Innovations in Workforce DevelopmentNed Hill

Professor of Economic Development

The Ohio State University

National Conference of State Legislatures

Jobs Summit

September 27, 2019

Current economic conditions

Tail winds

• Low unemployment

• High rates of labor force participation

• Wages are rising—especially at the bottom of the market

• Consumer spending is carrying the economy

Head winds building

• Consumer confidence softening

• Trade skirmish now a trade war; USMCA is in limbo

• Business investment is weak with uncertainty mounting

• Trouble in motor vehicles & aircraft

• Federal budget deficit (and other stuff) makes infrastructure bill unlikely 2

Employers’ pain pointsWhat are your constituents and friends talking about?

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Hiring is expensiveMistakes, more so

Healthcare lowest hiring costs. Why? Certification

Manufacturing highest hiring costs. Why? Chaos.

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Figure 3: Cost per Hire by Industry, 2014

$4,323 $4,300

$3,033

$5,611

$4,325

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

Banking /Financial Services

Business Services/ Consulting

Healthcare Manufacturing Technology

Source: Bersin by Deloitte, 2014.

Note: For further description of industries, please see “Appendix I: Definitions.”

Source: Talent Acquisition Factbook: 2015, Bersin by Deliott

The pain of the workforceWhat are your constituents and family experiencing?

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Let’s get the workforce rightThere is no one path

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Three routes to good jobs13 million require a high school

education

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STEM is not the answer on its ownSoft-skills are in demand

8Source: Fran Stewart, The STEM Dilemma, W.E. Upjohn Institute for Employment Research,2017.

Manufacturing: Change skills and competitiveness

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Sources: Leslie Parady, Manufacturing’s $6 Billion Problem, IndustryWeek, Sept. 27, 2019 and Edward (Ned) Hill, Manufacturing 5.0: The digital revolution in operations technologies, Ohio Manufacturing Institute, The Ohio State University

Technical jobs are everywhere

10Source: . Building America's Skilled Technical Workforce. National Academies of Sciences, Engineering, and Medicine 2017Washington, DC: The National Academies Press. https://doi.org/10.17226/23472.

First JobEmployer, Heal Thyself

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Heal Thyself

• Low wage

• Low benefit

• Top-down & inflexible management

• Unwilling to invest in people or plant

• Importance of on-the-job training

• Manufacturing’s challenges• Little hiring and training from 1979 to 2017; a two generation’s of management

• Semi-skilled, traditional skills, digital operations technology skills, leadership

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Heal ThyselfU.S. Chamber of Commerce’s talent management

principles

1. Talent has to be directly tied to strategy

2. Understand the source of the talent problem (retain, recruit)

3. Develop customized solutions that respond to core capabilities

4. Shared ownership for talent acquisition, retention, and development—it is not just HR’s job. Know why you are losing.

5. Develop effective sourcing strategies

6. Develop competency, credentialing, and other performance indicators

7. Measure with transparent scorecards to align incentives & performance

8. Use predictive analytics to monitor performance

13Source: U.S. Chamber of Commerce, 2014.

Second jobUnderstand the sources of workers

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There is no one workforce problemThere is no one workforce solution

The 5 Uns: Labor supply challenges

Uneducated: Illiterate and under-skilled

Unconnected: Felons, Addicted, Single-parent, Isolated, Retired or near-retired

Unpopular: Blue collar

• Trades

• Manufacturing

Unavailable

• Skilled technical workforce

Unready: Highly educated & inexperienced

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Three views of the workforce development systemBureaucratic, Education-centric, Pragmatic

Or, is it really a market?

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U.S. workforce development systemBureaucratic

17Source: Committee on Education and Labor, Republicans, U.S. House of Representatives, 2012

U.S. workforce development system:Education-centric

18Source: Building America's Skilled Technical Workforce. National Academies of Sciences, Engineering, and Medicine 2017. Washington, DC: The National Academies Press. https://doi.org/10.17226/23472.

U.S. formal workforce development system: Pragmatic

19Source: State Sector Strategies Come of Age, National Governors Association, 2013

Experiential learning: Apprenticeships, co-ops, internships, part-time work

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Apprenticeships

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South Carolina’s Program as of 2014

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• Funding: $1 million a year

• Grants: $1,000 tax credit for 4 years for each apprentice

• Sponsor/employers grew from 90 in 2007 to more than 600 in 2014

• Apprentices 777 in 2007 to 11,000 in 2014

Room to grow apprenticeships and they provide experience and

income

23Source: Building America's Skilled Technical Workforce. National Academies of Sciences, Engineering, and Medicine 2017. Washington, DC: The National Academies Press. https://doi.org/10.17226/23472.

Lessons on apprenticeships

1. Flexible within a framework; recognized as being valuable economically & socially

2. Clear rights & responsibilities for all partners and the student. • Apprentices are employees. • Recognize separate wage structures• Workplace is the center; educational institutions complement

3. Balance incentives (tax credits & subsidies) Recognize the cost of mentoring & training; monitor firm’s contributions

4. Recognized industry standards & competencies; coupled with graduation recognition

5. Strong coordinating intermediary24

Source: Andrea Messing-Mathie, National Academy of Science, 2015

Guiding Principles from Partnership to Advance Youth Apprenticeship (PAYA)

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• Career-Oriented: Learning is structured around knowledge, skills, and competencies

that lead to careers with family-supporting wages

• Equitable: Learning is accessible to every student, with targeted support

• Portable: Learning leads to postsecondary credentials and transferable college credit

• Adaptable: Learning is designed collaboratively to be recognized and valued across an

industry or sector

• Accountable: Student, employer, and program outcomes are monitored using

transparent metrics to support improvement.

Massachusetts’ Manufacturing Apprenticeship Program

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Source: Leslie Parady, Manufacturing’s $6 Billion Problem, IndustryWeek, Sept. 27, 2019 https://www.industryweek.com/sponsored/manufacturing-s-6-billion-problem

• Industry-developed, industry-recognized certificate aligns with the Massachusetts VocTechEducation

• Implemented and monitored by an intermediary organization MassMEP with deep industry knowledge

• Full apprenticeship (Level 3) registered with the MA Division of Apprentice Standards

• Pre-apprenticeship (Level 2) offered to vocational high school students earn an industry credential & diploma

• Articulated for 26 credits at a local community college certificate or AS degree (Level 4); online and on-campus

• “Quality career pathway” as defined by the Center for Law and Social Policy (CLASP) with multiple entry and exit points

FAME: Toyota, Kentucky and NAMFederation for Advanced Manufacturing Education

Program

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• “FAME has set the standard for industry-driven apprenticeships, and by taking it nationwide, we will open the door to high-paying manufacturing jobs for Americans across the country,” Jay Timmons, CEO of NAM.

• The program has “produced remarkably strong graduates,” Chris Nielsen, Toyota Motor North America executive vice president:

• 2-year industrial degree, Advanced Manufacturing Technician program (AMT )

• Begun in 2010 as a pilot in Toyota’s Kentucky plant

• Now just under 400 partner companies in 13 states.

Source: Toyota’s Apprenticeship Program to Serve as National Model for Training, IndustryWeek, Sept. 11, 2019, https://www.industryweek.com/talent/toyota-s-apprenticeship-program-serve-national-model-training

Sector Partnerships

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29Source: State Sector Strategies Come of Age, National Governors Association, 2013

Sector-led partnershipsCommon Pool Resource

30Source: State Sector Strategies Come of Age, National Governors Association, 2013

Sector-led partnershipsPrinciples

1. Led by employers – you need recognized committed industry leaders who want to own the problem and want to own the solution

2. Focus on a single industry

3. Regional—size of the labor market

4. Convened by a neutral intermediary

5. Clear benefits with short processes

31Source: Central Ohio Manufacturers’ Partnership, Ohio Manufacturers Association

Sector partnerships

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What intermediary is the trusted neutral convener? And is not a training provider

What is the functional, regional, labor market?

Who are the champion employers? What are the participation rules?

What pragmatic outcomes are expected? What is the value proposition

What is the eco-system? Who is the talent supply-chain partners that need to participate?

Thank you

Edward (Ned) HillProfessor of Economic DevelopmentJohn Glenn College of Public AffairsOhio Manufacturing InstituteHill.1973@osu.edu

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