Finding new workers crucial to the economy

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Finding new workers crucial to the economy

Sun, 12/24/2017 - 5:23am -- tim

Vermont Teddy Bear President & CEO Bill Shouldice keeps the line moving during the pre-Christmas rush. VBM photos.

by Timothy McQuiston and Charlotte Lyman Vermont Teddy Bear President Bill Shouldice doesn't take a break from his shift on the packing line at the Shelburne plant to explain the dilemma his company faces. On the one hand, sales are great. You couldn't play Pandora before Christmas without hearing about PajamaGram, another VTB brand. On the other hand, he needs seasonal workers in a region of the state in which the unemployment rate hovers around 2 percent. You couldn't listen to local radio without hearing Shouldice in an ad looking for employees.

"We need 600," Shouldice said two Saturdays before Christmas.

Vermont Teddy Bear isn't the only place looking for workers. Shouldice is competing with other seasonal employers, such as retailers before Christmas and the ski resorts right through his peak selling time from the holiday season, through Valentine's Day, and all the way to Mother's Day.

Want ads across the state are pitching not just seasonal employment, but are looking for everyone from medical professionals and engineers to full time manufacturing and everything in-between. Vermont is desperate for workers.

According to figures compiled by the Vermont Chamber’s Vermont Futures Project, of which Shouldice is chair, Vermont retains about 3,500 high school graduates and 4,500 college graduates. Still, 11,375 Vermonters retire and 4,800 new jobs are created.

Add the average number of part-time positions that become full-time (1,200), people who leave Vermont whose positions need filling (1,000), and the number of temporary positions that needs to be replaced (600), and you have an annual requirement of 18,975 workers.

Do the math, that's a gap of 10,975 workers.

Meanwhile, Dustin Degree and Sarah Buxton on behalf of the state are charged with leaving no rock unturned in an effort to find workers at every skill level for a Vermont economy that is, frankly, doing quite well, with the caveat “at the moment.” The pressure brought by a tight labor market, however, is and will put tremendous pressure on the state to grow and thrive.

Governor Phil Scott knows it will not grow and thrive under the current labor conditions, which is why he hired the two former legislators to find a way to get more people into the workforce.

“The economic impacts are huge for the state,” Degree said. The governor has a goal of adding 2,200 workers to the labor force every year.

Degree and Buxton will start with an entire population of potential workers that has been largely overlooked: Vermonters.

Buxton calls it the “participation rate.” While Vermont has a relatively high percentage of its in situ population working (64.8 percent against a US average of 59.7 percent), other states, including New Hampshire, are higher (66.7 percent). Even just 3 percent would represent over 10,000 new workers in Vermont.

Several factors are involved in this. As it was across the nation, the Great Recession of nearly a decade ago led to people dropping out of the workforce. Perhaps they retired early or were the “trailing spouse” in a two-income household and simply never rejoined the labor force.

If you’re not looking for work, you don’t count, literally, as a member of the labor force. This also makes the unemployment rate look falsely

better because the labor force is the denominator when doing the math.

Potential workers are also harder to find.

“If they’re not looking for work, we don’t know who they are,” Degree said.

The simple truth is that if you want to judge the economy through the broad measures of the monthly employment report, you’d want the labor force to be increasing, along with the number of total employed, while, of course, the number of unemployed is decreasing. Even if that increase in the labor force results in a higher unemployment rate.

(Vermont’s unemployment rate in October was 2.9 percent, tied for sixth lowest in the nation; the labor force is exactly where it was a year ago, but the number of employed has grown by 1,050. The fall in the unemployed population saves the state money in unemployment insurance costs. During the Great Recession, the state’s trust fund ran out of money and it had to borrow from the federal government in order to pay jobless benefits.)

Another significant factor, Buxton said, has been a low participation rate by Millennials, the generation now entering working age in great numbers. They work less than previous generations. Millennials take a lot of shine from their elders, especially Baby Boomers, but this is no joke.

Buxton explained that to a large extent they’re going to school at some level, but not working part-time at the same percentage as previous generations.

Degree said that the single greatest need in the Vermont job market at the moment is for cashiers, the typical domain of the young, part-time worker. For an American economy predicated on consumerism, this is a significant problem for the workforce.

The want ads and cardboard “Help Wanted” signs are nearly everywhere in the state and Degree and Buxton are looking not just at the tight labor markets in Chittenden and Franklin counties and in the Upper Valley, but across the state.

So, where do you start?

“We start everywhere,” Buxton said. Degree said they are attacking this problem with “a sense of urgency… I think the governor is open to everything.”

Manufacturing is searching, tech jobs are left begging and engineers are needed.

While including the needs of the entire state, they will look for solutions at the regional level.

For instance, the Rutland region is heavily invested in manufacturing and hospitality, while housing affordability is a significant problem for the labor force in Chittenden County, which then leads to a significant transportation problem as workers move farther away from their workplace, which then creates a significant problem with housing affordability in neighboring counties.

Governor Scott’s 6-3-1 mantra (he even has a license plate) identifies the core problems he seeks to address: On average every day, Vermont loses six workers and three students, while one baby a day is born to an opiate addicted mother.

Vermont already has essentially zero population growth.

While Vermont has an affordability problem as the second worst in terms of income-to-housing, it also has a demographic issue. The state is the whitest and second oldest. Entire countries like Italy and Japan have similar problems with low birth rates and an aging, homogenous population.

Along with looking for workers right here at home, Buxton said the state will also look for opportunities to grow the workforce with “new Americans.”

Recruitment of established adult workers from other states is expensive, but Buxton said Vermont has had its best success with people who have already had some connection with Vermont: The grew up here, went to college here, vacationed here, visited family here. The state has studied this issue and has and will focus its recruitment on this group.

Retention will be another aspect of their efforts, Degree said. Vermont is an importer of college students, so how do you keep them here? They’re a different generation and don’t have the same vision, at least not yet, of a home in the suburbs with a lawn to mow. They’re looking for a job and a life.

In any case, housing availability and affordability is a constant issue, whether it’s a kid out of college or for a family wanting to move back.

Competition for workers exits within the state – just look at the “Help Wanted” signs – and nationally.

According to the National Federation of Independent Business, 45 percent of business owners reported that they were unable to find qualified applicants to fill job openings in the first quarter of 2017. During that same period, the national unemployment rate, which was down from previous years, was roughly 4.7 percent.

While the numbers suggest that there are people available to fill the positions, the problem actually lies in what is known as the “skills gap,” which occurs when there is a disconnect between the skills an employer needs to fill critical positions and what prospective employees are equipped to do.

Here in Vermont, where the unemployment rate has reached an all-time low and more employees are aging out of the workforce, business owners are feeling the acute effects of the skills gap.

According to Joan Goldstein, Commissioner of the Vermont Department of Economic Development, “The biggest problem facing the state is the lack of a qualified workforce and its impact on economic development.”

Goldstein heads up the DED, a branch of the Agency of Commerce and Community Development, which is focused on helping business not only start in Vermont but also grow and prosper in the state. She said that, “In order to do help businesses succeed in Vermont, the skills gap must be addressed.”

Part of the job of her department is to come up with solutions to this growing problem, and one such solution comes by way of the DED’s Vermont Training Program (VTP).

VTP is a grant program that provides Vermont businesses with performance based grants through a reimbursement process for the training of new hires and incumbent workers.

Training can fall into categories such as on-the-job, classroom, or other specialized training as well as work-based learning programs for Vermont students. The program has been vital for many businesses across the state including Casella Waste Systems, GW Plastics, American Meadows, Butterworks Farm, and more.

“The Vermont Training Program has been instrumental in helping Vermont businesses grow and succeed,” said Goldstein. “The grants have allowed new businesses to move here, helped existing businesses retrain their workforce, and have ensured Vermonters have the skills they need to succeed as well.”

Another way the DED is working to bridge the skills gap is through the Vermont Talent Pipeline Management (VTPM) project, a collaborative initiative between the DED, Vermont Business Roundtable, Lake Champlain Regional Chamber of Commerce, Franklin Grand Isle Workforce Investment Board, and Brattleboro Development Credit Corporation.

The program is designed to tackle the workforce shortage by rethinking the way employers and educators work together.

Last fall, the VTPM group learned of a new approach to workforce development during a presentation by the US Chamber of Commerce that was built off lessons learned from supply-chain management, specifically looking at employers as the end-users of the education system.

Taking that information, the group set to work to create a statewide program in Vermont to help the state’s growing skills gap. The goal of VTPM is to better align an industry’s critical skills needs with the current educational programs being offered.

When employers become very explicit about the skills needed to fill key roles in their industry, they are better able to equip educational partners with the information they need to improve and expand current programs.

VTPM has since launched two pilot programs – one in construction and one in healthcare – and have started identifying the top skills needed to fill critical positions in these sectors.

Goldstein said, “The entire process is collaborative in nature and that for change to occur there needs to be a consensus across the board in regard to job descriptions and needs.”

The VTPM project is in its early stages, and Goldstein understands there is still work to be done.

“We know we can’t bite off everything at once, but this is a step in solving this problem to ensure Vermont businesses can thrive and grow,” she said.

The programs Goldstein mentioned, which rely on much federal funding, are a crucial part of the multi-departmental effort that Degree and Buxton are tasked with leading.

Scott appointed the bipartisan duo of former legislators in mid-November to strengthen and coordinate his Administration’s initiatives to expand the size of Vermont’s workforce.

State Senator Dustin Degree (R-Franklin) will serve as special assistant to the governor and executive director of workforce expansion. Former State Representative Sarah Buxton (D-Windsor-Orange 1) will assume the new role of director of workforce policy and performance within the Vermont Department of Labor (VDOL).

“Growing and strengthening our workforce is the most important goal we have as we work to grow our economy, make Vermont more affordable and protect the most vulnerable. Increasing the size of our workforce is central to our ability to make investments in the priorities of our state,” Scott said. “Dustin and Sarah’s experience, commitment to service and strong relationships with the Legislature will be valuable as we work to expand the size of our workforce and achieve real and measurable results.”

Degree said they’re in a politically advantageous position because workforce growth and development is “not a partisan issue.”

Degree also will serve as the executive director of the statewide Workforce Development Board, a 58-member panel charged with coordinating workforce training and education programs and engaging the state’s employers, workers and other partners.

Buxton will be responsible for simplifying and streamlining programs, processes and systems at VDOL to improve outcomes and better measure results. She will also ensure compliance with federal requirements, including the Workforce Innovation and Opportunity Act (WIOA).

"We cannot afford, nor can our economy sustain, a workforce that continues to shrink by about six workers every day – we simply must reverse this trend. To do so, we must implement more effective and efficient ways to educate and train Vermonters, so we can put more people to work. We also need to work with employers to recruit more working families to our state,” said Labor Commissioner Lindsay Kurrle.

She said that appointing Degree and Buxton will bring “the exact kind of energy and experience we need to strengthen and expand Vermont’s workforce, and create more and better paying jobs."

Scott will appoint a replacement to serve out the remainder of Degree’s term. Buxton already was in the Administration and has worked on workforce issues at VDOL since March.

While they are already experienced for their new tasks, they are also young and local, which is no coincidence.

Degree, 32, has served in the Vermont State Senate since 2015, representing Franklin County and Alburgh. In 2017, he was unanimously selected by the Republican caucus to serve as Senate Minority Leader, and he’s served on the Senate Finance, Transportation and Rules committees. Degree served as the director of communications for Mansfield Heliflight from 2015-2016.

He was a member of the startup team for NG Advantage – a company that delivers compressed natural gas to high-usage companies not served on a natural gas pipeline – and worked as a project consultant for the company.

He served in the Vermont House of Representatives from 2010-2012, and in the Office of Governor Jim Douglas from 2008-2010. Degree is a resident of St Albans, a graduate of Bellows Free Academy and the Tilton School, and attended both Norwich University and the University of Vermont.

Buxton, 39, has served as the Workforce Innovation and Opportunity Act (WIOA) policy and implementation analyst at VDOL since March. In this role, she worked closely with the Workforce Development Board, establishing key policies and procedures for the Department and leading the coordination of 18 federally funded programs to create a comprehensive “One-Stop” employment service delivery network in Vermont in July.

In 2010, Buxton was elected to the Vermont House of Representatives, serving three terms as the representative for Tunbridge and Royalton. A native Vermonter, Buxton resides in Tunbridge, earned her BA from the University of Vermont, and JD from Vermont Law School.

Vermont Futures Project, born out of the Vermont Chamber of Commerce, has identified a nearly 11,000-person workforce supply gap.

“The Vermont Futures Project has done the analysis and recognizes the need to put the workforce as a priority for economic growth. We applaud Governor Scott for not only emphasizing the need to strengthen Vermont’s workforce by focusing on the skills gap but also bringing attention to the need to increase the workforce supply,” said Shouldice.

The Vermont Futures Project, similar to Scott’s analysis, has estimated that only about 8,000 people enter the workforce annually, but employers have a need for 10,975 workers due to a modest rate of growth, retirements, and replacement of temporary workers and those that have migrated out of state.

The Vermont Futures Project promotes the long-term economic health of Vermont. It has created an economic data dashboard to provide leaders important metrics to understand and measure progress in securing Vermont’s economic future.