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Carol Cain

Carol Cain

The Talent Gap

June 07, 2013

As the state’s economy started to pick up, Governor Rick Snyder noticed more jobs being posted but an increasing number of those positions left unfilled because of a growing talent mismatch between employers and employees.

It’s a problem festering in communities across the Great Lakes State.

While Michigan’s unemployment rate is 8.5 percent, there are reports of 63,000 jobs open in IT, engineering, healthcare, manufacturing and other sectors.

“We could lower our unemployment rate 1.5 percent by filling those 63,000 open positions,” Snyder said.

With baby boomers starting to retire there will be an even bigger void with fewer young people prepared to step in.

Add in the brain drain of young talent, and need for more folks trained in manufacturing and what’s left is a major league talent disconnect that could threaten Michigan’s future.

The situation so concerning to Snyder that he organized a two day statewide economic summit in Detroit in March with employers, educators, political leaders, organizations, students and others to discuss ways to bridge today’s talent needs and tomorrow’s.

Just as the state put the world on wheels because of its technology might 100 years ago, Snyder believes the state can set a new marker when it comes to talent by turning its attention to the epidemic.

“Our talent is our state’s single biggest resource and asset, and a critical issue that the state must address,” said Snyder. “Helping align and match aptitudes and career passions with the current and evolving need of employers will ensure meaningful, fulfilling opportunities for Michiganders as well as drive our economic growth.”

Educators in high schools, trade schools, community colleges and universities across the state are also recalibrating their markers to “J” — for jobs.

Other leaders are zooming in on this issue like DTE CEO Gerard Anderson, Quicken Loans Founder Dan Gilbert, State Sen. Tom Casperson, Amway President Doug DeVos and others as they launch programs and initiatives to help ease the divide.

CBS 62 showcased some of those efforts in its latest “Eye On The Future” prime time TV special “Bridging Michigan’s Workforce Divide” that recently aired on the Metro Detroit station. (http://vimeopro.com/wwwjtvcw50/bridging-michigans-workforce-divide)

The CBS crew traveled to Detroit, Ann Arbor, Grand Rapids, Lansing and Marquette to show what was taking place as business leaders, politicians and educators, in some cases competitors, work together.

Taking the reins on talent issues

Seeing a need for more skilled tradesman, DTE created a lineman training program with 13 apprentices enrolled at its Shelby Service Center in Macomb County.

These lineman will spend two years learning the nuances of the demanding job which are high paying six-figure positions.

That’s just the tip of the iceberg of the company’s needs.

“We are going to have heavy turnover at DTE over the next decade — up to 40% of our workforce retiring,” said DTE CEO Gerard Anderson. “We are working hard with community colleges to develop programs to ensure we have the skills as our people leave. We have reinvigorated our college internship programs to pull in professionals/engineers. We are also a regular recruiter now at University of Michigan’s Ross School of Business.”

Gerard Anderson, CEO of DTE is head of the state’s largest utlility with 10,000 employees. He is preparing for a major workforce turnover with boomers retiring and more workers needed with greater technology skills. (Credit: CBS 62 Paul Pytlowany)

Cornerstone Schools teamed up with Grand Valley State University and Detroit Medical Center to open Cornerstone Charter Health High School on Detroit’s east side to train more young people for jobs in the fast growing medical arena. Not only doctors, but nurses, engineers and custodians are all types of jobs that will be needed in the future.

There were 70 students in the school’s inaugural class, with another 80 signed up to join them this fall.
Cornerstone School Chief Executive Officer Thomas Willis said the school will help more young people carve out brighter futures.

Detroit Chassis, which makes chassis for recreational vehicles, saw a big time uptick in its business and knew it needed more employees.

Wanting to help the community, the company turned to Michigan Economic Development Corporation’s Community Ventures program and hired dozen of workers who were considered unemployable.

To date, Detroit Chassis has hired 54 at-risk employees from Community Ventures and other programs. The company has 150 employees.

Cliffs Natural Resources — like many companies across the state — is working with schools including Northern Michigan University to confront its worker needs.

Jim Kochevar took over Cliffs Natural Resources’ Michigan operations in 2008 knowing that the 166-year-old company –which operates two mines in the Upper Peninsula — needed to keep ahead of changes in the industry.

One of his biggest challenges proved keeping abreast of an aging workforce as 50 percent of his staff would leave by 2013 as boomers retired.

“That kind of transition is difficult, you loose a lot of experienced and hands-on knowledge,” Kochevar said.

But it also allowed the company to bring in younger people with a new perspective.

No doubt that scenario of boomers bailing out of the job market will play out elsewhere as a study by the Michigan Bureau of Labor Market and Strategic Initiatives showed nearly 800,000 people – or 20 percent of the state’s workforce – are nearing retirement age.

To fill their job needs, Cliffs Natural Resources became more aggressive about recruiting. And the firm turned to institutions like Northern Michigan University.

It’s a call NMU President David Haynes has been getting more often.

In response, Haynes launched his “Roads Scholar Bus Tour” which takes leaders of its engineering, technical and other schools to communities to meet with businesses and help them find the workers they need today and plan for tomorrow.

Haynes aims to to take his bus tour to Metro Detroit to, “connect the north and the south” of the sprawling state.

NMU President David Haynes (Credit: CBS 62 Paul Pytlowany)

“We also want to work with companies to create jobs so more NMU graduates and others across the state will remain in Michigan,” he added.

State Senator Tom Casperson, who hails from the Upper Peninsula, thinks there needs to be a shift in Michigan’s Merit Curriculum to better focus students to the real world needs.

“Michigan’s Merit Curriculum, although well intended, is not meeting the needs of many students and employers throughout the state and Michigan needs to focus on ensuring kids are not simply college ready but that they are career ready,” Casperson said.

“We can make some slight adjustments to the MMC to ensure that students are career ready that do not jeopardize the rigors of the MMC that will better serve both our children and Michigan’s employers,” Casperson said adding he hoped leaders in Lansing would have an open mind to the idea.

Teaming up to fill the gap

Few would argue manufacturing has taken a hit as a career choice as hundreds of thousands of workers were right sized out of jobs.

This helps explain why there are reports of 700,000 manufacturing jobs open in the U.S. right now.

To keep ahead of the problem, Doug DeVos, president of Amway, teamed up with Jay Dunwell, president of Wolverine Coil Spring Co., and others at The Right Place’s Manufacturing Council to change the perception of the industry with young people.

Amway joined with other manufacturers on the west side of the state to entice more young people to consider manufacturing as a career. There are 700,00 manufacturing jobs open across the nation. (Credit: CBS 62 Paul Pytlowany)

That coalition launched a “Discover Manufacturing Today Video Challenge” for high school students with a competition to create a brief video on why manufacturing was cool.

Dozens of schools participated and the team from Caledonia High School won the top prize of $2,500. (http://www.youtube.com/watch?v=fpPOxM-B1wM)

One segment where the jobs are flush but those with matching skills are not – is information technology.

No where is that more pronounced than smack dab in the heart of Detroit where Quicken Loans is based.

Quicken Loans is confronting its worker needs through several programs including “IT in the D” which exposes people to the profession.

Quicken Loans also signed up to participate in MEDC’s Community Ventures program to hire structurally unemployed individuals and give them a chance.

“We need good people, and we are willing to look anywhere and everywhere for them,” said David Carroll, vice president of miscellaneous stuff at Quicken Loans.

At the moment, Quicken Loans has 200 IT jobs open in Detroit.

Seeing a need for more highly trained information technology workers 18 months ago, Quicken joined with fellow downtown IT businesses Compuware, GalaxE.Solutions, Marketing Associates and Fathead and launched “IT in the D” program. It is supported by the Workforce Intelligence Network.

GalaxE.Solutions, based in New Jersey, opened an office in Detroit because of the area’s technology might and strong DNA for innovation. They too saw the IT shortage and decided to get involved with “IT in the D,” said Ryan Hoyle, who heads up their recruiting.

“IT in the D” takes people and exposes them – about 25 people per class – to the IT field as they spend time with mentors from participating companies. Some enrolled in the program have been hired. When asked why Quicken Loans would hook up with companies all competing for limited IT employees, Carroll said, “we recognized we had a better chance to get qualified IT workers to choose Detroit over places like Silicon Valley by working together to show them what a great place this is.”

Carol Cain is an Emmy-winning journalist who is senior producer and host of CBS 62’s “Michigan Matters.” She produced/hosted the station’s “Eye on the Future” special “Bridging Michigan’s Workforce Divide.” She also writes about business and politics in Sunday’s Detroit Free Press. She can be reached at clcain@cbs.com.

June 6, 2013 · Filed under Carol Cain

44 responses so far ↓

  • 1 Kenneth // Jun 6, 2013 at 11:12 pm

    Thoughtful, well written essay in a timely subject– thank you!

  • 2 Chuck Fellows // Jun 7, 2013 at 7:27 am

    Interesting that the business community that “knows” what to do with education in order to populate their workforce failed to pay attention to the demographics of their own workforces.

    How many of these “jobs” are really wishful thinking on the part of business?

    This alleged shortage of talent didn’t just suddenly appear, it has causes and these causes are not all the result of an education system not meeting the “career” needs of the business community. Maybe there is a gap in the IT talent pool because business IT is way behind the curve on what IT is today and potential employees don’t see a future in old systems. Is there a shortage in entry level medical staffing since the health care industry facing a growth surge refuses to adopt 21st century IT opportunities?

    Answering the “Why?” question will help define what is really going on and indicate a path to solutions. That should be done before dictating to classroom teachers the what, when, where, and how of classroom activity. Tweaking the MMC, insisting on teacher evaluations that mirror failed business practice, thinking that “Quality Control” is an exercise of comparing, establishing meaningless targets, and creating dashboards full of metrics to classify winners and losers is a fools journey.

    It’s past time the business community stopped wasting their customers money and public resources and began paying attention to the incremental continual improvement of their own “business”.

    Business people, you can do better than this.

  • 3 fedup // Jun 7, 2013 at 9:59 am

    the education system is so broken in Michigan. No wonder so many companies and workers aren’t on same page.. It is the root cause of so much going wrong in michigan, it needs attention..

  • 4 John Newman // Jun 7, 2013 at 11:38 am

    Another great resource that’s getting attention in Michigan is immigrants. Organizations like Welcoming Michigan, Global Detroit and the Global Talent Retention Initiative of Michigan are looking to attract and retain immigrants as a way to stimulate and sustain the economy. Did you know that 28% of new businesses in 2011 were founded by immigrants or that 30% of patents filed in Michigan were by immigrants.

  • 5 Jill Rower // Jun 7, 2013 at 2:02 pm

    It is nonsensical that there could be 63,000 jobs open in Michigan with so many still out of work. And more have exhausted their unemployment which makes the 8.5 percent figure very low. Maybe Snyder could arrange job fairs in each quadrant of the state– a mega e-harmony for job seekers and those with jobs to help the cause…

  • 6 James Brazier // Jun 7, 2013 at 2:02 pm

    I wonder exactly how much we should worry about the mismatch of demand and supply in the labor markets when aggregate demand cannot keep up with aggregate supply. A more efficient labor market is a goal that can be facilitated but never really achieved.

    Blaming public education at K12 and higher education levels does not get us very far. It plays to the desires of employers who are facing inadequate supplies of the right applicants to have the public sector subsidize their labor costs by making them just recruiters and not trainers of talent. Michigan’s business community has seen their taxes go down while this has occurred. Yet, it costs money to train people in the skills being sought by businesses.

    One problem for businesses is the collective action problem of investing in skill training and education in the public sector since the return on investment may never be distributed at the pro rata rates of investment by each business. The distribution of rewards for such investments will never be fair enough to overcome this problem.

    Perhaps, businesses facing skill shortages in the labor market could underwrite the educational costs of students with a contractual exchange of services at market wages for a set number of years from each student. Then the risks and rewards of such investment could be allocated more fairly among businesses.

    Such a strategy could significantly reduce educational costs for students and future indebtedness for them. Along with improving the general welfare of much of the population by introducing greater certainty in the economic futures of and reducing costs for the youngest segment of the labor force.

  • 7 Ed Walsh // Jun 8, 2013 at 3:02 am

    Companies are to blame for the mismatch. They aren’t investing anymore in employees. They expect workers to come out totally trained which is crazy. Even educators arent quite sure what skill sets will be needed in few years..

  • 8 Anagnorisis // Jun 8, 2013 at 4:56 am

    It’s a cumulative effect and the numbers such as unemployment don’t match reality. Pulte Builders is leaving for Atlanta where the action is. The only work with anything resembling a secure future is medical, government or military, none of which offer much stimulation. We live in an era of “stagflation” that pep talks can’t enliven. The so-called “new paradigm” looks a lot like decline and fall using the template from past civilizations. The reasons are manifold but may be condensed to the apothegm of Eric Hoffer: “Every great cause begins as a movement, becomes a business, and eventually degenerates into a racket” – in other words a cycle with no new inspiration sensed.

  • 9 sara johnson // Jun 8, 2013 at 10:45 am

    If I was a 21 year old graduate now in Michigan I would be bailing out for places like Utah or New Mexico where you don’t have all the cultural baggage that leads to silliness like jobs open and no one able to fill them.

  • 10 bernie watson // Jun 11, 2013 at 1:08 pm

    we are doing a really dreadful job of preparing people –both young and old — and the skillsetthey need in today’s world. Me thinks the education set up needs to be reinvented… that would help the problem….

  • 11 FoonTheElder // Jun 16, 2013 at 1:02 pm

    Pure crap. I’ve heard this garbage from corporations for 35 years. It’s just that they want somebody with 20 years at a specialized job with below market pay.

    If there was such a big shortage of talent, then wages for this talent should go up instead of going downas they are.

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