIT2Work program has direct involvement with the airport terminal expansion planning committee.
How did program implementation create opportunities for all?
- Creating a diverse set of pathways: IRTP is the practical implementation of the P4W board's industry partnerships vision to help address Pittsburgh's looming workforce shortfall. By structuring the IRTP program using a variety of different funding sources and high-quality training programs, the board provided accessible pathways for underserved individuals into High Priority Occupations across Pittsburgh and Allegheny County. For example, the Pittsburgh region is becoming a hub for biopharma innovation and manufacturing. This includes investments in career and technical education (CTE) and apprenticeship programs to create pathways into these jobs. Expanding training expenditure beyond typical CDL licensing also allowed Partner4Work to embed supportive services directly into some programs or pair them with support from other sources to overcome barriers that individuals may face.
- Investing in what works to serve people better: IRTP was designed as an extension of the organization’s sector partnership work. It allows Partner4Work to influence standards and align investments with the organization’s goals. Focusing on apprenticeship, pre-apprenticeship and work-based learning models coupled with a performance-based funding model aligns the board's values with funding usage to maximize the number of individuals who are not only served but succeed. This allows Partner4Work to redirect funding when there are gaps and ensure more individuals can participate in the program. It also builds on the state workforce board’s commitment to using evidence of effectiveness to inform programs.
- Removing barriers to participation: P4W and the job center’s clients face barriers to sustained participation in programming. To reduce participant attrition, P4W either negotiates the inclusion of supportive services into the cost of IRTP contracts or pairs IRTP learning with support through co-enrollment in other programs such as WIOA. For example, one of the IRTP construction programs, which is in partnership with the airport to modernize a terminal, allows for on-site childcare, transportation, and a stipend.
What were the key activities leading up to and following launch?
Identifying industry and occupation priorities: To create a list of priority industries for IRTP, Partner4Work performs monthly labor market information analyses. This includes tracking shifts in job openings by occupation, labor market participation and unemployment. These data, coupled with quantitative and qualitative input from employers, as well as the in-depth knowledge of staff industry liaisons, ensures P4W is responsive to employer needs.
Setting aside training funding for IRTP programs: To direct funds to outcomes, the board designated up to $1.5 million to support the IRTP (program year 2024/2025) in addition to dedicated staff time to support its development, execution and evaluation. Prior procurement cycles were closer to $900,000. The budget was informed by in-depth knowledge of the programs that worked, based on a national scan of providers and research around models such as apprenticeships and available funding sources.
Setting payment terms: The 50/50 payment split was negotiated with training providers based on what would allow them to continue to operate and what would incentivize positive outcomes for participants.
Negotiating per participant costs: Per participant training costs for each program were negotiated based on the individual program needs, such as duration, materials and inclusion of supportive services.
Leveraging Active Contract Management (ACM): Partner4Work brings together the training providers, job centers and key board staff to collaborate on challenges and opportunities throughout implementation.The ACM approach provides clear channels for communication and risk management, allowing for flexibility to shift direction as population or employer needs change.
How was the approach funded?
Leveraging existing funding to support program development: IRTP program design and contract development was undertaken by existing P4W staff and was covered through existing WIOA budgets. Similarly, active contract management activities and project evaluation are also part of the core functions of the board and did not require additional or net new funding.
- Blending funding sources to support training programs: IRTP training uses a blended funding model which includes WIOA Adult, Dislocated Worker, and Youth Programs; Temporary Assistance for Needy Families; Community Service Block Grant; Community Development Block Grant; Reentry Employment Opportunities; and other federal or state grants. The vast majority is currently WIOA (an estimated 70%) with the other sources augmenting the work for particular populations or industries. Collectively, these funding streams allowed P4W to award contracts up to $1,500,000 in 2024-2025. Funding will fluctuate year to year based on the awards that P4W receives, however.
How was the approach measured and refined?
Assessing program quality while selecting training partners: IRTP evaluators reviewed past performance of potential training providers to understand the quality of their training programs, including the provider's history in meeting performance outcomes and other available evidence. Evaluation of the proposal included a preference for established MOUs with employers to increase the chance of successful participant placement.
Ongoing performance measurement: IRTP’s partner programs are measured against standard WIOA performance requirements. Specific performance goals are outlined in the contracts and tied to performance-based payments. Performance targets include enrollment, skills gained, credentials attained, program completion, job placements, wages, and job retention. P4W may also terminate a contractor for under performance or work with a contractor to remediate issues.
- Considering performance at contract renewal: IRTP contractors report data into the state reporting system and are regularly monitored in accordance with state and federal monitoring requirements for the associated funding streams (e.g. WIOA). P4W also performs yearly assessments of performance to determine contract renewal and has the right to perform observations or evaluation at any time to ensure continuous program improvement.