FEATURE STORY: Nothing Matters More Than Talent
By Jenny Vickers
From the July/August 2012 issue
According to a recent report, 10 million manufacturing jobs are unfilled worldwide due to a shortage of skilled workers. The report, issued by World Economic Forum and Deloitte Touche Tohmatsu in April 2012, says that economic growth and success rests with a skilled workforce.
“In the race to future prosperity, nothing will matter more than talent,” said Craig Giffi, co-author of the report. “The skills gap that exists today will not likely close in the near future, which means companies and countries that can attract, develop and retain the highest skilled talent—from scientists, researchers and engineers to technicians and skilled production workers—will come out on top.”
The lack of skilled workers is nothing new. In the U.S., about 600,000 jobs in manufacturing remain unfilled, a situation that is expected to get worse in the next three to five years as older workers retire. Worker shortages are found in skilled trades such as heavy equipment mechanics, construction, truck drivers, healthcare, and certain jobs in the IT sector to name a few.
To overcome talent shortages in the U.S., many states have launched workforce training programs that are helping workers develop the most relevant 21st century skill sets. Currently, at least 20 states offer some kind of training support. In this feature, Business Facilities has uncovered eight states that are planting the workforce seed for success—with oft emulated programs that are creating a seamless path between high school, post secondary and the workforce and helping states compete globally, create jobs, and achieve economic growth.
AIDT Builds Skilled Labor in AL
Alabama’s AIDT (Alabama Industrial Development Training) is a major force for workforce training in the state. For more than 40 years, AIDT’s “Total Workforce Delivery System” has provided thousands of skilled, motivated employees to AL industries.
AIDT offers comprehensive pre-employment selection and training, post/on-the-job training, maintenance assessments, industrial safety assessments and training, leadership development, and process improvement assessments—all specific to a company’s needs. AIDT’s workforce selection and training processes have achieved the world’s first ISO 9001:2008 certification for a state-funded workforce training program.
Technology changes constantly, evolving at an exponential rate, so AIDT has developed a new project to help train workers to keep up with high tech advancement. Called the Alabama Robotic Technology Park (RTP), the project is helping to move Alabama to the forefront of education, training and technology.
The first phase of the project, which was recently completed, consists of the Robotic Maintenance Training Center, a state-of-the-art facility where technicians will be trained to work on robotic machinery. The 52,000 square foot facility is staffed by trainers supplied by top robot builders and is home to several major robotics and automation brands.
“One of our struggles has been keeping up with the demand for multi-craft industrial maintenance techs and welders,” said Jacqueline Allen, AIDT’s Public Information Officer. “We have addressed this issue with the creation of Phase 1 of the Alabama Robotics Technology Park in North Alabama (Tanner) and the Maritime Training Center in South Alabama (Mobile).”
The RTP is a three-phase campus approach to training workers, developing technologies and integrating those technologies and workers into companies. It is a collaboration between the state of Alabama, Calhoun Community College, AIDT, and robotics industry leaders across the nation. When completed, the RTP will consist of three individual training facilities each targeted to a specific industry need. The three buildings will have an investment of approximately $73 million, including robotics equipment.
In Phase 2, the Advanced Technology Research and Development Center will feature a test facility for companies currently in the robotics manufacturing industry. The 30,000 square foot facility will be used by NASA and the U.S. Army Missile Command for the purpose of research, development and testing of leading edge robotics used for military projects and space exploration. The structure will have appropriate infrastructure to support these activities with substantial outdoor areas for testing in a variety of environments.
In Phase 3, the Integration and Entrepreneurial Center will be a collaborative consolidation of technology involving higher education and industry. This facility will allow companies to build and adapt robots for new industries. Start-up plants will be able to set up manufacturing lines to integrate software and equipment, test systems and train maintenance and production staff.
Alabama’s aerospace workforce is soaring after a recent announcement by leading aircraft manufacturer Airbus. In July, the company announced it will open its first U.S.-based production facility at the Brookley Aeroplex in Mobile, Alabama, creating as many as 1,000 new high-skilled jobs. Airbus is the largest export customer for the U.S. aerospace industry. Since 1990, the company has spent $127 billion with U.S. suppliers—$12 billion last year alone.
“The time is right for Airbus to expand in America,” said Fabrice Brégier, Airbus President & CEO at the announcement in Mobile. “The U.S. is the largest single-aisle aircraft market in the world—with a projected need for 4,600 aircraft over the next 20 years—and this assembly line brings us closer to our customers. Mobile is now becoming part of Airbus’ global production network, joining our successful and growing assembly lines in Hamburg, Toulouse and Tianjin.
Mobile has long been a hub for world class shipbuilding and it will now become one of just a few communities in the world capable of manufacturing high-tech, large commercial aircraft. Airbus workers in Mobile will assemble both Airbus’ existing A320 jet family as well as the A320 new engine option, or A320neo, jets.
“This project will create 1,000 stable, well-paying jobs that the people of this area need and deserve,” said Alabama Governor Robert Bentley. “Alabama has the best workforce you’ll find anywhere in the U.S.”
According to a recent news article in Mobile’s Press-Register newspaper, the training of workers will be primarily handled by an existing aircraft manufacturing and electronics training center at the Brookley Aeroplex. The training programs would be a partnership program with AIDT and Brookley’s Alabama Aviation.
Growing a High-Tech Workforce in Florida
Creating and sustaining jobs and workforce development is the central focus of Gov. Rick Scott’s economic growth strategy, including prioritizing STEM (science, technology, engineering and math) to focus Florida’s K-12 and higher education systems on producing graduates that can support a growing high-tech workforce.
Florida’s workforce and training programs consistently receive high accolades. According to the National Chamber Foundation, Florida ranks in the top eight in four of the six workforce and training measures. It ranks first in higher education efficiency and share of high school seniors taking advanced placement exams. The state ranks fourth for the efficiency of its workforce placement system and eighth in college affordability. In addition, Florida was ranked number two for workforce in a CNBC special report, “America’s Top States for Business 2011.”
Florida’s Quick Response Training and Incumbent Worker Training programs have a strong track record for helping businesses maintain a competitive talent pool. Administered by Workforce Florida, the statewide workforce investment board, both programs are nationally recognized and structured to be flexible to meet a business’s training objectives. In addition, the programs reimburse employers for a portion of their training costs.
Florida’s Quick Response Training (QRT) grants provide funding for customized training to new or expanding businesses. Through this customer-driven program, Florida is able to effectively retain and attract businesses creating new high-quality jobs. The grants are structured to be flexible and “respond quickly” to meet the business’s training objectives. As of June 2009, QRT grants have provided nearly $73 million in funds for customized training for almost 82,000 employees for just under 320 businesses and industries throughout Florida.
Florida’s Incumbent Worker Training (IWT) grants provide funding for customized training to existing for-profit businesses. Through this grant, Florida is able to effectively retain businesses and help them stay competitive by supporting skills-upgrade training for existing full-time employees. IWT grants are structured to be flexible to meet the business’s training objectives. The business may use a public or private training provider, or may use an in-house training provider based on the nature of the training. Since its inception, IWT grants have helped provide customized training to more than 98,000 Floridians at more than 1,000 businesses throughout Florida.
Nearly $1 million in QRT grants have been set aside to train approximately 1,000 new and existing workers at seaport businesses as well as manufacturing, logistics and related companies aimed at retaining jobs and expanding international trade and exports in Florida. Another $600,000 in QRT grants will provide training for 600 people who work for air cargo-related businesses, again with an eye toward boosting productivity and competitiveness for Florida companies to increase the state’s export volume. In addition, Workforce Florida is investing up to $600,000 to help create new career academies to develop pipeline talent for international trade jobs and forge stronger partnerships between local workforce investment boards and Florida’s deepwater seaports. Up to 15 career academies are being created in high schools throughout that state focused on international trade and logistics and advanced manufacturing for international trade opportunities.
GA Guarantees a Quick Start
Georgia’s Quick Start training program, which is ranked among the top workforce training programs in the country, is one of the main reasons that many companies choose to set up shop in Georgia, Caterpillar, Baxter International, Outdoor Network LLC, NCR, Kia Motors, and ZF Industries have all identified the program as a key reason for picking Georgia over other states.
Quick Start provides intensive, specified training to give companies the skilled employees they need to open quickly and run efficiently. These services come at no cost to qualified new companies or those adding new jobs or technology. The basic rule is that manufacturers can receive Quick Start benefits if they create at least 15 jobs over a 12-month period.
Created in 1967, Quick Start is the nation’s oldest state job training program. It has trained about 976,000 employees through more than 6,200 projects. During the 2011 fiscal year, Quick Start provided 168 customized projects, creating or saving 13,366 jobs.
Quick Start is a division of the Technical College System of Georgia, and some of the program’s training is held at technical colleges throughout the state. Once the program’s training is complete, companies can contract with the local technical college for ongoing support.
Quick Start was the deciding factor for Caterpillar Inc. moving its plant out of Japan and locating in Georgia. Georgia was behind several other states when it was making its decision to move to the U.S., but Quick Start help catapult Georgia to the top of the list. Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.
In February 2012, the company announced it is locating a new manufacturing facility in Georgia’s Clarke and Oconee counties. The new facility will be part of Caterpillar’s Building Construction Products Division (BCP). When fully operational, the new facility will have about 1,400 employees and a total investment in Georgia of $200 million.
Working through Athens Technical College, Quick Start will train Georgia workers in the full spectrum of Caterpillar’s needs—including those working in the office and production employees.
Quick Start has helped launched dozens of successful projects in the state. In March, National Cash Register (NCR) Corporation, a leading provider of ATMs, opened a second Columbus, GA, facility. More than 300 jobs are being created at the 100,000 square-foot facility, where employees will manufacture self-service point of sale terminals for retail and hospitality applications. NCR says that part of its success in Georgia is due to Quick Start, which has tailor-made a curriculum to train workers specifically for the new NCR plant.
“They’re training our people before they even hit the factory floor,” Rick Marquardt, senior vice president for global operations, said in the article. “It’s been a great asset to us. I give those people a lot of free advertising because I believe it’s one of the best in the country.”
In April, Baxter International, Inc., a global, diversified healthcare company that produces medical devices and pharmaceuticals and biotech products, announced they are locating a new bio-pharmaceutical manufacturing facility east of Atlanta as well as plasma centers throughout Georgia that will employ approximately 1,500 people across the state with potential for hundreds more. Total investment by the company will exceed $1 billion.
To assist the company with its workforce requirements, Quick Start will build and operate a state-of-the-art biotech training center that will not only provide Baxter with a fully-customized training program that meets the company’s start-up needs, but also builds capacity and curricula within the Technical College System of Georgia for maintaining a long-term pipeline of highly skilled employees who are well-trained in bio-manufacturing operations.
In June, Outdoor Network LLC, the parent company behind an extensive network of outdoor, powersports and marine-related sites, moved its primary business units for Outdoor Network distribution and Powersports Plus to Albany, Georgia, creating 112 jobs at a new order-fulfillment center and investing $3.2 million.
Outdoor Network already operates a retail operation in Albany, known as Powersports Plus, where it sells motorcycles, all terrain vehicles, parts and provides maintenance for these. Work force training for Outdoor Network will be provided by Quick Start through Albany Technical College.
“Quick Start brought to us a level of expertise that we did not have…in warehouse management and call center operations,” said Tom D’Azevedo, Owner of Outdoor Network LLC. “They have enabled us to go to the next level. That was a very, very instrumental part in our decision to move here.”
Louisiana Sets the Standard
Lousiana’s FastStart has been Business Facilities’ top-ranked workforce development programs in the nation for the past two years. The program, which is run by Louisiana Economic Development (LED), was launched in 2008 to help attract and develop workers for new projects.
One of its first successes was helping convince Gardner Denver Inc. to not close its Thomas Products Division plant in Louisiana, but rather to expand it by moving production from Wisconsin. LED FastStart became the key factor in convincing Gardner Denver to keep its Louisiana plant open, retaining 70 jobs and adding 200 new positions.
As part of a strategic incentive package, FastStart hosted job fairs and open houses in Monroe to build interest in the new jobs, and the FastStart team traveled to Wisconsin, where they performed key business analysis—defining behavior and competency requirements for the new jobs—and documented essential steps needed for a seamless transition from Wisconsin to Louisiana.
“FastStart gave the leadership team the assurance that they would be there, they would help us through the process,” said Rick Swoboda, Director of Manufacturing.
Just months after launching the Gardner Denver project, FastStart not only helped the company complete a successful transition to Louisiana, the project paid tangible financial dividends.
“The outstanding training support provided by the State of Louisiana … has been integral to the success of the project,” Gardner Denver CEO Barry Pennypacker said, telling Wall Street analysts in a third quarter 2009 conference call that the Louisiana project contributed significantly to an increase in the company’s profit margin.
To date, FastStart has completed nearly 70 major projects for expanding companies in Louisiana. The projects touch a variety of sectors, from agribusiness to digital media software development and corporate headquarters expansions. Often, the program becomes the key reason why companies choose to expand or relocate in Louisiana rather than another state or nation.
FastStart pursues projects in various industry sectors, everything from digital media companies to enterprise zone software to aviation training and corporate headquarters relocations. According to Secretary of Louisiana Economic Development Stephen Moret, FastStart sets itself apart from other workforce training programs in several critical areas. Expanding companies in Louisiana are eligible to receive LED FastStart assistance at no cost, if they meeting the following requirements:
- Alignment with Louisiana’s economic development targets, including:
- Digital media
- Headquarters and business operations
- Service industries
- Advanced and traditional manufacturing
- Warehouse and distribution
- Research and development.
- Company commitment to create a net of at least 15 new permanent manufacturing jobs;
- Or a net of at least 50 new permanent service-related jobs.
- Each request is evaluated prior to project commencement to ensure all eligibility requirements are met.
A perfect example of FastStart’s success is none other than EA Sports, one of the leading sports entertainment brands in the world. When EA Sports partnered with LED FastStart in 2008, the interactive entertainment company sought new methods for training video game testers inside its new North American Test Center in Baton Rouge.
Through close collaboration, FastStart took EA’s traditional form of training to the next level. Understanding that potential game testers are both young and accustomed to the visual intensity and the fast action of electronic games, FastStart incorporated game play into the training.
Utilizing recognized EA game platforms, the computer-based modules developed by FastStart introduce the important instructional points as part of the “game” that the tester is “playing.” Taking full advantage of visuals, voice-over, audio cues and text, FastStart created effective training material that feels much more like “play” than “study.”
So successful were FastStart’s training modules and procedures developed for the Louisiana project, that EA incorporated them into their training operations worldwide.
“We were wowed,” said Sarah Chavez, Global Training Manager at EA. “This is totally different than anything I’ve ever seen. This is totally engaging and fascinating. We like that kind of stuff, we like the high-tech experiences that we can get both in game and now with training. FastStart has been able to provide that.”
FastStart is also supporting a new GE Capital technology center in New Orleans. GE Capital, one of the world’s largest providers of credit, announced the project in February 2012. It will create 300 new direct jobs in IT and software development.
FastStart is providing GE Capital with significant recruitment processes to attract the right talent for the company’s very specific needs. FastStart is also deploying various tools that attract and speak to the culture of New Orleans, in an effort to convince the right talent to relocate and call New Orleans home. Additionally, FastStart has a unique program that provides destination services and relocation assistance to executives and key employees who are relocating from outside the state.
In another high tech project, FastStart has partnered with Pixomondo, an international visual effects company with a global network of studios, to open a new Baton Rouge studio in June. FastStart created a digital media training studio, complete with the necessary hardware and appropriate software to train digital compositors and rotoscope artists, all at no cost to the company. The training is both comprehensive and tailored and ties back directly to Pixomondo’s specific workflow, as well as the company’s unique culture.
One of LED’s most recent projects involves creating a pipeline of manufacturing-ready workers to meet the anticipated demand for automotive and aircraft manufacturing jobs expected in the state. LED’s FastStart worker training program, which helps attract and develop workers for new projects, is working with the Louisiana Community and Technical College System to launch C4M, or “Certified for Manufacturing.” The pipeline stage of the program was just completed and is unique due to the fact that there are no textbooks—the entire curriculum is delivered via iBooks, streaming videos and hands-on simulation in conjunction with Louisiana’s two-year schools and high schools.
LED’s long-term plans are to develop a similar program for digital media, one of the fastest growing sectors of the Louisiana economy.
Here are some additional Louisiana FastStart statistics: Total projects: 67; total hours trained: 140,480; total number of unduplicated trainees: 13,500; total number of trainees: 36,150.
NH Picks Up Training Cost
New Hampshire currently offers several workforce training programs that address both individual needs and employer needs. For individuals, it offers Individual Training Accounts, On the Job Training, and the Return to Work program, which allows prospective workers to “try out” a company while still receiving unemployment benefits. It also offers employers the Job Training Fund, which provides a 1:1 match for training costs for employee.
New Hampshire employers needing new hires can utilize a program that reimburses up to 90% of a new employee’s training wages. The On-the-Job training program is one of several offered through the Office of Workforce Opportunity and can be combined with other reimbursable job training funds designed to encourage employers to hire both trainable and skilled workers.
“While New Hampshire’s unemployment rate is well below the national average, there are still many skilled workers looking for full-time employment,” said Jackie Heuser, Director of the Office of Workforce Opportunity.
The On-the-Job training opportunity provides employers with a great incentive to hire workers who are eager, trainable and available to re-enter the workforce. The training wage reimbursement applies to new hires that have been unemployed 18 weeks or longer.
The average duration of unemployment for a New Hampshire worker is currently over 16 weeks, so we know there are many highly skilled people without work through no fault of their own,” said Heuser.
The On-the-Job program provides an incentive to hire such men and women who only need some training to fit the particular job requirements. For a business with 50 or fewer employees, a 90 percent training wage reimbursement is available. For business with 51 to up to 250 workers, a training of up to 75 percent is available by utilizing the On-the-Job training program.
A key component of the program is that employers are provided a list of qualified candidates, and the employer interviews and makes the selection.
“This is a classic ‘win-win’ situation, where a New Hampshire business owner can be reimbursed while training a new employee they select for their growing company,” said Heuser. “In addition, the unemployed worker now has a job, pays taxes, and returns to the skilled workforce New Hampshire needs to compete.”
The state’s “Return to Work” program can also be used first to test possible employees skills (while the trainee collects unemployment benefits); then entered into the On The Job reimbursable training wage program; and continued employee training with New Hampshire’s very successful Job Training Fund.
The Job Training Fund grant is a great opportunity for businesses to offer skills enhancement training for their employees without bearing the full cost of the training.
This matching grant program is eligible only to private businesses located in New Hampshire and businesses intending to locate in the state and to those who pay quarterly taxes into the NH Unemployment Trust Fund. Businesses that make voluntary (reimbursable) contributions are not eligible. In addition, local, county and state political subdivisions are not eligible for the program.
Employer-based training programs provide an opportunity for the business to choose the type of training needed – not only to increase the skills of workers, but ultimately to increase the company’s production.
Although New Hampshire has been successful with workforce development it has had a few hurdles to overcome—however its successes far outweigh any challenges.
“Funding is the largest challenge, with shrinking federal dollars being allocated to States, and state-level funding minimized or eliminated,” said Michael Power of New Hampshire’s Office of Workforce Opportunity. “However, New Hampshire is a small state, which enables us to collaborate among state and local agencies to a better extent than larger, more populated areas of the country.”
For example, New Hampshire’s federally-mandated statewide workforce board is the state’s only workforce board, whereas other states have multiple levels of jurisdiction, including regional workforce boards and local workforce boards.
New Hampshire has also seen success through the Workforce Investment Act (WIA), the federal law for workforce development programs funded by the U.S. Department of Labor’s Employment & Training Administration. “Our successes include placement rates for those going through our NH Works Career Center programs, including training programs funded by WIA for eligible (economically disadvantaged or dislocated) workers,” said Power.
PA: Ahead of the Curve
Pennsylvania has been at the leading edge of a U.S. movement to build a workforce system that is responsive and can meet the skill needs of employers, expand opportunity and security for workers and boost the competitive position of the commonwealth. Employment and training programs in Pennsylvania focus on new and innovative ways to encourage facilitation between economic development leaders, companies, educational and training communities, and workers to make them as effective as possible.
Two particular programs are major successes within the commonwealth. The Incumbent Worker Training program provides assistance to employers to help with certain expenses associated with new or upgraded skills training of full-time, permanent company employees to avert layoffs, reduce turnover, and become more competitive. The program benefits businesses and industry by assisting in the skill development of existing employees (incumbent workers) and increasing employee productivity, and the growth of the company.
The Industry Partnership (IP) program is a multi-employer collaborative effort that brings together management and labor around the common purpose of improving the competitiveness of a cluster of companies or organizations producing similar products or services and sharing similar supply chains, critical human resource needs, infrastructure requirements, business services, and/or retention/recruitment challenges.
The program concentrates attention and resources on high growth, successful clusters and/or those which face serious challenges to growth or retention. The program is a success because it brings together employers and their workers, allowing the public sector to learn significantly and qualitatively more about the opportunities and challenges facing a set of similar companies.
According to the Pennsylvania Bureau of Workforce Development Partnership, the annual wage and retention record for Pennsylvania shows that IP training participants’ wages start out, on average, 11 percent higher than individuals that do not engage in training when they switch careers within a targeted industry cluster. The wage and retention record also indicates that individuals that engage in incumbent worker training have an 11 percent higher retention rate within their industry than those individuals that do not participate in training.
In spite of a funding cut of more than $11.7 million (nearly 60 percent) from 2008 to 2009, the drop off in the number of workers trained was only 26 percent and the numbers of partnerships remained relatively even. This demonstrates the ability of the partnerships to adjust and adapt using local resources and relationships to stretch their limited dollars further.
Since 2005, the cost of training per participant has decreased by 82.8 percent. This is evidence of the strategic benefits of consortia-based training and the partnerships’ ability to identify cost-effective training providers as well as work together to negotiate high-quality, low-cost training programs that benefit a collective group of employers in the partnership. The cost per training program has decreased by 84.5 percent overall.
Pennsylvania has several job training programs to ensure that its workforce maintains its skills:
- Customized Job Training—The third largest program in the nation, the Customized Job Training program responds to employer needs by providing grant funds for specialized job training for existing or newly hired employees.
- Guaranteed Free Training Program—Through the Workforce and Economic Development Network of Pennsylvania (WEDnetPA), employees of qualified companies can receive free job training for basic entry-level skills and advanced information technology skills.
- Workforce Investment Act of 1998—A federal program that provides job training to eligible individuals for private and public sector employers.
Champions Emerge in Wheeling
In northwest suburban Chicago a vibrant manufacturing base exists. However, an aging workforce and worker shortage has created a major hurdle for area companies to overcome as they try to fill empty positions on the factory floor. Local economic development officials and leaders say that image and perception are key factors in the crisis. They say that because students aren’t aware of the key opportunities that lie in manufacturing most aren’t pursuing it as a career path.
Currently, the state has 80,000 manufacturing jobs that need to be filled—jobs that are, according to Terry M. Iverson of Iverson & Company, filled with “extreme technology, advanced innovations and exhilarating and good paying careers available for the next generation.”
To help change the public perception of manufacturing, Mr. Iverson created a new program called Champion Now, which is helping prepare young workers for a 21st century economy.
“Together, with the power of the industry supporting us, we will reach the next generation with exciting educational films that demonstrate how manufacturing is the foundation of our North American economy and offers exhilarating career choices,” says Mr. Iverson.
The Champion Now program, an acronym that stands for “Change How American Manufacturing is Perceived In Our Nation,” has created the Edge Factor Show, a High Definition film series that features real life manufacturing stories and shows the manufactures as the heroes. Edge Factor also includes a design contest with a reality show twist. Students submit designs and watch as their design idea transforms into a 3D model on our Reality Redesigned series. For more information on this program, visit www.championnow.org.