Economic Development Strategies Using Skilled Labor Information

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

2. 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. Topics

3. 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

4. Why is the availability of skilled labor important? • Factors 2006 Ranking • Labor costs 95.0% • Highway accessibility 90.9 • Corporate tax rates 90.8 • State and local incentives 88.6 • Telecommunications services 88.3 • Tax exemptions 86.7 • Occupancy or construction costs 85.5 • Availability of skilled labor 85.1 • Energy availability and costs 82.4 • High-speed internet access 82.1 Source: Area Development Magazine Annual Corporate Survey

5. Why are skills important? Higher Skills Higher Wages Stronger Economy

6. National Career Readiness Certificate Bronze Silver Gold Automotive Body Repairers Butchers & Meat Cutters Cooks, Cafeteria Furniture Finishers Home Health AidesHousekeeping 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

7. $660M Capital Investment • 350 - 550 Jobs • $60K Annual Salary • Sites in 18 states considered • Finalists • Clay, NY • Devens, MA Example: BioPharma Project

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

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

10. Government Labor Data Example: Davenport – Moline – Rock Island MSA Civilian Labor Force 211,500 Employment 203,000 Unemployment 8,500 Unemployment Rate 4.0% High School Graduation Rate 88.7% College Graduation Rate 24.6% Information based on geo-political boundaries

11. What does a Laborshed Survey Measure? • 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?

12. What are the elements of a good Labor Skills Assessment System? • Measurable skills standards • Levels of competency • All levels of workers • Related to job performance • Measures across industries • Training by competency levels • Individual development plans • Extensive test delivery network • Proven track record

13. “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

14. Is there a need for a national standard? 1955 2005

15. Ready for College, Ready for Work Findings: The same basic skills are needed for work and college www.act.org/path/policy/reports

16. How can the skills of workers be measured and developed? TM • Personal Skills • Talent • Fit • Performance • 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

17. 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

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

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

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

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

22. 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”

23. How is WorkKeys used for Local Expansions? • Subaru of Indiana, Inc. – Lafayette, IN • $230M expansion project with Toyota • 1000+ job openings • High hourly wages & benefits • Projected 10,000 applicants • Decision factor: Database of 6000+ • WorkKeys assessed job applicants • Tecumseh Area Partnership & • Indiana DWD • WIRED recipient for REACH program

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

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

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

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

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

29. 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

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