story by Roby Brock, a TCW content partner and owner of Talk Business
More than 40 state business leaders met with Gov. Mike Beebe at the Governor’s mansion last week to discuss job openings, skills gaps, and the need for more coordination among workforce agencies, schools and private enterprise to lower unemployment and thwart a workforce exodus expected in the coming years.
The primary concern is the state’s manufacturing base, which currently employs about 154,000 workers as of April 2014.
The national average for manufacturing wages is roughly $40,000 a year, while the state average is $36,000. However, there are a number of manufacturing incomes in Arkansas that can reach the high five-figure or low six-figure range.
Randy Zook with the Arkansas State Chamber of Commerce, who organized the Governor’s mansion meeting, contends that Arkansas companies have tens of thousands of job openings, but not enough workers to match them. He suggests that the situation could worsen if major problems aren’t quickly addressed.
There has been a rebirth in U.S. manufacturing in recent years, although Arkansas’ manufacturing sector has been sluggish compared to other states. New manufacturing jobs are less blue-collar and more high-tech in nature; however, traditional manufacturing job openings are expected to grow due to forthcoming retirements from the baby boomer generation.
Other factors such as disinterest from younger generations, a lack of key skills, and fewer job candidates have Zook and manufacturers clamoring for more coordination between education/training programs and existing industries.
Earlier this year in the state’s fiscal session, State Sen. Jane English secured a commitment from Beebe and her fellow legislators to overhaul Arkansas’ workforce training efforts in exchange for her vote on the Private Option renewal funding. Two months later, officials say progress is being made, but nothing concrete has been presented publicly in terms of change.
Privately, there are worries that government bureaucracy combined with self-preservation among the state’s educational institutions — from high school through college — can’t pivot quickly enough to address a workforce situation looming towards a “crisis” point.
“Businesses’ role is to communicate needs clearly. The state’s role is to be responsive,” says Arkansas Economic Development Commission director Grant Tennille, who was present at the mansion meeting.
Talk Business & Politics asked Tennille, Zook and the two major party candidates for Governor if the state needs a “workforce czar” — an individual with the authority to cut bureaucratic red tape who could also flex enough political muscle to make changes quickly, efficiently, and in the best interests of industry.
Tennille said he thinks the current construction of the Governor’s Workforce Cabinet are “in lockstep” to make the changes promised to Sen. English during the fiscal session. He is not sold on the notion of a workforce czar.
“I hesitate to introduce new bureaucracy to anything,” he said. “I think that the next Governor can serve ably as the workforce czar as long as he makes his priorities very clear to his cabinet level directors and commits to knocking down any barriers that might crop up. I think that one of our challenges right now is the communication between the policy makers at the 10,000-foot level and the people on the ground locally. I think that’s where the meat of this problem lies.”
Zook said the idea has merit, particularly if there is going to be a fast transition.
“[It] depends on how fast you want things to get better,” said Zook. “Fast? I think it would be a very smart move to, perhaps, not put somebody in a new role but assign a role at a very high level within the Governor’s staff or the Governor himself.”
Mike Ross, the Democratic candidate for Governor, has proposed a reorganization of the Governor’s Workforce Cabinet, which includes AEDC, the Department of Workforce Services, Department Career of Education, Department of Higher Education, and other agencies.
Ross would rename the group as a “Cabinet for Economic Development” and previously said he would have John Burkhalter, a businessman and the Democratic nominee for Lt. Governor, as the chair of the effort if Burkhalter is elected.
“Instead of having a single czar, Mike Ross has already announced his plan to create the Governor’s Cabinet for Economic Development, a statewide coordinated effort made up of key agency representatives that will provide better coordination, increased communication and a stronger, more unified strategy for our state’s workforce services and economic development efforts,” said Ross spokesman Brad Howard. “This alliance will bring together all of our resources on a regular basis to help the state of Arkansas become more efficient, more effective and more productive – and create a better trained workforce that will help Arkansas attract more and better-paying jobs.”
Howard said Ross plans to announce additional workforce services and economic development plans in the coming weeks.
Ross’ rival, Republican gubernatorial nominee Asa Hutchinson has proposed a restructuring of the state’s workforce efforts through eight regional councils. Hutchinson’s plan would require high schools, two-year colleges, and local employers to assess jobs needs across their regions and coordinate a plan of action for educating potential workers for those available jobs.
“As I announced in March, increased emphasis on workforce training is essential to industrial recruitment and job growth in Arkansas. My plan includes streamlining workforce education to reduce duplication and to make sure tax dollars are targeted to education that matches the job creation priorities of the various regions of our state,” Hutchinson said.
“I will work with the legislature to meet these goals, but I would not designate a ‘workforce czar’ or assign the leadership role to the Lt. Governor. The Governor is the right person to lead this effort toward effective workforce education,” he added. “Improving workforce education is such a priority that the direct leadership of the Governor is essential to success.”