Economic Development Strategies Using Skilled Labor Information Steve Anderson – ACT, Workforce Development 2007 Michigan WorkKeys Conference

Topics Why is skilled labor availability important? How can skilled labor be measured and reported? How is skilled labor information being used? How does skilled labor information benefit recruitment and retention programs? Developing a strategic economic development plan using skilled labor information.

Why is the availability of skilled labor important? Surveys of executives and site selection consultants indicate that the availability of skilled labor is one of the most important factors in site selection

Factors 2006 Ranking Labor costs95.0% Highway accessibility90.9 Corporate tax rates90.8 State and local incentives88.6 Telecommunications services88.3 Tax exemptions86.7 Occupancy or construction costs85.5 Availability of skilled labor85.1 Energy availability and costs82.4 High-speed internet access82.1 Source: Area Development Magazine Annual Corporate Survey Why is the availability of skilled labor important?

Why are skills important? Higher Skills Higher Wages Stronger Economy

National Career Readiness Certificate BronzeSilverGold Automotive Body Repairers Butchers & Meat Cutters Cooks, Cafeteria Furniture Finishers Home Health Aides Housekeeping Supervisors Janitorial Supervisors Painting & Coating Workers Refuse Material Collectors Accounting Clerks Auto Master Mechanics Billing Clerks Licensed Practical Nurses Machine Operators Machinists Medical Laboratory Technicians Payroll Clerks Pipe Fitters Production Inspectors Computer Programmers Electricians Environmental Engineering Techs Instrumentation Technicians Librarians Semiconductor Processors Training & Development Specialists Vocational Education Teachers Wholesale & Retail Buyers $26,000$34,000$49,000 Median Annual Salaries

$660M Capital Investment Jobs $60K Annual Salary Sites in 18 states considered Finalists Clay, NY Devens, MA Example: BioPharma Project

Where did the company decide to locate? The winner is The company perceived that the NY site did not have the skilled labor supply.

Government Data Laborshed Surveys Labor Skills Measurement How can skilled labor be measured & reported?

Government Labor Data Example: Davenport – Moline – Rock Island MSA Civilian Labor Force211,500 Employment203,000 Unemployment8,500 Unemployment Rate4.0% High School Graduation Rate88.7% College Graduation Rate24.6% Information based on geo-political boundaries

Size of the laborshed Business-center defined Unemployment Underemployment Sampling surveys - Self-assessments of skills - Willingness to change jobs - Desired wages - Commuting thresholds But what about skilled labor information? What does a Laborshed Survey Measure?

What are the elements of a good Labor Skills Assessment System? 1.Measurable skills standards 2.Levels of competency 3.All levels of workers 4.Related to job performance 5.Measures across industries 6.Training by competency levels 7.Individual development plans 8.Extensive test delivery network 9.Proven track record

“In the 1950’s, ACT created a nationally recognized, standardized resource for college entrance. Now, we’re doing the same thing for the workforce.” - Richard L. Ferguson, CEO and Chairman of ACT

Is there a need for a national standard?

Ready for College, Ready for Work Findings: The same basic skills are needed for work and college

How can the skills of workers be measured and developed? Foundational Skills Reading for Info Applied Math Locating Info Applied Tech Business Writing Teamwork Observation Writing Listening Skill Analysis Profiling Occupational Profiles Training Online Workbook Classroom Personal Skills Talent Fit Performance TM

National Career Readiness Certificate WorkKeys Skills Reading for Information Applied Mathematics Locating Information Three levels of performance Bronze (Level 3 or higher) Silver (Level 4 or higher) Gold (Level 5 or higher) Provides benefits to individuals, businesses, and economic development programs

National Career Readiness System National Career Readiness Certificates Talent Bank Job Bank Skills Training Registry & Database

STATE CRC REGIONAL CRC's) PENDING STATE CRC WorkKeys-Powered Career Readiness Certificates

Expansions Recruitment Plant Closings & Major Layoffs How can skilled labor availability be part of economic development?

How is WorkKeys used for Local Expansions? Recruitment of new workers Advancement of employees Certificate program Hiring Testing Costs - 64% O-T-J Training Costs - 50% Turnover - 35% This facility beat out several U.S. and international locations for a $130 million expansion

Indiana WorkKeys Program Largest state certificate program based on WorkKeys Over 1,000 job profiles Over 35,000 readiness certificates awarded Uses Hiring for existing and new facilities Attraction of businesses Education programs Apprenticeship programs DOC Re-entry programs “Raising everyone up one level”

Subaru of Indiana, Inc. – Lafayette, IN $230M expansion project with Toyota job openings High hourly wages & benefits Projected 10,000 applicants Decision factor: Database of WorkKeys assessed job applicants Tecumseh Area Partnership & Indiana DWD WIRED recipient for REACH program How is WorkKeys used for Local Expansions?

Administer WorkKeys assessments Identify training programs Identify potential local employers Displaced Individuals How can WorkKeys be used for Plant Closings?

How can WorkKeys be used for Plant Closings? Administer WorkKeys assessments Develop a composite of the displaced workforce Determine industry & company targets from Occupational Profiles Market to target companies Attraction of new business

Were the perceptions of the BioPharm company correct? Maybe, maybe not.

How do the skills of the workers in the Region compare to National?

1. Identify / engage regional workforce development stakeholders 3. Develop a regional CRC marketing program 4. Focus on engaging the business sector (MOUs): “Help your community while helping your company” 5. Identity resources for developing capacity 6. Provide training resources 7. Execute the plan / evaluate / update 2. Develop well-defined, realistic goals Developing a Regional Program: West Michigan Approach

How can the skills data be used? Obtain NCRC skills data for specified geographic region Combine with the Laborshed Study to provide an estimate of the availability of skilled workers in the laborshed Compare against National and other communities Align data with specific company skill standards, from WorkKeys Occupational Profiles or Occupational Opportunities

Economic Development Strategies Using Skilled Labor Information Steve Anderson – ACT, Workforce Development Questions?