Labor Education Alignment Program (LEAP) 2014 Annual Report. Tennessee Department of Economic and Community Development.

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1 Labor Education Alignment Program (LEAP) Annual Report Tennessee Department of Economic and Community Development November 15, Ann Thompson Director, Workforce Development Tennessee Department of Economic and Community Development 312 Rosa L. Parks Avenue, 27 th Floor Nashville, TN

2 Labor Education Alignment Program (LEAP) In 2013, the Tennessee General Assembly adopted Public Chapter 338 which established a Labor Education Alignment Program (LEAP). LEAP created a statewide, comprehensive structure enabling students in technology centers and community colleges to participate in technical training developed with input from area employers. Senate Majority Leader Mark Norris led the charge in this endeavor. The primary goal of this program is to create long-term relationships between employers and area community colleges and/or Tennessee Colleges of Applied Technology (TCATs) to identify and address the challenge of job candidate skills gaps in the local workforce pool. By ensuring that post-secondary educational institutions are producing the credentials employers need through alliance and data driven decision-making, Tennessee can meet the needs of current employers and also be more effective in recruiting new industry to the state. Pursuant to Section 10 of Public Chapter 338, The Department of Economic and Community Development (ECD) will submit a report to partner agencies on demonstrated workforce needs within existing and prospective businesses where the department has conducted project activity. Tennessee Momentum Tennessee was named the #1 state of the year in 2013 for economic development by Business Facilities magazine, a testament of the state s internationally competitive workforce. Private sector jobs have grown 9.03 percent during Governor Haslam s administration, and 2.08 percent from Tennessee ranks 12 th among all states in the nation for job growth during both of these time periods. Tennessee also ranks as the #1 state in the Southeast for 6.97 percent growth of Gross Domestic Product (GDP) during Governor Haslam s administration, 2 and was recently named the #1 state in the nation for 9,215 job commitments made through foreign direct investment in Tennessee is on an unprecedented trajectory in economic development, and its educational institutions are building the workforce pipeline to support business recruitment and expansion. Tennessee was named the fastest-improving state in the nation in the 2013 National Assessment of Educational Progress (NAEP) Nation s Report Card. Employer demand from Tennessee s workforce pipeline will continue to grow and multiply. In the last four years (January 2011 through November ), TNECD has secured 673 commitments from companies to create nearly 84,000 new jobs and invest $15.0 billion in capital. 4 Development of the workforce required to fill this significant inventory of open positions requires Tennessee institutional alignment. 1 Growth of private sector employment from 2010 Q3, and from 2013 Q3. Source: U.S. Bureau of Labor Statistics, Current Employment Statistics (CES). 2 Growth of Real GDP (to adjust for inflation), from the U.S. Bureau of Economic Analysis 3 Global Location Trends annual report from the IBM Institute for Business Value 4 Company commitments secured from January 2011 through November 13,. TNECD Annual Report 2

3 Labor Education Alignment Program (LEAP) Advanced Industries in Tennessee 5 Employing more than 131,300 Tennesseans, 6 advanced industries are an important force in Tennessee s economy. Ensuring Tennessee has a competitive and sufficient workforce to support the growth of innovation- and STEM- intensive industries is pivotal to the state s future economic growth. The Brooking Institute, through its Advanced Industries (AI) Series, defines 23 discrete industries which are a critical, innovation-intensive subset of the economy. This includes 17 manufacturing and six services industries which display above-average R&D spending as a share of total sales and employ a workforce in which the average worker is expert in at least one discrete STEM field. These industries are crucial drivers of global competitiveness and therefore prosperity in the United States These industries comprise the nation s industrial innovation sector. These industries transform lives and the economy through the introduction and diffusion of new technologies, processes, and solutions. Tennessee employs 85,350 people in advanced manufacturing, and 45,980 in advanced services industries. The AI workforce in Tennessee has grown significantly over the last year, ranking eighth in the nation and fourth among states in the Southeast for 4.4 percent growth ( ). Still, Tennessee s economy has significant gains to make in these fields. The AIs represent 5.75% of total employment, a percentage which ranks seventh highest in the Southeast and 29 th highest in the nation. Workforce Strengths and Needs Tennessee Analysis 7 The following report examines 320 occupations in the State of Tennessee that typically require a postsecondary non-degree award or greater for entry-level positions. The average hourly wage of these occupations is $30.03, indicating these are well-paying positions. Metrics incorporated in the analysis include wages, job growth, annual openings, regional competitiveness, and regional employment concentration. These measurable inputs are utilized in varying combinations to identify six indicators of Tennessee s workforce strengths and needs. The index places increased significance on occupations that are high-wage and high-growth, as these metrics indicate high-quality jobs that are attractive to job-seekers, are attractive to higher education institutions, and are indispensable components to growing organizations. TNECD has also identified the top 25 occupations for each of its targeted industry clusters and utilizes these national employment patterns to highlight Tennessee s workforce needs and strengths. 8 Occupations within STEM fields are also highlighted in this analysis. 5 Information on Tennessee s Advanced Industries are based on guidelines established by the Brookings Institute through its Advanced Industries Series Powering Advanced Industries, State by State () 6 Source of employment estimates for Advanced Industries: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW). Data available through LEAP Occupational Analysis conducted by TNECD Research utilizing EMSI. The full occupational methodology is included on page one of the report. 8 TNECD s targeted industry clusters include: (1) Aerospace and Defense; (2) Automotive; (3) Business Services (HQs, R&D, Data Centers); (4) Chemicals, Plastics and Rubber; (5) Energy Technology; (6) Entertainment and TNECD Annual Report 3

4 Labor Education Alignment Program (LEAP) Each occupation is assigned a workforce strength and need score. A high strength score indicates an occupation is critically important to Tennessee s economy and has an adequately-trained labor pool to fill vacancies and support industry growth. A high need score indicates an occupation is a significant component of Tennessee s economy and industry, and requires additional workforce development to support Tennessee s competitiveness. These occupations should be targeted by education institutions for increased training in related programs to produce the necessary workforce. A high need score may indicate that employers may be lacking qualified candidates to fill vacancies in these occupations, or indicate occupations where Tennessee s workforce could be more competitive to support industry growth. STEM (Science, Technology, Engineering and Math) There is a high prevalence of Science, Technology, Engineering and Mathematics (STEM) fields among the occupations requiring a postsecondary degree award or greater. Of the 320 occupations reviewed, 48.1% are identified as STEM or STEM-related 9 (94 are STEM occupations, and 60 are STEM-related occupations). This sample accounts for 92.8% of all STEM and STEM-related positions, as they identified by the U.S. Census Bureau and EMSI. This finding clearly shows the need for rigorous STEM education in all schooling prior to post-secondary. Strength and Need Indicators Strength Indicator Number 1 contains occupations that have high wages, and have grown in net employment from , due in part to the positive competitive effect of Tennessee s economy. In these occupations, Tennessee surpasses the expected change; a figure calculated using national occupational and demographic trends. These occupations are the ideal positions for a current job seeker. Tennessee shows strong competitive growth in the engineering field including industrial, civil, electrical, nuclear engineers, architectural, mechanical, aerospace, sales, mining and geological, ship, and biomedical engineers. Strength Indicator Number 2 contains occupations critical to TNECD s targeted industries that have a high regional concentration. It is notable to highlight the General and Operations Managers occupation appears in all 10 of TNECD s targeted industry clusters. A business is placed in a cluster based upon its primary business activity, which shows that general and operation managers are both a strength in Tennessee and a need in occupations TNECD focuses on recruiting. It is also notable to see the 2.78 location quotient for nuclear engineers, again showing the strength for Tennessee in the workforce for this occupation. Need Indicator Number 1 contains occupations with high wages and a positive growth trend despite a negative competitive effect in Tennessee. The causes of this negative effect are not specifically defined Media; (7) Food and Agribusiness; (8) Healthcare and Medical Devices; (9) Transportation, Distribution and Logistics; and (10) Other Manufacturing. 9 Occupations are identified as STEM and STEM-related based on definitions by the U.S. Census Bureau and Economic Modeling Specialists International (EMSI). According to a combination of these sources, there are 96 STEM occupations and 66 STEM-related occupations. TNECD Annual Report 4

5 Labor Education Alignment Program (LEAP) and could be due to a variety of regional trends such as a lack of the industry mix to support the occupation or the workforce to fill the positions within these occupations. Most notable in this data is the skills gap presented in information technology occupations. This includes software developers, application developers, systems software, computer occupations, computer network architects, database administrators, and computer hardware engineers. The occupations listed have a high opportunity for growth and expansion and present great opportunity for Tennessee. Need Indicator Number 2 contains occupations critical to TNECD s targeted industries that have a low regional concentration of employment. All of these occupations have a location quotient of less than 1, indicating a lower concentration of these occupations in Tennessee when compared to the national average. Software developers, medical scientists, aerospace engineers, computer hardware engineers, and multimedia artists all have a location quotient less than 0.4, which shows a much lower proportion of employment in these occupations compared to the rest of the nation. Need Indicator Number 3 contains occupations with a high wages, a high number of annual openings, and a low regional concentration. These occupations are in high demand, and Tennessee does not currently have the workforce available to meet this demand. The occupation with the largest gap is software developers, with a location quotient of This result aligns with the findings of Need Indicator Number 1. Need Indicator Number 4 contains occupations where net employment has decreased in Tennessee, despite having a projected increase according to national trends data. The negative competitive effect due to regional trends has prevented these occupations from growing as projected. Multipliers There are two tables in the report that contain data on the multipliers used in the occupational index. The first table lists the occupations categorized as high-wage, high-growth occupations. To qualify for this designation, the occupation must have an average hourly wage of $30.03 or higher and also must have grown in employment by 10% or more over the previous five years. The second table depicts occupations that are in the top 25 in terms of percentage of industry employment in one or more of TNECD s targeted industry clusters. These multipliers attempt to amplify the importance of high quality occupations that are important and will be integral parts of the industries that TNECD is attracting to the state. For example, the accountants and auditors occupation is a growing occupation that pays an above average hourly wage; the occupation is also among the top 25 occupations for employment in all ten TNECD clusters. Therefore, the multiplier will increase the occupational index score for the occupation due to its current and future importance to the state economy. Occupation Index Scores The final data compiled in this report contain occupational index scores. These tables show occupations with the highest workforce need scores, highest strength scores, and those with high score in both categories simultaneously. These tables show occupations that are most critical to labor-education alignment. TNECD Annual Report 5

6 Labor Education Alignment Program (LEAP) A high strength score indicates high quality, in-demand occupations where Tennessee has a strong workforce. Businesses will require further development of qualified candidates for these occupations as industry continues to grow and expand. A high need score indicates high quality, in-demand occupations where the state s workforce has the greatest gaps. The market for these occupations exists today, however there may not be enough qualified candidates to fill vacancies. Additionally, demand for these occupations will continue to grow as more businesses within TNECD s targeted industries continue to locate and expand in Tennessee. In these tables, STEM occupations well-represented, accounting for 23 of the 37 occupations listed (62%). Conclusion: Aligning to Fulfill In, Governor Bill Haslam challenged Tennessee with a critical mission: the Drive to 55. The goal of this initiative is to equip 55 percent of Tennesseans with a college degree or certificate by the year Through Tennessee Promise, high school students are offered two years of tuition-free community or technical college beginning with the Class of Tennessee is the only state in the nation to provide this opportunity. As part of Tennessee Reconnect, adults will be able to attend and earn a certificate at any of the 27 Tennessee Colleges of Applied Technology (TCATs) completely free of tuition and fees. Tennessee Labor Education Alignment Program (LEAP) will help ensure that the postsecondary institutions are producing the skills and credentials that Tennessee employers actually need. This $10M grant opportunity was created to eliminate skills gaps across the state in a proactive, data-driven, and coordinated manner by encouraging collaboration across education and industry and by utilizing regional workforce data to identify and then fill skills gaps across the state. Drive to 55 is not just a mission for higher education, but a mission for Tennessee s future workforce and economic development. In, Tennessee Governor Bill Haslam also created the Governor s Workforce Subcabinet, and under his leadership, this group has been tasked with overseeing the LEAP grant application process and dispersal. Comprised of the Department of Labor and Workforce Development, the Tennessee Higher Education Commission, the Department of Economic and Community Development, the Department of Education, the Department of Human Services, and the Tennessee Board of Regents, this diverse team works together to deliver a cohesive workforce development strategy statewide. Programs such as Workforce 360, a comprehensive workforce communication strategy, support this initiative. The data in this LEAP Report highlight the strengths and needs of Tennessee occupations across the state, and these data can be used to support the creation of labor and education alignment programs to fulfill skills gaps in current and near future workforce needs. TNECD Annual Report 6

7 LEAP Occupational Analysis State of Tennessee Department of Economic and Community Development Division of Research and Planning November 15,

8 Introduction The Occupation Index is a method to identify which occupations in Tennessee should be targeted by educational institutions in accordance with the Labor Education Alignment Program (LEAP). This study provides an analysis of all occupations that require a post-secondary non-degree award or greater, of which there are 320. Analysis was conducted utilizing Economic Modeling Specialists International (EMSI). Incorporating several labor market metrics as inputs, this study identifies six indicators to show strengths and needs in Tennessee s workforce. These indicators are multiplied by other market factors including wages, growth, STEM, and cluster focus to create an occupational index score. The complete index of occupations is provided as an attachment to this report. Methodology Inputs: The strength score attempts to highlight occupations that: 1. have high wages, 2. are growing, 3. display growth due to circumstances unique to Tennessee, 4. are highly concentrated in Tennessee, and 5. are critical occupations for TNECD s targeted industry groups The need score attempts to highlight occupations that: 1. have high wages 2. are growing, but not at a rate that would align with occupational and demographic expectations 3. have a low concentration in Tennessee 4. have a high number of openings 5. have decreased in net employment due to circumstances unique to Tennessee 6. are critical occupations for TNECD s targeted industry groups Universe: 320 occupations for which the typical entry level education is a postsecondary non-degree award or greater. Notably, STEM and STEM-related occupations account for 48.1 percent of the 320 occupations. This includes 94 STEM occupations and 60 STEM-related occupations. Source: Economic Modeling Specialists International (EMSI). Class of Worker: QCEW Employees Dataset Version:.3 Class of Worker Accessed: November TNECD LEAP Occupational Analysis 2

9 Indicators: Strength Indicators (SI) 1. Occupations which are high wage, and growing due to unique Tennessee trends Page 3 2. Occupations critical to TNECD s targeted industries that have a high regional concentration Page 5 Need Indicators (NI) 1. Occupations which are high wage and growing, despite inhibiting Tennessee trends Page 7 2. Occupations critical to TNECD s targeted industries that have a low regional concentration Page 9 3. Occupations which have high wages and a high number of openings, but a low regional concentration Page Occupations projected to increase in national forecasts that decreased due to inhibiting Tennessee trends Page 13 The indicators are aggregated and then weighted based on the following 4 multipliers to magnify strength and need: Growth Multiplier: a multiplier of 1.5 is applied to occupations where observed job growth from exceeded 10% Wage Multiplier: a multiplier of 1.5 is applied to occupations that have an average hourly wage of $30.03 or higher. This is the average wage for occupations that require a post-secondary non-degree award or greater STEM Multiplier: A multiplier of 2 is applied to STEM occupations and 1.5 to STEM-related occupations. The classification of STEM and STEM related occupations is based on the US Census Bureau and EMSI definitions. Cluster Multiplier: a multiplier ranging from 1-10 is applied to occupations which are ranked in the top 25 of occupations for overall employment in one or more of TNECD s industry clusters. The figure used for the multiplier equals 1, plus the number of clusters for which it is highly ranked. For a complete list of TNECD clusters, see Appendix A. A High Strength score indicates an occupation for which Tennessee has regional strengths based on the labor market indicators incorporated in this study. A High Need score indicates an occupation for which Tennessee has gaps in the labor market based on labor market indicators incorporated in this study. These are occupations where increased workforce development efforts may support current and future industry growth. Score Calculations: Strength Score: (SI 1 + SI 2 ) x (Growth Multiplier + Wage Multiplier + STEM Multiplier) x (Cluster Multiplier) = Total Need Score: (NI 1 + NI 2 + NI 3 + NI 4 ) x (Growth Multiplier + Wage Multiplier + STEM Multiplier) x (Cluster Multiplier) = Total TNECD LEAP Occupational Analysis 3

10 Strength Indicator No. 1 Occupations which are High Wage, and Growing due to Unique Tennessee Trends This table contains all high-wage occupations in the occupations universe that have had a net 5-year job increase AND Tennessee s competitive effect contributed to that increase. These occupations are high wage and growing, indicating desirable and high quality jobs. The positive competitive effect indicates the actual growth surpassed expected growth due to regional characteristics. These occupations are part of a competitive workforce to support Tennessee industries. SOC Description 2013 Expected Competitive Avg Effect 2 Hourly % Earnings Accountants and Auditors 21,125 11% 2,045 1, $ Financial Managers 12,297 9% 1, $ Industrial Engineers 7,054 17% 1, $ Sales Representatives, Wholesale and Manufacturing, Technical and Scientific Products 9,603 12% $ Chief Executives 7,982 9% $ Civil Engineers 4,607 12% $ Sales Managers 8,050 10% $ General and Operations Managers 42,463 8% 3,027 2, $ Computer Systems Analysts 9,426 17% 1,398 1, $ Electrical Engineers 2,630 13% $ Administrative Services Managers 6,898 9% $ Nurse Anesthetists 2,561 16% $ Human Resources Managers 2,689 17% $ Network and Computer Systems Administrators 6,021 10% $ Purchasing Managers 2,040 14% $ Computer Programmers 4,756 12% $ Industrial Production Managers 4,560 7% $ Nuclear Engineers % $ Education Administrators, Postsecondary 2,825 8% $ Veterinarians 1,248 16% $ Nurse Practitioners 4,433 15% $ Medical and Health Services Managers 7,476 9% $ Construction Managers 4,849 4% $ Tennessee s expected change in jobs from due to a combination of nationwide trends in occupational mix, demographic trends, and national growth effect 2 Competitive effect is the difference between the expected change and the actual observed change. It explains how much of the employment change for a given occupation is due to some unique competitive factors that the region possesses, because the change cannot be explained by national trends for that occupation or the economy as whole. A negative competitive effect means that job growth for a given occupation did not meet the expected growth. A positive competitive effect means that job growth exceeded expected growth for a given occupation. 3 High-wage occupations are those that have an average hourly wage of more than $30.03, the average wage for occupations that require a post-secondary degree of any type TNECD LEAP Occupational Analysis 4

11 SOC Description Expected % Competitive Effect Avg. Hourly Earnings Architectural and Engineering Managers 2,721 8% $ Engineers, All Other 1,849 11% $ Nuclear Technicians % $ Marketing Managers 3,253 11% $ Electrical and Electronics Repairers, Powerhouse, Substation, and Relay % $ Training and Development Managers % $ Health and Safety Engineers, Except Mining Safety Engineers and Inspectors % $ Mechanical Engineers 4,310 9% $ Dental Hygienists 3,469 11% $ Captains, Mates, and Pilots of Water Vessels 1,089 13% $ Air Traffic Controllers % $ Aerospace Engineers % $ Logisticians 2,037 17% $ Occupational Health and Safety Specialists 1,579 9% $ Compensation and Benefits Managers % $ Podiatrists % $ Materials Engineers % $ Materials Scientists % $ Physicists 494 9% $ Optometrists % $ Computer and Information Systems Managers 5,408 10% $ Sales Engineers 883 8% $ Mining and Geological Engineers, Including Mining Safety Engineers 87 32% $ Computer and Information Research Scientists % $ Ship Engineers 351 8% $ Oral and Maxillofacial Surgeons 169 8% $ Funeral Service Managers 189 6% $ Physical Scientists, All Other 265 3% $ Aerospace Engineering and Operations Technicians 74 1% 1 (2) 3 $ Biomedical Engineers % $ Dentists, All Other Specialists 67 5% $ TNECD LEAP Occupational Analysis 5

12 Strength Indicator No. 2 Occupations Critical to TNECD s Targeted Industries that have a High Regional Concentration These occupations rank in the top 25 for industry employment according to national industry patterns in at least one of TNECD s targeted industry clusters, and have a high regional employment concentration as indicated by a location quotient of greater than 1. Based on national industry trends, these occupations are important components of the workforce supporting TNECD s target industries. Tennessee s high regional concentration in these occupations represents a strength in the state s workforce. Encouraging further specialization in these occupations will prepare the state s workforce for future growth. SOC Description % 2013 Avg. Hourly Earnings Location Quotient General and Operations Managers 42,463 8% $ Industrial Engineers 7,054 17% $ First-Line Supervisors of Production and Operating Workers 14,276 4% $ Sales Managers 8,050 10% $ Industrial Engineering Technicians 1,933 13% $ Industrial Production Managers 4,560 7% $ Financial Managers 12,297 9% $ Chief Executives 7,982 9% $ Sales Representatives, Wholesale and Manufacturing, Technical and Scientific Products 9,603 12% $ Heavy and Tractor-Trailer Truck Drivers 50,700 11% $ Administrative Services Managers 6,898 9% $ Human Resources Managers 2,689 17% $ Purchasing Managers 2,040 14% $ Nuclear Engineers % $ Medical and Clinical Laboratory Technicians 6,271 23% $ Captains, Mates, and Pilots of Water Vessels 1,089 13% $ Food Scientists and Technologists % $ Radio and Television Announcers 922 (11%) $ Magnetic Resonance Imaging Technologists 979 9% $ Avionics Technicians % $ Electrical and Electronics Repairers, Powerhouse, Substation, and Relay % $ Chemical Technicians 1,742 10% $ Set and Exhibit Designers 252 (3%) $ No. of ECD Clusters 5 4 Location quotient (LQ): Ratio of proportion of an area s employment for an occupation to that of the nation as a whole. LQ is a way of quantifying how concentrated a particular occupation is in a region as compared to the nation. LQ=1: national average; LQ>1: occupation composes a greater share of the local area employment than the national average (indicating strong concentration or specialization); LQ<1: occupation composes a smaller share of the local area employment than the national average. 5 The No. of ECD Clusters column shows how many clusters for which an occupation ranks in the top 25 for employment. See Appendix B for complete list of TNECD s targeted industries. TNECD LEAP Occupational Analysis 6

13 SOC Description % 2013 Avg. Hourly Earnings Location Quotient Phlebotomists 2,864 16% $ Medical and Clinical Laboratory Technologists 4,238 8% $ Radiologic Technologists 5,052 9% $ Diagnostic Medical Sonographers 1,540 18% $ Heating, Air Conditioning, and Refrigeration Mechanics and Installers 6,514 7% $ Occupational Health and Safety Specialists 1,579 9% $ Medical and Health Services Managers 7,476 9% $ Telecommunications Equipment Installers and Repairers, Except Line Installers 5,182 3% $ Sound Engineering Technicians 306 (17%) $ Mechanical Engineering Technicians 1,131 17% $ Audio and Video Equipment Technicians 1,356 2% $ Physicians and Surgeons, All Other 6,783 5% $ Agricultural Inspectors 321 3% $ No. of ECD Clusters 5 TNECD LEAP Occupational Analysis 7

14 Need Indicator No. 1 Occupations which are High Wage and Growing, Despite Inhibiting Tennessee Trends This table includes all high-wage occupations that require a post-secondary non-degree award or greater that have had a net 5-year job increase BUT Tennessee s regional competitive effect negatively impacted that growth. These occupations are high wage and growing, indicating desirable and high quality jobs. However, the negative competitive effect indicates the expected growth was not achieved due to regional characteristics. For these occupations, an opportunity exists to create more growth and increase Tennessee s competitiveness. SOC Description % Expected 6 Competitive Effect Avg. Hourly Earnings Software Developers, Applications 5, % 788 (344) $ Physical Therapists 4, % 542 (338) $ Management Analysts 7, % 604 (308) $ Software Developers, Systems Software 3, % 334 (128) $ Computer Occupations, All Other 2, % 124 (79) $ Physicians and Surgeons, All Other 6, % 414 (79) $ Environmental Scientists and Specialists, Including Health 1, % 88 (75) $ Financial Analysts 2, % 204 (58) $ Computer Network Architects 1, % 95 (56) $ Physician Assistants 1, % 197 (54) $ Database Administrators 1, % 132 (36) $ Environmental Engineers % 54 (36) $ Operations Research Analysts 1, % 173 (30) $ Dentists, General % 56 (29) $ Internists, General % 30 (27) $ Computer Hardware Engineers % 39 (25) $ Surgeons % 76 (25) $ Audiologists % 33 (22) $ Personal Financial Advisors 1, % 182 (18) $ Anesthesiologists % 46 (17) $ Statisticians % 58 (16) $ Tennessee s expected change in jobs from due to a combination of nationwide trends in occupational mix, demographic trends, and national growth effect 7 Competitive effect is the difference between the expected change and the actual observed change. It explains how much of the employment change for a given occupation is due to some unique competitive factors that the region possesses, because the change cannot be explained by national trends for that occupation or the economy as whole. A negative competitive effect means that job growth for a given occupation did not meet the expected growth. A positive competitive effect means that job growth exceeded expected growth for a given occupation. 8 High-wage occupations are those that have an average hourly wage of more than $30.03, the average wage for occupations that require a post-secondary degree of any type TNECD LEAP Occupational Analysis 8

15 SOC Description % Expected 6 Competitive Effect Avg. Hourly Earnings Orthotists and Prosthetists % 19 (16) $ Family and General Practitioners 1, % 58 (14) $ Agents and Business Managers of Artists, Performers, and Athletes % 61 (12) $ Pharmacists 8, % 239 (12) $ Actuaries % 36 (11) $ Biochemists and Biophysicists % 26 (10) $ Information Security Analysts 1, % 149 (9) $ Psychologists, All Other % 16 (9) $ Petroleum Engineers % 36 (5) $ Obstetricians and Gynecologists % 13 (5) $ Chiropractors % 25 (5) $ Life Scientists, All Other % 5 (4) $ Natural Sciences Managers % 19 (4) $ Public Relations and Fundraising Managers 1, % 81 (4) $ Atmospheric and Space Scientists % 6 (2) $ Marine Engineers and Naval Architects % 7 (2) $ Agricultural Engineers % 3 (2) $ Advertising and Promotions Managers % 47 (1) $ Political Scientists % 4 (1) $ Animal Scientists % 2 (1) $42.69 TNECD LEAP Occupational Analysis 9

16 Need Indicator No. 2 Occupations Critical to TNECD s Targeted Industries that have a Low Regional Concentration These occupations rank in the top 25 for industry employment according to national industry patterns in at least one of TNECD s targeted industry clusters, and have a low regional employment concentration as indicated by a location quotient of less than 1. Based on national industry trends, these occupations are important components of the workforce supporting TNECD s target industries. However, Tennessee has a lower than average employment concentration when compared to the nation. There is room for improvement to increase regional specialization and concentration to support current and future business growth. SOC Description % 2013 Avg. Hourly Earnings Location Quotient Accountants and Auditors 21,125 11% $ Market Research Analysts and Marketing Specialists 6,671 16% $ Computer Systems Analysts 9,426 17% $ Mechanical Engineers 4,310 9% $ Software Developers, Applications 5,365 9% $ Software Developers, Systems Software 3,009 7% $ Human Resources Specialists 6,864 12% $ Network and Computer Systems Administrators 6,021 10% $ Architectural and Engineering Managers 2,721 8% $ Electrical Engineers 2,630 13% $ Logisticians 2,037 17% $ Computer and Information Systems Managers 5,408 10% $ Electrical and Electronics Engineering Technicians 2,655 7% $ Management Analysts 7,031 4% $ Chemists 1,062 (4%) $ Marketing Managers 3,253 11% $ Engineers, All Other 1,849 11% $ Training and Development Specialists 4,370 8% $ Mechanical Drafters 1,210 8% $ Electronics Engineers, Except Computer 1,248 (3%) $ Graphic Designers 2,924 (6%) $ Medical Scientists, Except Epidemiologists 698 (16%) $ Computer Programmers 4,756 12% $ No. of ECD Clusters 10 9 Location quotient (LQ): Ratio of proportion of an area s employment for an occupation to that of the nation as a whole. LQ is a way of quantifying how concentrated a particular occupation is in a region as compared to the nation. LQ=1: national average; LQ>1: occupation composes a greater share of the local area employment than the national average (indicating strong concentration or specialization); LQ<1: occupation composes a smaller share of the local area employment than the national average. 10 The No. of ECD Clusters column shows how many clusters for which an occupation ranks in the top 25 for employment. See Appendix B for complete list of TNECD s targeted industries. TNECD LEAP Occupational Analysis 10

17 SOC Description % 2013 Avg. Hourly Earnings Location Quotient Aerospace Engineers % $ Computer Hardware Engineers 630 2% $ Compliance Officers 4,601 1% $ Aircraft Mechanics and Service Technicians 1,899 (5%) $ Biological Technicians 891 (10%) $ Semiconductor Processors 72 18% $ Biomedical Engineers % $ Materials Engineers % $ Web Developers 1,371 10% $ Sales Engineers 883 8% $ Financial Analysts 2,922 5% $ Biochemists and Biophysicists 343 5% $ Agricultural and Food Science Technicians 401 4% $ Natural Sciences Managers 660 2% $ Aerospace Engineering and Operations Technicians 74 1% $ Budget Analysts 697 (0%) $ Public Relations Specialists 2,386 (1%) $ Chemical Engineers 650 (1%) $ Writers and Authors 539 (2%) $ Art Directors 304 (4%) $ Broadcast Technicians 462 (4%) $ Broadcast News Analysts 75 (5%) $ Multimedia Artists and Animators 189 (6%) $ Microbiologists 200 (7%) $ Editors 1,214 (11%) $ Producers and Directors 1,055 (12%) $ Camera Operators, Television, Video, and Motion Picture 233 (16%) $ Reporters and Correspondents 704 (17%) $ Film and Video Editors 307 (29%) $ No. of ECD Clusters 10 TNECD LEAP Occupational Analysis 11

18 Need Indicator No. 3 Occupations Which Have High Wages and a High Number of Openings, But a Low Regional Concentration This table includes occupations with high wages and a location quotient of less than 1. Additionally, occupations that have at least 50 annual openings are included. This table contains high wage jobs where there are a considerable amount of annual openings due to job growth and turnover. While openings may represent high employer demand for these occupations, the state s regional concentration is low relative to the nation. There is sufficient demand in these high paying occupations to support workforce development investment. SOC Description % Location Quotient 11 Annual Openings Avg. Hourly Earnings Accountants and Auditors 21,125 11% ,067 $ Computer Systems Analysts 9,426 17% $ Civil Engineers 4,607 12% $ Computer Programmers 4,756 12% $ Mechanical Engineers 4,310 9% $ Management Analysts 7,031 4% $ Network and Computer Systems Administrators 6,021 10% $ Computer and Information Systems Managers 5,408 10% $ Software Developers, Applications 5,365 9% $ Dental Hygienists 3,469 11% $ Lawyers 6,868 (1%) $ Marketing Managers 3,253 11% $ Electrical Engineers 2,630 13% $ Architectural and Engineering Managers 2,721 8% $ Financial Analysts 2,922 5% $ Securities, Commodities, and Financial Services Sales Agents 3,667 (4%) $ Software Developers, Systems Software 3,009 7% $ Logisticians 2,037 17% $ Occupational Therapists 1,754 (10%) $ Engineers, All Other 1,849 11% $ Location quotient (LQ): Ratio of proportion of an area s employment for an occupation to that of the nation as a whole. LQ is a way of quantifying how concentrated a particular occupation is in a region as compared to the nation. LQ=1: national average; LQ>1: occupation composes a greater share of the local area employment than the national average (indicating strong concentration or specialization); LQ<1: occupation composes a smaller share of the local area employment than the national average. 12 Annual Openings are an estimate of labor market demand. Openings are positions made available as result of job growth and also through retirement and other forms of turnover. 13 High-wage occupations are those that have an average hourly wage of more than $30.03, the average wage for occupations that require a post-secondary degree of any type TNECD LEAP Occupational Analysis 12

19 SOC Description % Location Quotient 11 Annual Openings Avg. Hourly Earnings Speech-Language Pathologists 2,087 (4%) $ Personal Financial Advisors 1,850 10% $ Aircraft Mechanics and Service Technicians 1,899 (5%) $ Operations Research Analysts 1,396 12% $ Physician Assistants 1,380 12% $ Environmental Scientists and Specialists, Including Health 1,460 1% $ Computer Occupations, All Other 2,169 2% $ Database Administrators 1,582 7% $ Credit Analysts 1,336 5% $31.42 TNECD LEAP Occupational Analysis 13

20 Need Indicator No. 4 Occupations Projected to Increase in National Forecasts That Decreased Due to Inhibiting Tennessee Trends This table contains occupations where the expected change, which is based on nationwide occupational and demographic trends, was projected to increase net employment over the five year period from However, the competitive effect was so sharply negative that it produced a decrease in net employment rather than an increase. A negative competitive effect for these occupations indicates unique regional factors may be driving the decrease in net employment. Workforce development for these occupations would improve Tennessee s competitiveness and support businesses requiring this workforce. SOC Description Expected 14 Competitive Effect Occupational Therapists 1,957 1,754 (203) 205 (407) Lawyers 6,939 6,868 (71) 163 (234) Mental Health and Substance Abuse Social Workers 1,540 1,461 (79) 157 (236) Public Relations Specialists 2,400 2,386 (14) 154 (168) Speech-Language Pathologists 2,163 2,087 (76) 142 (217) Respiratory Therapists 3,439 3,298 (141) 114 (255) Aircraft Mechanics and Service Technicians 1,993 1,899 (94) 83 (177) Clinical, Counseling, and School Psychologists 1,302 1,211 (91) 67 (158) Community and Social Service Specialists, All Other 1, (56) 64 (120) Financial Specialists, All Other 1,662 1,661 (1) 60 (61) Biological Technicians (99) 45 (145) Graphic Designers 3,102 2,924 (178) 46 (223) Producers and Directors 1,202 1,055 (147) 42 (189) Medical Scientists, Except Epidemiologists (133) 40 (172) Elementary School Teachers, Except Special Education 25,666 25,650 (16) 39 (55) Chemists 1,104 1,062 (42) 39 (80) Social Workers, All Other (18) 33 (52) Radiation Therapists (3) 32 (35) Chemical Engineers (5) 29 (34) Airline Pilots, Copilots, and Flight Engineers 1, (415) 27 (442) Special Education Teachers, All Other (32) 22 (54) Budget Analysts (1) 21 (21) 14 Tennessee s expected change in jobs from due to a combination of nationwide trends in occupational mix, demographic trends, and national growth effect 15 Competitive effect is the difference between the expected change and the actual observed change. It explains how much of the employment change for a given occupation is due to some unique competitive factors that the region possesses, because the change cannot be explained by national trends for that occupation or the economy as whole. A negative competitive effect means that job growth for a given occupation did not meet the expected growth. A positive competitive effect means that job growth exceeded expected growth for a given occupation. TNECD LEAP Occupational Analysis 14

21 SOC Description Expected 14 Competitive Effect Writers and Authors (10) 19 (29) Psychiatrists (45) 19 (64) Multimedia Artists and Animators (11) 18 (29) Set and Exhibit Designers (7) 17 (25) Health Diagnosing and Treating Practitioners, All Other (8) 18 (25) Pediatricians, General (1) 18 (18) Art Directors (12) 16 (28) Statistical Assistants (9) 12 (22) Therapists, All Other (15) 13 (27) Recreational Therapists (52) 12 (64) Fashion Designers (29) 11 (40) Education, Training, and Library Workers, All Other 1,418 1,413 (5) 12 (16) Electronics Engineers, Except Computer 1,292 1,248 (44) 10 (55) Economists (29) 9 (38) Microbiologists (14) 8 (23) Social Scientists and Related Workers, All Other (17) 8 (25) Camera Operators, Television, Video, and Motion Picture (43) 5 (49) Interior Designers (28) 7 (34) Financial Examiners (80) 6 (85) Zoologists and Wildlife Biologists (8) 3 (12) Insurance Appraisers, Auto Damage (14) 3 (17) Landscape Architects (15) 2 (17) Hydrologists (2) 2 (4) Emergency Management Directors (1) 1 (2) TNECD LEAP Occupational Analysis 15

22 Multipliers: High Growth, High Wage Occupations These occupations have grown by more than 10% over the previous 5 years and pay an average hourly wage that is above average for occupations that require at least a post-secondary non-degree award. Occupations in the table below are included in both the Wage Multiplier and the Growth Multiplier. SOC Description TNECD LEAP Occupational Analysis % 2013 Avg. Hourly Earnings Accountants and Auditors 21,125 11% $ Sales Representatives, Wholesale and Manufacturing, Technical and Scientific Products 9,603 12% $ Computer Systems Analysts 9,426 17% $ Sales Managers 8,050 10% $ Industrial Engineers 7,054 17% $ Network and Computer Systems Administrators 6,021 10% $ Computer and Information Systems Managers 5,408 10% $ Computer Programmers 4,756 12% $ Civil Engineers 4,607 12% $ Nurse Practitioners 4,433 15% $ Dental Hygienists 3,469 11% $ Marketing Managers 3,253 11% $ Human Resources Managers 2,689 17% $ Electrical Engineers 2,630 13% $ Nurse Anesthetists 2,561 16% $ Purchasing Managers 2,040 14% $ Logisticians 2,037 17% $ Personal Financial Advisors 1,850 10% $ Engineers, All Other 1,849 11% $ Operations Research Analysts 1,396 12% $ Physician Assistants 1,380 12% $ Veterinarians 1,248 16% $ Captains, Mates, and Pilots of Water Vessels 1,089 13% $ Information Security Analysts 1,003 16% $ Nuclear Engineers % $ Training and Development Managers % $ Health and Safety Engineers, Except Mining Safety Engineers and Inspectors % $ Air Traffic Controllers % $ Electrical and Electronics Repairers, Powerhouse, Substation, and Relay % $ Nuclear Technicians % $ Agents and Business Managers of Artists, Performers, and Athletes % $ Optometrists % $50.14

23 SOC Description % 2013 Avg. Hourly Earnings Compensation and Benefits Managers % $ Computer and Information Research Scientists % $ Statisticians % $ Aerospace Engineers % $ Biomedical Engineers % $ Materials Engineers % $ Materials Scientists % $ Petroleum Engineers % $ Podiatrists % $ Mining and Geological Engineers, Including Mining Safety Engineers 87 32% $ Mathematicians 51 16% $ Political Scientists 44 10% $ Mathematical Technicians 23 10% $31.45 TNECD LEAP Occupational Analysis 17

24 Multipliers: Occupations that are in the Top 25 for Employment in Four or more TNECD Clusters Occupations included in the table below appear among the top 25 occupations by industry for at least four of TNECD s targeted industries. National patterns determine the percentage of employment in a given industry for each occupation. Some occupations appear in many different clusters, such as accounting, financial, and managerial occupations. The more clusters an occupation appears in, the more intense the Cluster Multiplier will be in the occupational index. SOC Description No. of Clusters Accountants and Auditors General and Operations Managers Industrial Engineers Sales Managers Market Research Analysts and Marketing Specialists First-Line Supervisors of Production and Operating Workers Computer Systems Analysts Financial Managers Industrial Production Managers Mechanical Engineers Industrial Engineering Technicians Software Developers, Applications Software Developers, Systems Software Chief Executives Architectural and Engineering Managers Network and Computer Systems Administrators Human Resources Specialists Sales Representatives, Wholesale and Manufacturing, Technical and Scientific Products Electrical Engineers Computer and Information Systems Managers Logisticians Heavy and Tractor-Trailer Truck Drivers Management Analysts Chemists Electrical and Electronics Engineering Technicians 4 TNECD LEAP Occupational Analysis 18

25 Occupation Index Scores Occupations with highest Strength Score SOC Description STRENGTH NEED Industrial Engineers General and Operations Managers Sales Representatives, Wholesale and Manufacturing, Technical and Scientific Products Sales Managers Accountants and Auditors Computer Systems Analysts Financial Managers Industrial Production Managers Chief Executives Human Resources Managers Electrical Engineers Mechanical Engineers Industrial Engineering Technicians 28 0 Occupations with highest Need Score SOC Description STRENGTH NEED Accountants and Auditors Software Developers, Applications Software Developers, Systems Software Computer Systems Analysts Electrical Engineers Mechanical Engineers Computer and Information Systems Managers Architectural and Engineering Managers Network and Computer Systems Administrators Engineers, All Other Logisticians Management Analysts Chemists 0 35 Note: Occupations in blue text indicate STEM occupations TNECD LEAP Occupational Analysis 19

26 Occupations with High Strength and High Need Some occupations have high scores for both Strength and Need, signifying areas where Tennessee may generally have high wages and high growth, high concentration, and competitiveness; but also displays a need for further growth based on employment trends and projected industry growth. The occupations in the table below may represent the greatest opportunity for state educational institutions to emphasize in the near future. SOC Description STRENGTH NEED Accountants and Auditors Computer Systems Analysts Electrical Engineers Mechanical Engineers Computer and Information Systems Managers Architectural and Engineering Managers Network and Computer Systems Administrators Engineers, All Other Logisticians Marketing Managers Computer Programmers Note: Occupations in blue text indicate STEM occupations TNECD LEAP Occupational Analysis 20

27 Appendix A: TNECD Target Industry Clusters A business is placed into a cluster based on its primary business activity. Below is a list of industries utilized for this study: Cluster NAICS Code Industry Description 3364 Aerospace product and parts manufacturing Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing Aerospace & Defense Automotive Chemicals, Plastics & Rubber Transportation, Distribution & Logistics Energy Technology Military armored vehicle, tank, and tank component manufacturing Small Arms Ammunition Manufacturing Ammunition (except Small Arms) Manufacturing Small Arms, Ordnance, and Ordnance Accessories Manufacturing Other Support Activities for Air Transportation 3361 Motor Vehicle Manufacturing 3362 Motor Vehicle Body and Trailer Manufacturing 3363 Motor Vehicle Parts Manufacturing Tire Manufacturing (may also place these in Rubber, depending on business) 325 Chemical Manufacturing 326 Plastics and Rubber Products Manufacturing 42 Wholesale Trade Scheduled Freight Air Transportation 482 Rail Transportation Coastal and Great Lakes Freight Transportation Inland water freight Transportation 484 Truck Transportation 488 Support Activities for Transportation 492 Couriers and Messengers 493 Warehousing and Storage Electric Power Generation Electric Power Transmission, Control, and Distribution 2212 Natural Gas Distribution Petroleum Refineries Power Boiler and Heat Exchanger Manufacturing Heating Equipment (except Warm Air Furnaces) Manufacturing Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing Turbine and Turbine Generator Set Units Manufacturing 3344 Semiconductor and Other Electrionic Component Manufacturing Automatic Environmental Control Manufacturing for Residential, Commercial, and Appliance Use Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals Electric Lamp Bulb and Part Manufacturing TNECD LEAP Occupational Analysis 21

28 Cluster NAICS Code Industry Description 3353 Electrical Equipment Manufacturing Battery Manufacturing All Other Electrical Equipment and Component Mfg. Food & Agribusiness 311 Food Manufacturing 3121 Beverage Manufacturing Electromedical and Electrotherapeutic Apparatus Manufacturing Analytical Laboratory Instrument Manufacturing Healthcare & Medical Devices Irradiation Apparatus Manufacturing 3391 Medical Equipment and Supplies Manufacturing 6215 Medical and Diagnostic Laboratories Business Services (HQs, R&D, Datacenters, Call Centers) Data Processing, Hosting, and Related Services 5417 Scientific Research and Development Services Corporate, Subsidiary, and Regional Managing Offices Telemarketing Bureaus and Other Contact Centers 5614 Business Support Services Manufacturing Motion Picture and Sound Recording Industries 515 Broadcasting (except Internet) Entertainment & Media Musical Instrument Manufacturing Musical Groups and Artists Blank Magnetic and Optical Recording Media Manufacturing TNECD LEAP Occupational Analysis 22