MassDevelopment: Blueprint for Economic Diversification

June 4, 2016

By: Alex Cooke, senior consultant, TIP Strategies

Salem Muster

Image credit: Salem Muster [Image 1 of 2], by 1SG Donald Veitch via DVIDS (Public Domain)

TIP recently completed an engagement for MassDevelopment, the Commonwealth of Massachusetts’s economic development and finance agency, to develop a Defense Industry Economic Diversification Study and Strategic Blueprint. MassDevelopment applied for and received a grant from the Department of Defense, Office of Economic Adjustment (OEA) to create the blueprint, which is designed to mitigate the potential impact of federal defense budget cuts and sequestration on the state and regional economy. Supporting TIP on this project was a consulting team consisting of UMass Donahue Institute’s Economic and Public Policy Research group, Chmura Economics & Analytics, and Business Development Advisors.

The planning process included stakeholder meetings with representatives of businesses, industry groups, agencies, and institutions throughout Massachusetts to gather ideas and expertise to inform the plan. Through these meetings, a number of specific initiatives were identified to assist defense-dependent businesses in diversifying and commercializing their products/technologies, providing skills training for employees, and improving their manufacturing processes and products.

To secure needed funding to launch the pilot initiatives and determine their effectiveness, MassDevelopment submitted implementation grant award requests to OEA before the blueprint was even completed. In all, MassDevelopment received over $3.6 million from OEA to fund five initiatives. These initiatives include assisting small manufacturers and R&D firms to commercialize their products and technologies and diversify their business portfolios, providing consulting services and technical assistance to small manufacturers, and helping defense-related firms export their products/services. The successful implementation of these and other initiatives proposed in the blueprint will serve to strengthen the Commonwealth’s defense sector and enable it to seize emerging opportunities, both commercial and defense related.

Washington State: Planning for the Defense Sector’s Future

June 1, 2016

By: Ashton Allison, consultant, TIP Strategies
USS Abraham Lincoln Returns To Washington

USS Abraham Lincoln Returns to Washington [Image 2 of 2] by Seaman Jerine Lee via DVIDS (Public Domain)

In 2015, TIP Strategies was selected by the Washington Department of Commerce as the lead contractor for multiple phases of the state’s $4.3 million US Department of Defense, Office of Economic Adjustment (OEA) grant. The grant was awarded as part of OEA’s Defense Industry Adjustment program, which encompasses a range of planning activities designed to mitigate potential impacts of federal spending cuts on the defense sector.

The initial “Planning & Communication” phase of the grant focused on formalizing the Washington Military Alliance (WMA), a coalition of defense-related stakeholder organizations in the state. Completed in December 2015, this phase included the preparation of an organizational strategy and communications plan for the WMA, along with an inventory of stakeholders and assets. Our 2015 work for the Department of Commerce also included a review of an economic model of the state’s defense industry contracts prepared by a separate firm.

Earlier this year, TIP kicked off projects encompassing three additional phases of the grant. The work will be completed by September 2016 and includes a military and defense contractor services pilot program as well as two closely related projects: a statewide strategy and an implementation and sustainability plan.

  1. The pilot program—currently underway with management consulting firm, Kepner-Tregoe—will assist the state with the design and testing of potential economic diversification strategies specific to the defense services supply chain.
  2. The statewide strategy represents the culmination of OEA-funded planning efforts. When completed, this project will provide a clearly defined roadmap for ensuring the short-term and long-term success of the state’s military and defense sector.
  3. The sustainability plan will integrate the various grant-funded activities with existing state, local, and federal initiatives with the goal of transitioning the effort from OEA-funded support. The report will include an analysis of the alignment of the statewide strategy with Washington’s target industry and talent-focused initiatives, an assessment of the capacity of relevant partners to aid in its implementation, and a review of the state’s business support infrastructure as it relates to the defense sector.

Once all phases of the grant are completed, the results will provide a framework for sustaining the health and vitality of the state’s defense-reliant economy amid potential budget reductions. Taken together, the statewide strategy and sustainability plan will provide a comprehensive blueprint for military and defense contractors and related support organizations to anticipate and mitigate potential losses through effective planning and strategic decision-making.

TIP has conducted numerous projects funded by OEA, including several aimed at convening stakeholders, diversifying the economy, assisting private businesses, retaining displaced workers, and developing sustainability strategies. We have also worked extensively in military-dependent communities throughout the country, and have direct experience with leveraging and supporting this valuable sector.

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.

Frisco’s Employee Talent Base Receives High Marks In Consulting Firm’s Study

June 4, 2014

By: Renee Hansen
Via: Community Impact Newspaper

Weakness identified as mismatch between city’s jobs, workforce
The release of a new Frisco labor market study shows the city as having a strong talent base of employees that is attracting businesses and impressing employers. The comprehensive analysis was conducted by Austin-based TIP Strategies, an economic development consulting firm.
The report, released May 22, shows there is a highly educated workforce of nearly 500,000 people within a 10-mile radius of Frisco. The workers’ strengths focus around information technology and line up with the industries found in the city’s borders such as telecommunications, software development, and financial and medical services.
Area residents soar above the national average of educational attainment levels with 58.3 percent holding a bachelor’s degree or higher, compared with the national average of 28.5 percent, according to American Community Survey data.
Employers also give the area’s workforce high marks, with 80 percent surveyed saying the workforce is either “good” or “excellent” in computer skills, trainability and employee attitudes.
Given its size, quality of the workforce and ability to draw in workers from throughout the Metroplex, Frisco is the place to be for economic growth, according to TIP.
The Frisco Economic Development Corp. requested the study to gain insight on the labor market of the city, FEDC President James Gandy said.
“It was great for us to have an opportunity to work with [the FEDC],” said TIP Strategies President Tom Stellman. “They are one of the most respected economic development groups in the Metroplex.”
The FEDC has helped facilitate projects to create or retain nearly 12,500 jobs since 2009. With a population of more than 133,000, the report said Frisco is projected to gain 65,000 new working-age adults over the next 15 to 25 years.
Although Frisco houses a large and talented workforce, the study identified that the majority of Frisco workers commute out of the city for their jobs. The market overview reported Frisco residents fill only one in five positions within the city, which means there is a mismatch between employment options and the skills of the area workforce.
“The study has identified a number of things that we intend to work on,” Gandy said. “There’s a tremendous opportunity for new companies to move here and utilize the readily available workforce within our city that may currently be commuting outside our city.”
FEDC Director of Marketing Darcy Schroer explained the benefits to keeping Frisco residents within the city borders for employment.
“We have a great quality of life, and we want the people who live here to enjoy that quality of life,” she said. “It opens up a whole different lifestyle when you can work in the city you live in.”

Office And Administrative Support Occupations Make Up Nearly 16 Percent Of U.S. Employment, May 2013

April 11, 2014

Via: U.S. Bureau of Labor Statistics

In May 2013, office and administrative support was the largest occupational group, making up nearly 16 percent of total U.S. employment. The next largest groups were sales and related occupations and food preparation and serving related occupations, which made up about 11 and 9 percent, respectively. Seven of the 10 largest occupations were in one of these three groups.

Click here for interactive version
The smallest occupational groups included legal occupations and life, physical, and social science occupations, each making up less than 1 percent of total employment in May 2013.
The highest-paying occupational groups were management, legal, computer and mathematical, and architecture and engineering occupations. Most detailed occupations in these groups were also high paying. For example, all 19 computer and mathematical occupations had average wages above the U.S. all-occupations mean of $46,440, ranging from $50,450 for computer user support specialists to $109,260 for computer and information research scientists.
The lowest-paying occupational groups were food preparation and serving related; farming, fishing, and forestry; personal care and service; building and grounds cleaning and maintenance; and healthcare support occupations. Annual mean wages for these groups ranged from $21,580 for food preparation and serving related occupations to $28,300 for healthcare support occupations. With few exceptions, the detailed occupations in these groups had below-average wages. For example, occupational therapy assistants and physical therapy assistants were the only healthcare support occupations with mean wages above the U.S. all-occupations mean.
Among 665,850 employed persons in the District of Columbia in May 2013, there were about 3,370 political scientists—accounting for 50.6 out of every 10,000 jobs in the District of Columbia. In all of the United States there were 5,570 political scientists employed out of a total of 132,588,810 employed people—meaning less than 1 (0.42) out of every 10,000 jobs in America were political scientists. The ratio that compares the concentration of employment in a defined area (in this case, the District of Columbia) to that of a larger area (the United States) is referred to by the Bureau of Labor Statistics as the “location quotient.”

Click here for interactive version
The location quotient of political scientists in the District of Columbia is 50.6 divided by 0.42 (the location quotient of political scientists in the United States), which equals about 120.5—indicating there are about 120.5 times as many political scientists per 10,000 total employed people in the District of Columbia as in the United States as a whole.
These data are from the Occupational Employment Statistics program. To learn more, see, “Occupational Employment and Wages — May 2013” (HTML) (PDF), news release USDL-14-0528.

Project Update: Greater Houston Partnership’s Regional Workforce Development Task Force

February 6, 2014

By: Caroline Alexander, Senior Consultant, TIP Strategies

Port of HoustonPhoto courtesy: Port of Houston Authority

Over the past 6 months, TIP Strategies has helped the Greater Houston Partnership (GHP) facilitate their Regional Workforce Development Task Force and develop a strategic action plan.
The Greater Houston region is on the brink of unprecedented growth. With almost $20 billion in investment in new plants and facilities announced, the next 5 years are slated for rapid expansion. Employers, however, are concerned that the region does not have the talent it needs to fuel this expansion. Further complicating the labor market is the aging of the workforce and the pending wave of retirements.
In response to these concerns, the Greater Houston Partnership convened the Regional Workforce Development Task Force (RWDTF). The task force is composed of 104 members representing 79 organizations, including large employers, workforce and economic development, education, and social services. The task force met six times over the course of last half of 2013 with the intention of formulating an action plan to address the challenges over the next five years. The initiative focused in on the middle skills segment of the job market.
The RWDTF identified 4 gaps in the workforce development system that must be addressed in order to create the pipeline of talent required to meet the needs of the region’s employers. The gaps are:

AWARENESS
Potential workers are not aware of the opportunities in the middle skills segment or hold inaccurate perceptions of the jobs.
BASIC SKILLS & EMPLOYABILITY
Many potential workers lack some of the most basic hard and soft skills needed for any middle skills job.
COORDINATION
The landscape of programs and organizations with a focus on workforce is broad and varied, but also fragmented.
DATA
The lack of accurate, reliable data creates a disconnect between demand and supply.

The strategic action plan takes a sector-based approach to create a more demand-driven workforce system. The strategies are structured around addressing the identified gaps. The plan will be finalized at the end of February and GHP is already on the road to implementation. Stay tuned for more news as GHP hires a director of workforce development and launches its first sector council.