WIOA Offers Opportunities for Both Workforce and Economic Developers

June 2, 2015

By: Jeff Marcell, Senior Partner, TIP Strategies

Image Credit: Workforce 2011 Job Fair at Blaisdell Center by Daniel Ramirez via Flickr (CC BY 2.0)

The release of the International Economic Development Council (IEDC) report, Shifting Workforce Development into High Gear, signals significant changes ahead for workforce development activities. The “shift” the report refers to will be seen in full when the Workforce Innovation and Opportunity Act (WIOA) takes effect in July 2015. I am proud to say that I worked closely with the Workforce Development Council (WDC) of Seattle and King County when I led the Economic Development Council of Seattle and King County before joining TIP Strategies. Our collaborative effort was included as a case study in the IEDC report, along with several other best practice examples.

As an Executive Committee member of the Seattle WDC, I had the honor of representing the organization at the National Association of Workforce Boards’ (NAWB) annual meeting in Washington DC in March of this year. The four-day conference was held at the same time as the IEDC Federal Economic Development Forum a few miles away. The NAWB saw record attendance, a tribute to the speakers (national experts and leaders in the field of workforce development) and an indication of the interest in hearing more about WIOA.

This is an exciting time for workforce development professionals because they have been seeking a reauthorized national workforce law to replace the Workforce Investment Act (WIA) of 1998. However, it is also a time of uncertainty. Now, there is greater pressure to perform at a more advanced level than ever before.

It is already clear that the new law will drive a cultural shift at workforce development organizations across the country. The law will require Workforce Investment Boards (WIBs) to approach their work as an integral part of a larger economic system that includes the entire education system (early childcare through higher education institutions), transportation, and other areas. WIOA will require WIBs to increase their scope of “customers” to include not just job seekers but employers as well. They will have to identify, build, and maintain a larger network of relationships.

WIOA will require WIBs to:

  • Be data driven and prepared to track and report on their work with increased specificity.
  • Consolidate with other WIBs, when appropriate, to serve local economies rather than political boundaries.
  • Understand industry sectors in their local economies and establish strategies to serve them.
  • Engage other organizations and reconfigure their boards to become more inclusive.
  • Coordinate with existing community programs including working with local economic development efforts.
  • Diligently identify their communities’ specific needs.

One message was clear at the conference: WIBs shouldn’t delay in implementing as much of the new law as possible. It was also made clear that WIOA isn’t just a repackaged WIA; the new law features significant changes, including new partnerships at the federal level (such as the Department of Labor working more closely with other federal agencies like the Department of Education and the Department of Health and Human Services).

Secretary of Labor Tomas Perez was the center of attention at the NAWB conference, and he conveyed enthusiasm for the new law and its impact. Perez emphasized that the aim of the law is to scale the workforce development system by building partnerships—to serve more people and businesses through collaboration. He also stressed that the workforce development system needs to be driven by demand and acknowledge multiple paths to prosperity for young people, from 4-year colleges to 2-year degree and certificate programs.

Under this new law, WIBs have a lot to prove and must create a larger impact than ever before. The ultimate goal is to improve the workforce development system throughout the country, not simply to implement individual workforce development programs. WIBs will have to understand the needs of businesses. To succeed, they’ll have to develop good working relationships with business leaders. This is one area where economic development professionals can help.

If you are an economic development practitioner who hasn’t engaged your local workforce board, I strongly encourage you to offer them your assistance. Economic Development Practitioners know how businesses function and what they need. They have established relationships, and they know what drives the local economy. These are all things WIBs will need to understand under WIOA. On the flip side, Workforce Boards provide a connection to a business resource, one that is arguably more valuable than any other: the talent pipeline. Collaboration will have multiple benefits for both economic and workforce developers, not the least of which will be the unification of efforts to reach out to local businesses.

To learn more about WIOA, reach out to your area Workforce Investment Board and visit the WIOA resource website. I welcome the opportunity to discuss WIOA and alignment of workforce development and economic development with you at any time. Feel free to reach me at jeff@tipstrategies.com.

Study: Region Must Fill 37,000 Jobs in Five Years

May 12, 2015

By: Derrek Asberry
Via: Aiken Standard

NORTH AUGUSTA ­— Employers reportedly will need to fill more than 37,000 job openings over the next five years in Aiken and four other counties in a five-county service area.

Students in the region, however, are not choosing careers in the area’s high-demand occupations, such as welding and engineering, according to a Regional Workforce Study conducted by TIP Strategies, a Texas economic-consulting firm hired by the Savannah River Site Community Reuse Organization.

Tom Stellman, the president of TIP Strategies, presented the findings Wednesday in the Palmetto Terrace room of the North Augusta Municipal Building. The 37,000 job openings, Stellman said, is a “conservative estimate” and stems from both new job creation and replacement employment.

Breaking down the study

The study gathered data using labor analysis and research that included roundtable discussions and interviews with local employers, economic developers, education and training providers, and by using employer surveys.

Specifically, it examined the workforce trends in a five-county service area: Aiken, Allendale and Barnwell counties in South Carolina and Richmond and Columbia counties in Georgia.

Collected data show that more than 50,000 workers commute into the five-county region for work each day. The region – combined with the commuter counties of McDuffie, Richmond and Burke counties in Georgia and South Carolina’s Edgefield County – creates a nine-county region that employs 400,000 people, TIP Strategies reported.

“The workforce of the SRSCRO region is inextricably linked together,” Stellman said. “This shared labor pool is what also links our region’s employers together.”

Concerns in the numbers

According to the study, about 80 percent of the 37,000 job openings will be replacement jobs – employment availability because of attrition or retirement. The rest, roughly 7,600 jobs, will be new to the region.

Rick McLeod, the executive director of the reuse organization, spoke about Aiken’s biggest employer: the Savannah River Site. McLeod said the site serves as an ongoing example of upcoming replacement jobs, stating that the average age of a site worker is 54. He added that the average age in the manufacturing sector is 48.

“There’s going to be a lot of opportunities for transitions to occur in the next three years,” McLeod said.

Another point Stellman mentioned is that the most popular jobs aren’t always reflected in job availability. The region graduates 7,300 students annually from 15 higher-education institutions. The most popular fields of study are nursing, liberal arts and business administration; those fields, however, don’t match the high-demand occupations, TIP Strategies wrote.

“Bachelor’s degrees in such areas as engineering, computer science and health science are in high-demand,” Stellman said. “Students often choose their majors without this type of labor market information.”

The new model

TIP Strategies said the goal will be creating a more demand-driven workforce that supports recruitment and retention. That mission can be met through collecting information, holding workforce summits, connecting partners to students and job seekers and creating a marketplace that attracts younger workers.

Todd Glover, North Augusta’s city administrator, said the city has embraced those concepts through constructing a new facility for Medac – a provider of services and products to anesthesia-related health care providers that is expected to provide more than 600 jobs.

North Augusta also is in the process of jumping legal hurdles to move forward with Project Jackson, a proposed 25-acre development consisting of a hotel, stores and a baseball stadium for the Augusta GreenJackets that would be between The River Club and Hammond’s Ferry neighborhoods.

“The new model is creating a place where people want to live and then find jobs, which is the opposite of what they used to do,” Glover said. “With the younger millennials, we’re trying to create a place where they would want to live and we think those industries will follow behind them.”

Sufficient employers and employees coming and staying in the region is a top priority, said Susan Winsor, Aiken Technical College president and the chairwoman of the SRSCRO.

“We never ever want to hear from a prospective employer that workforce availability is the reason they went elsewhere,” Winsor said. “We want to be the reason they come here. So it’s up to us to prepare our young people for the jobs of tomorrow.”

David Jameson, the president and CEO of the Greater Aiken Chamber of Commerce, added that it’s important not to put “all of our eggs into one basket.”

“We need to also be continuing to attract a workforce in many segments: nuclear, IT, health care and manufacturing,” he said. “We need to also make sure there’s room for advancement in these jobs and not just entry-level positions.”

Collective problem-solving

The way to attract that workforce, Jameson added, is by counties working together instead of competing. He said the issue is not a city-by-city or county-by-county problem. Rather, it is one that impacts each part of the region.

“One area could have a strength that the other doesn’t have. So if we pull those strengths together and work together, we can tackle this workforce issue,” Jameson said.

TIP Strategies made several recommendations, including working with economic development partners to implement teacher programs, events and other initiatives to bring quality employment to the forefront.

McLeod added that the next few months will be spent working to define roles and responsibilities to implement the recommendations.

“We’re interested in making sure we put things in place so that local citizens have an opportunity to get degrees and find quality employment here,” he said.

Derrek Asberry is the SRS beat reporter for the Aiken Standard.

Jon Roberts Presents at ULINE Corporate Headquarters

March 27, 2015

By: Jon Roberts & Karen Beard, TIP Strategies
TIP Strategies has maintained a long association with KABA (the Kenosha Area Business Alliance) and southeastern Wisconsin. From our first interactions with the organization in 2001 (in connection with our planning effort in neighboring Racine County) to our work on the 2009 economic development plan that underlies the organization’s Kenosha First strategy, our ongoing relationship with KABA is something we are proud of—especially in light of the region’s recent successes. These successes include major expansions of the ULINE Corporation, Amazon, and downtown improvement projects involving Jockey International.

As a result of this connection, Jon Roberts is frequently invited back to the region to share his expertise. In early March, the ULINE Corporation (headquartered in Pleasant Prairie, WI) featured Jon in two sessions of their employee Lunch and Learn. Building on themes he had previously presented to KABA and the Wisconsin Economic Development Association, Jon held interactive discussions with ULINE staff about current trends in economic development and their importance for the company’s future and for the economy of Kenosha and the Chicago-Milwaukee Corridor.

The impact of “disruptive technologies”—innovations in products, services, and business models that displace existing structures—continues to be an important focal point for TIP’s trend discussions. In addition to their impact on individual business, such as ULINE, disruptive technologies—think 3-D printing, big data, the self-driving car—by definition cause massive (and often rapid) changes to supply chains, social norms, and the labor pool. In addition to changing demands for labor, the presentation touched on how these trends impact the skillsets required by employers and what needs to be done to change the talent equation.

TIP Hired To Assist With An Economic Development Action Strategy For The Minneapolis–Saint Paul Region

December 15, 2014

By: Caroline Alexander, Senior Consultant, TIP Strategies

Image credit: 2008-0712-MPLS-panorama by Bobak Ha’Eri via wikimedia commons (CC BY 3.0)

A broad-based regional partnership has hired TIP Strategies to develop the Minneapolis–Saint Paul Economic Development Action Strategy. The primary goal of this work is to create a strategy with short and medium-term actions to accelerate investment and job creation in the region’s core cities.

Though the work will be guided by economic development principles, it will also integrate strategies with community and workforce development to ensure that market-challenged areas and lower-skilled workers also benefit.

The project partners include Greater MSP, the City of Minneapolis, the City of Saint Paul, the Saint Paul Port Authority, Hennepin County, Ramsey County, Minneapolis Regional Chamber of Commerce, Saint Paul Area Chamber of Commerce, and Minnesota Philanthropy Partners.

The Greater Fargo-Moorhead Region Hires TIP For Workforce Strategy

December 1, 2014

By: Caroline Alexander, Senior Consultant, TIP Strategies

Image Credit: Fargo by ethankan via flickr (CC BY-SA 2.0)

TIP Strategies was recently engaged by a regional collaborative that consists of the Fargo-Moorhead-West Fargo Chamber of Commerce, the Greater Fargo-Moorhead Economic Development Corporation, the Fargo-Moorhead Area Foundation, and the United Way of Cass-Clay. The engagement will consist of a comprehensive labor study and a regional workforce strategy. With an unemployment rate of 2.5 percent, the Greater Fargo-Moorhead region faces formidable workforce challenges as their economy continues along its stable growth trajectory. The collaborative formed to undertake a regional approach to addressing these challenges. The TIP study will create the foundation for this initiative, providing information and strategic recommendations that will guide regional investments in workforce development.

In Highly Educated Larimer County, Skills Gap Persists

November 5, 2014

By: Madeline Novey
Via: The Coloradoan

Photo credit: "techshop_members_welding_project" by TechShop via Flickr (CC BY 2.0)

Employers want people like Lexynton Seeley.

The 17-year-old Berthoud High School senior is one of about 60 students in Front Range Community College’s welding certificate program for high school students. Raised by a dad who’s skilled in the craft, she later dated someone enrolled in the program and thought: “It looks really interesting to me, this trade that’s in such high demand.”

After graduation, she’s considering going to New Mexico State University or the University of Colorado at Colorado Springs to study biomedical engineering or mechanical engineering, with the hope of one day building prosthetics or bodily implants.

She plans to weld during the summers to pay tuition: “I didn’t want to be eternally paying debt.”

Seeley is part of a new generation of workers who could change the face of employment in Larimer County and the nation, bridging the gap between skills employers need and the workforce.

Blue-collar work is changing. Workplace environments are safer and cleaner. The wages are in many cases higher than jobs filled by a plethora of college graduates.

National labor statistics indicate there’s a need for roughly 300,000 machinists, welders and other skilled tradespeople to fill vacancies left by a wave of people in their 50s and 60s nearing or in retirement. Media have widely reported that industry-specific phenomenon, but the skills gap touches other facets of Larimer County’s job market.

September’s unemployment rate dropped to 3.2 percent — the lowest level since 2007 — but people are still looking for work.

Jobs in retail, restaurants, hospitality and personal services are among the county’s fastest-growing industries that support the population, according to TIP’s labor market profile, but are relatively low-paying and highly competitive; the region has an “overqualified” workforce to meet the needs of these industries. At the same time, Larimer County employers are having trouble hiring welders, machinists, electricians, sales representatives, drivers, engineers and more.

About half of Larimer County workers have a bachelor’s degree or higher. But only 23 percent of the region’s jobs require college degrees, as reported in a September labor market profile compiled by Austin-based TIP Strategies.

Closing the gap is imperative to building a healthy economy.

Josh Birks, the city’s economic development director, thinks it’s the responsibility of the entire community — the city, educational institutions, employers, the Larimer County Workforce Center and others — to close the skills gap. He said his office will work with partners to further dissect TIP Strategies’ labor market profile and use the data to inform a current revisit of the 2012 Economic Health Strategic Plan, presented to the City Council on Tuesday.

Closing the skills gap will require a number of steps. Programs such the machining shop at Front Range Community College’s Longmont campus — one of nine community colleges to receive a portion of dollars from a $25 million U.S. Department of Labor Grant to build a pipeline of advanced manufacturing workers — can’t do it alone.

Birks said such steps could include increasing alignment between employers and educational institutions, as PSD, Front Range and other institutions have been doing. It could also mean helping connect the labor force with training programs and create greater awareness of employer needs, as the Economic Health Strategic Plan rework addresses, he said.

The city’s Economic Health Office is also aiming to create less of a mismatch between the highly educated workforce and the relatively low percentage of jobs that require a college degree, said Caroline Alexander, a consultant at TIP Strategies. She said the office is cultivating key industry clusters, supporting an innovative ecosystem that fosters new business development and growth; and is ensuring the city has space for these businesses to grow.

“Of course, these strategies will take time to narrow the gap,” she wrote, “but the city has gained traction over the last three years since it adopted its Economic Health Strategic Plan.”

How we got here

Some say it’s too difficult to pin down one culprit for the skills gap.

Some point to impending waves of baby boomer retirements and a lack of trained people to fill tens of thousands of vacant positions, as is the case in skilled trades such as welding and machining. Some think there’s a lack of awareness about the aforementioned jobs and how good they can be. Others say we as a society pushed too hard to get everyone to go to college and, thus, siphoned off pipelines feeding blue-collar industries.

“It’s pretty well known that if you go to college, you will make higher wages than if you don’t. That’s certainly the push that we put out there,” said Martin Shields, CSU’s regional economist.

Shields was referring to the oft-advertised statistic that college graduates will, on average, make $1 million more in their lifetime than someone without a degree.

But “wages for college-educated workers are stagnant and others are declining. A college education is not this path to riches, necessarily; it’s the path to treading water,” he said.

George Newman, director of Front Range Community College’s machining program, said “there’s been an overemphasis on four years of college for everyone.”

He’s noticed a philosophical shift that puts college and trade work education on more equal footing. It’s driven by increased awareness about the skills gap, a greater consideration of whether students want to take on significant student loan debt to pay for college and shifting perceptions about machining.

Contrasted with their oil-splattered, 20th-century machining shop counterparts, today’s facilities are cleaner and safer, Newman said. Instructor Brian Glover joked on a recent day in October that one could “eat off the floors” in the new machining shop at Front Range Community College’s Longmont campus.

“I mean, look at this facility,” he said, motioning to rows of computer-controlled equipment programmed by humans to do precise work. “It’s not your grandfather’s machine shop anymore.”

Impact on employers

Mandy Dicker is a recruiter for A World of Tile, which has 15 stores in Colorado, Arizona and New Mexico. The company intends to grow annual revenues from $15 million to $100 million by 2020, and it “absolutely” faces a challenge to fill sales representatives positions.

College graduates are great, Dicker said, but employees don’t necessarily need the degree to make the cut; eagerness to serve people and sales skills (taught in company-specific trainings) are key to getting a position she said pays an average of $50,000 a year.

In the Fort Collins market, Dicker said she’s yet to figure out where and how to reach job seekers. The secret to closing their skills gap is yet unsolved. She thinks people may not consider sales as a career because the job is overshadowed by a negative reputation. People don’t want to be used car salesmen, she said.

Steve Anderson is CEO of Forney Industries, one of the oldest manufacturing companies in Fort Collins. He’s working with others in the Northern Colorado Manufacturers Group, as well as partners PSD, Front Range and CSU, trying to bring more manufacturing to the region. He is struggling to find people to do the work.

“We are seeing a real void in kids that have the ability to get into manufacturing. They are not aware of the jobs, for sure, but they don’t have the training,” he said.

The college path isn’t for everyone, something Poudre School District recently stressed in its long-term vision for what graduates should look like.

Jason Walsh, director of Front Range Community College’s welding technology program at the school’s south Fort Collins campus, said his shops are running at full steam. He’s enrolled all the students he can and is excited for the campus’ new integrated technology building to open later in 2014 with a larger footprint and extra welding bays.

Roughly 50 students graduate from FRCC’s welding programs each semester; a bigger building could increase the number of graduates 10 percent to 20 percent, he estimates. However, another challenge is finding and hiring trained instructors who are willing to earn less in academia than in the field.

“We’re in a weird spot where we’re not really having a major shortage in people who want to learn. We’re seeing a bottleneck in being able to train them quickly for it,” he said.

When Walsh started at FRCC’s Larimer campus 10 years ago, he got calls from parents asking him whether it was safe for their children to work as welders and if they’d make enough money to make ends meet. Things have changed.

“We’re constantly getting calls from parents that want us to talk with their kids about welding instead of going to a four-year college,” he said. A significant factor is money.

A young person could spend four years and accrue tens of thousands of dollars in debt for a liberal arts degree and make $30,000 to $40,000 a year, Walsh said. Or they could pay about $6,000 for an associate degree in welding technology at Front Range “and they’ll have a job waiting for them” at graduation day making $16 to $20 per hour.

Even with “low skills and low experience,” companies across Northern Colorado are “giving people a chance.”

“It’s really a no-brainer if you want to pay the bills,” Walsh said.

“Blue collar, we make more than people with history degrees,” said Jen Steen, prevision machining instructor at FRCC’s Longmont campus. And for the self-described entrepreneur with an MBA working in manufacturing means being part of something bigger, something necessary to keep America’s economy vibrant.

“I think there’s a lot of pride to being part of what keeps the world turning,” she said.