2007 Denver Regional Workforce Gap Analysis. New Picture Here (this is a placeholder)

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1 2007 Denver Regional Workforce Gap Analysis New Picture Here (this is a placeholder) September 14, 2007

2 ABOUT DEVELOPMENT RESEARCH PARTNERS Development Research Partners specializes in economic research and analysis for local and state government and private-sector businesses. Founded in 1994, Development Research Partners combines extensive experience in real estate economics and economic development to provide clients with reliable consulting services in four areas of expertise: Economic and Demographic Research Research in support of business and community activities, ranging from community profiles to evaluating and forecasting economic and market conditions. Industry Studies Specialized research projects including industry cluster research, industry trends analysis, workforce issues studies, and strategic competitive analysis. Fiscal and Economic Impact Analysis Comprehensive analysis and analytical tools to evaluate and forecast site-specific activities and model publicprivate sector relationships. Real Estate Economics Preparation of strategic market data and analysis for prospective real estate development and public-private partnerships. Development Research Partners Patty Silverstein, President Greg McBoat, Research Economist Emily Stuart, Research Economist West Belleview Avenue Suite 100 Littleton, Colorado

3 TABLE OF CONTENTS EXECUTIVE SUMMARY... i INTRODUCTION...1 WORKFORCE SUPPLY...3 POPULATION...3 EDUCATION...6 LABOR FORCE...7 WORKFORCE SUPPLY SUMMARY...8 WORKFORCE DEMAND...10 EMPLOYMENT...10 OCCUPATIONS...11 WORKFORCE DEMAND SUMMARY...12 GAP ANALYSIS...13 METHODOLOGY...13 WORKFORCE GAPS...15 OCCUPATIONAL ANALYSIS...18 OCCUPATION IN UNDER-SUPPLY...18 OCCUPATION IN-BALACE...19 OCCUPATION IN OVER-SUPPLY...20 INDUSTRY ANALYSIS...22 BUSINESS SUPPORT/FINANCIAL SERVICES...23 CONSTRUCTION...26 HEALTHCARE...29 INFORMATION COMMUNICATIONS TECHNOLOGY (ICT)...33 SMALL BUSINESS...36 SUMMARY...39 APPENDIX A: COMMUTE AND LABOR SHEDS... A-1 APPENDIX B: DEGREES BY CLASSIFICATION OF INSTRUCTIONAL PROGRAM...B-1 APPENDIX C: EMPLOYMENT BY INDUSTRY...C-1 APPENDIX D: EMPLOYMENT BY OCCUPATION... D-1 APPENDIX E: RATIO GAP ANALYSIS CHART...E-1 APPENDIX F: SHARE GAP ANALYSIS CHART...F-1 APPENDIX G: ABSOLUTE GAP ANALYSIS CHART... G-1 APPENDIX H: FOCUS GROUP PARTICIPANTS... H-1 APPENDIX I: TWO-DIGIT NAICS CODE LIST...I-1 APPENDIX J: TWO-DIGIT SOC CODE LIST...J-1

4 EXECUTIVE SUMMARY The City and County of Denver Office of Economic Development wants to understand the most pressing workforce needs for businesses and residents in Denver. This report will help identify the largest challenges. The City and County of Denver Office of Economic Development conducted a comprehensive workforce profile in 2004 for the City and County of Denver and the seven-county Metro Denver area, including Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, and Jefferson counties. The report analyzed occupational gaps present in the workforce by quantifying the supply of occupations in the areas and the demand by businesses for those occupations. The report considered the 2004 workforce and projected supply and demand levels to This report is an update of that 2004 report. Using similar methodology, this workforce gap analysis was conducted using data from 2006 and projecting workforce supply and demand levels through This report expanded the geography and scope of research. In some cases, different data series were utilized that were unavailable in The City and County of Denver Office of Economic Development and the Workforce Board of Metro Denver will utilize the information in this report to target methods to strengthen the workforce of the ninecounty region. The 2007 research has been expanded to include focus group meetings with business leaders in the industries most effected by the largest occupational gaps. Data collected from each of the five focus groups is presented by four major workforce topics: Skills- what skills are most needed within the industry and what skills are most abundant within Denver. Hiring- an understanding of where businesses are hiring workers, the most used sources for recruitment, issues resulting from a retiring workforce, and perceptions of the industry by workforce stakeholders. Education/Training- industry partnerships with education and needed training and degree programs. Most Important Needs- the most important workforce issues facing Denver businesses. The geography for the 2007 report was expanded to include Larimer and Weld counties. This new geographic definition gives a fuller picture of the regional workforce and allows for comparison with the work conducted from the Metro Denver Workforce Innovation in Regional Economic Development (WIRED) Initiative. This report compares the City and County of Denver with the nine-county region including Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Jefferson, Larimer, and Weld counties. The workforce gap analysis is presented in five sections: 1. Workforce Supply 2. Workforce Demand 3. Gap Analysis 4. Occupational Analysis 5. Industry Analysis Workforce Supply Population In 2006, 575,300 people lived in the City and County of Denver and close to 3.2 million people lived within the nine-county region. The population continues to see the impact of the baby boomer generation. The older population is increasing in proportion to the total population and the working age population percentage (those people between 16-65) is decreasing. The region s population is becoming more ethnically diverse, allowing companies to locally hire a more diverse workforce. Education The City and County of Denver s population is well educated and becoming more so as time goes on. In 2005, 81.5% of residents in the City and County of Denver and 88.6% in the nine-county region held at Page i

5 EXECUTIVE SUMMARY least a high school degree, up from 80.8% and 87.9% in The high school graduation rate in the City and County of Denver increased by 14% between 2000 and 2004 to 76.9%. Though the annual high school graduation rate has improved, the City and County of Denver s annual dropout rate is more than twice the level of Colorado. In 2006, over 181,300 students enrolled in Colorado public colleges and universities. Labor Force The labor force, which includes people employed and seeking work, totaled over 310,900 in the City and County of Denver and nearly 1,782,000 in the nine-county region in Following the recession in 2001, the labor force has recovered and is expected to grow at an annual rate of 1.2% through Both the City and County of Denver and the ninecounty region have the largest occupational representation in: Office and Administrative Support, Sales and Related, Management, and Construction and Extraction. Unemployment has declined since the recession. The unemployment rate was 4.9% in 2006 and is forecasted to continue to decline through 2011 meaning fewer workers looking for jobs. Workforce Demand Employment More people live than work in the City and County of Denver. In 2007, there were 438,100 workers in the City and County of Denver and 579,200 residents. Employment is expected to grow at an average annual rate of 1.6% through Almost all people (89.1% in 2004) employed in the City and County of Denver live within the nine-county region. The five largest industries in terms of employment in the nine-county region in 2006 were: Government, Retail Trade, Healthcare and Social Assistance, Accommodation and Food Services, and Professional and Business Services. Occupations Service-related occupations are the largest share of employment in the City and County of Denver and the nine-county region. In 2006, Office and Administrative support and Sales and Related occupations accounted for almost 30% of the entire employment in the nine-county region. The fastest growing occupations are those in healthcare, legal, education, and sciences. Gap Analysis Denver s workforce is a robust mix of many occupational groups. Though Colorado has a highlyeducated and productive workforce, many businesses struggle to find and retain the quality workers needed to grow and prosper. As the baby boomer generation retires, workforce needs will only increase. The City and County of Denver Office of Economic Development seeks to meet the workforce needs of businesses in Denver. Methodology Like the 2004 report, this gap analysis utilizes three workforce gap methods to arrive at the most significant workforce gaps for the City and County of Denver and the nine-county region. Ratio Gap Analysis Share Gap Analysis Absolute Gap Analysis Each gap analysis method provides insight into the occupational positions that will be in demand in the City and County of Denver and the nine-county region in the next four years. Workforce Gaps Based on the data collected, and using the three workforce gap methodologies (ratio, share, and absolute gap analysis) ten major occupational gaps have been identified for the City and County of Denver and the nine-county region: Business and Financial Operations Computer and Mathematical Page ii

6 EXECUTIVE SUMMARY Architecture and Engineering Life, Physical, and Social Science Community and Social Services Legal Education, Training, and Library Healthcare Practitioners and Technical Healthcare Support Construction and Extraction In order to understand the workforce demand needs of Denver businesses affected most by the workforce gaps, the occupational gaps were linked to the Denver industries most heavily using these occupations. The workforce gap occupations are heavily represented in the following four major industries: Business Support/Financial Services Construction Healthcare Information Communication Technology (ICT) Focus group meetings were conducted with a total of 49 business leaders in the selected industries as well as a meeting devoted to understanding the specific needs of small businesses in the nine-county region. The focus groups shared many common workforce issues related to skills, hiring, and education/training and concluded with the most important needs to that industry. These needs can be used to create programs, influence policy, and generally work to meet the key workforce needs of the nine-county region. Focus Group Summaries Common Workforce Issues Skills The most significant skill gaps of the nine-county region s workforce include a lack of foundational skills. The workforce often lacks basic skills needed to work in any position. Many candidates do not possess the mathematics, science, writing, and reading skills needed to succeed. Businesses will train employees on job-specific skills, but a lack of core education is challenging to overcome. The nine-county region s businesses, regardless of industry, struggle to find candidates with a strong work ethic and solid professionalism. Businesses perceive that today s workforce cares less about the work they do and more about what they will get out of a position. High employee turnover and sometimes confusing career paths lead to wasted training resources for companies. The nine-county region s workforce is a diverse population and language skills are essential to communicate with customers and other employees. Businesses need multilingual workers, especially those who speak English and Spanish, at all levels of an organization. Though applicants often state during the hiring process that they are fluent in a language, their knowledge is not always sufficient to read, write, and converse in actual practice. Hiring Businesses look locally to hire workers. The population often works close to their home and companies have success recruiting within the neighborhoods surrounding the business location. For some occupations, especially the higher-level jobs with specific skill sets, businesses are forced to hire workers from outside of the area. Employee referral programs prove to be the most successful way to hire quality individuals who have the necessary skills and work well in the company environment. Online jobsites, such as Craigslist, Monster, and Jobbing, are widely used but inundate companies with many unqualified applicants. Most focus group participants, regardless of the industry, indicated they do not use workforce centers because they are unaware of the services offered or find the services to be too time-consuming and confusing. Many focus group participants share the perception that applicants with the needed skill sets cannot be found at workforce centers. Page iii

7 EXECUTIVE SUMMARY Most industries are beginning to see the impact of the retiring baby boomer generation. Businesses experiencing increased retirement are attempting to connect experienced older workers with younger workers. The retiring workforce is opening up new sources of workers and could help bridge some occupational gaps in the region. However, some businesses are hesitant to hire older workers and the older workforce has different needs in terms of training and scheduling. Education/Training Businesses conduct most of their training in-house and on-the-job to save time and money. Some areas of training that are lacking for businesses include: English as a second language and foreign languages Time management and organizational skills Business finance and accounting Soft skills, such as communication, customer service, and leadership Most focus group participants did not feel educational institutions are teaching the skills and real-world experience needed for the incoming workforce to succeed. Businesses see the need to work with educational institutions but struggle to find the time and resources to participate in these programs. Internship programs are used sporadically by Denver businesses but companies often do not have the time, money, or see the benefit to participate in the programs. Most Important Needs Denver businesses need increased understanding of workforce issues and services. Companies do not understand what services and programs are available and would use them more if they were promoted and easily understood. Companies should be educated on the benefits of older workers. Businesses need a service that connects them with potential candidates. A customized, personal service that is simple to use and takes little time would be beneficial. Businesses would use training programs that would help teach core skills (such as writing, communications, and organization) to employees. The programs would be more successful if they had flexible schedules and were conducted at a business location. Financial support for training and internship programs would encourage businesses to take advantage of them more often. Providing equipment and family services to employees going through training is needed. Language skills, especially Spanish, are important for every industry. Helping workers understand each other and their customers is growing in need. Providing training for employees who are not fluent in English as well as foreign language training for English-speaking workers will increase productivity and decrease miscommunications that can lead to frustration or in some industries, accidents. Businesses need local networking opportunities to connect them with other businesses and potential qualified applicants. The incoming workforce is not prepared for the working world. Educational institutions need to prepare youth for the business world through more hands-on experience and practical knowledge while giving them the basic skills they need to succeed. By identifying the largest occupational gaps within the City and County of Denver over the next four years, the City and County of Denver Office of Economic Development and Metro Denver Workforce Boards will strive to meet the workforce needs of Denver businesses. While these occupations cross a number of different industries, there are four key industries impacted by current and projected occupational gaps. An understanding of the issues surrounding worker skills, hiring patterns, and education/training helps link workers seeking employment with businesses that need employees, creating a stronger and more productive economy. Page iv

8 INTRODUCTION The City and County of Denver Office of Economic Development wants to understand the most pressing workforce needs for businesses and residents in Denver. This report will help the Office of Economic Development identify the largest challenges. The City and County of Denver Office of Economic Development conducted a comprehensive workforce profile for the City and County of Denver and the seven-county Metro Denver area 1 in The report analyzed occupational gaps present in the workforce by quantifying the supply of individuals by occupation in the areas and the demand by businesses for those occupations. The report considered the 2004 workforce and projected supply and demand levels to This report is an update of that 2004 report. Using similar methodology, this workforce gap analysis was conducted using data from 2006 and projecting workforce supply and demand levels through This report expanded the geography and scope of research. In some cases, different data series were utilized that were unavailable in The City and County of Denver Office of Economic Development and the Workforce Board of Metro Denver will utilize the information in this report to target methods to strengthen the workforce of the ninecounty region. The geography for the 2007 report was expanded to include Larimer and Weld counties. This new ninecounty definition gives a fuller picture of the regional workforce and provides research that is complementary to the work conducted by the Metro Denver Workforce Innovation in Regional Economic Development (WIRED) Initiative. This report compares the City and County of Denver with the nine-county region. The 2007 research has been expanded to include focus group meetings with business leaders in the 1 The Metro Denver region included seven counties in 2004: Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, and Jefferson. industries most effected by the largest five occupational gaps. Data collected from each of the five focus groups is presented by four major workforce topics: Skills- what skills are most needed within the industry and what skills are most abundant within Denver. Hiring- an understanding of where businesses are hiring workers, the most used sources for recruitment, issues resulting from a retiring workforce, and perceptions of the industry by workforce stakeholders. Education/Training- industry partnerships with education and needed training and degree programs. Most Important Needs- the most important workforce issues facing Denver businesses. The workforce gap analysis is presented in five sections: 1. Workforce Supply 2. Workforce Demand 3. Gap Analysis 4. Occupational Analysis 5. Industry Analysis The first part examines the supply-side of the workforce equation, or the resident population. A picture of the existing and future workforce is provided through an examination of the population, labor force, and educational attainment. The second part of the study details the demand-side of the market, or the needs of business. Existing and future trends are revealed through a review of employment by industry, employment by occupation, wages, and job vacancies. The third part of the report identifies the gaps that exist between the working population and the types of industries and occupations that drive employment. Three different methodologies are employed to identify the five major occupational gaps within Denver s workforce. Page 1

9 INTRODUCTION The final part of the report presents workforce issues for industries most impacted by the occupational gaps in the areas of skills, hiring, education and training, and most important needs. Page 2

10 WORKFORCE SUPPLY Thousands In order to understand the nature of the workforce in the City and County of Denver and the nine-county region 2, the first factor to consider is the supply of labor in the region. Population Total Population In 2006, 575,300 people lived in the City and County of Denver and close to 3.2 million people lived within the nine-county region. Over the next five years, the population of the City and County of Denver is projected to increase by 4,000 people annually, or 0.7%, due to natural increase and net migration. The nine-county region is projected to grow by approximately 60,000 people annually or 1.8% per year. Components of Change Population growth is measured by two factors: natural increase and net migration. Natural increase is a count of births minus deaths. This number is relatively stable and averages approximately 7,000 people annually in the City and County of Denver and 27,000 per year within the nine-county region. Total Population, City and County of Denver Source: Colorado Division of Local Governments, Demography Section. 2 The nine-county region includes: Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Jefferson, Larimer and Weld counties. Thousands 3,500 3,400 3,300 3,200 3,100 3,000 2,900 2,800 Total Population, Nine-County Region, Source: Colorado Division of Local Governments, Demography Section. Net migration is the count of people moving into a given area minus those leaving that area. The City and County of Denver has seen negative net migration since 2001 due mainly to the impact of the recession as people tend to move based on their perception of job opportunity. Though Denver saw its largest net out-migration in 2006, the trend is expected to decrease through The nine-county region, on the other hand, experienced positive net migration, throughout the analysis period. Net migration is forecasted to increase, totaling over 34,000 people in Population by Age The City and County of Denver is already beginning to feel the impact of the retiring baby boomer generation and this impact will only increase in the future. Overall, the population in the City and County of Denver is projected to grow at an average annual rate of 0.7% from 2006 to 2011, adding over 19,600 people during that time period. The over 60 population is projected to grow at an average annual rate of 3.3%, close to five times the rate of the overall population. The over 60 population is forecasted to increase by 14,500 from 2006 to While both the population under the age of 20 and over the age of 40 is projected to grow through 2011, the age group is actually expected to see a decline in population as the baby boomer generation ages. Page 3

11 WORKFORCE SUPPLY Thousands Population by Age, City and County of Denver <19 20 to to to to to 69 Source: Colorado Division of Local Governments, Demography Section. Thousands 1, to 79 The nine-county region also expects to see gains in the older population through The largest population increase (based on average annual growth from ) is projected for the age group, followed by the age group, the over 80 age group, and the age group. The youth population (under 20) is forecasted to grow more rapidly in the City and County of Denver than the nine-county region. However, an increase in the younger working population (age 20-29) is expected in the nine-county region while the City and County of Denver expects to see a decline in that population Population by Age, Nine-County Region <19 20 to to to to to to Working Age Population As the population ages, the labor force participation rate decreases, and thus businesses have a smaller supply of workers from which to draw. Though the City and County of Denver s total population will grow through 2011, the working age population, people aged 16-65, is expected to decrease. In 2006, 67.1% of the population was within working age. By 2011, that percentage is projected to fall to 64.4%, a decrease of more than 3,400 people. The majority of this decline is due to the aging baby boomer generation. In 2006, 14.5% of the population was age 60 or over; by 2011 that percentage is expected to grow to 16.4%. Occupations by Age By 2011, the over-60 population is estimated reach 16.4% in the City and County of Denver and 15.6% in the nine-county region. Several occupations are forecasted to have an oversupply of older workers by The occupations expected to see an overrepresentation of workers over the age of 60 by 2011 include: Education, Training, and Library Legal Life, Physical, and Social Sciences Healthcare Practitioners Management Younger workers are over-represented in the fields of: Food Preparation and Serving Farming, Fishing, and Forestry Construction and Extraction Computer and Mathematical The following chart provides a complete breakdown of occupations by age. Source: Colorado Division of Local Governments, Demography Section. Page 4

12 WORKFORCE SUPPLY City and County of Denver Occupation by Age, 2000 SOC years Total over Total over CODE Occupation years years years and over Management 44.8% 30.9% 19.2% 5.1% 55.2% 24.3% 13 Business and Financial 49.9% 26.4% 18.1% 5.5% 50.1% 23.7% 15 Computer and Mathematical 60.0% 26.5% 11.8% 1.7% 40.0% 13.5% 17 Architecture and Engineering 51.1% 27.5% 16.7% 4.7% 48.9% 21.4% 19 Life, Physical, and Social Science 43.6% 32.8% 18.0% 5.6% 56.4% 23.6% 21 Community and Social Services 47.3% 25.0% 19.8% 8.0% 52.7% 27.7% 23 Legal 42.4% 30.6% 21.1% 5.9% 57.6% 27.0% 25 Education, Training, and Library 40.1% 26.6% 23.3% 10.0% 59.9% 33.3% 27 Arts, Sports and Media 52.8% 27.9% 14.3% 5.1% 47.2% 19.3% 29 Healthcare Practitioners 43.8% 32.0% 19.4% 4.8% 56.2% 24.2% 31 Healthcare Support 53.8% 24.9% 15.4% 6.0% 46.2% 21.3% 33 Protective Service 48.6% 23.1% 22.1% 6.1% 51.4% 28.2% 35 Food Preparation and Serving 76.6% 13.3% 7.2% 2.9% 23.4% 10.1% 37 Building Cleaning and Maint 52.5% 25.4% 13.8% 8.4% 47.5% 22.1% 39 Personal Care and Service 52.0% 22.7% 16.3% 9.0% 48.0% 25.3% 41 Sales and Related 52.9% 24.3% 15.5% 7.2% 47.1% 22.7% 43 Office and Admin Support 51.5% 24.7% 17.1% 6.7% 48.5% 23.8% 45 Farming, Fishing and Forestry 77.5% 5.7% 5.7% 11.1% 22.5% 16.8% 47 Construction and Extraction 63.5% 22.4% 10.8% 3.3% 36.5% 14.1% 49 Installation and Maintenance 49.7% 29.6% 16.9% 3.7% 50.3% 20.6% 51 Production 53.0% 26.0% 16.1% 4.9% 47.0% 20.9% 53 Transportation 51.6% 26.3% 15.8% 6.2% 48.4% 22.1% TOTAL 51.7% 26.0% 16.5% 5.7% 48.3% 22.2% Source: 2000 Census Data from Equal Employment Opportunity Commission. Nine-County Occupation by Age, 2000 SOC years Total over Total over CODE Occupation years years years and over Management 43.2% 31.9% 19.6% 5.4% 56.8% 24.9% 13 Business and Financial 47.2% 28.8% 18.5% 5.6% 52.8% 24.1% 15 Computer and Mathematical 59.7% 27.6% 11.0% 1.7% 40.3% 12.7% 17 Architecture and Engineering 47.7% 30.0% 17.8% 4.6% 52.3% 22.3% 19 Life, Physical, and Social Science 44.3% 31.8% 17.9% 6.0% 55.7% 23.9% 21 Community and Social Services 46.5% 25.9% 20.3% 7.4% 53.5% 27.6% 23 Legal 41.8% 32.1% 20.4% 5.7% 58.2% 26.1% 25 Education, Training, and Library 43.4% 28.5% 21.7% 6.5% 56.6% 28.2% 27 Arts, Sports and Media 53.3% 26.4% 14.4% 5.9% 46.7% 20.3% 29 Healthcare Practitioners 42.6% 34.1% 18.5% 4.7% 57.4% 23.2% 31 Healthcare Support 58.8% 23.3% 12.9% 5.0% 41.2% 18.0% 33 Protective Service 54.8% 24.2% 16.1% 4.9% 45.2% 21.1% 35 Food Preparation and Serving 79.3% 11.6% 6.4% 2.7% 20.7% 9.0% 37 Building Cleaning and Maint 53.3% 25.2% 13.9% 7.7% 46.7% 21.6% 39 Personal Care and Service 59.5% 20.6% 12.8% 7.2% 40.5% 20.0% 41 Sales and Related 54.1% 23.3% 15.1% 7.4% 45.9% 22.5% 43 Office and Admin Support 52.3% 24.7% 16.6% 6.3% 47.7% 22.9% 45 Farming, Fishing and Forestry 63.9% 17.4% 9.9% 8.8% 36.1% 18.6% 47 Construction and Extraction 61.9% 23.8% 11.1% 3.2% 38.1% 14.2% 49 Installation and Maintenance 54.5% 27.7% 13.9% 3.9% 45.5% 17.8% 51 Production 52.1% 26.9% 16.1% 4.9% 47.9% 21.0% 53 Transportation 54.4% 24.2% 14.7% 6.7% 45.6% 21.3% TOTAL 52.6% 26.1% 15.8% 5.5% 47.4% 21.3% Source: 2000 Census Data from Equal Employment Opportunity Commission. 1-10% more than average 10-24% more than average Over 25% more than average Page 5

13 WORKFORCE SUPPLY Hispanic/Latino 35% Population by Race and Ethnicity City and County of Denver, 2005 Two or more races 1% Asian and Pacific Islander 3% Source: U.S. Census Bureau, County Population Estimates by Race. Hispanic/Latino 20.5% White 50% Population by Race and Ethnicity Population by Race and Ethnicity Nine-County Region, 2005 Black or African American 10% Am Indian & Alaska Native 1% Population in the City and County of Denver continues to become more diverse. Increases in the Hispanic/Latino, multi-racial, and Asian/Pacific Islander population give Denver businesses a more diverse population from which to select workers. In 2000, 32% of the City and County of Denver population was of Hispanic/Latino ethnicity (17.7% in the nine-county region). By 2005, the Hispanic/Latino population in the City and County of Denver had grown by 1.7% per year to 34.9% of the total population. The nine-county region had even greater increases in the Hispanic/Latino population with 4.6% annual increase from 2000 to 2005 and totaled 20.5% of the population. Two or more races 1.5% Asian and Pacific Islander 3.1% Am Indian & Alaska Native 0.5% Source: U.S. Census Bureau, County Population Estimates by Race. White 70.2% Black or African American 4.2% Other racial and ethnic groups experienced increases from 2000 to Persons of multiple racial backgrounds increased during the period in both the City and County of Denver and the nine-county region. The multi-race population increased at an annual rate of 0.9% in the City and County of Denver and 3.6% in the nine-county region from 2000 to Asian and Pacific Islanders increased annually by 1.2% for the City and County of Denver and by 3.7% for the nine-county region. Education The City and County of Denver s population is well educated and becoming more so as time goes on. Educational Attainment The City and County of Denver has experienced rising high school attainment rates. In 2005, 81.5% of the City and County of Denver s population had a high school degree or higher, up from 80.8% in The nine-county region has seen a slight increase from 87.9% in 2000 to 88.6% in This upward trend was true for college degrees as well with 39% of the City s population having at least a bachelor s degree or higher in 2005, up from 35% in High School Denver high schools are increasing their graduation rates. In 2000, the City and County of Denver had a high school graduation rate of only 62.9%. By 2003, that figure had grown to 70.6%, an increase of over 12%. The nine-county region also experienced an increase in high school graduation rates from 81.8% in 2000 to 83.8% in In 2003, the Colorado Department of Education changed its methodology for calculating graduation rates and thus, time-series analysis of the data is not available for recent years. Though graduation rates are increasing, overall dropout rates are also growing. Since the school year, Colorado dropout rates have grown annually and totaled 3.3% in the school year excluding alternative schools. The nine-county region had a slightly higher rate in of Page 6

14 WORKFORCE SUPPLY 3.6%. The City and County of Denver s dropout rate of 8.5% was over twice that of the nine-county region. College In 2006, there were over 181,300 students enrolled in public post-secondary educational institutions in the nine-county region, 26.6% of whom attended community colleges. In 2006, over 53,000 students graduated from fouryear and community colleges in Colorado, an increase of 19.7% from 44,500 graduates in Over two-thirds of community college graduates in Colorado studied in one of two major curriculum areas: Health Professions 44.7% Liberal Arts and Sciences 22.4% Graduates of Colorado four-year colleges and universities received a more diverse range of majors. The three largest areas of study for graduates in 2006 were: Business Management 15.4% Engineering 9.6% Social Sciences 8.7% Data is only available for public institutions through the Colorado Commission on Higher Education. For a complete breakdown of degrees awarded by type of institution, see Appendix B. Labor Force The labor force includes not only people who are currently employed but those people who are available and willing to work. Labor force is usually defined as the sum of the employment and unemployment in a given area. Size of Labor Force In 2006, the labor force in the City and County of Denver totaled over 310,900 people. The labor force in the nine-county region reached nearly 1,782,000 in The City and County of Denver experienced a decline in the overall labor force during the recession in 2001 and Recovery was slow for the labor force during the next two years. The labor force began to see larger growth beginning in Over the next five years, the labor force is forecasted to grow at an average annual rate of 0.8% and will total 324,000 people by 2011 in the City and County of Denver and 1,944,400 in the nine-county region. Occupations Both the City and County of Denver and the ninecounty region have a wide breadth of workers in all occupational areas. The largest occupational groups are the same for both the City and County of Denver and the nine-county region. Occupational data is presented using the 22 major Standard Occupational Classification (SOC) codes. For a list of major SOC codes and typical occupations in those categories, see Appendix J. The City and County of Denver has larger proportions of Legal; Arts, Entertainment, Sports and Media; Food Preparation and Serving Related; Building Cleaning and Maintenance; and Construction and Extraction workers than the ninecounty region. Largest Occupational Groups City and Occupational Group County of Denver 9-County Region Office and Administrative Support 13.2% 14.2% Sales and Related 10.6% 12.3% Management 9.8% 11.3% Construction and Extraction 7.4% 6.5% Source: Colorado Department of Labor, Occupational Employment Statistics. Page 7

15 WORKFORCE SUPPLY Occupational Growth Rates: Occupational Group The highest growth within the nine-county region is expected to be in occupations involved with healthcare, information technology, business and finance, construction, and farming. Employment The number of employed members of the labor force in the City and County of Denver totaled almost 295,800 in That number is forecasted to increase to over 318,000 by Employment in the nine-county region reached 1,704,700 in 2006 and is forecasted to grow to over 1,855,000 by Unemployment Growth Rate All Occupations 14.7% Computer and Mathematical 32.3% Healthcare Practitioners and Technical 23.9% Healthcare Support 23.9% Farming, Fishing, and Forestry 22.5% Construction and Extraction 19.7% Business and Financial Operations 19.3% Source: Colorado Department of Labor, Labor Market Information, Projections Unit. Unemployment grew to record levels in the City and County of Denver in 2003 with almost 22,000 people, or 7.3% of the labor force, seeking employment. That number decreased to 15,100 in 2006, a 4.9% unemployment rate. The nine-county region experienced a similar increase in unemployment during the recession, topping out at almost 102,800 (6.2% of the labor force) looking for work in By 2006 that number had decreased to 77,300, or 4.3%. The economic recovery in Colorado has led to a continued constriction of workers. By 2011, people available and looking for work in the City and County of Denver is expected to slightly decline to 14,300 or 4.5% of the labor force. In the nine-county region, the rate is forecasted to be slightly lower at 4.4% with almost 84,200 people seeking work. Though there are fewer people available for work compared to 2003, overall more people are in the labor force. Since 2000, both the City and County of Denver and the nine-county region have seen an increase in the labor force participation rate (a measure of the proportion of people within the labor force versus the overall population). In 2001, the labor force participation rate was 77.4% in the City and County of Denver. By 2006, that percentage had grown to 77.8%. The nine-county region also increased labor force participation, increasing from 77.1% in 2001 to 77.4% in This increase could be due in part to more people staying in the labor force and postponing retirement. Workforce Supply Summary In 2006, 575,300 people lived in the City and County of Denver and close to 3.2 million people lived within the nine-county region. The population continues to see the impact of the baby boomer generation. The older population is increasing in proportion to the total population and the working age population percentage (those people between the ages of 16-65) is decreasing. Denver s population is becoming more ethnically diverse, allowing companies to locally hire a more diverse workforce. The City and County of Denver s population is well educated and becoming more so as time goes on. In 2005, 88.6% of residents in the City and County of Denver held at least a high school degree, up from 80.8% in The high school graduation rate in the City and County of Denver increased by 14% between 2000 and 2004 to 76.9%. In 2006, over 181,300 students enrolled in two and four year colleges and universities in the nine-county region. The labor force, which includes people employed and seeking work, totaled over 310,900 in the City and County of Denver in Following the recession in 2001, the labor force has recovered and is expected to grow at an annual rate of 1.2% through Page 8

16 WORKFORCE SUPPLY The unemployment rate was 4.9% in 2006 and is forecasted to continue to decline through 2011 meaning fewer workers are looking for jobs. Both the City and County of Denver and the ninecounty region have the largest occupational representation in: Office and Administrative Support, Sales and Related, Management, and Construction and Extraction. Unemployment has decreased since the recession. Page 9

17 WORKFORCE DEMAND Local businesses are the drivers of current and future employment. By examining the composition of employer industries and the occupations these businesses need, a better understanding of the demand for the workforce can be achieved. Employment The following employment information for the City and County of Denver and for the nine-county region is based on the Quarterly Census of Employment and Wages from the Colorado Department of Labor and Employment. The industries included are based on the 21 two-digit North American Industrial Classification System (NAICS) codes. A listing of the NAICS codes and descriptions is included in Appendix I. Total Employment There were almost 431,400 people employed in the City and County of Denver in Employment has increased by 0.9% annually from 2004 to Over 1.5 million people were employed in the ninecounty region in Nine-county region employment increased at an average annual rate of 1.0% from 2004 to 2006, and is expected to continue increasing at an average annual rate of 1.6% from 2006 to Almost 126,000 net new jobs are expected to be added over the five-year period, bringing the nine-county region total employment in 2011 to almost 1.7 million workers. Commuting Patterns The nine-county region is used in this analysis in part due to the substantial interrelationship its workforce has with the City and County of Denver. Most City and County of Denver residents work in the nine-county region and most City and County of Denver workers live in the nine-county region. Businesses in the nine counties draw upon the regional workforce to find the skills and workers needed. In 2004, 95.3% of residents living in the City and County of Denver worked within the nine-county region. The majority of City and County of Denver residents work in the City and County of Denver, but this percentage is declining. In 2004, 51.6% of residents worked in the City and County of Denver, down from 52.9% in Most workers (89.1%) employed in the City and County of Denver reside in the nine-county region. The largest worker share comes from the City and County of Denver, followed by Arapahoe, Jefferson, and Adams counties. For a complete breakdown of the resident and workforce by county, see Appendix A. Employment by Industry In 2006, employment in Government (15.4%) comprised the largest share of total employment in the City and County of Denver, followed by the Healthcare and Social Assistance (9.5%), Professional and Business Services (8.5%), Accommodation and Food Services (8.4%) and Administrative and Waste Services (7.8%) industries. The largest industries in the nine-county region are similar to the City and County of Denver. Government was the largest industry by share of employment (14.4%) in the nine-county region, followed by the Retail Trade (10.8%), Healthcare and Social Assistance (9.1%), Accommodation and Food Services (8.7%) and Professional and Business Services (8.1%) industries. For a complete list of employment and growth rate by industry, see Appendix C. Employment Growth by Industry The greatest average annual growth rates from 2006 to 2011 are expected to be in the Professional and Business Services and Administrative and Waste Services industries in the nine-county region. The Professional and Business Services industry is forecasted to experience the highest average annual growth rate of 3.1% out of 21 industries from 2006 to The next highest average annual growth rate of 2.5% will be in Administrative and Waste Services. The Construction; Arts, Entertainment, and Recreation; and Healthcare and Social Assistance Page 10

18 WORKFORCE DEMAND industries will experience a higher than average annual growth rate over the five-year period. The Professional and Business Services industry is expected to add over 20,300 net new jobs between 2006 and 2011, the greatest absolute industry employment gain over the five-year period. Both the Administrative and Waste Services industry and the Healthcare and Social Assistance industry are projected to add 13,700 net new jobs over the fiveyear period. In 2011, the largest industries in the nine-county region by share are projected to be Government (14.0%), Retail Trade (10.8%), Healthcare and Social Assistance (9.2%), and Professional and Business Services (8.7%). Occupations While employment growth by industry provides insight into what types of businesses are driving employment, understanding the employment situation by occupation is pivotal to workers, educational facilities, and workforce centers. By determining the most in-demand occupations, these groups can tailor their efforts to better fit the needs of businesses within each industry. Employment by Occupation Office and Administrative Support occupations were the largest occupational group by share of total employment with a 17.4% concentration in the City and County of Denver in Sales and Related (12.1%) and Food Preparation and Serving Related occupations (8.1%) were the second and third largest occupational groups by concentration in The same three occupations had the highest concentrations in the nine-county region in Office and Administrative Support occupations were the largest occupational group by concentration with 17.1% of total employment. Sales and Related (11.8%) and Food Preparation and Serving Related occupations (8.3%) had the second and third largest concentrations in the nine-county region in For a complete list of occupations and growth rates by occupation, see Appendix D. Employment Growth by Occupation The highest average annual growth rates in the City and County of Denver from 2006 to 2011 are expected in Legal occupations (2.6%) and Education, Training, and Library occupations (2.5%). Life, Physical, and Social Science (2.3%); Construction and Extraction (2.2%); and Architecture and Engineering (2.1%) also experienced high growth rates. By 2011, the greatest concentration of employment is expected to continue to be in Office and Administrative Support and Sales and Related occupations in the City and County of Denver. The highest average annual growth rate from 2006 to 2011 is expected in Education, Training, and Library (3.5%) and Legal (3.2%) occupations in the ninecounty region. Healthcare Practitioners and Technical; Healthcare Support; and Life, Physical, and Social Science occupations are all expected to experience 3.0% average annual growth from 2006 to 2011 in the nine-county region. Over 31,300 net new jobs in Office and Administrative Support occupations are expected to be added in the nine-county region between 2006 and 2011, the greatest absolute occupational gain over the five-year period. The number of jobs in Sales and Related occupations are projected to increase by 16,200, while the number of jobs in Education, Training, and Library occupations is projected to increase by 15,300 over the five-year period, the second and third highest rates by absolute occupational employment growth respectively. In 2011, the largest occupations by share are projected to be Office and Administrative Support (17.2%), Sales and Related (11.5%), and Food Preparation and Serving Related (8.2%). Wages by Occupation Current forecasts indicate the five fastest growing occupations in the nine-county region over the fiveyear period from 2006 to 2011 will be Education, Training, and Library; Legal; Life, Physical and Social Science; Healthcare Practitioners and Technical; and Healthcare Support occupations. Page 11

19 WORKFORCE DEMAND Seven other occupations in the nine-county region will experience above average annual growth rates over the five-year period. The occupational groups experiencing the largest absolute job growth between 2006 and 2011 are: Office and Administrative Support; Sales and Related; Education, Training, and Library; Construction and Extraction; and Food Preparation and Serving Related occupations. Among all fastest growing occupational groups, Legal occupations have the highest median hourly wage at $30.43, almost twice the median hourly wage of all occupations in Colorado ($15.82). Four of the five fastest growing occupational groups have higher than average wages. Occupation Wage Range of High-Growth Occupations Nine-County Region, Median Hourly Wage ALL OCCUPATIONS $15.82 Top Occupations by Average Annual Growth Rate Education, Training, and Library $18.90 Legal $30.43 Life, Physical, and Social Science $26.61 Healthcare Practitioners and Technical $26.10 Healthcare Support $12.43 Top Occupations by Absolute Job Growth Office and Administrative Support $14.52 Sales and Related $12.51 Education, Training, and Library $18.90 Construction and Extraction $17.03 Food Preparation and Serving Related $8.12 Sources: U.S. Bureau of Labor Statistics (Wages from Colorado 2006) and Development Research Partners. 2011, Government is expected to have the largest concentration of employment in the nine-county region, followed by Retail Trade and Healthcare and Social Assistance industries. Education, Training, and Library occupations are expected to experience the greatest average annual growth between 2006 and 2011 in the nine-county region, with employment increasing by 3.5% annually for a total of 15,300 net new jobs by Legal; Healthcare Practitioners and Technical; Healthcare Support; and Life, Physical, and Social Science occupations are expected to experience higher than average growth from 2006 to By 2011, Office and Administrative Support occupations are expected to continue to have the largest concentration of employment in the ninecounty region, followed by Sales and Related and Food Preparation and Serving Related occupations. Legal occupations have the highest median hourly wage ($30.43) out of the fastest growing occupations. The median hourly wage of all occupations in the nine-county region was $15.82 in Workforce Demand Summary The Professional and Business Services industry is expected to experience the greatest average annual growth between 2006 and 2011 in the nine-county region, with employment increasing by 3.1% annually for a total of 20,300 net new jobs by Administrative and Waste Services followed by the Construction and Arts, Entertainment, and Recreation industries will be the next fastest growing industries over the five-year period. By Page 12

20 GAP ANALYSIS Nothing is more important to a business than its workforce. A business must be able to find a sufficient local labor pool to fill its employment needs. After evaluating Denver s workforce supply (residents) and workforce demand (employees), the gap analysis attempts to bring both pieces together to explain where the opportunities and challenges for employment by occupation will occur over the next four years. Methodology Data was collected from a variety of sources including the U.S. Census Bureau, Occupational Employment Statistics, the Quarterly Census of Employment and Wages, Local Area Unemployment Statistics, and the State Demography office in order to estimate current and future numbers of workers by occupation within the City and County of Denver and the nine-county region. These data were collected on both the supply side of the workforce and the demand side of the workforce. The workforce supply details characteristics of the population residing within the City and County of Denver and the nine-county region. The workforce demand details the employment within the City and County of Denver and the nine-county region. It is the difference between the count of people versus a count of jobs. After analyzing both sets of data, techniques were implemented to identify the gaps within the ninecounty workforce. Workforce gaps within a region exist when the local supply of labor is less than the demand for labor. It is important to note that while the gap analysis may indicate an occupational category has an oversupply of labor or is in-balance, this designation is not meant to suggest that there are no employment opportunities in these occupations. There will continue to be employment opportunities due to job turnover and retirement, but those opportunities may be more difficult to pursue or more competitive to secure due to workforce over-supply. There is no one approach to the gap analysis that provides a clear picture of any mismatch between the supply of labor and the demand for labor. For this reason, three different methodologies are used to discuss the gap between the supply of labor and the demand for labor. Data Limitations As this report compares the workforce supply and demand, it is important to keep in mind that these two numbers will never match exactly. Labor supply data derives from U.S. Census Bureau s American Community Survey (ACS) figures, based on sampling methodology. In this survey, individuals are asked to identify various demographic and economic characteristics, including their occupational group. However, the occupational group where individuals may classify themselves may not match with the occupational group that an employer may use to identify that worker. The labor demand data derives from the Colorado Department of Labor s Occupational Employment Statistics (OES) and Quarterly Census of Employment and Wages (QCEW). The QCEW data includes those employees covered by unemployment insurance; it does not include the self-employed. The self-employed and sole proprietors are important and growing segments of the economy, but are small segments that can be difficult to measure. The second challenge with the data is multiple job holdings. While each individual is counted only once in the workforce supply data, workers may be double-counted in the workforce demand data due to residents with multiple jobs. For example, an individual that has two part-time positions will be counted twice in the labor demand data as the employment data makes no distinction between fulland part-time employment. The final challenge with comparing the labor supply and labor demand data concerns commuting patterns. For example, there are significantly more people working in the City and County of Denver Page 13

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