The following article appeared in the October edition of Community Divided, a quarterly publication from the Federal Reserve Ban of Minneapolis’s Community Development Department.
While the U.S. faces a pressing shortage of jobs in the short term as a result of the recent economic crisis, in the long term it is projected to face an even more pressing shortage of skilled workers. For example, it is reported that by 2018, 70 percent of jobs in Minnesota will require education beyond high school, yet only 40 percent of working-age adults have a postsecondary degree.
On May 25, 2011, the Community Development Department of the Federal Reserve Bank of Minneapolis hosted an event that explored how one community in the Ninth Federal Reserve District is responding to the widening gap between job requirements and workers’ skills. Workforce Development 2020 and Beyond: A Conversation with the Fed showcased Workforce 2020, a unique collaboration of community leaders in Rochester, Minn., who are working to unite business and education to support a competitive workforce. Rochester has an employment base of more than 70,000 workers, many of whom hold high-skill, science-based jobs at employers such as Mayo Clinic and IBM. However, it is projected that more than 10,000 of those workers will be retiring within 20 years. This, combined with a shrinking youth population, means the region must find new workers of all skill ranges to meet the needs of industry and sustain the economic health of the community.
Established by the Rochester Area Chamber of Commerce in 2007, Workforce 2020 is made up of educators, employers, nonprofit leaders, elected officials, community members, and businesses that are committed to cultivating the local workforce and keeping Rochester competitive. Member organizations include the Rochester Area Foundation; Rochester Area Economic Development, Inc.; the Minnesota Department of Employment and Economic Development; and United Way of Olmsted County. Workforce 2020 members convene around a three-pronged strategy of promoting education, economic development, and venture capital. As the following summary indicates, participants in the May 25 Workforce Development 2020 and Beyond discussion focused on the education and economic development prongs.
Collaboration to ensure a competitive workforce
Education: Short- and long-term approaches. As Workforce 2020 members pointed out on May 25, education and retraining opportunities are the cradles of workforce development, and they present long- and short-term opportunities and challenges. For example, in Minnesota there is an urgent need for closing the skills gap in the short term, because two-thirds of the state’s 2035 labor force is already of working age. Studies have shown that there is a significant earnings advantage for working adults after just two semesters of postsecondary credit and a credential, compared to adults who have just a high school diploma. Workforce 2020 takes a holistic view of the education system in which the educational aspect of workforce development includes both short- and long-term approaches and covers the complete continuum from birth through “end of work.”
According to its members, Workforce 2020 has supported long-term investments in the future workforce through K-12 education programs such as STEM, an initiative to promote advanced science, technology, engineering, and math coursework to Rochester area students. In addition, Workforce 2020 has supported short-term training academies that give local young adults the training they need to get in the door of local businesses. For example, the United Way of Olmsted County sponsors short-term, employment-focused training programs in conjunction with community partners. Trainings include extensive soft-skills instruction and mandatory financial literacy training in addition to specific occupational training. Interviews with local employers and employment agencies are held immediately following and at the same venue as the graduation ceremonies. Lance Laack, community impact specialist at United Way of Olmsted County, commented that this program has been well received in the community and has seen a considerable increase in highly qualified and motivated students. However, placement numbers are still well below goals.
Laack explained, “All this has come at a comparatively high cost per student. As a result, much of the initial enthusiasm for the program has subsided and we face growing calls to invest in higher-return community projects.” While supportive of these initiatives, local employers have been reluctant to commit to numbers or specific employment goals, given a high level of economic uncertainty in recent years and the varying demand for labor. As a result, United Way of Olmsted County is shifting the emphasis from job training to investigating ways to give job seekers hands-on work experience.
Economic development: Mining the local ore. Although it engages in some business attraction activities, Workforce 2020 aims to mine the economic ore in its own backyard. According to Workforce 2020 members, the initiative’s primary focus in the economic development arena is on retaining and expanding Rochester’s existing business base and supporting local entrepreneurs. Members explained that from a program perspective, the most cost-effective job creation has come from direct investment in local entrepreneurs. Rather than making investments to attract businesses from outside the community, Workforce 2020 is investing in Rochester’s entrepreneurs so that their ideas can be translated into viable business enterprises.
Evolution and measurement
Workforce 2020 members indicated that the initiative’s strategy is evolving. The coalition has developed a focus on providing incentives and engaging the community so that the workforce education system can change itself from within. To evaluate whether the strategy is working, Workforce 2020 has identified critical success factors for business, community, and education. The business success factors include new products and processes, new value added to products and markets, and new applications for human and environmental health. Success factors for the vitality of the community include ensuring that all community members have a sense of societal belonging, access to amenities, and adequate responses to social or physical infrastructure needs. For education, Workforce 2020 has identified select benchmarks, such as the level and availability of talent and the amount of collegiate-level course work present in high schools.
Advice to share
Workforce 2020 members shared some words of advice for other regional initiatives struggling to respond to workforce development and employment needs:
• Have a broad vision, invite diverse perspectives, and create a culture of collaboration by identifying shared issues, goals, measurements, and results. Engage with businesses, nonprofits, government agencies, and educational institutions. All of these organizations have a vested interest in workforce development and education because they share the same resource: people.
• Don’t expect to be all things to all people. Focus on what is in your control in order to influence and drive systemic change.
• Be persistent and stay engaged, even when there is dissent.
• Expect progress and positive change, but don’t expect closure. Workforce development and employment needs are complicated and continually evolving.
• Above all, in the words of Jessica Ihrke from the Rochester Area Chamber of Commerce, “Look at education, workforce development, and economic development as a triangle or three-legged stool. You need all components in play in order to thrive.”
Looking ahead
When asked about next steps for the coalition, Workforce 2020 members commented that they recognize the need to work on data sharing among coalition partners. Without data sharing and longitudinal data collection to track long-term results, workforce development initiatives will be working blind. Workforce 2020 sees potential for the Federal Reserve Bank of Minneapolis and local banks to help fill a data-sharing coordination role. In addition, Workforce 2020 members commented that local bankers, under the obligations of the Community Reinvestment Act, have been supportive of nonprofits and organizations in the Rochester community; however, the support is scattered. There are a lot of different initiatives, but they lack an umbrella objective that connects all of their visions. Workforce 2010 members suggested that banks can use their positions of influence to help drive shared community agendas. Lastly, Workforce 2020 members see a role for policymakers to play—not only in funding workforce development, but also in simply protecting what is already in place and supporting initiatives that build the capacity of individuals and, therefore, their communities.
Wudase Tefera served as a Community Development intern at the Federal Reserve Bank of Minneapolis in the summer of 2011. She is pursuing degrees in finance and international business at the University of Minnesota.
