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Economic Development in a Tight Labor Market John M. Bacheller Empire State Development Corporation NGA Workforce Development Policy Forum Dearborn, Michigan November 30, 2000
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What ESD Does Primary mission -- create and retain jobs Traditional focus on employers -- Service and manufacturing companies with regional or national markets.
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Traditional Approaches Marketing: –Build positive perceptions. Incentives: –Offset location disadvantages.
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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
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Changes in agency strategy Fewer incentive dollars Focus on marketing “distressed areas” New strategies to respond to labor availability concerns
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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
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New Media Companies -- Difficult to Fill Positions
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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.
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Respondents Indicating that Employee Shortages in Specific Areas Limit Business Success source: New York Regional Council Surveys, 1999
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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
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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
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Response: Company assistance Availability an explicit element of location decision –Economic development agencies address availability concerns: Provide labor data Support recruitment assistance Facilitate training
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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”
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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.
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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
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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
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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
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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.
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Training Focus Current employees: –New equipment –Leadership/supervision/project management –Industry standards (ISO 9000 - ISO 14000)
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Issues Availability of WIA dollars uncertain Red tape issues Flexibility of providers
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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
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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
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Lessons “Work first” is consistent with employer preferences –Employers value a record of employment.
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Lessons Developing effective programs: Economic development agency as catalyst –Identify industry needs –Work with provider consortia –Provide seed dollars for pre-employment programs
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Lessons –Keys to success: Employers as customers Work with industries that are: –Growing –Modernizing Make programs accessible –Nights and weekends –Locations
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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
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