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- Indiana’s employers say they need increased skills, wages, & benefits to grow workforce
Tuesday, July 18, 2017
By Andrew Bradley
The Indiana Chamber of Commerce
recently released its 10th annual Employer
Survey, and the responses paint a telling picture of the Hoosier workforce
and what’s needed to grow our economy. While the survey results reinforce a
growing demand for skilled employees, they also show employers need to be able
to increase wages and benefits to secure the workforce they want. Indiana’s policymakers can help employers on both counts by implementing a 'Good Jobs' strategy and job quality policies that create a more stable and skilled workforce.
What makes headlines from the
survey is the increasing proportion of employers who report difficulty filling
their workforce with skilled applicants as a top concern, and the 47% who report
unfilled jobs due to a lack of qualified applicants. And those employers have a
point – the data
show a growing gap between the number of in-demand middle-skill jobs and
the percent of Hoosiers who currently have the education and skills attainment
to qualify for them. A new
report from the Indiana Institute for Working Families breaks down the
non-academic barriers (such as childcare, transportation, and stable housing)
that prevent would-be adult students from enrolling, persisting, and completing
the training needed for these in-demand jobs. To help fill the skills gap, Indiana
policymakers should focus on removing these barriers to adult attainment as
they overhaul
workforce policies this year.
Incumbent worker training should
be a natural way to increase the skills of a company’s workforce, but employer
responses reveal roadblocks here, too. While nearly half (48%) of Indiana’s
employers reported they offer tuition reimbursement programs to upskill their
employees, and 40% report partnering with educational institutions to provide
it, few indicated that employees successfully take advantage. Disturbingly high
percentages of employers claim reasons such as employees' lack of desire/motivation to participate
(60%) and ‘see no personal benefit in advancing their education’ (35%). But
taken together, 58% of employers not taking advantage of reimbursement echo
non-academic barriers: employees' inability to afford upfront tuition costs (32%), unaware
(13%), lack of childcare (10%) or transportation (3%). Employers should better
articulate internal career pathways for promotion and compensation to see more
reimbursement program uptake. And policymakers should support their efforts by
expanding and better marketing upskilling programs including prior learning assessments, EARN Indiana
work-study, and aid for working adults pursuing degrees and credentials.
But beyond skill issues, the
Chamber’s survey results about wages give a fuller picture of why Indiana’s
employers have a hard time maintaining a skilled workforce. Nearly half (45%) of
employer respondents agree or strongly agree they have applicants who are not
willing to accept the pay offered, while the reported lack of minimal
educational requirements in those cases was only 27%. That means the Chamber's
own survey speaks to more of a ‘wage gap’ than a skills gap! In addition, only
26% of employers responded being very likely or extremely likely to add
high-wage jobs in next two years. In fact, employers’ specific comments about
their challenge with filling positions included “offering sufficient benefits/
compensation and matching salary expectations.”
The disconnect between employers' reported
difficulty of filling positions and the high percent of applicants turning down
low wage offers reflects a policy environment in Indiana that keeps wages and
incomes below where employers and employees need them to be. Indiana’s
wages increased only one tenth of one percent from 2000-2016, among the
bottom ten in the nation. Median household incomes are more than $5,000 below
the U.S. average as well, and grew
so little in the past year that Indiana slipped from #34 in 2014 to #36 in
2015. U.S.
Chamber of Commerce data from its own members shows a great majority of employers
support higher wage and job quality policies.
Nationwide, 79% of surveyed Chamber members supported raising the minimum wage,
73% supported paid sick leave, and 83% supported paid family leave.[1]
So what can be done? Change often
starts at home, and employers can take steps to provide the wages and benefits
applicants require to be self-sufficient at home and stable on the job.
Companies who have problems with applicants turning down offers should seek to
‘transform
today’s bad jobs into tomorrow’s good jobs’ by utilizing MIT research to
provide wages, training, and skills that will more effectively grow the workforce of the future. These profitable strategies could help give a competitive edge to employers
who feel they’d be putting themselves in a vulnerable position by offering
better wages and benefits than they currently do.
Indiana’s legislators should support
employers’ efforts by ‘raising
the floor’ of wage & job quality policies such as fair scheduling & paid family leave, at the same time they ‘build ladders’ to career pathways with workforce development initiatives.
Improving Indiana’s bottom-dwelling
work & family policies will not only jibe with employers’ wishes as
mentioned above, it will also give business a more stable and self-sufficient
workforce and applicant base. This in turn will help reward high-road employers
and build a high-wage, high-demand business climate for Indiana.
Indiana should listen to
employers when they tell the state they need a skilled, sufficiently-paid
workforce, and policymakers need to do their part to boost the economy and take
the state's workforce to the next level.
[1]
While Indiana received a federal
grant to study paid family leave, the Legislative Council declined to assign it as a topic. This is unfortunate, because as our report shows, a state
insurance system for paid leave could increase the supply of skilled labor and
improve employee retention, morale, and productivity while lifting costs for
businesses.
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