Skills Gap: Reality or Myth?
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Texas Manufacturing Skills Gap A presentation to the Texas Economic Development Council TIP Strategies | Tom Stellman, president & CEO | February 28, 2013
description
Skills gap: reality or myth? The presumed mismatch between the skills of the workforce and the needs of employers, commonly referred to as the “skills gap,” has garnered the attention of politicians, employers, economic developers, and professionals in workforce and education. A number of authoritative sources—Manpower, Deloitte, McKinsey—point to statistics which show that, despite relatively high levels of unemployment, a number of jobs are going unfilled because employers can’t find candidates with the skills they want. This issue will be the subject of discussion led by TIP’s president and CEO, Tom Stellman, at the Texas Economic Development Council’s 2013 Legislative Conference this week. Get a preview of his slides here. Several factors are contributing to this gap, including an aging workforce, an education system focused on 4-year degrees, the growing use of automation, and distortions caused by the labor demands of the energy sector. Yet some argue the current situation is less of a “skills” gap than a “wage” gap. Manufacturing wages have stagnated as the value of goods produced per worker has soared. This lackluster performance can make it even harder to attract young workers to manufacturing careers, particularly in a culture that often perceives the industry as a less–than-desirable option for its children. Even if we could agree on its existence, the question of how best to fill it remains. Focusing on education is at the heart of many initiatives. Yet even if education is the answer, the challenges of timing the flow of workers with the needs of industry remains. Trying to predict which skills will be in demand can result in well-meaning training programs that produce a number of workers in a particular industry only to find that the economy has moved on and left these newly minted skills in the dust. So, reality or myth? Maybe, like many of life’s questions, the answer is a little of both. NOTE: The Geography of Jobs slide is a data visualization- go to http://tipstrategies.com/geography-of-jobs/ to see the animation
Transcript of Skills Gap: Reality or Myth?
Texas Manufacturing Skills GapA presentation to the Texas Economic Development CouncilTIP Strategies | Tom Stellman, president & CEO | February 28, 2013
Agenda• About TIP
• Relevant trends
• Manufacturing trends
• Skills gap in the spotlight
• Responses
Based in Austin, TexasHelping clients with economic & workforce
development analytics & strategy
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Our experienceWe have 17 years of experience in over 100 communities, across 29 states & 4 countries
Geography of Jobs
Total unemployed in the US
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TOTAL UNEMPLOYED, 16 YEARS AND OVERin Millions, Seasonally Adjusted
Source: U.S. Bureau of Labor Statistics (Current Population Survey).
12.08 million
unemployed
Nov 2012(preliminary)
Share that has earned at least a bachelor’s degree Share that
does not have a 4-year degree
Source: US Bureau of Labor Statistics (Current Population Survey).
Educational attainment of the labor force age 25 years and over
Peak unemployment rate for the share of the labor force over 25 without a four-year degree
10.0% 5.0%Peak unemployment rate for the share of the labor force over 25 that has earned at least a bachelor’s degree
Source: US Bureau of Labor Statistics (Current Population Survey). Unemployment for those without a 4-year degree peaked in Oct 2009; unemployment for those with a 4-year degree peaked in Sept 2009.
0250,000
500,000750,000
1,000,0001,250,0001,500,0001,750,0002,000,0002,250,000 projections
GROWTH OF THE WORKING AGE POPULATIONProjected net annual change for the US population age 18-64
Sources: US Census Bureau, estimated (2005-2011); projected (2012-2040) .
The tightening labor market
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GROWTH OF THE WORKING AGE POPULATIONProjected net annual change for the TEXAS population age 18-64
Sources: US Census Bureau, estimated (2005-2010); projected (2011-2040) .
projections
The view for Texas
Manufacturing trends
Since 1970, total US employment in manufacturinghas fallen by 7 million
1970
1972
1974
1976
1978
1980
1982
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1986
1988
1990
1992
1994
1996
1998
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2002
2004
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2008
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INDUSTRY SHARE OF TOTAL US GDP, 1970-2010
SOURCE: U.S. Bureau of Economic Analysis
Manufacturing
Trade, transport& utilities
Prof. & businessservices
Financial activities
Health services
Leisure &hospitality
Government
This chart provides greater context for employment changes by comparing
the share of all jobs in the US
Jobs (in millions) Shipments (in $ trillions)* Value of Shipments per Worker*
02468
101214161820
1977 2011$0
$1
$2
$3
$4
$5
$6
1977 2011$0
$50,000$100,000$150,000$200,000$250,000$300,000$350,000$400,000$450,000$500,000$550,000
1977 2011
US manufacturing trends | Productivity increases have yielded steady output with fewer and fewer jobs
SOURCE: U.S. Census Bureau, Economic Census and Annual Survey of Manufactures (various years)*inflation-adjusted (2011 dollars)
Total manufacturing jobs (in millions)
Source: EMSI Complete Employment – 2012.4; TIP Strategies.
US
~12.5 m
Texas~900k
Source: EMSI Complete Employment – 2012.4; TIP Strategies
Two different views Manufacturing
Employment relative to 2002
0.92
0.80
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0.7
0.8
0.9
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1.1
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2004
2006
2008
2010
2012
2002
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.0
Texas US
Manufacturing As a share of total
employment
8.1%
6.0%
9.6%
7.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2002
2004
2006
2008
2010
2012
As a
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Texas US
Skills gap?
In the spotlight
As many as
600,000 jobs are going unfilled … at the same time the national education curriculum is not producing workers with the basic skills manufacturers need.
A survey of 1,123 manufacturing executives conducted by Deloitte and The Manufacturing Institute, October 2011.
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52 percent of US companies struggled to fill key jobs in 2011
According to ManpowerGroup's 2011 Talent Shortage Survey, the highest percentage in the six-year history of the survey
Top 10 Hard-to-Fill Jobs:• Skilled trades• Engineers• IT staff• Sales representatives• Accounting & finance staff• Drivers• Mechanics• Nurses• Machinist/machine operators• Teachers
Recruiting challenges | 2011 SHRM Poll
% of respondents having a difficult time recruiting for specific job openings
Source: Society for Human Resource Manager. 2011 SHRM Poll: The Ongoing Impact of the Recession – Recruiting and Skill Gaps. Survey of 2,286 randomly selected SHRM members in eight industry sectors. Recruiting challenge questions asked only of respondents whose organizations were currently hiring full-time staff. Figures represent share of respondents expressing an opinion; “don’t know” responses were excluded.
High-TechManufacturing
Professional servicesOverall
Construction, mining, oil and gasHealth
FinanceState and local government
Federal government
0% 20% 40% 60% 80%71%
68%59%
52%51%50%49%
33%31%
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Hard-to-fill occupations | All industries
Source: Society for Human Resource Managers. 2011 SHRM Poll: The Ongoing Impact of the Recession – Recruiting and Skill Gaps.Note: N=104-610. Chart represents the job categories in which survey participants found recruiting "Somewhat difficult" and “Very difficult.” "Not applicable" responses were excluded from this analysis. Only respondents whose organizations were having a difficult time recruiting for certain types of jobs were asked this question.
Engineers
High-skilled technical (e.g., technicians, programmers)
Managers and executives
Skilled trades (e.g., electricians, carpenters
Production operators
Drivers
Hourly laborers
0% 20% 40% 60% 80% 100%88%
86%85%
83%78%
72%68%
54%52%
49%36%
34%29%
24% 2011 SHRM Poll
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Hard-to-fill occupations | Manufacturing
Source: Society for Human Resource Managers. 2011 SHRM Poll: The Ongoing Impact of the Recession – Recruiting and Skill Gaps.Note: N=104-610. Chart represents the job categories in which survey participants found recruiting "Somewhat difficult" and “Very difficult.” "Not applicable" responses were excluded from this analysis. Only respondents whose organizations were having a difficult time recruiting for certain types of jobs were asked this question.
High-skilled technical (e.g., technicians, programmers)
EngineersSkilled trades (e.g., electricians, carpenters
Managers and executivesSales representatives
ScientistsHR professionals
Production operatorsAccounting and finance professionals
Hourly laborersDrivers
Customer service representativesAdministrative support staff
0% 20% 40% 60% 80% 100%89%88%
83%80%
74%72%
64%56%
50%39%38%
28%17% 2011 SHRM Poll
DEMOGRAPHICS
AUTOMATION
CULTURE
POLICIES
EDUCATION
Skills gap?
TRAINING
WAGESSCREENING
IMAGE
Less than 24 years
25-34 Years
35-44 Years
45-54 Years
55-64 Years
65+ Years
6.3%
17.4%
23.6%
30.1%
18.7%
3.8%
1 in 5 workers is 55 years or older
Source: EMSI Complete Employment – 2012.4; TIP Strategies
Age distribution of US mfg. workforce
Less than 24 years
25-34 Years
35-44 Years
45-54 Years
55-64 Years
65+ Years
6.8%
18.5%
23.9%
28.6%
17.5%
4.6%
Age distribution of Texas mfg. workforce
Today’s manufacturing is less likely to look like this ….
And more likely to look like this …
Source: US Bureau of Labor Statistics, Current Employment Statistics
Skills gap … or wage gap?19
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US MANUFACTURING EMPLOYMENT TRENDS, 1940 to 2012Production and nonsupervisory employees (left) and inflation-adjusted ave. hourly earnings (right)
Deep thoughts this week:
1. There is no skills gap.
2. Who will operate a highly sophisticated machine for $10 an hour?
3. Not a lot of people4. As a result, there is
going to be a skills gap.By Adam Davidson
Published: November 20, 2012
Failure to pass HR screening
TESTING REASON 2007 2008 2009 2010 2011
Follow-Up 7.7% 7.6% 7.5% 6.5% 6.6%
For Cause 19.2% 22.0% 26.8% 26.9% 26.8%
Periodic 1.4% 1.4% 1.5% 1.3% 1.3%
Post-Accident 5.8% 5.6% 5.3% 5.3% 5.3%
Pre-Employment 3.9% 3.6% 3.4% 3.6% 3.5%
Random 5.7% 5.3% 5.4% 5.3% 5.2%
Returned to Duty 5.6% 5.3% 4.6% 5.2% 5.2%
Table 4. Positivity Rates By Testing Reason - Urine Drug TestsFor General US Workforce. Based on >4.8 million tests from January to December 2011
Source: The Drug Testing Index © 2012 Quest Diagnostics Incorporated. All rights reserved. The Quest Diagnostics Drug Testing Index is published as a public service for government, media and industry and has been considered a benchmark for national trends since its inception in 1988. It examines positivity rates - the proportion of positive results for each drug to all such drug tests performed - among three major testing populations: federally mandated, safety-sensitive workers; the general workforce; and the combined US workforce.
The Geography of Drug Tests?
Overall Positivity by 3-Digit ZIP CodeUrine Drug Tests | January to December 2011
Disruptions | Shale plays
Top 35 Occupations: Total impacts (direct, indirect and induced) 2011 Occupations impacted in 14 producing Eagle Ford Shale counties:
SOC Code Occupations impacted Number
Share of total
Total 14-county impact 38,000 100.0%1 53-3032 Truck drivers, heavy and tractor-trailer 1,864 4.9%2 47-2031 Carpenters 1,192 3.1%3 47-2061 Construction laborers 1,127 3.0%4 47-2073 Operating engineers and other construction equipment operators 1,036 2.7%5 43-9061 Office clerks, general 969 2.5%6 47-1011 First-line supervisors/mgrs of construction trades and extraction workers 914 2.4%7 41-2031 Retail salespersons 811 2.1%8 43-3031 Bookkeeping, accounting, and auditing clerks 748 2.0%9 11-1021 General and operations managers 712 1.9%10 53-7062 Laborers and freight, stock, and material movers, hand 705 1.9%11 41-2011 Cashiers, except gaming 689 1.8%12 53-7032 Excavating and loading machine and dragline operators 685 1.8%13 49-9042 Maintenance and repair workers, general 596 1.6%14 43-6014 Secretaries, except legal, medical, and executive 575 1.5%15 43-6011 Executive secretaries and administrative assistants 564 1.5%16 13-2011 Accountants and auditors 546 1.4%17 43-4051 Customer service representatives 500 1.3%18 51-9021 Crushing, grinding, and polishing machine setters, operators, and tenders 409 1.1%19 43-1011 First-line supervisors/managers of office and administrative support workers 379 1.0%20 11-9021 Construction managers 362 1.0%21 35-3021 Combined food preparation and serving workers, including fast food 358 0.9%22 35-3031 Waiters and waitresses 350 0.9%23 41-4012 Sales representatives, wholesale and manufacturing, except technical and
scientific products350 0.9%
24 37-2011 Janitors and cleaners, except maids and housekeeping cleaners 348 0.9%25 29-1111 Registered nurses 343 0.9%26 43-4171 Receptionists and information clerks 332 0.9%27 53-7051 Industrial truck and tractor operators 325 0.9%28 43-5081 Stock clerks and order fillers 308 0.8%29 23-1011 Lawyers 288 0.8%30 49-3042 Mobile heavy equipment mechanics, except engines 281 0.7%31 53-3033 Truck drivers, light or delivery services 258 0.7%32 47-5051 Rock splitters, quarry 257 0.7%33 37-2012 Maids and housekeeping cleaners 247 0.6%34 13-1199 Business operation specialists, all other 246 0.6%35 39-9021 Personal and home care aides 231 0.6%
Labor force impact | Eagle Ford Shale
Source: Workforce Analysis for the Eagle Ford Shale, October 2012, prepared by Center for Community and Business Research at the University of Texas at San Antonio’s Institute for Economic Development. Counties included in analysis: Atascosa, Bee, DeWitt, Dimmit, Frio, Gonzales, Karnes, La Salle, Live Oak, Maverick, McMullen, Webb, Wilson, and Zavala.
Responses
[I]nitiatives in manufacturing, energy,
infrastructure, housing all these things will
help entrepreneurs and small business
owners expand and create new jobs. But
none of it will matter unless we also
equip our citizens with the skills and training to fill those jobs.
«
»President Obama
2013 State of the Union
• Manufacturing Innovation Institute Network. One-time $1 billion investment to create a national network of 15 mfg. innovation institutes.
• Community College to Career Fund. $8 billion to forge new partnerships between community colleges and businesses to train 2 million workers. Supports “pay for performance” strategies.
• Manufacturing Technology Acceleration Centers. $25 million to launch industry-specific centers that can serve as a coordination point within key supply chains.
Investing in Manufacturing proposals2013 State of the Union Address
Source: http://www.whitehouse.gov/
Statewide business coalition. “Pushing bills that would loosen high school graduation requirements and foster better career and technical training” (AAS – 2/16/2013)
SB3, carried by Ed. Committee Chairman Dan Patrick, R-Houston would:
• Create single HS diploma (currently 3 graduation plans – minimum, recommended, and distinguished)
• Relax 4x4 standards (e.g., substitute diesel mechanics for required science)
• Increase CTE 83rd Texas LegislatureStatewide
TAM priorities for 2013 session:
• Energy affordability and reliability
• Critical infrastructure, esp. water
• Taxation on capital intensive businesses
• Preserving tort reforms
• Efficient permitting process
• Education system flexibility• Incentivizing R&D activity
• Business attraction and retention.
Texas Association of ManufacturersStatewide
• Industry-driven (initiated by Toyota)
• Focused (single, high-impact industry)
• Scalable (grew from quickly from single state – KY– to multiple states)
• Private-sector engagement (members were required to bring partner to the table with them)
• Outcomes-based (program has common set of standards to assess student success; part of NSF’s Advanced Technological Education Centers program)
Automotive Mfg. Technical Education Collaborative (AMTEC )
Multiple states | www.autoworkforce.org
• Skills-focused (goal to create pipeline of workers for automotive and advanced mfg. employers with skills in automated control systems, robotics, and mechatronics and other industry needs)
• Multiple industry partners (members include range of automakers and suppliers)
• Outreach model (begins in secondary system to attract, enroll, and graduate a diverse population of students )
• One of 39 regional Advanced Technological Education (ATE) Centers under the National Science Foundation’s ATE Program.
Consortium for Alabama Regional Center for Automotive Mfg. (CARCAM)
Alabama | www.carcam.org
NATL. CENTER FOR OPTICS AND PHOTONICS EDUCATIONUniv. of Central Florida | Waco
CENTER FOR THE ADVANCEMENT OF PROCESS
TECHNOLOGYCollege of the Mainland |Texas City
NATL. GEOSPATIAL TECHNOLOGY CENTER OF EXCELLENCE
Del Mar College | Corpus ChristiBased on http://atecenters.org/centers-map/
Advanced Technological Education (ATE) Centers In Texas
CONVERGENCE TECHNOLOGY CENTER
Collin College | Frisco
• Industry-initiated (group of 5 advanced manufacturing companies)
• Scalable (expanded to include > 15 cos.)• Targeted at specific occupational
shortage (CNC machinists)• Tailored curriculum (Tarrant County
College used existing funds to purchase equipment needed to simulate desired work environment)
• Multiple funding approaches (College equipment, state and federal grants, private sector donations of time and expertise)
• Outreach (“Gotta Make It” video available to local students on DVD and via YouTube)
Advanced Manufacturing/ CNC ConsortiumFort Worth area
Industry-driven partnership. Includes cities (San Antonio, New Braunfels, and Seguin), The Alamo Colleges, school districts, chambers of commerce, Port of San Antonio, Workforce Solutions Alamo and local employers. Designed to create bridge between K-12 and post-secondary systems.
Focused on building pipeline. Graduates of 2-year program earn 31-34 college semester hours at no personal cost and receive a Level I Certificate of Completion through the Alamo Colleges along with high school diploma.
Offered via four academies:• Aerospace• Information Technology & Security• Advanced Technology & Manufacturing• Health Professions
Alamo Area AcademiesSan Antonio area | www.alamo.edu/academies
Critical labor shortages. Initiative is designed to address critical shortages in the manufacturing and energy industries.
Industry-driven. Fox Tank Company in Kerr County partnered with Alamo Colleges to custom-train 135 new and current workers in basic and advanced welding.
New facility. Training will be offered at 40,000 square foot state-of-the-art Workforce Center of Excellence opened November 2012.
Skills Development Fund. Training is funded through a $304,848 grant from the Texas Workforce Commission.
Customized Training – Basic & Advanced Welding Skills Development Fund award | Kerr County
“Teaming up for Kerrville,” Hill Country Community Journal
Industry partnerships. Customized training programs for careers in oil and gas, alternative energy, or mechanized (automated) production for corporate partners (e.g., Haliburton, Anadarko, and Baker Hughes)
Response to “The Big Crew Change.” 2011 study* points to “outflow of more than 22,000 senior key petro-technical professionals (in the energy and production industries) by 2015.”
State-of-the-art facility. Focused on technical and engineering skills required by industry. Construction of 80,000 square-foot dedicated facility approved in Sept. 2012.
*Study conducted by Schlumberger Business Consulting as cited in http://www.lonestar.edu/news/19782.htm
Lone Star College Energy & Manufacturing Institute Houston area
Parental involvement. Initiative designed to increase involvement of Hispanic parents in their children’s education.
Early intervention. Started with 5th grade. Designed to keep parents involved as kids make critical transition into middle school.
Focused on improvement in four areas: parent-teacher communication; at-home engagement (e.g., helping with homework); home learning environment; and parental volunteering at school.
Data driven. Worked with E3 Alliance, a regional, data-driven education collaborative based in Austin.
Latinos Educated and Dedicated (LEAD)Austin area | Hispanic Austin Leadership
• Pharr-San Juan-Alamo (PSJA) ISD focused on improving HS graduation rates. Completion rate has increased from 62.4% in 2007 to 86.7% in 2010
• College, Career & Technology Academy. “Dropout recovery” program for students between 18-26 years of age who lack high school credits and or exit exams to graduate.
• Countdown to Zero campaign. Door-to-door approach to invite non-completers to return to school, coupled with preventive work at PSJA ISD campuses to ensure students that are falling behind are caught up and graduate on time.
http://www.psjaisd.us/apps/news/show_news.jsp?REC_ID=256017&id=0
Career & Technical AcademyTexas Lower Rio Grande Valley
Since the CC&T Academy opened in 2007, close to 1,000 students have received their high school diploma and have been connected to post-secondary education, 212 of those students over the age of 21.
thank you.
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