San Diego Region Identifies and Tackles the Skills Gap

On November 6, nearly 500 business leaders, educators, career counselors, and economic and workforce development professionals attended the San Diego Workforce Partnership (SDWP) conference on "Identifying, Tackling, and Closing the Skills Gap."

This conference was a follow-up to the one-day conference held in October 2014 where reports analyzing five industry sectors vital to the San Diego region were released. These five sectors are:

• Advanced Manufacturing
• Clean Energy (also referred to as Advanced Transportation)
• Life Sciences
• Information and Communication Technologies (ICT)
• Health Care

Since the release of these reports last year, the region has received $18.4 million in grants to support career pathway training programs in these priority sectors. Posters created on each sector have been posted in schools throughout the region to help students "understand what the jobs are, what they pay, and the career path to get there. People cannot aspire to careers they do not know exist."

During the past year, the SDWP:

• Produced labor market analysis reports on the five listed priority sectors and aerospace
• Conducted 40+ community presentations
• Performed contracted research services on behalf of  regional partners, including:
  • Middle skill jobs, gaps, and opportunities
  • Aircraft maintenance and piloting occupations
  • Automotive technicians and managers
  • Motorcycle technicians

"This research was a vital step in identifying the skills gap. We need to train young people and help them find the careers they want," SDWP President/CEO Peter Callstrom commented.

Myeisha Peguero Gamino, vice president of lead sponsor J. P. Morgan Chase & Co., said that her company had developed New Skills at Work, a 5-year, $250 million global initiative to build employer-led talent-development systems, and San Diego was one of the areas they selected.

Dr. Sunita Cooke, superintendent/president of MiraCosta Community College District, announced that the Board of Governors for California's Community Colleges would be meeting on November 17-19^th to review the reports and make decisions on future programs.

Small Business Needs

The audience was provided with executive summaries of three reports released at the conference. The summary of the first report on "Workforce Needs of Small Businesses in San Diego County," was presented by Zhenya Lindstrom, director of the Center of Excellence, San Diego and Imperial Counties Region.

Within the San Diego region, small businesses of less than 50 people represent 95% of all businesses, but in the first four of the five sectors, they represent 97% (health care is 92%). However, 86% of these businesses are even smaller ─ less than 20 persons.

The report states: "In 2015, small businesses (including owner-operated firms) employed approximately 568,000 workers. By 2016, total employment in small businesses is expected to grow by 15%, or 87,800 positions."

The top five challenges for these businesses are: 1. Ongoing/continuous improvement (51%), 2. Identifying growth opportunities (44%), 3. Cost reduction strategies (28%), 4. Employee recruitment and retention (24%), and 5. Product innovation and development (21%.)

The top skills sought in new hires are: work experience, technical skills, "soft" skills, and post-secondary education. While businesses ranked soft skills as third in importance, further analysis showed that "topics such as critical thinking, problem solving, communication and leadership ranked highest in terms of useful workshop topics."

"Two out of three small businesses do not utilize any of the resources available to small businesses," Lindstrom noted. The top three resources familiar to the companies surveyed were: chambers of commerce, Better Business Bureau and the Small Business Administration.

The report made the following recommendations:

• Increase awareness of resources available to small businesses
• Develop strategies to connect small businesses to employees who have the skills needed, and provide training on effective approaches to employee retention
• Incorporate training that enhances skills such as social media marketing, IT and accounting into small business training programs
• Ensure that small business modules are incorporated into community colleges’ curricula so that graduates are prepared to enter the workforce in small business fields

The second report, "Middle-Skill Jobs, Gaps, and Opportunities," was presented by Michael Coombs, research manager for the San Diego Regional EDC.

The report defines middle skill jobs as "a position that requires at least a high school diploma… an associate degree or less;" however, only skilled labor with extensive training can fill these positions…With over 38% of households earning below the self-sufficient wage of $13.09 per hour and over 80,000 people unemployed each month, San Diego needs to fill these positions and close the skills gap." Currently, there are 603,535 San Diegans employed in middle-skill jobs.

Six of the top 12 occupations for which employers are having difficulty hiring workers are related to advanced manufacturing: CNC programmers (82%), machinists (80%), CNC machine tool operators (78%), inspectors (68%), machine setters & operators (62%), and welders, solderers and brazers (55%).

Educational attainment has remained relatively unchanged since 2004, yet San Diego employers expect more education and technical expertise from the workforce."

The challenges to tackling the skills gap are:

• "Between 2004 and 2014, 16% or 350,000 San Diegans ages 25 and older did not have a high school diploma.
• Educational attainment has remained relatively unchanged since 2004, yet San Diego employers expect more education and technical expertise from the workforce.
• An estimated 35% of San Diegans ages 25 and older lack the post-secondary credentials to fill middle-skill job openings.
• 42% of the adult population is at or nearing retirement.
• Employers consistently report a lack of soft skills, such as communication and problem solving, in workers."

According to the report, there are currently "603,535 middle-skill jobs in San Diego, accounting for 37% of all employment in San Diego County." The opportunities are:

• "The median hourly wage for these workers is $20.20 versus the San Diego median hourly living wage of $13.09" and these positions have opportunities for career advancement.
• "20,565+ middle-skill jobs openings are projected to be available every year through 2019.
• Advanced manufacturing has the largest number of skilled jobs in San Diego and employs 13% of San Diego’s workers.
• Health care employs more than 100,000 people and is considered “recession-proof.” Health Care grew 11% while overall San Diego employment declined 6% during the Great Recession (2007–2009).
• ICT employs more than 42,000 workers and is projected to add 1,600 jobs over the next five years."

The report states that "Industry- or employer-driven curriculum, programs and training will be key in closing the middle-skill jobs gap" and made the following recommendations:

• "The workforce development system will need to focus more on internships and apprenticeships where hands-on training will help develop workers’ knowledge, skills and abilities for middle-skill jobs.
• Employers would benefit from participating in high school and higher education curriculum development.
• Past public-private partnerships have been shown to generate workers with strong “foundational skills” such as mathematics, and will increase availability of talent as well as employee retention.
• Policymakers have the ability to pave the way for more productive collaboration between educators and employers by implementing effective interventions and removing regulatory and legal barriers."

During a panel session, Hernan Luis y Prado, president//CEO of Workshops for Warriors, said, "Since 2011, we have certified 194 veterans and wounded warriors and granted a total of 532 certifications. We recently received a $75,000 grant from J. P. Morgan Chase, $50,000 from Verizon, and a $37,000 donation from Core Powered Inc. We were just approached by the Department of Labor about starting an apprenticeship program."

During the lunch break, Mayor Kevin Faulconer spoke briefly about the importance of the five priority sectors to the economy of the San Diego region and the need to have a public/private collaboration to close the skills gap. Keynote speaker Dr. Brice Harris, chancellor of the California Community College system, then outlined the expansion of the community college mission from its establishment in 1907 to the present day. There are 113 colleges in the system, making it the largest system in the country. He said, "In the 1970s, only 28% of jobs required more than a high school diploma. This grew to 56% by the 1990s, and by 2020, it will be 65% of jobs. California needs 1 million more workers meeting these requirements by 2020, but today, 40% of youth ages 16-24 are not in school or not working. Pre-recession 1 of 11 youth was in college; now it is 1 of 14. About 70% of students need remediation in math, English or both. Every year of education by one worker increases the regional GDP per capita by 10.5%."

The executive summary of the final report, "Priority Sectors Workforce Initiatives in San Diego County," was presented by Kelley Ring, senior business and research analyst at the SDWP. The purpose of this analysis was to determine how we did in the last year and what do we need to do in the future. I was astounded that he said "There are 492 workforce initiatives from 100 organizations that impact one or more of the priority sectors." Of these 492, 402 are related to training and education. There are 129 related to ICT, 126 related to health care, 95 related to clean energy, 58 related to life sciences, and 57 related to advanced manufacturing. (Note: There are some initiatives that cross sectors or types; therefore, the totals may add up to more than 492.)

The most important goals for the advanced manufacturing initiatives are:

• Change the public perception of traditional manufacturing to advanced manufacturing
• Foster science, technology, engineering and math (STEM) education in the K–12 system
• Add internship/work experience requirements to training and education programs
• Increase the number of public-private partnerships to share resources

Community colleges play the biggest role in providing education and training in the advanced manufacturing sector, while private businesses play the biggest role in the health care and clean energy sectors.

California is now certifying and providing some funding for apprenticeship programs at private companies.

This report concluded: "Many initiatives have begun to address these recommendations, but there is still much work to be done. Common challenges across the priority sectors still remain, including the need to:

• Foster STEM education in the K–12 system.
• Include internship or work experience requirements in training and education programs.
• Improve soft skills (e.g., critical thinking, teamwork and communication) for job seekers.
• Develop training and education programs that result in professional licensures.
• Work with employers to ensure that training programs meet employers’ needs."

In the last five years of researching and writing articles about STEM education, the skills gap, and workforce development and training, I have never encountered a region that is doing more to identify, tackle and close the skills gap than the San Diego region. I believe this is why San Diego has an advantage over other regions of California in attracting and retaining manufacturers despite the high cost of doing business in California.