April 16, 2008 Volume 1 Workforce Solutions: Governor Jindal s Comprehensive Workforce Redesign Legislative Package
Executive Summary: The purpose of this position paper is to highlight the relevance of the current comprehensive workforce redesign package being proposed by Governor Jindal to the workforce challenges highlighted in the Baton Rouge Area Chamber s (BRAC s) recent Baton Rouge Area Workforce Assessment. Passage of this important legislation will provide the Capital Region with new means to achieve effective workforce solutions. The two sets of companion bills (HB 1104, SB 612; HB 1018, SB 420) offered by Speaker Tucker and President Chaisson will help ease workforce challenges in the Baton Rouge area and other regions of the state by (i) sending a positive message to businesses and workers that workforce concerns are a priority; (ii) better funding high-demand training programs delivered through Louisiana Community and Technical College System (LCTCS) schools like Baton Rouge Community College and the Louisiana Technical College; (iii) increasing regional capacity to offer specialized occupational training critical for many high skills manufacturing jobs; (iv) streamlining and integrating state services to provide better regional access to workforce assistance; and (v) offering increased opportunities for input from regional business leaders to ensure alignment between industry needs and training program design, thereby addressing high-demand jobs faster and more effectively. Furthermore, the legislative package provides unique opportunities for BRAC to become more heavily involved in regional workforce initiatives, and to serve as a facilitator as local initiatives are coordinated at a regional level. Workforce Challenges for the Capital Region Worker scarcity is not an issue isolated to any one firm or industry in the Baton Rouge area. Nor is it an entirely new phenomenon nationally. However, in today s hurricane recovery environment, the availability of qualified labor has moved to the top of the list of Baton Rouge area business concerns; workforce issues have been identified as the #1 concern of Capital Region business leaders for the past two years. Spurred by the increasing challenges associated with matching workers and job vacancies, a community-wide call to accelerate workforce solutions has emerged. BRAC as part of its 2007 Business Plan commissioned a regional workforce assessment from a team of nationally-recognized economic and workforce development consultants, Younger Associates and the Wadley- Donovan Group. The result was the Baton Rouge Area Workforce Assessment, involving a survey of 1,240 Baton Rouge area residents and 96 employers, 22 community stakeholder interviews, and extensive statistical analyses. The assessment yielded a robust examination of labor supply and demand, job candidate strengths and weaknesses, current workforce development efforts, 2
and untapped labor resources. (The full report is available on BRAC s website at www.brac.org/research, under the heading Regional Workforce Analysis. ) The Baton Rouge area, like many other regions across the state, is experiencing a workforce gap due in large part to a mismatch between labor market demands and the skill sets of workers produced by the area s education systems. At the state level, nearly 60% of jobs require more training than high school but less than a four-year college degree, however only about 12% of high school graduates opt to pursue training at a community or technical college. The majority of the state s workforce is undertrained, having only a high school degree or less. Conversely, nearly a third of high school graduates are entering four-year institutions, while the demand for graduates of those programs as a percentage of the total workforce hovers below 20%, creating a brain drain situation as graduates leave the state in search of opportunity not readily available in Louisiana. While the entire state struggles with workforce issues, the challenges and potential solutions to those challenges are region-specific. In the Capital Region, the workforce problem has reached a critical level. Surveyed employers indicated that 56% of occupations in the Capital Region are very difficult or impossible to recruit, while another 14% are recruitable but with difficulty. Unique challenges facing the Baton Rouge area include: Difficulty recruiting professional and other talent from outside the region Borderline satisfactory basic skills (e.g., written communication, reading, math, problem solving) Borderline acceptable quality of high school graduates and educational programs Employers infrequent use of the region s post-secondary educational institutions for training programs, apprenticeships, co-ops, and other programs The assessment also highlights regional assets key to addressing the Baton Rouge area s challenges: a young population, significant hidden labor supplies (e.g., not-employed residents interested in employment, underemployed residents, and recent college and technical school graduates), post-secondary educational opportunities, and strong employer ratings for work ethic and productivity. Successful workforce solutions will leverage these regional assets to address regional challenges, creating a competitive, first-class workforce. BRAC supports comprehensive reform of Louisiana s workforce development systems to streamline training delivery based on market demands, and supports Governor Jindal s comprehensive workforce redesign legislative package. 3
Impacts of Governor Jindal s Comprehensive Workforce Redesign Legislative Package on the Capital Region 1. Dramatic, sweeping reform will send a strong, positive message about Louisiana and the Capital Region Marketing the nine-parish region and recruiting new businesses to the area is critical for future economic growth. As part of BRAC s regional business expansion and recruitment strategy, the area must demonstrate that it is actively working to solve present and future workforce availability and quality concerns. Competing regions have taken steps toward developing a responsive, well-integrated workforce delivery system, and these efforts have played a critical role in their long-term growth. The passage of Governor Jindal s workforce reform bills will send a strong message to businesses and workers inside of Louisiana as well as across the nation, that the creation of workforce solutions is important to the state and the Baton Rouge area. Strengthening workforce resources will support the continued growth and success of existing employers throughout the Capital Region, and will provide a workforce base attractive to new companies. 2. The Louisiana Community and Technical College System (LCTCS) will become more effective at meeting workforce needs and market demand A concurrent resolution will be introduced during the 2008 regular legislative session urging the Board of Regents to modify the funding formula for the Louisiana Community and Technical College System (LCTCS) to better account for real program costs and create incentives for strengthening high-demand programs. Realignment of the funding formula will ensure that it is not cost-prohibitive for LCTCS member institutions to offer training programs that meet industry needs. Strong training in high-demand areas will attract employer participation in apprenticeships, co-ops, and other programs that help bridge the gap between training and employment. Currently, while employers occasionally work with Louisiana State University and Southern University for such programs, most other institutions, including Baton Rouge Community College (BRCC), are underutilized. 3. The Capital Region will have increased capacity to provide expensive occupational training to workers through its community and technical colleges The new state Workforce Education Fund created by HB 1018 and SB 420 will appropriate $10 million annually to fund high-demand, high-cost occupational training programs at LCTCS schools like BRCC and the Louisiana Technical College, Baton Rouge Campus. Funding allocation will be determined by market demand as well as economic and 4
employment projections. Since the Baton Rouge area is home to numerous industrial plants and independent contractors, the availability of occupational training programs is particularly important to help fill regional workforce demands in these high-paying jobs. In addition, Governor Jindal has committed to creating the Louisiana Fast Start program, designed to quickly respond to workforce challenges and opportunities in the state. Access to this new program will aid the Capital Region s competitiveness for business expansion and recruitment in targeted sectors. 4. The Baton Rouge area will benefit from the streamlining of state workforce efforts as well as the representation of regional business and industry leadership on state advisory bodies The Baton Rouge Area Workforce Assessment illustrated the gaps between the region s workforce needs and the output of the current system. HB 1104 and SB 612 dramatically restructure and streamline workforce efforts at the state level, which will result in a regionally responsive workforce system and create a positive impact on the Capital Region. The Louisiana Workforce Commission will replace the existing Department of Labor, which in addition to maintaining its current agency duties, will be responsible for coordinating with other state agencies to integrate the delivery of all education, training, employment, and apprenticeship programs across the state. The Louisiana Workforce Investment Council will replace the existing Louisiana Workforce Commission, serving as the state Workforce Investment Board (WIB). Made up of leaders from across the state, this council will be responsible for advising the Governor on workforce matters and directing the Occupational Forecasting Conference. Mandated changes to the forecasting methodology will require reliance on more local and regional data, which is expected to produce a more coordinated, strategic statewide forecast of workforce needs. Of the 29-member commission, 13 members will be appointed by the Governor from specified business and industry sectors across the state, ensuring that the voice of the business community is integral to the workforce system s design, output, and accountability. 5. Business and industry engagement in workforce solutions will be enhanced by enabling demand-driven priorities to be set at the regional level At the regional level, HB 1104 and SB 612 give additional responsibilities and authority to local WIBs. Among other duties, local WIBs will be responsible for (i) identifying target industry sectors and those sectors skill and human resource requirements; (ii) mapping career pathways and talent pipelines; (iii) evaluating and ensuring the effectiveness of strategies 5
and operations of workforce activities; (iv) conducting program oversight for workforce activities; and (v) reviewing plans for workforce education to ensure that they address the current and future needs of existing and emerging businesses. The legislation will implement strong accountability standards from the Workforce Investment Council and give local leadership increased control and ownership of local challenges and local solutions. In addition to outlining new responsibilities for local WIBs, the Administration s legislation establishes new rules for the composition of local boards. All local WIBs will be led by local and regional business leaders (half of whom must represent small business) in partnership with local government, economic development agencies, organized labor, and educational agencies. Private sector business leaders will be nominated by general purpose business organizations. The new WIB structure presents a tremendous opportunity for BRAC to get involved in critical local workforce efforts by ensuring strong business leadership on Capital Region WIBs. Lastly, while the state boasts eight economic areas, there are 18 local WIBs. The Baton Rouge area is home to two WIBs, one for East Baton Rouge Parish, and one for the surrounding eight parishes. HB 1104 and SB 612 will additionally provide for financial incentives and program waivers to urge WIBs within the same region to coordinate their activities over time at a regional level. BRAC supports this level of regional coordination of WIBs, community and technical colleges, and other training providers to meet targeted, priority workforce needs. This legislation will provide yet another opportunity for BRAC, as a regional organization, to aid and facilitate this process with our partners throughout the Capital Region. Conclusion Creating workforce solutions for the Baton Rouge area has been, and continues to be, a top priority of BRAC. The passage of Governor Jindal s comprehensive workforce redesign legislative package will provide the Capital Region with the means to strengthen and align LCTCS training programs with market demand. Furthermore, the package will empower the business community, and BRAC in particular, to take a strong leadership role in the creation, coordination, and evaluation of workforce initiatives. 6