Vast web works to meet Connecticut's labor challenges

When Gov. Dannel P. Malloy took office in 2011, he laid out his vision for creating one of the global economy's “best-educated, most-skilled, highest-productive” workforces that would give every Connecticut business access to “qualified, skilled, job-ready” talent.

While experts say the Malloy administration has made progress on those goals over the past eight years, challenges remain — a point the governor himself concedes as he enters his final four months in office.

While Connecticut's workforce remains highly educated and productive, many industries report difficulties filling positions, including manufacturing, construction, transportation and logistics and health care, to name a few.

“There's a vast need across a lot of categories for good-paying jobs — $15 an hour or more, plus benefits — that are out there, and we can't fill them,” said Pete Gioia, a longtime economist for the Connecticut Business & Industry Association, who recently announced his retirement.

The stakes surrounding workforce development are high for Connecticut, which is expected to need to fill an estimated 56,000 jobs per year through 2024, in addition to facing major budget deficits.

Adding tens of thousands of new or higher-earning taxpayers could take a major bite out of that red ink, while also tethering talent-hungry employers to the region.

“More people with good jobs, they buy houses, all of the sudden the housing market's back on track. They buy cars. All this stuff feeds into positive momentum,” Gioia said.

Many use the term “skills gap” to describe employers' reported challenge in filling needed positions. It's an imbalance between supply and demand that the state Department of Labor (DOL) says is tough to measure.

The state's unemployment rate — 4.4 percent as of July — is at its lowest level since 2007, meaning the pool of available labor is constrained. Connecticut's aging workforce and population outmigration in recent years is also causing headaches.

Connecticut will need to attract more out-of-state college graduates, and keep the ones it produces here, to meet its workforce needs over the next few years, a major challenge for a state that's been fighting a brain drain.

CT's web

To understand how skills gaps might be addressed, one must grasp the vast apparatus that operates as Connecticut's workforce-development ecosystem.

It's a broad array of agencies and service providers — that has perhaps best been described as a “system of systems” — mandated to collaborate closely on common objectives, despite having varying funding sources, eligibility requirements and outcome measures to worry about.

Key players include the state and federal labor departments; the state Department of Economic and Community Development (DECD); employers; universities and community colleges; municipal officials; the K-12 and technical high school systems; the Connecticut Employment and Training Commission; the Office of Workforce Competitiveness; and the state's five regional workforce boards and dozens of training and service providers they certify or contract with.

“That's the challenge,” said Mark Hill, chief operating officer of the Eastern Connecticut Workforce Investment Board, which — like its four peer boards across the state — oversees a network of regional workforce-development programs. “It's basically getting all the different stakeholders in the room and working toward a common goal.”

Connecticut's system lacks a singular workforce-development overseer, or “czar,” which some say could help to better guide and organize the disparate players to ensure Connecticut's talent pipeline meets employers' future needs, particularly at a time of great change in the state, national and world economies.

Others say that workforce development is such a broad and multi-pronged effort that a sole overseer wouldn't make sense.

“There's no singular agency that can manage that ecosystem,” former state Department of Labor Commissioner Scott Jackson said in an interview with HBJ, shortly before Malloy named him state tax commissioner.

Federal chassis

Many Connecticut companies handle workforce planning and training on their own, but for those that want to tap state assistance, they'll have to reckon with the decentralized structure, one that's common in other states, too.

That structure is in place partly because a core piece of the workforce-development system is built on a federal chassis. Each year, the federal government ships billions of dollars in workforce funding to the 50 states, including $42 million to Connecticut this year.

Programs that money funds fall under the requirements of the federal Workforce Innovation and Opportunity Act (WIOA), which was previously called the Workforce Innovation Act. Though any jobseekers can access its services, WIOA prioritizes people most in need, including low-income residents, those on public assistance or deemed skills deficient, the underemployed and veterans.

Connecticut's labor department allocates those federal funds to its five workforce boards, which help oversee a network of “one-stop” offices or American Job Centers spread around the state, and hire service providers to operate additional training and education programs.

The WIOA programs help jobseekers like Miguel Santiago build resumes and access career counseling, job fairs, skills assessments, referrals to a menu of incentives for educational programs, on-the-job training and certificate program tuition incentives.

On a recent August morning, Santiago was at an American Job Center in Hartford, seated in a room with a dozen others who were filling out applications to work as ramp agents at Bradley International Airport.

“I want to get a good job,” Santiago, 51, said, as Briana Stacker, a recruiter from Menzies Aviation walked the group through the application and drug-testing process.

Santiago said he left Puerto Rico 10 months ago following Hurricane Maria, which devastated the island. Since arriving in Hartford, he found work as a machine operator making envelopes, but he said he wants better pay.

Rosa Rivera, a 42-year-old food-service worker from Windham, said she was at the Job Center also looking for a higher-earning job. The Bradley positions have a starting hourly rate of $13 an hour, according to Stacker. Connecticut's minimum wage is $10.10.

The workforce boards, along with their overseer the Connecticut Employment and Training Commission, also interface with colleges and employers to gauge demand and design new training programs based on projected needs in their respective regions.

In addition to the core pot of WIOA money, which helped serve some 26,000 people in 2016, the federal government also provides additional, often multi-year workforce grants for certain innovative programming. Since 2014, those grants have totaled nearly $77 million in Connecticut, serving thousands of additional jobseekers, according to state data.

“When you look at how the dollars flow and you see this network, sometimes it looks a little complicated,” said Bill Villano, CEO of the Workforce Alliance in New Haven, who is perhaps the longest-serving workforce development official in the state.

In his role at the workforce board since 1982, Villano believes the system is working well, despite challenges that labor administrators say include insufficient program funding, low literacy levels among some job-training participants, and a lack of consistent quality standards to drive funding decisions.

Villano downplays the latter challenge, arguing he and others on the ground floor of workforce development are closely focused on how their programs are performing.

Even with a federally designed structure, Villano said state workforce boards can be innovative.

“Programs run the gamut and that is good,” he said. “The bad is we're an old state, we've got anemic and sometimes negative population growth, and outmigration of our young and educated residents. The ugly is funding issues, academic deficiencies people have, and transportation issues.”

To Villano's point about performance, data on Connecticut's workforce-development results in recent years show that the state's WIOA programs for jobseekers have often met or exceeded their targets related to participants' success in getting and keeping jobs.

However, other states have produced better outcomes for those same performance targets, federal labor data show. Between 2008 and 2015, Connecticut workforce-development programs for adults, “dislocated” (laid-off) workers and youth averaged rankings of 38th, 24th and 10th in the nation, respectively.

Patrick Flaherty, a state DOL labor economist, says Connecticut has nothing to be embarrassed about.

He suspects some states with top results are “cream skimming,” or directing more of their training and services toward jobseekers deemed more likely to succeed, so that their numbers look better. Connecticut isn't doing that, he said.

“And so I think that if we are showing that we're average, I think it's because we're doing our job,” Flaherty said. “We are working hard to try to help the hard-to-serve, and that's going to hurt our numbers.”

DOL noted that its team is working on ways to better measure performance outcomes.

The state's role

While the federal government plays a major role in workforce development, the state's own policies can't be overlooked.

When Malloy took office, strengthening the workforce quickly became one of his top priorities.

“We had convinced ourselves manufacturing was going to go away,” Malloy said in a recent interview. “As a state, we took our eye off the ball.”

In 2011, Malloy pushed through a jobs bill that's provided hundreds of millions of dollars for the “First Five” program, which among other features included money for employee skills upgrades. The bill also included a “Step-Up” program, which as of a year ago spent nearly $50 million to train and subsidize the salaries of more than 4,882 new hires.

Since then, the state has made major bets on aerospace and submarine building, offering hundreds of millions of dollars in incentives to Pratt & Whitney, Sikorsky and Electric Boat. Those employers are also hiring thousands of workers, significantly contributing to the state's talent needs.

The legislature has also created the Manufacturing Innovation Fund, which has spent $44 million since 2014, approximately half of it on skills training, according to DECD.

Meantime, eight community colleges have established advanced manufacturing centers with the help of $20 million in state money, and recently lawmakers authorized the state Bond Commission to set aside $50 million for an apprenticeship program that aims to train and certify as many as 10,000 residents to fill job shortages in manufacturing, health care and construction. That money has yet to be allocated, but would add to the state's 7,000 existing apprenticeships.

Manufacturing has been the biggest focus of the state's efforts, which Gioia says makes sense, given major orders for aircraft engines and submarines and the broader impact the industry has on the economy.

“We have roughly a generation of critical needs in aerospace and defense in this state, so this is not a short-term thing, this is a sea change,” he said.

Lawmakers have also created a $10 million technology talent fund, paid for a significant expansion of UConn's engineering program, and tweaked the rules to allow high school students to earn college credit for certain technology classes, among other efforts.

“What we've been focused on is the employers' perspective,” said DECD Commissioner Catherine Smith. “Being nimble and responsive is task No. 1.”

Malloy said he has some regrets. Though the process is well underway, convincing community colleges to shift their academic identities more toward job training has been challenging. He also laments budget cuts to the state's network of universities and the impact that's had on the number of graduates with in-demand skills.

But overall, Malloy celebrates the progress made during his tenure.

“So much more progress has to be made,” he said. “At least now we have a roadmap.”

CBIA has been a critic of some of Connecticut's regulatory and tax policies, but Gioia gives the state credit for its workforce-development progress. At the same time, he says it still hasn't kept pace with demand.

He wants to see more promising programs scaled up. And he hopes Connecticut's next governor talks about workforce development like it's an emergency.

“We've got to get away from terms of business as usual and start talking in crisis terms, because we have a crisis,” he said. “If we do not supply the quality workers companies need, they will build elsewhere.”

Wish lists

What would DECD's Smith like to see if the state were gifted a major increase in workforce funding?

She said she'd scale up what Connecticut has already built.

“I don't see any next big thing. I think it's about doing the basics really well every day,” she said. “We have to keep looking over the bow to make sure we're not missing the next wave of real need for employers.”

The Workforce Alliance's Villano agrees with Gioia and Smith that ramping up certain programs, like a partnership between Electric Boat and local colleges that's led to hundreds of new hires, is key.

“There are good models all over the state,” Villano said. “What we need to do is take those good models to scale.”

Ram Aberasturia, director of labor operations at the state DOL, said he would spend additional money trying to boost literacy and math skills.

There are people who come to Job Centers for help who have graduated high school but still fare poorly on aptitude tests that could help propel them into training programs and more promising careers.

“People aren't talking about that,” Aberasturia said. “They're stuck in that menial wage job. In a sense, they're in a hamster wheel and it's like, 'How do we get those individuals out?' “

HBJ Editor Greg Bordonaro contributed to this story

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