availability of skilled workers - hartfordinfothe connecticut business and industry association...

2008 Survey

Availability of

SKILLEDWORKERSin Connecticut

CBIACONNECTICUT

BUSINESS & INDUSTRY ASSOCIATION

John R.RathgeberPresident and CEO, ConnecticutBusiness & Industry Association

James P.TorgersonCEO, UIL Holdings Corporation,The United Illuminating Company

ThomasPhillipsPresident and CEO,Capital Workforce Partners

introduction

nnovation, quality and productivity are longstanding hallmarks ofConnecticut businesses. The state is home to a diverse mix of com-panies of all sizes and sectors — among them, worldwide leaders

in manufacturing, renowned finance and insurance firms, and innovatorsin research and development, professional services and retail trade.

Connecticut businesses have depended on the state’s skilled workers to pro-duce their products and services. However, a shortage of skilled workers isnow affecting businesses of all types and sizes in every industry and eachregion of the state. It is a challenge made worse by the impending retire-ments of baby boomers, and an exodus of young people from the state.

The Connecticut Business and Industry Association (CBIA), CapitalWorkforce Partners and the United Illuminating Company conducted thisAvailability of Skilled Workers in Connecticut Survey in order to deter-mine the perspectives of Connecticut businesses on the current and futureworkforce issues facing the state. The results help define the challengescurrently facing businesses and help point the way to viable solutions —such as a more robust education and training pipeline to ensure a skilledworkforce and make Connecticut businesses perennially competitive inthe global marketplace.

As businesses strive to develop and grow within the state, it is imperativethat they have a readily available pool of qualified workers. We hopethese survey findings increase awareness of this pressing issue. We alsoencourage businesses, policymakers, educators and residents to worktogether to implement policies and actions that will help ensure thatConnecticut remains a healthy and vibrant state for employers andemployees alike, for generations to come.

I

“Connecticut has traditionally prided itself on a highly educated,skilled and talented workforce. If the state is to remain an economicleader, policy makers, educators and the business community must allwork together to address the issues that are challenging our ability toproduce enough skilled workers and sustain our competitiveness.”

John R.Rathgeber • President and CEO, CBIA

“Our company is committed to investing in the future by creatingan environment that allows us to recruit and retain a talented andqualified workforce.”

James P.TorgersonCEO, UIL Holdings Corporation, The United Illuminating Company

“In workforce development, we determine the business community tobe our primary customer. This survey helps us better understand thechallenges and opportunities that are upon us today and can help usbe better positioned for the needs we may face in the future.”

Thomas PhillipsPresident and CEO, Capital Workforce Partners

AVAILABILITY OF SKILLED WORKERS IN CONNECTICUT 3

executive summary

Connecticut has long been considered adesirable location for businesses becauseof its highly skilled workforce and excellentquality of life. In recent years, however, itsposition as a hub for top-notch skilled profes-sionals has been under increasing strain.

Businesses are experiencing greater difficultyin finding and hiring a workforce suitableto their needs. The state is experiencing atwo-pronged demographic challenge in thedeclining population of young people at thesame time the baby boomer generation pre-pares to retire. Consequently, the availabilityof skilled workers in the state has becomea critically important economic issue.

I.Connecticut’s labor market

Regular workforce attrition, the expansion ofbusiness operations, continually changingtechnologies and competitive pressures mean

that businesses need access to a steadystream of skilled workers in order to remaincompetitive.

In several recent CBIA surveys, the availabilityof qualified workers has surfaced as one ofthe top challenges confronting employers inConnecticut, second only to the high cost ofdoing business in the state. Employers saythey simply cannot find enough skilled work-ers. It’s a challenge that is certain to becomeincreasingly significant in coming years, asmore and more baby boomers begin to retireand businesses seek skilled professionals toreplace them.

Connecticut businesses are clearly under pres-sure, with 82% of survey respondents sayingtheir company has experienced difficulty infinding qualified workers within their industry.Fewer than half (41%) of respondentsdescribed qualified workers as “somewhat”

AVAILABILITY OF SKILLED WORKERS IN CONNECTICUT4

available, and only 3% saidqualified workers are extremelyavailable in Connecticut.

Asked to identify reasons for theshortage of skilled workers, 83%of respondents blamed the highcost of living in the state. Otherfactors cited included high hous-ing costs (73%), a perception thatthe state’s educational systemdoes not sufficiently preparestudents for the current job market(44%), transportation issues (40%)

and “braindrain” — theemigration ofyoung, educat-ed workersfrom the state(38%). An over-whelming 92%of respondentssaid housingaffordability isvery importantto attractingand keepingskilled workersin Connecticut.

The current jobmarket remains

Yes

82%

No

18%

Percentage of respondents on whether their com-pany has had difficulty finding qualified workers

Difficulty findingworkers

80%

60%

40%

20%

0%High cost of

livingHigh housing

costsState educationalsystem does not

sufficiently preparestudents for current

job market

Transportationissues

“Brain drain” ofyoung, educatedworkers leaving

the state

83% 73%

40% 38%44%

Percentage of respondents on reasons for the shortage of skilled workers inConnecticut

Reasons for skilled worker shortage

“We are activelyinvolved with educa-tional and communityinstitutions to helprecruit for anddevelop the skillsrequired for theelectric utilitybusiness.”

DianePivirottoAssociate Vice President ofHuman Resources, The UnitedIlluminating Company


relatively active, with 42% ofsurvey respondents anticipatingadding workers within the next12 months. Nearly half (47%)plan to maintain current work-force levels, and only 10%foresee a decrease in theirworkforce within the next year.

Among the most difficult typesof positions to fill are skilledprofessional/technician (24%),skilled machinists and other

manufactures(20%), engi-neering (9%),sales (8%),and customerservice (5%).

Employee skillsets most indemand aretechnical,mechanicaland manufac-turing-relatedskills (35%);professionalor “soft” skills,such as commu-nication, team-work and

leadership (27%); overall employ-ability, such as a positive workethic and punctuality (21%); andadvanced computer, scientific,research and development, andengineering skills (13%). Only5% of survey participants saidtheir current workforce lacksbasic math, reading, writing andproblem-solving skills.

Entry-level workers were in great-est demand for nearly half (49%)

50%

40%

30%

20%

10%

0%Significantdecrease

Moderatedecrease

No appreciablechange

Moderategrowth

Significantgrowth

2%

8%

39%

3%

47%

Percentage of respondents on what change, if any, they foresee in the sizeof their workforce over the next 12 months

Predicted changes in workforcesize

“Connecticut’sbusiness communityis eager to workwith educators andpolicymakers inaddressing thestate’s shortage ofqualified workers.”

Lauren W.KaufmanExecutive Director ofEducation Foundation,Vice President, CBIA


of employers in the last 12 months, and 47%of employers expect demand to remain highover the next year. Another 47% reportedgreatest demand for mid-level professionalsover the previous 12 months, and that samepercentage (47%) foresee this being the casewithin the next 12 months.

II.Economic Impact

The availability of skilled workers hasimportant implications both for Connecticutcompanies and for the state’s overall

economy. Businesses need qualified individu-als to fuel expansion efforts as well as replaceretiring workers. Businesses that are unableto find the workers they need in Connecticutmight have to cut back operations or considerrelocation.

More than two-thirds (68%) of survey respon-dents said that the availability of qualifiedworkers is somewhat to very important indetermining whether or not to expand or relo-cate to a new area. Add to this an intensify-ing demand for skilled workers to replace andsupport retirees, and the economic impact of

40%

30%

20%

10%

0%Hampered

growthpotential

Higher over-time costs forexisting skilled

workers

Decreasedproductioncapacity

Not able to ex-ploit new marketopportunities as

quickly

Moreoutsourcing

of work

42% 40%

29% 28%29%

Percentage of respondents on the effects Connecticut’s tighter labor supplyhas had on their business

Effects on business50%

40%

30%

20%

10%

0%Very

importantSomewhatimportant

Not a majorconsideration

47%

21%

32%

Percentage of respondents on the importance ofaccess to qualified workers in company decisionsabout business expansion or relocation

Location factor


Connecticut’s skilled workforcecrunch becomes especially clear.

A tighter labor supply has alreadyaffected businesses’ growth poten-tial (42%), led to higher overtimecosts (40%), decreased produc-tion capacity (29%) hamperedefforts to exploit new marketopportunities (29%) andincreased the outsourcing ofwork (28%).

Fifty-four percent of survey partici-pants believe that the effects ofthe skilled workforce shortage

could be suffi-ciently mitigat-ed by futuregains in pro-ductivity, butabout 47%disagree. Inaddition, nearlythree-quarters(72%) ofbusinessessurveyed havefound thatcompetitionfor qualifiedworkers hasincreased.

For Connecticut companies, thismeans undertaking new efforts toensure that their workforce is ofadequate size and skill level tomaintain a long-term competitiveadvantage.

One way businesses are seekingto do this is by stepping upemployee training. Fifty-three per-cent of respondents indicated amoderately to greatly increasedlevel of investment in employeetraining over the last three years;another 46% have maintained

40%

30%

20%

10%

0%Increasedgreatly

Increasedslightly

No change Decreasedslightly

Decreasedgreatly

31%

41%

1% 0%

27%

Percentage of respondents on how competition for qualified workers hasincreased in the last 12 months.

Competition for workers

“If we’re going tobe competitive inglobal markets, wehave to foster anenvironment thatdevelops a talentpipeline.”

RodneyPowellBoard Chair, Capital WorkforcePartners and President andCOO, Western MassachusettsElectric Company


steady levels but have notdecreased investment.

Survey respondents typicallyrecruit individuals employed with-in their industry (73%) as well asunemployed individuals (45%)and those employed in othertypes of jobs and industries(27%).

Connecticut companies are alsothinking outside the box toaddress the skilled workershortage. Sixty-four percent ofbusinesses surveyed said theyseek out qualified candidatesin underutilized labor pools,including veterans, persons withdisabilities and workers age 55or older (20%), and former prisoninmates (4%).

In addition, 55% are activelyencouraging their older employ-ees to continue working beyondthe traditional retirement age,and 8% are developing a policythat would enable them to doso. Nearly two-thirds (63%) ofrespondents believe that immi-gration will play a somewhatto extremely important role insupplying Connecticut withskilled workers in the future.

Businesses identified several fac-tors that would most significantlyhelp their businesses grow oradd jobs in Connecticut. Theseinclude a wider pool of skilledlabor (24%), lower health carecosts (20%) and a reduced taxburden on businesses.

50%

40%

30%

20%

10%

0%Yes No Currently developing

such a policy

55%

38%

8%

Percentage of respondents on whether their compa-ny actively encourages older employees to continueworking beyond the traditional retirement age

Stay beyondretirement age

“Over the yearsthe manufacturingbusiness has becomemore sophisticated,technical and competi-tive. In our business,we can buy the tech-nology, the softwareand the machines,but we can’t buy theworkforce.”

KenFlanaganPresident, Flanagan Industries


Youth exodus

The exodus of young professionals fromConnecticut is particularly troublesome. From1990 to 2004, the young adult populationdeclined 25% throughout New England, andthis trend is predicted to continue at least until2020. Businesses are clear about the eco-nomic repercussions: 94% said it will have anegative to very negative impact on the state,and 78% foresee a negative or very negativeimpact on their company in particular.

Respondents indicated that their location maybe contributing to the emigration of workersages 25-34. Young professionals tend togravitate toward jobs where they find thecommunity and local lifestyle desirable. But

69% of respondentsdescribed theirlocation as some-what to extremelyunattractive in termsof cost of living andhousing, and 57%said transportationissues posed asignificant problem.

On the other hand,many respondentssaid their communi-ties were relatively

50%

40%

30%

20%

10%

0%Very negative

impactNegativeimpact

Positiveimpact

No significantimpact

26%

42%

52%52%

22%

6%

1% 1%

Company

State

Percentage of respondents on the impact the trend of youth exoduswill have on their company and the state, respectively

Effects of youth exodus

37%

22%

39%

32%35%

30%17%

27%

18%

Cost of living

Ease of transportation

Housing costs

40%

30%

20%

10%

0%Extremely

unattractiveSomewhatunattractive

Neither attractivenor unattractive

9%12%

9%

5%3% 4%

Somewhatattractive

Extremelyattractive

Respondents on the attractiveness of their firm’s region in terms of living costs, ease of transportation andhousing costs

Attractiveness of region


attractive to young professionals interms of recreational and cultural activi-ties (36%), breadth and depth of joboptions available (35%), and the area’ssocial networking opportunities (26%).

Meanwhile, a regional study describedConnecticut as the third-oldest state inthe nation (in terms of population), witha “larger and more rapidly growingshare of the older population than therest of the nation.”

III.Recruiting,Training and Education

Connecticut companies are usinga number of strategies to attract andretain skilled workers. Incentives mostoften offered by respondents’ compa-nies include enhanced pension/401(k)benefits (58%), more competitive healthinsurance packages (54%), in-housetraining programs (54%), more compet-itive salaries (53%), flexible workschedules (50%), tuition reimbursement(39%), and employee longevity incentivesand awards (28%).

Thirty-two percent of respondents have ahuman resources professional dedicated tofinding, hiring, maintaining, and trainingqualified workers; 27% have an HR program

that handles these responsibilities. What’smore, 78% of respondents believe theircompany is somewhat to highly aware ofcurrent best practices research and informa-tion regarding effective employee recruitmentand retention methods, including provenand measurable techniques for hiring skilledworkers and reducing turnover.

50%

40%

30%

20%

10%

0%Reform

education toprovide betterwork-readygraduates

Greater numberof training pro-grams geared

to high-demandoccupations in

the state

Higher qualitytraining pro-

grams gearedto high-demandoccupations in

the state

Government sub-sidies/incentives

to attract andkeep young,

skilled workersin the state

Measuresto increase

productivity ofour existingworkforce

56% 51%

37%

31%

49%

Percentage of respondents on what actions they believe would be mosthelpful in ensuring a skilled, young workforce

Helpful steps


Given the upward trend in theage of Connecticut’s workingpopulation, businesses wereasked to indicate what wouldbe most helpful in ensuring newgenerations of skilled workers.Suggestions included reformingeducation to better provide work-ready graduates (56%), offeringa greater number (51%) oftraining programs geared tohigh-demand occupations in the

state and higher quality of suchprograms (49%), governmentsubsidies and other incentives toattract and keep young, skilledworkers in the state (37%),and measures to increase theproductivity of the existingworkforce (31%).

One key to ensuring Connecticutcompanies have greater access toskilled workers in the future is to

invest in andimprove theeducationsystem. Anoverwhelmingmajority (85%)of surveyrespondentssaid improvingthe K-12 publiceducation sys-tem could havea strong to verystrong impacton Connecticut’sfuture workforceby preparinghighly skilled,job-ready youngadults. Nearly

50%

40%

30%

20%

10%

0%Very strong

impactStrongimpact

Someimpact

Littleimpact

Noimpact

51%

34%

2% 1%

13%

Percentage of respondents on what impact an improved public educationsystem could have on Connecticut’s future workforce

Effect of improved publiceducation

“Our CTWorks OneStop Career Centersare supported byprofessional industryrepresentatives in thegrowth clusters in ourregion. These BusinessServices Consultantscontinually listen tothe needs of businessand work togethertoward training andrecruitment solutions.”

PamelaNaborsDirector of One-Stop Services,Capital Workforce Partners


all respondents (98%) said thatexpanded initiatives in math andscience are somewhat to extremelyimportant in preparing today’sstudents for future careers.

Only 49% of respondents ratedthe schools in their firm’s regionfavorably. Even fewer (34%) rated

the state’s current public educa-tion system as good or excellentwith regard to providing studentswith employment skills andpreparing them for career successin future careers; the rest gave ita rating of average (44%), fair(16%) or poor (6%).

Accordingly,95% of surveyparticipantssaid they aresomewhat toextremelysupportiveof greateraccountabilityand higherstandards inConnecticut’spublic educa-tion system.Most had agenerally posi-tive view ofConnecticut’spublic collegesand universi-ties, on theother hand, with64% saying

60%

50%

40%

30%

20%

10%

0%Extremelysupportive

Somewhatsupportive

Neithersupportive norunsupportive

Somewhatnot supportive

Not at allsupportive

65%

30%

0% 1%5%

Percentage of respondents on their support for greater accountability andhigher standards in Connecticut’s public education system

Support for better schools,greater accountability“As the needs of

businesses becomemore complex, it willbe increasingly moreimportant for oureducational institu-tions and businessesto form an ongoing,collaborative relation-ship to ensure ahighly skilledworkforce.”

Judy K.ResnickDirector of WorkforceDevelopment, CBIA


they do a good to excellent job ofproviding graduates with theknowledge and skills needed toprosper in future careers; 27%rated them average and only 9%believed they are fair or poor.

The importance of a qualityeducation is highlighted by thefact that over half of respondents(55%) require at least a highschool degree for the majorityof new hires; nearly a fifth (17%)require graduation from a tradeor technical school; and 18%require at least a bachelor’sdegree. Businesses are doingtheir part to help students seehow the skills they acquire inthe classroom directly relate totheir professional careers; 40%participate in an apprenticeship,internship, training, cooperative,or other partnership program witha college or university, and 19%do the same with high schools.

Connecticut’s business communityis eager to work with educatorsand policymakers in addressingthe state’s shortage of qualifiedworkers. They recognize theneed for improved educational

opportunities for Connecticut’sstudents as well as affordableliving and housing for the state’syoung, educated workers. Theyare taking measures to remaincompetitive so that the state’seconomy can continue to grow.

The results of this survey clearlyindicate the critical need for acollaboration among businesses,educators and policymakers toensure that Connecticut’s econo-my remains supplied with skilledworkers for generations to come.

Availability of SkilledWorkers in Connecticut

SUPPLEMENTS (published separately)

■ Connecticut’s North CentralRegion

■ Industry Sectors ofConnecticut’s North CentralRegion

■ Manufacturers

■ Finance, Insurance andReal Estate Sector (FIRE)

■ Fairfield County

■ Hospitality, Retail and Tourism

For more information about these supplements,contact CBIA’s Jason Giulietti at 860-244-1946.

“The ability ofConnecticut businesses tomeet the demands of ahighly competitive globalmarket hinges greatly onour capacity to providethem with a highly skilledworkforce. As our latestsurvey clearly shows,there is a significant chal-lenge moving forwardto ensure Connecticutremains a top locationfor skilled workers.”

Peter M.GioiaVice President andEconomist, CBIA


Business executives who responded to thissurvey lead companies located throughoutthe state. Thirty-seven percent are located inHartford County, 22% in Fairfield County,20% in New Haven County, 7% in MiddlesexCounty, 6% in Litchfield County, 3% in NewLondon County, 3% in Tolland County, and2% in Windham County.

A wide variety of industries are represented.Using the Standard Industrial Classification(SIC) codes, 35% of respondents are fromthe manufacturing sector; 33% from service;7% finance, insurance and real estate; 6%from retail trade; 5% from wholesale trade;5% from construction; and 8% from otherindustry sectors.

Companies responding to the survey rangedfrom microbusinesses to midsize or largeemployers, with a workforce of 10 or fewerpeople (33% of survey respondents), 11 to49 (37%), 50 to 99 (7%), 100 to 499 (16%),and 500 or more (8%).

This survey was conducted electronically.In October 2007, surveys were e-mailed toapproximately 4,000 Connecticut businesses.A total of 563 surveys were returned, for a14% response rate and a margin of error ofplus or minus 4 percentage points. The percent-ages quoted in this report relate to the numberof respondents answering each question; thusthe sample size for each question varies. Inaddition, all figures are rounded to the nearestwhole number and may not total to 100%.

If you have questions or would like additionalcopies of the survey, please contact Jason J.Giulietti at 860-244-1900.

35%

33%7%6%5%5%8%

Manufacturing

Service

Finance, insuranceand real estate

Retail trade

Wholesale trade

Construction

Other industry sectors

demographics

methodology


Connecticut Business& Industry AssociationCBIA is Connecticut’s largest business organiza-tion, with 10,000 member companies. Ourpublic policy staff works with state governmentto help shape specific laws and regulations tomake Connecticut’s business climate competitiveand support job creation. Our councils, commit-tees and roundtables give members forums inwhich to become involved in the legislative andregulatory processes.

One of the most important functions of CBIA isto provide our members with information ontopics that can help them better manage theirbusinesses. We conduct training seminars andworkshops; arrange for consulting services; andhold conferences on environmental regulations,health and safety, human resources, taxes,energy, health care, compensation, and bene-fits. Our telephone consulting service gives ourmembers free access to an experienced staff ofprofessionals on a wide range of business topics.

Many CBIA members take advantage of ouremployee benefits plans. These include aninnovative health insurance program as wellas other insurance lines, retirement plans, aCOBRA continuation program, an eyewear sav-ings plan and group purchasing opportunities.

Visit cbia.com.

about CBIA


Capital WorkforcePartners (CWP)CWP, established under the federal WorkforceInvestment Act (WIA) of 1998, coordinates comprehen-sive programs contracted through private and publicpartner organizations. These programs develop askilled, educated and vital workforce to support theeconomic growth of the 37 municipalities in theHartford region. A consortium of the region’s chiefelected officials oversees CWP and appoints represen-tatives from business, education, labor and publicgroups to serve on our board of directors. This boardis responsible for creating and implementing ourstrategic plan.

Capital Workforce Partners is the result of a mergerof two innovative and active Workforce InvestmentBoards — the Capital Region Workforce DevelopmentBoard and Workforce Partners of Mid-Connecticut.As a result of a state-mandated consolidation of eightworkforce development boards to five, CWP nowserves a total population of 959,322 and a laborforce of 486,500, making it the largest workforceinvestment area in Connecticut.

OUR MISSION: To support an effective workforcedevelopment system that strategically connectseconomic development and education resources forthe purpose of building and maintaining a strong andvibrant workforce.

OUR VISION: We envision a system that prepares andsustains a diverse, highly skilled, and educated work-force who can command wages sufficient to createprosperity and support the region’s economic vitality.

Visit capitalworkforce.org.

The United IlluminatingCompanyThe United Illuminating Company (UI) is a New Haven-based regional distribution utility established in 1899.UI is engaged in the purchase, transmission, distributionand sale of electricity and related services to more than320,000 residential, commercial and industrial customersin the Greater New Haven and Bridgeport areas. UI’sparent company, UIL Holdings Corporation, is tradedon the New York Stock Exchange under the symbol UIL.

Visit uinet.com.

sponsor profiles

CBIACONNECTICUT BUSINESS & INDUSTRY ASSOCIATION

350 Church St. • Hartford, CT 06103-1126 • 860-244-1900

cbia.com

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