THE CURIOUS CASE OF GLOBALFOUNDRIES AND ITS WORKFORCE | The Challenge of Matching Jobs and Job Seekers

by Guest Author 7. November 2013 11:21

Please click here for the introduction and index to this series of articles.  In this installment, we’re pleased to have Kent Gardner, Chief Economist at the Center for Governmental Research (CGR), contribute his observations from the Rochester Area Skill Needs Assessment and Business Climate Survey. 

The Challenge of Matching Jobs and Job Seekers

There is nothing more debilitating than unemployment—both for the individual and society. The jobless are deprived of the dignity of work and the community is deprived of the benefit of their labor. We look to workforce development programs and higher education to match jobs and job seekers and, often, to help the unemployed gain the skills that are needed in the workplace.

Recent attention has focused on “middle skills,” those positions requiring some postsecondary technical education and training but not a four year college degree. A recent Harvard Business Review article[1] found that nearly half of new job openings from 2010 through 2020 will be middle-skills positions in fields such as computer technology, nursing, and high-skill manufacturing. Community colleges (such as Monroe Community College) are particularly well suited to addressing the middle skills gap and are exploring how they can best fill that need.

This leads to a reasonably neat policy prescription: If we have willing workers whose skills simply fall short, then the public’s role is to provide a bridge to employment through training. Easy, right? As one of the Rochester area’s most strategic training providers, Monroe Community College is continuously seeking better information on the needs of its market.

Survey of Firms. MCC’s Economic Development and Innovative Workforce Services division engaged CGR to support its effort to survey the workforce skill needs of the business firms in the MCC service territory. The Rochester Business Journal (RBJ) joined the partnership, providing feedback on survey design and access to the list of individuals who have registered to receive the RBJ Daily Report or other e-newsletters.

The 338 firms that responded to the survey represented about 86,000 workers, a quite respectable share of total employment in the Rochester metro. Manufacturers made up the largest share of respondents, nearly a third of the total.

Skills gap. We were particularly interested in learning more about this “skills gap,” the notion that there are positions that remain persistently vacant because the workforce lacks the skills to secure these positions. Survey respondents reported 740 persistently unfilled positions. In a rough extrapolation across the entire Finger Lakes economy, we estimate that the total would be about 23,000 across a range of occupations, just under 5% of total occupied positions. “Production” occupations were the plurality, with machinists mentioned far more frequently than any other single occupation. Consistent with the national middle skills discussion, 61% of the unfilled positions are considered middle skills, most requiring “long-term on the job training.”

While lacking an external reference point, this doesn’t seem to be particularly high. After all, a firm employs a range of skills that are deployed in a variety of combinations. Specific positions often fail to fit a convenient set of characteristics. Perhaps a valued employee, call him “Jim,” leaves for a position in another firm. The position could be hard to fill because Jim brought an unusual set of skills—yes, he is machinist, but also has a natural rapport with the engineers who are the firm’s customers. Oh, and he was the only employee who could get a particularly cranky machine properly calibrated. There isn’t a Jim curriculum at the local community college.

Positions may also remain unfilled just because a job’s rewards fall short of its headaches. The home care industry struggles with a very high level of turnover—caring for the infirm elderly can be physically and emotionally demanding. Workers who don’t feel a calling to the position are unlikely find the pay sufficient if they are presented with other options.

And we also wonder if the “skills gap” is a manifestation of the firm’s competitive position. One tantalizing clue: The “persistently unfilled” positions were predominantly found at small firms. Large firms seem able to deal with the problem. Perhaps smaller firms can’t afford to pay what is required to meet their needs or lack the capacity to cast their employment net across a larger geography.

Basic employability. Another common theme in the survey is the lack of “basic employability” skills, e.g. work ethic, coming to work on time, etc. This kind of non-specific training may fill the “skills gap” that exists for those positions that are considered low skill or semi-skill, particularly many of the customer service/sales positions mentioned by respondents.

While much of this is real, this could also be partly generational. Baby boomer managers may expect a level of dedication and reliability that a younger generation lacks.

What’s next? MCC is using the results of the survey to determine how to focus its resources. The need for “long term on the job training” suggests that customized training for individual sectors—such as the tooling and machining or optics—should continue and possibly be expanded. The issue of basic employability reinforces the role of programs that bring young people into the workforce—summer jobs programs, internships and coops.

We’re going back to our survey pool to learn more, such as: Are firms with unfilled positions searching outside the area? Are the missing skills available at a higher price point? A revised survey will be rolled out in the next few weeks.

The Curious Case of GlobalFoundries”, discussed by Camoin’s Michael N’dolo in a previous issue of this newsletter is also intriguing. If you’ve not read his post, he did a simple cost benefit analysis of training Hudson Valley Community College in Electrical Technology, a degree that nearly guarantees access to jobs at GlobalFoundries, Tokyo Electronics and other firms in the SUNY College of Nanoscale Science & Engineering universe. Michael concluded that “[T]he payback is extremely quick and lifetime earnings are likely doubled or tripled.[2]

Despite the near-certain payoff, HVCC has had difficulty filling classes. Moreover, about half of those enrolling drop out before getting the degree. And GlobalFoundries has been forced to import skilled workers from outside the Capital District to meet its needs.

Back to high school? Mr. N’dolo speculates that the HVCC coursework may demand more mathematical competence than high school graduates bring to the workforce. Which brings us back to the recent statewide test scores: Less than a third of students in grades 3-8 statewide met the new math standard. Only 29% of Albany County’s 8th graders and 9% of Albany City’s 8th graders—surely a big part of a HVCC’s pool of future candidates—met the standard. Sad to report, less than 4% of 8th graders passed the math bar in our local Rochester city school.

The ECONOMY has raised the bar.  NYS Education Commissioner John King has faced a firestorm of protest over the new Common Core-aligned standards. He recently cancelled a series of forums on the subject after protesters disrupted the first in the series (he’s rescheduled since). It isn’t fair to blame the Commissioner or the Regents, however. As the GlobalFoundries examples suggests, it is the global economy that has “raised the bar” for student achievement. The skills gap starts in Pre-K.

Kent’s original article appeared in the Rochester Business Journal - free registration and login may be required: http://www.rbj.net/article.asp?aID=202518

The Rochester Area Skill Needs Assessment and Business Climate Survey can be found here: http://www.cgr.org/reports/13_R-1712_MCCAreaSkillNeedsSurvey.pdf

About the Author:

Dr. Gardner leads CGR’s study of economics and public finance and also serves as Chief Research Officer, responsible for ensuring that CGR’s work is thoughtful, reliable and accessible. He brings 25 years’ experience in state and regional economic analysis, assessing the impacts of major developments, institutional change or public policy. He frequently comments on economic issues for the media and before community and public organizations.

Kent Gardner, Chief Economist
Center for Governmental Research
kgardner@cgr.org  |  @KentGardner_CGR
http://www.cgr.org/

 

To read other articles in this series, visit our Blog Library. 


[1] Who Can Fix the "Middle-Skills" Gap? by Thomas Kochan, David Finegold, and Paul Osterman.  Harvard Business Review December 2012

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