Economic Development in a Tight Labor Market John M. Bacheller Empire State Development Corporation NGA Workforce Development Policy Forum Dearborn, Michigan November 30, 2000

What ESD Does Primary mission -- create and retain jobs Traditional focus on employers -- Service and manufacturing companies with regional or national markets.

Traditional Approaches Marketing: –Build positive perceptions. Incentives: –Offset location disadvantages.

Changes since 1995 Initial concern: lingering recession of early 1990’s –Business climate concerns –Labor availability not a major concern Current concerns: –Tight labor market –Limited number of available sites

Changes in agency strategy Fewer incentive dollars Focus on marketing “distressed areas” New strategies to respond to labor availability concerns

Labor availability issues Information Technology Industry: –Nearly half report “high” or “very high” impact from shortage of: Technicians B. S. level programmers B. S. level systems analysts Computer scientists

New Media Companies -- Difficult to Fill Positions

Labor availability issues Overall: –Nearly 1/3 report “high” or “very high” shortage of employees with IT skills, scientists, engineers and managers. –20%- 25% report -- “high” or “very high” need for basic literacy and non-IT production skills.

Respondents Indicating that Employee Shortages in Specific Areas Limit Business Success source: New York Regional Council Surveys, 1999

Response: Market NYS to Graduates NYS not perceived as technology center –Graduates driven by perceived opportunities Sell job availability –Quality of life NYS as vibrant center

Marketing to Graduates TV and college media campaign with NYS Dept of Labor Web site with customized interface to America’s Job Bank Recruitment Incentive

Response: Company assistance Availability an explicit element of location decision –Economic development agencies address availability concerns: Provide labor data Support recruitment assistance Facilitate training

Company preferences Currently employed workers Flexibility in recruitment –Often use temporary agencies. –Job fairs, etc. Training: focus on specific company needs Simple assistance processes -- no “red tape”

Most Important Labor Dept. Services Regional reps work closely with DOL on: –Job fairs –Job seeking announcements Labor Department less useful for training needs because of eligibility requirements, red tape.

Training Focus New hires –Often not ready for work environment Need basic and technical skills –Provide pre-employment training Once hired, companies use OJT –Machinery, technology, workflow

Issues Responsiveness of service providers to company realities. –Need for evening/weekend training. –Pre-employment courses meeting specific needs. –Public agencies seen as less responsive than private providers in NYS

Issues Unsettled nature of WIA/WIB funding. –WIB’s are still developing plans. –Progress is varied Need for $$ not tied to specific populations. –JTPA funds were too inflexible. –Jury still out on WIA

Issues Employer preferences often work against use of public training sources: –Preference for less red tape ESD will fund other expansion costs. –Preference for short courses at convenient times. Community colleges not always flexible.

Training Focus Current employees: –New equipment –Leadership/supervision/project management –Industry standards (ISO ISO 14000)

Issues Availability of WIA dollars uncertain Red tape issues Flexibility of providers

Capacity Development (Industry Strategies) Work with industry groups to meet needs: –Regional consortia Long Island: –Pharmaceutical Industry –Machine shops Albany area –Distribution industry –Medical devices companies

Issues Night/weekend programs for employed workers Specific programs for industry needs Providers need seed dollars to develop programs –not specifically tied to individual trainees

Lessons “Work first” is consistent with employer preferences –Employers value a record of employment.

Lessons Developing effective programs: Economic development agency as catalyst –Identify industry needs –Work with provider consortia –Provide seed dollars for pre-employment programs

Lessons –Keys to success: Employers as customers Work with industries that are: –Growing –Modernizing Make programs accessible –Nights and weekends –Locations

Lessons –Program funding should be flexible -- should reach broad range of workers. Employers as customers Programs for narrowly targeted populations create funding obstacles for –Employers –Providers