Summary
Grand Rapids Community College (GRCC) commissioned an Economic Impact Study to better understand the effect of its non-credit workforce development programs. In the past, it has been difficult for colleges to quantify the impact of workforce development programs with confidence, due to a lack of methodologies designed specifically for non-credit programs.
The study found that alumni of GRCC’s non-credit programs generated $129.7 million in new income for the region through improved wages, higher productivity, and increased spending.
Aside from the non-credit alumni impact, the college also generated $310 million in new income for the region through its grant spending, and its contribution to attracting or expanding local businesses.
Thanks in part to the availability of skilled alumni from GRCC, 41 businesses either located to the GRCC service region or expanded their operations in the 2016-2017 fiscal year alone.
Workforce training: a regional powerhouse
For many community colleges, articulating the full impact of their non-credit workforce development programs is a challenge. While professors and staff may have a wealth of anecdotal evidence, it can be difficult to quantify the big-picture impact with hard numbers and economic data. As a result, public perception is not always aligned with the true value that these programs provide, despite the fact that these programs are often a crucial component of the college’s mission alongside more traditional for-credit offerings.
But now, through a research partnership with Lightcast (formerly Emsi), Grand Rapids Community College has solid numbers backing up the notion that their non-credit programs are a powerful economic development engine, supplying the critical talent that many local employers are desperately looking for.
Evidence for this comes from an impact study recently completed for GRCC. Like many community colleges, GRCC serves a diverse mix of credit-seeking and non-credit, workforce development students. In 2017, GRCC worked with Lightcast on a study that focused on the impact of their for-credit programs. After seeing the thorough analysis and findings from that report, the administration wanted to expand that research by assessing their non-credit programs as well.
“We realized that there was a large piece of the economic development work we did in this region that we hadn’t captured in that initial report,” said Lisa Freiburger, vice president for finance and administration at GRCC.
The methodology
To do the analysis, Lightcast took an in-depth look at GRCC’s certificate programs in business, manufacturing, healthcare, applied technology, and computer information systems (to name a few), as well as the college’s short-term job-training partnerships assisting local companies.
One of the biggest hurdles to measuring the effects of non-credit programs is figuring out a measurable proxy for increased human capital–the skills, knowledge, and experience gained. In academic settings, you count credits. So to obtain a similar quantitative unit, Lightcast's consulting team measured Credit Hour Equivalents (CHE). Each CHE is 15 hours of classroom instruction time per semester, and the average non-credit student at GRCC takes 6.6 over a course of study.
Lightcast estimated the wages of all the graduates of the non-credit programs in the last 30 years, and compared them to those of peers without GRCC training. Different certifications had different outcomes, but the consulting team found that the average value per CHE was $158 in earnings annually.
Lightcast then multiplied all the CHEs earned by students over the past 30 years with the average value of the CHE for that year, and added up the products for total added labor income. In order to avoid inflating the results, Lightcast economists also adjusted for attrition: alumni that may not still be working in Grand Rapids due to migration, retirement, or unemployment. Then the team estimated a counterfactual scenario to figure out how much of that added income would be replaceable if GRCC didn’t exist.
The findings
There are two main findings associated with this study: the increased earnings of grads and the ability of the local economy to add to or attract new business because of new talent.
First, between 2016 and 2017, alumni of the non-credit workforce brought in $129.7 million in new income to the region. That number—equivalent to nearly 1,600 jobs—is based on the increase in alumni earnings, the additional productivity their newfound skills enable, and the ripple effect on local businesses from both companies and workers spending more money in the local economy.
Second, the presence of these programs makes Greater Grand Rapids an attractive location for businesses to relocate or expand. In the 2016-2017 fiscal year alone, 41 companies did one or the other. These companies added almost $294 million in regional income. Along with the $16.6 million generated from the grant money GRCC spends on its workforce development programs, that’s a total of $310 million over and above the alumni impact.
Shaping your economic development narrative
Quantifying the concrete effects of these programs is important both in justifying GRCC’s presence and planning for the future, according to Freiburger. “We really wanted a measurement process to validate the impact we were having on the community,” she said. “One of our goals is to tell our story to people who wouldn’t necessarily take one of our classes, to show that there is value to them in having us here even if they never take a single class.”
GRCC is also using the data in discussions with donors, legislators, and potential students. Most importantly, however, the study will help them in their mission of service to Michigan communities.
“We are blessed to be able to work at an institution that does phenomenal things for this community by serving students, serving businesses and just providing a community resource all around,” said Freiburger. “I think our ability to continue to innovate, to respond to the ever changing needs of our community is huge. We’re perfectly positioned.”
The impact study certainly backs up Freiburger’s optimism. And she’ll be bringing more than optimism to future meetings with stakeholders. She’ll have the hard fact of over $400 million in added value—a difficult number for even the staunchest pessimist to argue with.
In 2023, our friends at GRCC commissioned another economic impact study from Lightcast that revealed their $1 Billion impact on Michigan. You can read about it here.